The Top 5 Travel Trends for 2012: what the experts are thinking

Keeping on top of trends in an industry that has changed dramatically over the past few years is no mean feat.

With EyeforTravel’s Travel Distribution Summit Asia 2012 nearly upon us we identify the five hottest travel topics for 2012 and share insights from some of the event’s foremost speakers.

 

Many of the biggest issues facing travel firms in all corners of the world are fairly similar but what differs is the level of development of individual markets and where consumers are at.

Here are the Top 5 travel trends to affect the APAC region that will be top of the agenda at next week’s event:      

1.     The world is increasingly social and mobile - think smart-phones, tablets, e-readers - and is inhabited by rising numbers of tech-savvy consumers. Social and mobile are not going away so now more than ever travel companies must keep pace

The use of social media and rising numbers of people searching the web via mobile phone will continue. A recent Google whitepaper found the number of users researching travel via their mobile devices is expected to grow 51% in 2012. In APAC the case is equally compelling; over 15% are projected to book travel products and services via mobile by 2013.  While hotel bookings made via a mobile in Asia are lower than elsewhere, this is changing rapidly. What is more, Asia has the largest number of mobile subscribers in the world (2.1 billion) with a forecasted growth of 50% by 2020.

According to Stu Lloyd, senior director for marketing and membership services, Pacific Asia Travel Association (PATA), mobile bookings “are rising fast especially as some countries like Indonesia and the Philippines leapfrog the use of landlines altogether. Indonesia is also one of the most social-media connected markets in the whole world”.

But are companies ready? According to an EyeforTravel survey of over 500 APAC travel brands in late 2011 57% admitted confusion over how to launch, track and achieve ‘mobile success’. While some players, like Kayak, are getting to grips with the mobile platform there is still work to be done.

Instead of treating the mobile platform as a down-sized version of the web, 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,” says Robert Bailey, president and chief excecutive of Abacus International.

And of course we should not forget about tablets which are emerging as a strong contender to replace the laptop and desktop for many users.

2.     Understanding, influencing, differentiating and delighting a customer during all stages of the travel experience will be the key to survival

There are a number of ways to do this. Do you choose Facebook or Twitter, Pinterest or Google Plus? Do you throw your energy into all of the above? VisitBritain, the national tourism agency for Britain, has certainly used Facebook to innovative advantage. It has used the channel in a range of ways including to seed commercial partner offers, amplify VisitBritain.tv videos, share amazing images, deliver ‘buzz’ content, engage with people touring Britain, inspire people to experience all the country has to offer and engage with them once they have returned home in the hope they will share.  

“There is so much you can do on Facebook it really is a marketer’s dream channel where everything is driven by user-insight and interactions,” says Philip Taylor, head of digital, VisitBritain 

Another likely trend is that social media evangelists are expected to take on a greater role in the life of a hotel or hotel group.

“In the past, social media has been treated as almost an experimental part of hotel operations. I predict that in 2012, hotels or 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,” reports Edward Perry, global senior director of social media, OTA partnerships and innovation projects, Worldhotels.

2.     Travel search is becoming more complex and must increasingly focus on personalisation and socialisation

Google’s entry into the travel vertical was probably most significant development of 2011. But nor can Baidu’s investment in Qunar be ignored either. Of course everybody is expecting Google to deliver with its new products but there is a widely held view that the issue of obtaining data won’t be solved by any one player in the future.

“ITA [which Google has acquired] has always been a brilliant solution for searching from the US point-of-sale but from most Asia-Pacific markets they are missing nett fares, paper fares and web only fares as well as the all important LCC [low-cost] fares. This is true for a lot of Europe also,” says Ross Veitch, chief executive of Singapore-based meta-search player Wego.

So there is certainly space for competition. As Veitch points out the main focus right now should be “doing the core stuff better”.  In other words more partners, accuracy, more third-party data and speed.  “Beyond that the main areas of cumulative focus seems to be on mobile site development, app development, UI innovation, social graph integration and so on,” he says.

Also don’t forget about search becoming personal which is top of mind for Google’s head of travel in Asia.    

“Search will become more personal, more social and most importantly, more relevant,” stresses Ali Yilmaz, head of Travel, Google Southeast Asia.  

For Google, what this means is that you will start to see personal results. When you search for ‘hotels in Ho Chi Minh City’, for example, you might see a colleague’s thoughts about about a hotel on a review site, a college friend’s pictures on a photo website or a business page of a local Vietnamese Travel Agency on Google Plus. So search results will become more personal, more social and most importantly more relevant.

We are not there yet but it is getting there. Search is complicated and keeping a close eye on Google – and players like Baidu - is imperative.

4.     Domestic and international travel will continue to grow rapidly in APAC so understanding the consumer in these markets and innovating for a growing middle class will yield benefits     

China and India's online travel markets boasted the greatest overall travel market growth and hotel bookings in 2011. Spend by Chinese travellers on travel accommodation domestically and abroad is expected to increase by 20% over 2010 -2015 to reach US$67 billion. In Asia the most noticeable growth trend is intra-Asian travel and many are seeking to capitalise on this. According to a recent Hotel Price Index by Hotels.com in India there has been a clear price rise at hotels in popular destinations across the country; New Delhi’s hotels are up by as much as 9%.  

“Two words: Middle Class. Middle Class is a strong indicator of travel intent, desire and ability,” says PATA’s Lloyd.

We have already mentioned a growing middle-class but Lloyd offers some eye-watering statistics: China is producing 25,000,000 new people classified as ‘middle class’ each year, and Indonesia will soon reach 60,000,000 of its population deemed to be middle class. India, too, cannot be ignored for the same reasons.

Tailoring offerings to local markets will be essential and there are some early pioneers in the space. This will mean understanding how consumers plan trips, engage with social media (and not just global brands like Facebook either) book in different markets and so on.

“Hospitality suppliers will need to continue to adapt their distribution, marketing and operational strategies to meet the needs of these [Asian] consumers who are increasingly focused on more individual, high-quality experiences,” argues Adrian Currie, group management board member, Priceline.com.

5.     All businesses aim to thrive so revenue generation across all platforms will be an ongoing theme. And of course the inevitable return on investment question from social media and mobile efforts is not going away either   

Maximum profits are the ideal but given the unpredictable nature of the world we live in – an economic crisis one minute, an earthquake the next, there cannot be a one-size-fits-all approach, stresses Douglas Hesley, director APAC RM, Four Seasons Hotels & Resorts.

His advice is to be proactive rather than reactive. Organisations that want to successfully navigate through the future will need a comprehensive strategy that positions them for growth during bullish times as well as successful recovery during the bearish periods. The primary focus of revenue management will always be identifying the right price for a product – for the right time. “As an industry, we are shifting our approach from cost-based logic to value-based pricing for both core and ancillary products,” he says.  

When it comes to measuring return on investment there is clearly work to be done. Consider this: 67% of APAC travel brands claimed to have deployed social campaigns in 2011 but nearly 55% said they were confused about how to effectively track and measure return-on-investment.  That can change but you need to know what you are trying to achieve.

Here is one word of advice from Barbara Pezzi, director analytics & search optimization at Fairmont Raffles Hotels International who will be speaking at this year TDS Asia.  “Make sure you take into account savings in your profit calculation but do not create or use intangible ‘made up’ metrics like the ROI of a Facebook ‘like’ or a twitter follower. It is a simple case of costs vs profits. If the investment is in $, then so must be the outcome, not followers, likes or clicks.”

When it comes to mobile, knowing where to invest for maximum return is certainly no easy task. But there are some innovative solutions emerging from the early adopters who have identified the total-trip experience as a core area for development.

The traveller should have the ability and accessibility to his or her scheduled meeting dates, restaurant, hotel, flight bookings and son from a single mobile point. Think of the commercial, revenue generating implications of this for up-selling timely and relevant travel products and services. The potential for travel brands is truly enormous.”

Brett Henry, vice-president marketing, Abacus International

Other issues to think about are how adoption and usage of HTML5 pans out (will it become the standard?) and how mCommerce evolves in the coming year. Findings by Penn-Olson in 2012 were that 69% of Asian consumers were keen to use their mobile for payment.  Much of this will rely on Near Field Communication (NFC) technology, which is available in most of the newer smartphones. So we should see a shift from barcode swiping technology to encompassing NFC utilisation once the infrastructure is in place, says Henry.

It goes without saying that these are exciting times in Asia Pacific for online travel and the stage is set in Singapore for two action-packed days. We are expecting heated debate, cutting-edge trends and expert predictions on the next phases in the evolution of online travel by 75 the foremost APAC industry experts. A handful of these have been quoted above. A very limited number of places are still available, for more information please email marco@eyefortravel.com

 

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