Mobile, video and peer-to-peer at the heart of the latest travel trends, with Asia in focus

When over 50,000 people gathered in London earlier this month, it could only mean one thing: the World Travel Market (WTM) had arrived. This massive event brings the travel and tourism industry together to network, negotiate and discover the latest industry research and trends, such as the new findings from the WTM 2013 Industry Report and WTM Global Trends Report. Based on results from both reports as well as best practices shared at WTM, ICEF Monitor presents tips and insights that can help work-and-travel providers, educational institutions and agents focus their appeal to prospective students and young travellers.

Asia's emerging markets

Travel trends often run parallel to international student recruitment trends, such as the rise in Canada’s popularity. The country has seen double digit year-on-year growth in the number of international arrivals from China (up 38%), Australia (12%), France (10%), and Mexico (9%). The opening up of visitor visas in 2009 is said to have contributed to China’s boom. Jon Mamela, Vice President International for the Canadian Tourism Commission said, “Historically, we viewed China as an emerging destination, but it’s on course to rank alongside the UK and Germany as one of our biggest source markets.” And yet, it seems the BRICS (Brazil, Russia, India, China, South Africa) are taking a bit of a back seat to other developing nations. Going back to the 2010 WTM report, "almost half (47%) of the industry saw the BRIC nations (minus South Africa at that stage) as one of the biggest growth opportunities until 2014, with almost one in three (28%) seeing them as the single biggest opportunity over the same period. But this latest report reveals that 28% of senior travel industry leaders say that BRICS nations are not important to their business"... despite, for example, China’s size and spending power and Brazil’s forthcoming tourism events (Olympics and World Cup). For the 72% of the senior travel executives who are still very much interested in BRICS, India ties with Brazil for third place in terms of it being the most important of all BRICS. The Global Trends report offers up reasons to pay more attention to the country: “Proximity and lower costs are helping young Indian netizens opt for Southeast Asian destinations such as Thailand, Vietnam, Cambodia and Bhutan. These are being promoted extensively by online travel companies through social media. Expedia India has led the way, advertising 50% off holiday prices to Thailand via Facebook. And while only 12% of the Indian population is online, Facebook claims to have 82 million users in the country, which makes India its third largest global market after the US and Brazil. India is predicted to have over 300 million Internet users by 2017, with more than 75% active on social media. Online travel retail sales in India are forecast to reach US $14.7 billion in 2017, following a 19% Compound Annual Growth Rate (CAGR) from 2012." The growth predicted for Asia is staggering, as these findings illustrate:

• "The World Travel and Tourism Council (WTTC) further projects that South Asia will have the strongest growth in travel and tourism’s direct contribution to GDP in the coming years - with a growth rate of 6.7%. Its ten year outlook is that South Asia will outperform all other world subregions with a 7.2% growth rate driven by increasing wealth in the middle classes.
• The UNWTO predicts the Asia Pacific region will have the largest increase in inbound tourism through to 2030 with an increase of 330 million international arrivals reaching a total of 535 million international arrivals by 2030 and a 30% global market share – the only region with an increasing market share through to 2030.
• Furthermore, research company Trimetric has four Asian countries in its Tourism Potential Index Top Ten. Singapore is first (due to the buoyant economies in key source markets of Indonesia, China and Malaysia), Malaysia is fourth, Thailand fifth, and Japan is at number ten.”

Asia is clearly a hotbed of emerging markets, as the WTM report backs. They spotlight Vietnam, Myanmar/Burma and Cambodia as up and coming destinations. And they note that SLIMMA markets (Sri Lanka, Indonesia, Malaysia, Mexico, Argentina) continue to show strong potential. The Philippines and Thailand were also identified for their travel and tourism potential. Some of the drivers of this emergence, which affect both inbound and outbound tourism, include infrastructure investment and the end of civil war in Sri Lanka, high disposable income in Indonesia and Mexico, aggressive marketing from Malaysia, and economic growth in Argentina. Note how each driver has the potential to impact upon each country’s education sector. For example, ICEF Monitor’s October 2013 Sri Lanka market snapshot discussed the country’s plan to update such educational infrastructure as accommodations and facilities. Similarly, with regard to income in Mexico, ICEF Monitor’s July 2013 Mexico piece cites a growing middle class and consumer expenditure on education rising 43% between 2002 and 2011.

Global travel outlook

The travel industry has been on the rebound following the global economic crisis. 2012 was the first year more than one billion (1.035 billion) global trips were taken, with the global youth and student travel market estimated to include over 200 million international trips. This year is poised to be even better with the UNWTO predicting a further 4% increase, as almost 500 million trips were taken in the first half of the year (an increase of 5%). By 2030, that number is expected to reach 1.8 billion people. Naturally, the industry is feeling optimistic as the new year comes into view: nine out of ten senior industry executives feel secure in their company’s prospects in 2014. Chief factors of concern that could negatively affect this growth include political instability in destination countries, taxes, and visa regulations. The latter has strong sway when it comes to student and traveller mobility. At WTM’s Ministers’ Summit, Taleb Rifai, Secretary-General of the United Nations World Tourism Organization (UNWTO) said, “In 2008, we had 77% of the world’s population requiring a visa before they arrived [in another country]. In five years, that 77% became 64%. That’s real progress, that’s real, real progress.”

He went on to explain that regional travel agreements would be the key to increase mobility: “There are now going to be eleven APEC (Asia-Pacific Economic Cooperation) countries that accept each other’s visas. Now, very soon a visitor to one country will be able to visit the other country without a visa.”

Not only does this open up opportunities for increased business in the tourism sector, language travel providers can also expect to reap rewards.

Mobile mania

Let's turn now to the influence of online and mobile channels on travel. “Online travel sales recorded another strong performance in 2012 growing by 8.4% globally to reach US $524 billion, or 25% of global travel and tourism value sales, and it is expected to continue steadily in the next five years at a 9.5% CAGR. Online travel growth was especially sharp in emerging markets, with Asia Pacific recording the highest increase at 19% in 2012." Have a mobile strategy cannot be stressed enough. “By 2017, the mobile channel is expected to account for over 30% of online travel value sales.” WTM’s report 2013 findings on traveller's behaviour and technology no doubt resonate with education providers. Three trends were clear:

• Booking via mobile Internet devices is a growing channel.
• Mobiles have increased people's customer service expectations. Customers now expect 24-hour real-time answers and more customisation of services, at all points before, during and after their trips.
• Mobile concierge services improve travellers’ holiday experiences and can deepen relationships between travel companies and customers.

Applied to the education arena, these facts support earlier data indicating that prospective students have increasingly higher demands for customised services. The report uses the suggestive phrase “deepen relationships,” meaning that institutions that make use of mobile technology can do so to cultivate a positive impression of their brands. For educational providers and student recruitment agencies, these findings offer further incentive to “go mobile” and develop 24/7 customer service touchpoints on mobile devices. Mobile concierges can offer customised welcome messages, updates or reminders regarding scheduled activities, maps of the campus and/or surrounding areas with important locales singled out, suggestions about nearby points of interest, guidance regarding meals and entertainment, and more. Some mobile concierge apps are GPS-based, allowing them to know where the user is at any given time and tailor information accordingly.

As travellers embrace mobile technology more, these concierge services will increase in popularity.

WTM reveals that smartphones and tablets will become the key customer service tool in the travel industry within the next five years, while Euromonitor International forecasts global smartphone sales to continue their climb. The areas expected to grow most within mobile concierge services include “personalised advice and customer assistance requests and feedback.”

Inspiration vs. advice

Strong support services throughout customer touchpoints is obviously important for a company's reputation, referrals and repeat business, but is that the main factor that draws consumers in? One distressing finding that kept WTM attendees talking was a fact from Yahoo’s survey of over 6,400 European travellers: only 3% of them were inspired by travel companies. Gary Bembridge of TravellersTips.com pointed out that rather than inspiration and anecdotes, travellers really want advice and tips foremost. When it came to specifics, advice on getting value for money was important to 54% of travellers, reviews and recommendations was important to 52%, and more general advice important to 48%. He stressed:

“One of the most important things for travellers is not inspiration; it’s risk reduction. It’s about content that confirms they are making the right decision and helps them make the most out of their limited travels.”

Google research suggests online conversion rates across the travel industry are between .3% and 1% - the reason for such low results? According to Sarah McDonald, Head of Holidays for Google, is that travel companies are not achieving their two main goals with their video content: inspiring customers and answering two key questions: “Is this holiday what it says it is? Is it right for me?”

Using video to inform and inspire

YouTube’s dominance on the web cannot be underestimated; it logs four billion searches a day and has one billion monthly users. In looking closer at video ads, Ms McDonald also revealed that approximately 15% of consumers watch the ads served up before YouTube content is shown and that in the UK, for example, click-throughs from those ads begin at GBP .03, making them very competitive when compared with other pay-per-click models. How do you create an ad that encourages viewers to click, or at least to watch? During a session on mobile video and travel, Reine Gammoh, Social Media Manager at WTTC, reminded us of one of her favourite quotes from online performance artist and vlogger Ze Frank:

“The most incredible gift you can give someone in a video is to help them feel less alone... The things that make us feel the most alone, have the greatest power to connect us."

Matt Carroll, Creative Director at Media Ark also spoke about the challenge to get people not to skip ads on YouTube. Although he admits that you can pay YouTube about GBP 5,000 to disable the ability to skip, thus ensuring your ad receives 100,000 views, this should not be the goal behind video production. Instead, the objective is to tell authentic, meaningful, relevant stories, conjuring up emotions such as inspiration, humour, and surprise and “appealing to humanity.” Mobile video is becoming a hugely important marketing channel for travel companies and tourism destinations. Based on his experience with Media Ark, Mr Carroll has found that videos achieve three times the click-through-rate on mobile devices over desktop views.

Next generation peer-to-peer travel

Finally, the Global Trends Report also highlights the expanding scope of peer-to-peer travel, as typified by home swaps, sofa-surfing, car sharing, short-term car hires, and other forms of pre-designed contact with local residents. Some of the companies that serve this sector include Airbnb, HouseTrip, Homeaway, Flipkey (recently acquired by TripAdvisor), Couchsurfing, Blablacar, Zipcar (recently purchased by Avis), Vayable, Touristlink, and a host of others. According to a recent article in Forbes, the European peer-to-peer accommodation market could grow to be worth USD 15.4 billion by 2017.

Experts predict that we will see more websites specialising in all types of peer-to-peer travel services, including accommodation, transportation, car rental, tours and activities.

According to WTM, three developments have helped spur growth in this corner of the travel landscape:

• The evolution of online commerce and social media have made sharing travel services easier, leading to new business models involving peer-to-peer options.
• As Europeans in particular seek cheaper travel options to counteract continued economic austerity, sharing travel services offers opportunities at lower prices than traditional methods.
• In addition to value savings, sharing travel services has the potential to offer more authentic travel experiences, something a growing segment of travellers, particularly youth travellers, actively seek.

In terms of the benefits offered, peer-to-peer travel is similar to the mentoring and buddy programmes already offered by many educational institutions. Such programmes are typically designed to increase the comfort level of incoming or current international students by allowing them to absorb the local knowledge of other students, a process not all that different from peer-to-peer interactions. While these mentoring services are popular and their implementation is expanding, the rise of peer-to-peer travel indicates that educational institutions could gain an edge by expanding the range of such programmes to encompass prospective students. A legitimate peer-to-peer option for visitors could tap into the growing trend of travellers seeking increasingly authentic localised knowledge. Because there are so many potential influencers of student satisfaction, brand advocacy from a peer could be instrumental in turning a “maybe” into “yes.”

Research background

The World Travel Market 2013 Industry Report is produced in association with Euromonitor International and is based on the findings of two independently conducted surveys. The first survey was a poll of 1,277 World Travel Market stakeholders comprised of tourist boards, private sector travel industry organisations, and senior members of the WTM Buyers’ Club. The second survey targeted 1,001 British holidaymakers, representing a cross-section of the UK public in all regions and income brackets.