Panel Moderator Gavin Ramjaun discusses the results from the WTM Global Trends Report with Euromonitor’s Caroline Bremner, Angelo Rossini and Nadejda Popova.
LONDON—At the Global Trends Report press conference on the opening day of the World Travel Market 2011, U.K. TV personality Gavin Ramjaun presented several key emerging trends.
Split into geographic regions, the report, compiled by Euromonitor International, focused on the way travel and tourism markets were responding to both the global economic downturn and also political unrest such as the Arab Spring.
Global arrivals were expected to slow down 5.8% from last year but by 2012 are expected to break the 1-billion arrivals barrier—amounting to a total spend of almost US$1 trillion. The global overview was of ‘recovery on the brink’ with the IMF predicting 4% global GDP growth in 2011, down from 5.1% in 2010. Rising fuel and commodity prices, taxation, austerity measures, political turmoil and social unrest were all found to have exerted some influence. Across all markets, online growth was considered to be without a doubt the most important growth area in the long term, with sales in the mobile device area very strong in the mid-term.
What follows is a list of key trends by region:
North America: mystery trips
“Mystery trips” are on the rise, particularly for popular milestone holidays such as honeymoons and birthdays. Luxury Link’s mystery auction and American Express’ Nextpedition provide hotels, airlines and online travel agencies to sell excess capacity in an opaque bundle that “brings back the element of surprise to the travel experience,” Ramjaun said. Millennials aged 20 to 34 are the main target of these trips, for whom luxury operators review customer profiles and customize mystery experiences for them.
Some other key stats from North America: During 2010, real GDP growth was 3.8% in North America but only 1.9% in 2011. Predictions for 2012 show an increase to 2.2%. Average hotel value in dollars saw 1.3% growth in 2010, 3.6% growth in 2011 and is estimated to be 2.9% in 2012.
U.K.: Rent a garden
“The outlook (in the U.K.) remains bleak with a stagnant economy,” Ramjaun said. Travelers are increasingly searching for alternative accommodation such as campsites and hostels, especially as hoteliers push rates in the buildup to the Olympics. 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 has 350 gardens listed, 80% of which are in the U.K.
The report also found that some London hotels are charging five times more during the Olympic period, and the International Olympic Committee is 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,” Ramjaun said. “In South Africa with the World Cup, arrivals were up 10%. It really is a once in a lifetime opportunity for the U.K. to take advantage of this.” Whereas in the U.K. hotel growth was found to be -5.4% in 2010 and -0.1% in 2011, 2012 predictions were up to 2.1%.
Europe: luxury without the guilt
The report found the focus was shifting towards “luxury without the associated guilt” in Europe, and therefore ethical and sustainable travel was showing a strong presence. There is an increase in use of “living walls” and “vertical farms” so that luxury hotels can have their own kitchen gardens. The high-end segment is outperforming its mid- and lower-tiered counterparts.
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The region as a whole is threatened by a double-dip recession, with increased volatility in the financial markets. Despite this, teal GDP growth remained reasonably stable at 1.8% in 2010, 1.5% in 2011. It is expected to be 1.4% in 2012. Spain, Italy and other bailed-out countries Ireland, Greece and Portugal continue to suffer with high debt and unemployment.
Middle East: rebranding
Arab Spring and other political unrest resulted in a 6.2% decline in tourism arrivals in 2011 compared to 11.5% growth in 2010. But rebranding efforts in regions such as Egypt and Tunisia will yield a bounce back in travel for the Middle East, according to the report.
New campaigns by Egypt’s tourist board are already underway. Bahrain’s summer festival attracted 83,000 visitors and it is thought that post-Gaddafi opportunities will open up in Libya, after an extensive restoration of the countries tourism infrastructure.
Tourist arrivals are expected to increase 1.3% during 2012.
Africa: Mobile commerce boosts travel
Africa was found to be 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 so they could 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.
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 enjoyed healthy growth but are expected to slow. In China, IHG renamed the Holiday Inn Express to ‘Smart Choice’ and the HND group acquired 20% of NH Hotels. Hotel companies continue to expand in China, with companies like Hilton Worldwide providing comforts such as food and amenities to outbound Chinese. Spending by Chinese travelers is expected to increase. Intra-regional travel is forecast to boost arrivals and incoming tourist receipts as more middle-class travelers explore the region for the first time.
Gamification of travel
Also highlighted as a key area of growth is the ‘gamification’ of travel, or the use of gaming dynamics in non-gaming environments. Interaction is key, with social media playing an integral part in building the brand. Online travel sales are expected to grow around 8% in value this year. The report found that gamification encourages people to share their experience. It appeals to 18-34 year olds and allows companies to target a specific market, build awareness, grow an online community and add information, competition, games and special offers. The report gave as an example Tourism Ireland’s ‘Ireland Town’ game on Facebook, where users can visit well-known tourist attractions in Ireland and share the experience with their friends. The campaign plans to engage 60 million people.
Global village—evolution of social media
On the subject of technology, the report found that hotels are fine-tuning their marketing to reach online audiences and capture social networks with friends and followers. Hotel chains were found to have embraced social media and to provide greater levels of customization. Global hotel chains are providing social media care teams and creating targeted events. A free-spa event in New York’s Madison Square boosted ‘likes’ for Marriott International, for example. For hotels, the benefits were seen as helping enhance brand awareness, opening direct lines of communication and enabling them to aim exclusive offers to online followers.