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The future of Travel & Tourism: Technology is driving significant change growth is on the horizon Summary Travel and tourism accounts for more than one-tenth of global GDP making it one of the most important industries there is. After a long period of fairly limited innovation the industry is experiencing a new time of significant change that is beginning to change the nature of the industry. More than any other factor, technology is driving this change causing businesses in the industry to r
The future of Travel & Tourism: Technology is driving significant change growth is on the horizon
Travel and tourism accounts for more than one-tenth of global GDP making it one of the most important industries there is. After a long period of fairly limited innovation the industry is experiencing a new time of significant change that is beginning to change the nature of the industry.
More than any other factor, technology is driving this change causing businesses in the industry to rethink their business model and adapt to the times to better engage with their customers. The future of the industry is going to be recognizable, but there will certainly be new types of products that take advantage of the fact that travelers are now increasingly mobile, constantly connected and demanding new and unique experiences.
- Many have alluded to the rise of Airbnb as indicator of the end of the dominance of the big hotel chains and Airbnb has brought some changes to the industry, but ultimately the big hotel chains are growing well regardless. The future of the industry is likely to include Airbnb as a significant player that offers the most rooms, but Airbnb is best viewed as more of a marketplace for property owners than a hotel industry threat, because they operate in very different segments.
- Despite this though the future of the hotel industry will require some flexibility and change on the part of the hotel industry, because there are some new requirements coming from younger generations and from business customers that want more leisure and experiences built into their hotel stay. This requires expensive redesigns of some chains if they intend to cater for this trend.
- Not regarded as a market prone to sudden changes, vacations have been experiencing gradual development of late due to adjustment to developing consumer tastes. Now a growing part of the market and attracting investment, cruises are attracting new audiences. Package vacations have survived numerous dips following terror attacks around the world, and appear set to remain the mainstay of vacations.
- The market is adapting to the rise in solitary travelers and continued popularity of short-term city breaks, marking a departure from the traditional two-week vacation. Those companies best able to survive the transition to modern consumer tastes stand to prosper over the long-term
- The airline industry continues to experience periods of flux. Not only are flag carriers across Europe struggling to counter budget airline expansions, but consolidation could become a more prominent feature as airlines attempt to replicate the rise of profitability recorded in the United States. What leading airlines are expected to do is changing; so to is how revenues are generated. Social media and online platforms are of growing importance, inciting growth in the importance given to those areas.
- Examine the Airline industry and how its changing to deal with difficult market conditions
- See how the hotel market is dealing with the threats from new entrants
- Look at the types of holidays that are popular in the travel and tourism industry today
- Examine the opportunities for the travel insurance industry and what the future of insurance might look like
Reasons to buy
- What are the major changes developing in the travel and tourism industry?
- What might the future of the industry look like?
- How are the hotels, airlines and insurance industries preparing for the future?
- What are the big trends in the industry and what products and sales techniques are prospering? Table of Contents
Executive summary 2
Airline industry is striving for innovation amid difficult trading conditions 2
Hotel market not changing as dramatically as once thought 2
People are going on different types of vacation, changing the market 2
The business of selling holidays is changing 2
The Travel insurance industry has many options for innovation 3
Airline industry is striving for innovation amid difficult trading conditions 8
Sustainable airlines are minority in industry where margins are thin 8
Consolidation is reaching logical limits in United States - Europe will likely follow 9
Ancillary and additional charge revenue becoming more important to airline balance sheets 10
Online platforms now attracting large investments from leading players 11
Airlines are harnessing social media in bid to attract larger audience 12
Hotel market not changing as dramatically as once thought 14
The global hotels market is growing quite well driven by key trends in technology 14
Global occupancy rates are good particularly in Europe and Asia 15
The UK is about to experience a large spike in room numbers 15
Airbnb is a popular phenomenon, but hotels are strong regardless 16
Airbnb can never standardize its service the way hotels can 17
Airbnb is trying to move into the enormously lucrative business space 18
Airbnb might need to consider a substantial rewards system 19
There has been a boom in hotel booking websites, who have considerable power 19
Attracting millennials to hotels is entirely possible with some changes 20
People are going on different types of vacation, changing the market 22
Helped by growing interest from new markets, cruises are attracting enough attention for the fleet to expand 22
Prone to fluctuations caused by outside influences, package vacations are here to stay 23
More people are choosing to travel alone, changing the focus of travel and tourism market 24
City trips are set to dominate travel and tourism for a long time to come 25
The business of selling holidays is changing 27
Online is now the dominant method of buying and selling holidays 27
Tourist boards and travel companies now increasingly use Instagram to reach customers 28
Holidays with millennials are less traditional and tend to favor ?instagramable? experiences 29
Prices are now similar for Instagram posts and for TV advert buys 30
Deploying technology to help improve and sell the holiday experience 31
Deploying AR and VR as a method of selling holidays and showcasing the experience 32
Using the Internet of things to customize and sell 32
The Travel insurance industry has many options for innovation 34
The insurance industry has been slow to evolve but is now changing significantly due to disruptors 34
Personalized products and increased connectivity are a boost to convenience 34
Full automation is a prime example of how costs savings can be made 34
Big data is changing how insurers do business, allowing better fraud detection and tailoring policies to individual consumers 35
The development of flight delay policies is a major benefit 37
The nature of the travel insurer is going to change 38
Key Findings 40
Further Reading 41
Ask the analyst 42
About MarketLine 42