So what are some of the key trends in the travel industry and where the industry could it be heading next?
These are takeaways from a talk by Mario Jobbe, COO and co-founder of Brand Karma, during a conference recently by Travelclick and Ideas in India.
Jobbe obviously highlighted social media, emerging BRIC countries (Brazil, Russia, India, China), rich media (video, pictures) and mobile, but perhaps most interestingly how so-called Generation Y will embrace (or not) these elements.
Asian millennial travellers (AMT) already account for nearly 35% of $600 billion spent by Asians on international travel. AMTs are expected to increase their travel spending by 1.6 times to $340 billion by 2020, mostly due to growth in their own personal income.
Among AMTs, Chinese are the largest spenders and seek "brand name destinations" for their vacations. Chinese millennials travel around four times a year. Indians travel twice a year with an average trip of five nights.
Perhaps somewhat weirdly, Gen-Ys define luxury as "Instagram-able experiences", not least that to the efforts of Australia's Instagram hotel, and Starwood's decision to include content taken by guests on their own, branded websites.
Another trend among millennials is "low touch luxury", ensuring minimal touch points with travellers. When this age groups checks in to a hotel, they typically do not want the same luxury (an end to end service) that their parents experience in similar properties, rather they want to remain independent and they will ask for help when needed.
The table below lists the classic marketing approach versus that of Generation Y. Here, "Evangelism" is empowering your customer with shareable experiences that they can talk for you.
On the social media front, apart from SMS, users are using mobile messaging apps such as Whatsapp, China-based WeChat, Japan's LINE, and Korea's Kaokao Talk. All of these products are ripe for innovation in travel industry, Jobbe says.
A few industry examples include:
- Japan Airline's JALION user community has over 5.7 million users.
- Starbucks used WeChat to promote its new "Refresha drink" in China. The pair jointly announced a campaign to encourage users to scan a QR code (which then opened Starbucks's WeChat account) in every Refresha drink cup, add Starbucks to WeChat and tell the company the "mood" of the user. Depending on the mood of the user, a song was played real-time there by refreshing the user's mind, in addition to providing a refreshing drink. This campaign gained Starbucks 270,000 WeChat fans (that was three times the expected target audience number), additional 525,000 Weibo fans, over $160,000 worth of PR, and more than 427,000 emoticons were shared with Starbucks.
Apart from using social media as a customer engagement tool, companies are also generating revenue out of it. Case in point - Starwood hotels created a Facebook page
and just posted deals across all of its brand hotels. The hotel spent a total of about $40,000 in marketing effort (Facebook ads), but ultimately generated a revenue of $2 million
Jobbe says over the next five years, hotel brands will expect the same ROI from social media channels and the other revenue generating channels such as Google ads.
Jobbe also highlighted five additional elements to keep an eye on:
- Virtual reality
- Quadcopter and Gopro camera
- The sharing economy: Airbnb
- The internet of things
- Wearable technology
The experience of Oculus virtual reality
, for example, can also be extended to the travel industry. For example, hotels can map their property features, and let customers experience the hotel/destination before they arrive.
And, using Quadcopter and Gopro camera, travel videos can be created for destinations:
NB:Young tourist image via Shutterstock.
NB 2: Travel to the conference was arranged by organizers.