As the decade that brought us the Eurozone crisis, Brexit and Trump draws to a close, we have identified a few stand-out themes that will define the early years of the 2020s.
Travel as a Digital Leader
Travel will finally transform into a digital first industry, where online travel sales will account for 52% globally by 2024, with mobile sales representing a quarter of all travel bookings in value terms as the travel industry continues its digital transformation. Airlines lead the way with almost 70% of sales made online, compared to lodging on 47% and activities and experiences trailing behind on 12% in 2019.
The Experience Factor
There is a very high level of interest in experiences by consumers, where nearly 79% globally value real world experiences. By 2030, the Experience Economy itself is expected to be valued at $8 trillion USD according to Euromonitor International. Travel brands and destinations clearly play a fundamental role in delivering elevated, curated and authentic interactions for visitors, to heighten the enjoyment of culture, heritage or nature.
Travel brands are therefore falling over themselves to provide the perfect end to end trip, plus experience. However, the travel activities and experiences sector is beset by high volume, low value transactions which has led to mass commoditisation combined with high levels of fragmentation and short booking windows.
Competition is rife and consolidation has been taking place with leading players like TripAdvisor, OTAs, activities platforms like Klook and Get Your Guide, and even Google battling it out for supremacy. Thanks to APIs, travel activities and experiences will develop outside of the travel sector, plugging into the retail market and online lifestyle platforms, like super apps.
Inclusive As The Standard
The accessible agenda is gaining momentum, in the same way that we saw with the anti-plastics movement that has taken hold. It will not be long until we reach the tipping point where consumers will demand inclusion for all, regardless of age, ability or gender.
It is therefore important to look beyond the number of people with physical and intellectual disabilities, to encompass all those with mobility needs - including seniors and babies - across the human life cycle. By 2030, the proportion of 65+ and the very young will increase to 20% - a fifth of the world, notwithstanding the one billion people living with a disability across all age groups.
Targeting the accessible market is not just about doing the right thing - it drives repeat visitors, retention, extends seasonality and higher spend per visitor thanks to the multiplier effect. Thanks to technology, brands will increasingly become consumer-centric across the customer journey for the benefit of all. Embracing universal design online and in the physical world is a great place to start.
Social for Seamless
Both Facebook and Instagram are moving into s-commerce as a means to diversify their product offer and remain relevant to consumers.
Instagram launched s-commerce functionality in 2018 and has continued to roll out tools such as in-app checkout, helping to shorten the booking window and enable more instant purchases directly with the consumer. This move helps it to branch out from the discovery and inspiration stage of the customer journey where it currently holds a strong position.
Brands on Instagram work to build up a community of followers, engaging with them directly that helps to demystify the brand and humanise it by crafting a personality. This is achieved by producing engaging content through photos, videos and stories to tell the brand’s story, values and messages. Integrating s-commerce functionality with search is a natural next step in providing a seamless user experience.
S-commerce will cause further disintermediation in the travel industry, where influencers will be able to sell travel products directly to consumers via sites like Instagram.
Sustainably-Proofed
With the Global Goals around the corner, the pressure is growing (despite the lack of success at COP25) to push forward with the sustainability agenda.
Airlines bear the brunt of criticism about how carbon-intensive their operations are, and in response have set targets to cap net emissions by 2020, making international flights carbon neutral, and halving emissions by 2050 compared to 2005 levels through the UN’s Corsair scheme. In the meantime, there is a sharp focus on energy efficiencies, finding alternative fuels and electric aircraft are being tested by the likes of easyJet and Airbus’s hybrid aircraft.
The consumer backlash to over-tourism and the need for sustainability has given rise to the flight shaming movement in the Nordics and the launch of the Southern Europe against Touristification (SET) network in the south. Such shifts in consumer attitudes will ultimately impact travel behaviour.
Digital tools have started to emerge, that calculate and display carbon emissions per trip, taking into consideration the different modes of transport, activities and lodging such as Carmacal and Climate Smart Vacation. Developing such tools that allow for transparency on carbon usage is an important step-forward in making carbon neutral the standard.
For further insight, please contact Caroline Bremner, Head of Travel Research.