World Travel Market 2011: Eight Key Trends in Global Travel
Cape Town Tourism just concluded four fruitful and insightful days at the World Travel Market (WTM) in London, one of the leading global events for the travel industry. About 48 000 senior travel industry professionals, government ministers and international media arrived at the Exhibition Centre London on November 7 and 10 to network, negotiate and hear about the latest industry opinion and trends.
Says Mariëtte du Toit-Helmbold, Cape Town Tourism CEO, “The international tourism industry provided more than 235 million jobs last year, representing 8% of international employment. Despite economic uncertainty, tourism will remain a significant international economic driver with international tourist arrivals forecast to reach 1.8 billion by 2030.”
At the session about the latest WTM Global Trends Report, several key emerging international travel trends were discussed.
Divided into geographic areas, the report, published by Euromonitor International, indicated the different ways the travel and tourism industry are reacting to the global economic downturn, as well as political and social unrest such as in the Middle East.
Global arrivals are predicted to slow down by 5.8% from last year but by 2012 are anticipated to break the one billion arrivals barrier—accumulating in a total spend of almost US$1 trillion. The global overview was of “recovery on the brink” with many analysts anticipating a double dip recession, specifically in Europe. The International Monitory Fund predicts a 4% global GDP growth in 2011, down from 5.1% in 2010. Rising fuel and commodity prices, taxation, austerity procedures, political turmoil and social unrest are all reported to have contributed to the slower GDP growth. Across all markets, online marketing is considered to be the most significant growth area in the long term, with applications on social media and mobile devices very lucrative in the medium term.
The following key trends are reported per region:
North America: Mystery Trips
The need to escalate the excitement of travel is fuelling a rise in mystery trips that are premium in price and are for popular milestone vacations such as honeymoons and birthdays. The mystery trips range from customers bidding on packages with an unknown destination and hotel name, to being handed a smartphone unveiling the itinerary day by day, according to their preferences and budget.
Travellers pay only 50% of the sales price and suppliers benefit from selling excess capacity without undermining their brand. Luxury Link’s mystery auction and American Express’s NEXTPEDITION provide hotels, airlines and online travel agencies to sell excess capacity in an opaque bundle that “brings back the element of surprise to travel experiences”. Millenials aged 20 to 34 are the main target of the mystery trips. Luxury operators review their customer profiles and customise mystery experiences in often new and unknown destinations.
United Kingdom: Rent a garden
The outlook in the UK remains bleak with a stagnant economy. Travellers are progressively searching for alternate accommodation options such as campsites and hostels. Value remains key in the travel decisions of Britons. A growing alternative is garden camping, in which Generation Z and the Baby Boomer markets rent garden spaces in which to camp out. Campinmygarden.com is growing in popularity and provides listings of individuals and establishments that rent their gardens for camping purposes.
The issue of pricing in the lead-up to the London Olympic Games is high on the tourism agenda. The report found that some London hotels are charging five times more during the Olympic period, with the International Olympic Committee taking around 40% of hotel availability. Consumers were said to be becoming more ingenious and bypassing high hotel rates with “peer-to-peer transactions tapping into the zeitgeist of what consumers are looking for”. The tourism industry in the UK is looking at South Africa’s World Cup experience in terms of pricing and capacity and, similar to the World Cup, the Olympics are reported to be “a once in a lifetime opportunity for the UK travel industry” whereas in the UK hotel growth was found to be -5.4% in 2010 and -0.1% in 2011. The 2012 predictions were up to 2.1%.
Europe: luxury without the guilt
Following the global economic crisis, a new kind of luxury tourism is emerging in Europe – more authentic and ethical with a focus on “luxury without the associated guilt”. Responsible and sustainable travel is high on the agenda with around 50% of the European luxury outbound market demanding responsible tourism practices when travelling. There is an increase in the use of “living walls” and “vertical farms” whereby luxury hotels have their own kitchen gardens and implement community support in a local produce growing and social empowerment movement. In Europe the high-end segment is outperforming its mid- and lower-tiered counterparts.
The European region as a whole is threatened by a double-dip recession, with increased volatility in the financial markets. Despite this, GDP growth remained realistically stable at 1.8% in 2010, 1.5% in 2011. It is predicted to be 1.4% in 2012. Spain, Italy and other the bailed-out countries Ireland, Greece and Portugal continue to suffer from high debt and unemployment.
Middle East: rebranding
The political and social unrest in the Middle East resulted in a 6.2% decline in tourism arrivals in 2011 compared to 11.5% growth in 2010. Countries such as Egypt and Tunisia are placing considerable focus on country and regional rebranding exercises. Tourism rebranding processes are complex due to each country’s unique political, economic and social conditions, with the major challenge being how to change perceptions of the region. According to the Global Trends Report, comprehensive rebranding campaigns will yield a bounce back in travel for the Middle East – a popular region for travel from Europe.
Egypt’s tourism board is implementing an international branding and marketing campaign, Bahrain’s summer festival attracted more than 85 000 visitors and it is predicted that post-Gaddafi opportunities will emerge in Libya after a widespread renewal of the country’s tourism infrastructure.
Tourist arrivals in the Middle East are expected to increase by 1.3% during 2012.
Africa: Mobile commerce boosts travel
Africa is leading the world in m-commerce with 60% of mobile web users using mobile phones to purchase goods. Mobile-phone money transfer service M-PESA in Kenya targeted unbanked Africans to book travel via phones. The upwardly mobile population means that Africa is leap-frogging earlier forms of media and taking travel to those who were traditionally excluded from it. WTM Chairman, Fiona Jeffery said: “The continent of Africa has tremendous potential for the global travel and tourism industry. With blue-chip corporations such as IBM and Vodafone involved in building a mobile commerce network, regional and global travel companies should be looking even more closely on what the region has to offer. Mobile payments systems are commercially and economically important for all sectors operating in the region, with travel and tourism ideally placed to take advantage.”
In 2010, airlines such as Kenya Airways and Uganda Airlines joined M-PESA and Airtel Money to enable consumers without a bank account to buy air tickets.
During 2011, real GDP growth in Africa was more than 5%, driven by economic development and backed by a growing disposable income.
Asia and China: Growing influence
Asia’s economies continue to enjoy healthy growth. Spending by Chinese travellers on travel accommodation domestically and abroad is expected to increase by 20% over 2011/15 to reach US$67 billion, second to the USA. Hotel companies are customising their brands in China, partnering with Chinese companies, and creating programmes to cater to the Chinese abroad.
Intra-regional travel is high on the agenda for Asia and is expected to boost arrivals and incoming tourist receipts as more middle-class travellers explore the region for the first time.
Technology and online travel: Gamification
Gamification, or the integration of gaming dynamics in non-gaming environments, started in the US entertainment industry and is now a growing movement in the travel and tourism industry. By encouraging consumers to join competitions and share their experiences, photos and videos, the trend generates brand awareness and loyalty for destinations. It works through the offering of points, badges and real-life gifts, with some websites allowing web users to explore a region’s attractions, complete challenges and win trips to the desired region.
Gamification appeals predominately to 18- to 34-year-olds and allows destinations to target specific markets, build awareness, grow an online community and add information, competition, games and special offers. The report gave an example of Tourism Ireland’s “Ireland Town” game on Facebook, where users can visit distinguished tourist attractions in Ireland and share the experience with their friends. The “Ireland Town” campaign plans to engage 60 million people.
Global village – evolution of social media
Social media was at the forefront of tourism marketing activity during 2011, leveraging offline events to interact with online audiences. Social media focus is shifting to loyalty programmes, bookings, concierge and customer service and the aim is to capitalise on its power and friends/followers’ influence to drive bookings and build loyalty. Hotels are rethinking their marketing strategies to target online audiences in a more tailored and intimate way. An upsurge in hotel chains utilising social media during 2011 was reported. Global hotel chains are providing social media care teams and creating targeted events. For hotels, the benefits were seen as helping enhance brand awareness, opening direct lines of communication and enabling them to aim exclusive offers at online followers. Uncertainty remains about how to determine return on investment for social media.
Mariëtte du Toit-Helmbold
CEO: Cape Town Tourism