WTM Vision Panel Discussion
LtoR Geoff Cowley (Hoseasons) , Paul Simmons (Easyjet), Andy Washington (Expedia), David Burling (TUI), Michael East
It was a great turnout at the #WTMVision conference in April as 150 travel industry players listened to Euromonitor travel expert Caroline Bremner sharing her predictions on global tourism over the next five years. Mark Frary from Social Travel Market and Travel Perspective then provided a visual feast of 10 travel takeaways on social media best practice. A lively travel industry discussion followed as shown above and expertly chaired by Michael East.
Travel growth shifts East, driven by low cost carriers
Euromonitor showed outbound travel growth shifting eastwards as the BRIC markets drive future growth and higher spend. Hong Kong now claims star city status with 21 million arrivals in 2011. The huge future growth of low cost carriers in the Philippines, Vietnam, Indonesia and India is a key driver although it will not overtake North American low cost air traffic. Caroline was quick to stress that even growth in emerging markets is likely to be affected by the double dip recession.
Source: Euromonitor International
Eurozone still a worry
The Eurozone gives the greatest cause for concern as youth unemployment remains high (22% in UK). The travel industry will have to get used to an uncertain future as even the resilient German traveller is showing restraint.
Slower global growth
The global economy forecast growth of 3.5%, revised down by IMF will have repercussions for travellers. Although the over 55s often take more than 4 holidays a year – 30% are cutting back on shorter trips. Those earning more than £100k a year are less affected providing some hope for the luxury travel market. Euromonitor claims the mid market priced hotels fared well in Asia Pacific and Latin America whilst budget chains led the way in North America. As First Choice becomes a 100% all inclusive brand, holiday rentals may also battle with all inclusive as the OTAs expand their accommodation offerings.
Source: Euromonitor International
Rail, medical tourism and shopping drive travel growth
The largest growth markets are forecast to be rail, medical tourism and shopping with cruise growing 2%, despite its recent adverse press. However unlike PhoCusWright, Euromonitor claims the US will retain its dominance of the online travel market and will not be overtaken by Europe.
Source: Euromonitor International
Quality is very important
Whilst the emphasis stays on providing value for money, quality is still an important factor when choosing a travel provider, with an increasing trend to independent booking of travel components online.
Travel booking goes mobile
Smartphones may become the dominant internet platform in emerging markets as usage surges ahead. Most surprising were the 40-70% estimates of mobile bookings for travel within 24 hours. Players like KLM now offer one hour response times on their social channels to meet demand for 24/7 customer service.
Differing opinions of future travel growth
Whilst Andy Washington at Expedia forecasts double digit growth, the speakers from Easyjet, Hoseasons and TUI were less optimistic. Market share will have to be grabbed from other players in a fairly static European travel market.
Easyjet is focusing on the business travel market with its new allocated seating and flexi fares. As airfares take a larger share of the travel costs, the length of stay for main UK outbound leisure trips is reducing from 14 to 10 days.
An Olympic feelgood factor?
Amongst the gloomy European forecasts, the Olympics and Queen’s Jubilee will drive UK domestic tourism growth as 70% of Olympics tickets are sold in the UK. Inbound traffic to the UK is expected to increase 2% in 2012. Expedia cites savvy inbound Olympic visitors booking cheaper fares into Glasgow as more hotel beds are released and prices come down.
The UK travel industry has little to celebrate yet with an uncertain Olympics legacy and Euromonitor not predicting major recovery in Europe’s travel industry until 2016. One thing the delegates agreed on was the importance of social media to build customer relationships in the tough years ahead.