IN-DEPTH The travel industry is growing globally but the geographical and technological balances are shifting. The Internet continues to be ascendant and disruptive in its ability to change the way the travel industry operates.
By Ritesh Gupta
2011 was marked by several external challenges to tourism and the travel industry. But there is plenty to look forward to this year, be it for spotting the growth markets or even the way consumers are going about their travel planning and buying process.
Significantly, Asia’s travel market is growing steadily despite facing tougher market conditions and a global economic slowdown.
“2012 looks to be another challenging year with the economic situations in Europe and America. Japan and Thailand are also still going to be recovering from their recent events: earthquake and flood respectively. However, if key markets like China and India continue bucking recessionary trends, we may see an increase in the demand for travel services,” says Robert Bailey, president and CEO of Abacus International, who is scheduled to speak at the forthcoming Travel Distribution Summit Asia 2012, to be held in Singapore (May 9-10) this year.
While there have been upticks in areas such as business travel, the consumer space is in constant flux.
In addition to the geographic evaluation as part of their business strategy, travel businesses also need to focus on areas of innovation - social, local, and mobile.
It’s clear that technology will continue to shape the future of this industry in a big way. The fact that the Asia travel landscape still remains robust and dynamic, fuelled especially by the growth of mobile growth, exemplifies the same.
In order to know more about the current sentiments regarding the marketplace, EyeforTravel's Ritesh Gupta spoke to senior industry executives about various topics. Excerpts:
Robert Bailey, president and CEO of Abacus International (top travel trends in 2012):
1. The Growth in Mobile – an invaluable resource in 2012 – there are always things going on in the mobile space, with leading players like Kayak now getting the hang of right-sizing the right functions on the mobile platform. In 2012, what will be interesting is to see how these players can push the envelope even further. Instead of treating the mobile platform as a down-sized version of the web, to look at building travel applications that can only be used with today’s smartphones. These apps would be able to integrate great content with the traveller’s social graph as well as location-awareness.
2. Adoption and usage of HTML5 – even though it is part of the mobile platform, HTML5 has emerged as the preferred standard against native apps. While many apps have now been ported to multiple platforms, most of the ported apps are just copies of the original and do not take advantage of the native platform. In this case, companies may be better off building the app in HTML5 instead of going through the process of porting apps. Of course there will be applications do work better as apps, but travel is so dynamic and the user base so dispersed that it makes sense to focus on HTML5 as the standard.
3. Tablets – 2011 saw mobile devices become the primary focus of most applications. In 2012 however, we should see some applications beginning to target tablet users. With a larger screen and increased storage capabilities, the tablet has emerged as a serious contender to replace most of the functions of the desktop or laptop for most end users. Shared capabilities with smartphones such as GPS, touchscreen and rotational view also make it more intuitive as a travel research tool.
4. Aggregation – Travel remains a very fragmented space, but we are beginning to see more providers making their content and services available via web services. 2012 should see some interesting applications which aggregate content from a variety of sources instead of the usual approach of putting points on maps.
5. Social Networking Sites – Social Networking Sites (SNS) have been an area to watch for some time. However, due to the lack of a compelling model, this has yet to really take off. With the increase of smartphone usage, especially in Asia, companies, including travel players will continue to find the right way to utilise this phenomenon.
Adrian Currie, Group Management Board Member, Priceline.com:
1. The global tourism industry will continue to grow as traveller numbers increase and suppliers expand product choice. However, it will continue to be impacted by numerous positive and challenging forces – examples being the wonderful promotion of New Zealand by the 2011 Rugby World Cup set against the devastating earthquakes seen in the city of Christchurch.
2. Chinese travellers will continue to become an increasingly important component of the travel industry mix (e.g. China is already Australia's largest source market in terms of economic value). Hospitality suppliers will need to continue to adapt their distribution, marketing and operational strategies to meet the needs of these consumers who are increasingly focused on more individual, high-quality experiences.
3. London will host a wonderful Olympic games (“the best ever”) albeit in the middle of an austere economic year for the UK and Continental Europe.
Ali Yilmaz, head of Travel, Google Southeast Asia (on online consumer trends and behaviours, and mobile):
1. Search will become personal. You will have a chance to see personal search results. This means, when you search for “hotels in Ho Chi Minh City”, you might see a colleague’s reviews about a hotel on a review site, a college friend’s pictures on a photo website, your brother’s video about the Cu Chi Tunnels on YouTube or a business page of a local Vietnamese Travel Agency on Google+. So search results will become more personal, more social and most importantly more relevant.
2. Air Travel will grow and become digital in Asia. There will be an inevitable growth of air travel in Asia. It will either be in the form of more aircraft being ordered, more budget airlines coming into the game, new destinations opening or more flight aggregators taking the stage. Regardless of any or all of these happening, they will have to become more digital. Airlines will have to adapt to the digital consumer faster than their counterparts in US and Europe otherwise they will fail.
3. Travel players in Asia will have to adapt to the digital consumer. Travel players have to realise the local trends in Asia. Asian traveller is becoming way more digitised faster than the rest of the world and mobile is taking the stage faster than the desktop in the region. The classical approach of “desktop first mobile second” approach will fail in Asia as the consumer leap-frogged the desktop. Travel industry players have to realise that Asia is skipping some of the Internet evolution steps and catching up with the rest of the world.
Edward Perry, Global Senior Director of Social Media, OTA Partnerships and Innovation Projects, Worldhotels (2012 predictions in terms of hotels and social media):
1. Social Media Evangelists will take a great role in the life of a hotel/hotel group.
In the past, social media has been treated as almost an experimental part of hotel operations. I predict that in 2012, hotels/hotel groups will seek to integrate social outreach into all aspects of a hotels business: sales, front desk, housekeeping, customer service, operations, food & beverage, etc. Social networkers will play an instrumental role in assisting team members to understand the role they plan on the social graph.
2. Social Media Focus ROI will shift from ROI to ROE (Return On Engagement)
As we all grappled in the past to measure return on investment of social media, our main focus was to find a financial return on investment. As we mature in our understating of social media outreach methods, we have learned that social media plays a far greater role than incremental room nights In 2012, we will see that social media is the glue to our success as hospitality providers. Social media professionals will mold the customer experience that has been initiated by traditional marketers and sales professionals. They will also bring the experience back on track when things do not happen as smoothly as anticipated through a collaboration of every member of the Team.
3. Every hotel will have a social media professional in 2012…period.
Gone are the days when hotels could take a backseat to social media. Equally passé are the conversations of how busy we all are to even think about social media. At this point in our reality, our customers expect us to be savvy in relating to them in a “social” manner. If our customers have a general expectation of us, we need to respond responsibly as an industry. In 2012, every hotel and every hotel group will need at least one social media professional to monitor the “buzz”. Our customers will no longer accept any excuses.
May 2012, Singapore