The future of Travel & Tourism: Technology is driving significant change growth is on the horizon
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 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.
KEY HIGHLIGHTS
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 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.
KEY HIGHLIGHTS
- 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
- 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?
Executive summary
Airline industry is striving for innovation amid difficult trading conditions
Hotel market not changing as dramatically as once thought
People are going on different types of vacation, changing the market
The business of selling holidays is changing
The Travel insurance industry has many options for innovation
Airline industry is striving for innovation amid difficult trading conditions
Sustainable airlines are minority in industry where margins are thin
Consolidation is reaching logical limits in United States - Europe will likely follow
Ancillary and additional charge revenue becoming more important to airline balance sheets
Online platforms now attracting large investments from leading players
Airlines are harnessing social media in bid to attract larger audience
Hotel market not changing as dramatically as once thought
The global hotels market is growing quite well driven by key trends in technology
Global occupancy rates are good particularly in Europe and Asia
The UK is about to experience a large spike in room numbers
Airbnb is a popular phenomenon, but hotels are strong regardless
Airbnb can never standardize its service the way hotels can
Airbnb is trying to move into the enormously lucrative business space
Airbnb might need to consider a substantial rewards system
There has been a boom in hotel booking websites, who have considerable power
Attracting millennials to hotels is entirely possible with some changes
People are going on different types of vacation, changing the market
Helped by growing interest from new markets, cruises are attracting enough attention for the fleet to expand
Prone to fluctuations caused by outside influences, package vacations are here to stay
More people are choosing to travel alone, changing the focus of travel and tourism market
City trips are set to dominate travel and tourism for a long time to come
The business of selling holidays is changing
Online is now the dominant method of buying and selling holidays
Tourist boards and travel companies now increasingly use Instagram to reach customers
Holidays with millennials are less traditional and tend to favor “instagramable” experiences
Prices are now similar for Instagram posts and for TV advert buys
Deploying technology to help improve and sell the holiday experience
Deploying AR and VR as a method of selling holidays and showcasing the experience
Using the Internet of things to customize and sell
The Travel insurance industry has many options for innovation
The insurance industry has been slow to evolve but is now changing significantly due to disruptors
Personalized products and increased connectivity are a boost to convenience
Full automation is a prime example of how costs savings can be made
Big data is changing how insurers do business, allowing better fraud detection and tailoring policies to individual consumers
The development of flight delay policies is a major benefit
The nature of the travel insurer is going to change
Key Findings
Appendix
Sources
Further Reading
Ask the analyst
About MarketLine
Disclaimer
Airline industry is striving for innovation amid difficult trading conditions
Hotel market not changing as dramatically as once thought
People are going on different types of vacation, changing the market
The business of selling holidays is changing
The Travel insurance industry has many options for innovation
Airline industry is striving for innovation amid difficult trading conditions
Sustainable airlines are minority in industry where margins are thin
Consolidation is reaching logical limits in United States - Europe will likely follow
Ancillary and additional charge revenue becoming more important to airline balance sheets
Online platforms now attracting large investments from leading players
Airlines are harnessing social media in bid to attract larger audience
Hotel market not changing as dramatically as once thought
The global hotels market is growing quite well driven by key trends in technology
Global occupancy rates are good particularly in Europe and Asia
The UK is about to experience a large spike in room numbers
Airbnb is a popular phenomenon, but hotels are strong regardless
Airbnb can never standardize its service the way hotels can
Airbnb is trying to move into the enormously lucrative business space
Airbnb might need to consider a substantial rewards system
There has been a boom in hotel booking websites, who have considerable power
Attracting millennials to hotels is entirely possible with some changes
People are going on different types of vacation, changing the market
Helped by growing interest from new markets, cruises are attracting enough attention for the fleet to expand
Prone to fluctuations caused by outside influences, package vacations are here to stay
More people are choosing to travel alone, changing the focus of travel and tourism market
City trips are set to dominate travel and tourism for a long time to come
The business of selling holidays is changing
Online is now the dominant method of buying and selling holidays
Tourist boards and travel companies now increasingly use Instagram to reach customers
Holidays with millennials are less traditional and tend to favor “instagramable” experiences
Prices are now similar for Instagram posts and for TV advert buys
Deploying technology to help improve and sell the holiday experience
Deploying AR and VR as a method of selling holidays and showcasing the experience
Using the Internet of things to customize and sell
The Travel insurance industry has many options for innovation
The insurance industry has been slow to evolve but is now changing significantly due to disruptors
Personalized products and increased connectivity are a boost to convenience
Full automation is a prime example of how costs savings can be made
Big data is changing how insurers do business, allowing better fraud detection and tailoring policies to individual consumers
The development of flight delay policies is a major benefit
The nature of the travel insurer is going to change
Key Findings
Appendix
Sources
Further Reading
Ask the analyst
About MarketLine
Disclaimer
LIST OF FIGURES
Figure 1: Air-France KLM net income 2005 to 2017 (EURm)
Figure 2: Air Berlin
Figure 3: Ryanair net income 2007 to 2016 (EURm)
Figure 4: MyRyanair App
Figure 5: Emirates Instagram page
Figure 6: Global hotels and motels market 2012-2016
Figure 7: Hotel chains and Airbnb valuation compared Sept 2017 $bn
Figure 8: Airbnb and hotel prices compared in US cities $
Figure 9: Net income of the top public hotel chains ($m)
Figure 10: Hotel chains and Airbnb total room listings millions
Figure 11: Hilton Canopy hotel room, Reykjavik
Figure 12: Fincantieri shipyard, Trieste
Figure 13: Global hotels and motels value ($bn) 2010 to 2016
Figure 14: Traveling alone growing in popularity
Figure 15: Seville, Spain
Figure 16: Survey, customers that booked a holiday through channel in 2017
Figure 17: Age groups and their preferred methods of booking holidays
Figure 18: Survey asking 1000 millennials the most important factors when booking holidays
Figure 19: Travelling focused on social media content
Figure 20: Instagram holiday destination content and products
Figure 21: AliveCor Kardia EKG analysis app for i-watch
Figure 22: Allianz travel smart app
Figure 1: Air-France KLM net income 2005 to 2017 (EURm)
Figure 2: Air Berlin
Figure 3: Ryanair net income 2007 to 2016 (EURm)
Figure 4: MyRyanair App
Figure 5: Emirates Instagram page
Figure 6: Global hotels and motels market 2012-2016
Figure 7: Hotel chains and Airbnb valuation compared Sept 2017 $bn
Figure 8: Airbnb and hotel prices compared in US cities $
Figure 9: Net income of the top public hotel chains ($m)
Figure 10: Hotel chains and Airbnb total room listings millions
Figure 11: Hilton Canopy hotel room, Reykjavik
Figure 12: Fincantieri shipyard, Trieste
Figure 13: Global hotels and motels value ($bn) 2010 to 2016
Figure 14: Traveling alone growing in popularity
Figure 15: Seville, Spain
Figure 16: Survey, customers that booked a holiday through channel in 2017
Figure 17: Age groups and their preferred methods of booking holidays
Figure 18: Survey asking 1000 millennials the most important factors when booking holidays
Figure 19: Travelling focused on social media content
Figure 20: Instagram holiday destination content and products
Figure 21: AliveCor Kardia EKG analysis app for i-watch
Figure 22: Allianz travel smart app
