Travel just isn’t what it used to be. It’s better. At least in some ways.
The hard part is keeping up. The business is changing fast. I become even more convinced of that when I ran across a report from Skift, a travel industry intelligence magazine based in New York City. The publication recently researched and compiled a list of what it deems the most powerful trends in the travel and hospitality business. And it found no less than a dozen trends it argues qualify as “mega” in their influence. Here is a rundown.
Hospitality is now driving innovation in travel. For the first time since online travel booking became mainstream, hotels are being rewired and rethought from top to bottom, and every obvious part of hospitality is being turned over, questioned and retooled. For all the hype airlines receive as the highest-profile sector in the global travel industry, for all the media attention online travel companies and new digital tools and services get, the future of travel — at the intersection of design and user experience — is being quietly charted elsewhere. The global hospitality industry — comprising the organized hotels sector, the vacation rentals sector and the still-nascent sharing economy sector — is driving all innovation in travel now.
The conferences and events industry is going through a creative renaissance. There exists what Skift calls an unprecedented systemic shift in the global conferences and events industry. TED/TEDx, South by Southwest, C2MTL, OpenWorld and a slew of new innovation/tech summits are leading the event industry renaissance, and more and more planners are taking notice and reworking their events. Skift says, “The rise of new event technology is affecting every stage of the event planning process. The traditional methods of learning and networking are no longer effective because everyone is so easily distracted by their digital devices within close reach. Event planners are building more interdisciplinary events by bringing new voices from new sectors into the experience to deliver more layered meaning and context. Next-generation attendees crave a creative mashup of global perspectives and intelligence pathways connecting thought leaders within and without their specific industry.”
The rise of boutique destinations. Sure you’ve been to New York City, but what about Sedona, Ariz., or Ashland, Ore.? The emphasis on local, unique experiences leading many consumers to eschew big brands in favor of boutique products is having a similar effect on how people choose vacation destinations, as well as how cities and regions market themselves. While destinations once chased the same trends found in big cities, they are now taking a long look at what they have to offer that is different.
The rise of ubiquitous booking. The most successful travel companies have always focused on the transaction, and the ability to book is becoming even more ubiquitous, flexible and mobile. Driven by mobile’s omnipresence, the proliferation of devices from laptops to wearables, and the desire to add elegance to the user experience, new companies such as metasearch players are scurrying to get involved in the booking process. As a result, it is becoming ever more streamlined and efficient.
Mobile pay and wearable tech move from concept to real-world disruptor. The travel industry will watch mobile payments and wearable devices newly combine, starting in 2015, creating powerful conversion-driving opportunities for brands. To start, the market for U.S. mobile payments alone will expand from $52 billion in 2014 to $142 billion by 2019, according to Forrester Research. Meanwhile, U.S. consumers have undergone a transformation already when it comes to mobile tech: only 19 percent of them owned a smartphone in 2009 but, as of 2014, 66 percent were carrying the devices.
Travel brands reimagine themselves as lifestyle connoisseurs. Customers, especially millennials, are seeking deeper connections to brands, their values and the lifestyles they represent. Travel is especially well positioned to take advantage of this. As lifestyle connoisseurs, brands are wielding creative content to drive customer engagement, loyalty and sales outside the traditional travel cycle.
The real and literal disruption of travel is a genuine threat. Travel does not exist in a vacuum. For many travelers the world has lost its mystery, thanks to the globalization of commerce, real-time Instagram uploads, tweets from distant lands, and the access that digital technology that gives them access to information from around the world. Want to see a 360-degree view of Machu Picchu? There’s an app for that.
The online travel duopoly won’t reign forever. The Booking.com/Expedia duopoly in online travel is solid at the moment, but trends are coalescing that could knock one or both off their perches, or at least change the current lineup. These two companies clearly dominate the global online hotel business, but it is easy to envision this changing. After all, at the start of this century, Travelocity was the leading online travel agency, and it is now a shell of its former self, having outsourced most of its operations to Expedia, which overtook Travelocity more than a decade ago and, in turn, was left in the dust by Booking.com.
Alternative travel is now a reality across the world. The sharing economy — once an indie endeavor — has gone mainstream. Book a room at big-box Marriott. Sign up for a packaged double-decker bus tour. Wait as the hotel concierge hails you a taxi and offers you restaurant recommendations. But you are isolated from the lives of people who actually live in the city you are visiting. This experience, a byproduct of limited access and awareness, was once the only way to explore a new city. That frustration has finally given birth to new options, giving travelers access to quaint East Village apartments, intimate walking tours led by local professors and community meals shared with strangers in Williamsburg lofts.
Downsizing on design and moving toward simplicity. The changes that digital innovation have brought about in consumers’ lives are perhaps most apparent in the absence of clutter in the physical world, as travelers move from car to train to plane to hotel room and even onto a convention floor. Travel brands are responding by downsizing, from slim-line seats on planes to smaller desks in hotel rooms, and using the extra space to either pack in more passengers or make room for new things travelers need. Bring your own device means travel providers with a solid wi-fi network can rethink how they use space and what they offer their guests.
Mobile is moving in-market. The past year was a seminal one for travel booking. According to data from eMarketer, 2014 marks the year when desktop online bookings peaked, and they are expected to decline by 1 percent to 2 percent every year for the next five years. Meanwhile, mobile booking is poised to grow exponentially during the next five years.
Travel brands look to Instagram for the influencer bump. Lots of things are shared, but what that translates into is still to be determined. Hotel brands and destination marketing organizations once saw travel blogs and social networks — especially Twitter — as the best new source of unfiltered insight into their hotel or destination. That didn’t turn out to be the boon everyone hoped. From SEO setbacks to viral hashtags that never translated into boots on the ground, the price of bringing a gaggle of bloggers and telling them what to write and how to market it has never quite achieved the hoped for return on investment. So now many travel brands are embracing the promise of Instagram influencers and what they have to offer. More immediate and viral than bloggers, this new breed of travel sharer promises to hit all the marks social media managers need — millennials, smartphones, visuals — and, hopefully, go viral.
Exhausted yet? If not, you can download a full copy of the 37-page Skift report here.
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Mike Consol is editor of Real Assets Adviser.
