Social media and mobile technology will dramatically change the face of the tourism industry in future, according to a new report.

Published: 05 Jan 2011

Social media and mobile technology will dramatically change the face of the tourism industry in future, according to a new report.

The ITB World Travel Trends Report 2010/2011, prepared by IPK International, has highlighted that holiday tips from friends worldwide, interactive bookings and mobile travel guides at the destination will become the norm in years to come. Excerpts from the report:

Travellers are active social media users

Around the world more and more travellers are using social media. In the USA, about 52% of the 152 million adult leisure travellers – or some 79 million people - already use social media, Laura Mandala, managing director of US-based Mandala Research, reported. They represent an attractive customer segment generating $102.9 billion for

the domestic US tourism sector compared to $69.5 billion from non-social media users. Their greater impact is driven by a higher average number of trips (5.4 per year vs 4.2), although they spend less per trip on average. A high 41% of US online leisure travelers have become ‘travel social fans’ (TSFs), signing up as friends, fans or followers of travel suppliers on social networking sites, she said.

US social media users tend to be active on Facebook, read other social sites, use the Internet intensively for travel information, check out hotels on TripAdvisor and use online travel retailers such as Travelocity and Expedia, the American tourism researcher explained. But only a low 20% rely on social sites for leisure travel information and

websites are trusted much more than social networks. Like non-social media users, they still rely heavily on traditional sources for trip information, such as friends and family, brochures and diverse media.

“These figures shows that travel in social media is still at an early stage,” Mandala commented. “Destinations should thus get into social marketing but they must establish trust with the users. Credibility and dependability are critical,” she stressed. Travel suppliers should segment the social media target audience into different types, select

their targets and then position their product with a distinct image, she recommended. At present, the travel industry spends only a low sum on marketing via social media and has few effective ways of measuring the success of its activities, according to research.

Mobile technology takes off

The dramatic success of smart phones such as the iPhone over the last few years opens up exciting new opportunities for the travel industry. As many as 40% of international travellers already own a smart phone with Internet and e-mail access and other functions, while 57% have a conventional mobile phone (2% still do not have a mobile phone), this year’s World Travel Monitor revealed. More than 40% of smart phone owners already use their devices to get destination information, and 34% of business travellers / 26% of leisure travellers use them to make booking changes during their trip.

Unsurprisingly, more and more travellers are also using social networks by mobile access during their trips. As many as 37% of international leisure travellers say they use mobile social networks, according to the World Travel Monitor. This means holiday photos and other contents are being posted online on sites such as Flickr or Facebook while the traveller is still at the destination.

A flood of travel apps

The travel and tourism industry is already responding to this growth with a flood of apps that are proving popular, Mats Staugaard, head of Norwegian consulting firm Infinite Loop, told Pisa participants. Tripadvisor, for example, was the most-downloaded app for a year due to its useful content. However, the industry should be sure to develop products for all smart phone types, not just iPhone, and also consider mobile websites rather than apps, he suggested.

Non-travel companies and organizations are also targeting the sector with various applications. For example, Wikihood, the new Wikipedia iPhone product, is designed to organise and display “the world’s knowledge about any location worldwide” with text and images, including cultural information. According to their website, “you can go on

a virtual city tour using the new, enhanced map component which can show all locations as pushpins along with their picture on a satellite or schematic map”. Based on GPS location-fixing technology (a new ‘mobile mega-trend’ according to Staugaard), this is effectively a personal tour guide in a smart phone.

“I spy with my mobile eye”

A powerful new tool for the tourism sector could be the combination of GPS with the in-built camera which can be developed into so-called ‘augmented reality’. This refers to viewing something through the smart phone camera combined with additional screen displays of information or images. This creates an interactive display of the user’s

immediate surroundings. LonelyPlanet has already launched interactive city guides for smart phones featuring this technology.

Destinations are now starting to take advantage of augmented reality. The Dutch Tourist Board, for example, recently launched such a smart phone app under the name “Holland-layer” using the free Layar Augmented Reality technology. Consumers firstly download the app to their smart phone and can then use the phone’s camera to call up location-based tourist information and get directions. Information is generated from the tourist board’s database covering 17,000 points of interest in the country. “As a visitor to Holland you’ll have access to all the relevant touristic information and explore the country in a whole new way... For example, if you are standing on the Museumplein in Amsterdam and activate the Holland-layer, you’ll be able to access all the information on attractions and museums nearby and it will even point you in the right direction.” (Source: Dutch Tourist Board).

Real-time travel information

Moreover, the travel industry is one of the obvious sectors for use of important real-time data such as changes to flight times. Trip Deck, for example, is an iPhone app that manages flights, hotel reservations, car rentals or other services, and includes real-time flight tracking. (On November 18 Expedia announced the acquisition of Trip Deck

creator Mobiata. Mobile traffic currently accounts for approximately 4% of all visitors to Expedia.com, with mobile bookings up in 2010 nearly five times over the previous year. "Mobile and travel are just made for each other," said Joe Megibow, Expedia’s VP of Global Analytics and Optimization.)

Ads and cash but what about the costs?

Looking ahead, two other new developments could be highly important for the tourism industry, Staugaard said. Apple is now testing mobile advertising under the product name ‘iAds’ with ads from diverse companies. According to CEO Steve Jobs, “iAd offers advertisers the emotion of TV with the interactivity of the web”. This new product gives destinations and travel providers a new marketing channel to target mobile phone owners directly. Another big trend will be mobile payment, according to Staugaard.

“The iPhone will also turn into a wallet to pay for everything imaginable,” he said. In particular, mobile ticketing will be an important development for the travel sector. One negative factor, however, remains the high costs of downloading data on mobile devices when outside the home country due to high roaming tariffs. Since July 1 this

year, an automatic €50 monthly limit on roaming costs has been introduced within the EU and operators have to send users a warning when 80% of their limit has been reached. "There will be no more bill shocks for tourists or business travellers surfing the internet with smart phones or laptops while in another EU country,” Neelie Kroes,

Commission Vice-President for the Digital Agenda, declared while presenting the measure in Brussels earlier this year. The Commission aims to get EU roaming charges down to home country levels by 2015. But there is no such cap for overseas destinations. And despite the €50 overall limit international travellers have little transparency about the individual cost of activities such as using an interactive travel guide in a European capital city or searching online for a hotel or restaurant.

Travel industry tries out social media and mobile technology

Against this fast-changing technological background, participants in the Pisa meeting discussed how the industry could best use social media and mobile technology. Many destinations have yet to develop social media marketing strategies, according to Expedia research. Yet there are already success stories. Air Asia, for example, has one million Facebook followers and claims to generate 13% of sales through the social network. In Japan, 20% of domestic flights are booked through mobile phones.

In Europe, many countries are already active in social media but face the challenge of measuring the return on investment. The approach is diverse. The Netherlands, for example, has an online department which is active in a wide variety of areas, including social media and mobile technology. In the social media field, the Dutch are focusing in particular on users in the USA, Spain and Italy since their target groups in these countries are heavy users of social media. Austria gives its social media experts considerable freedom, knowing that the technology and the demands are changing rapidly and that the social media experts are the ones to best understand and address

the technology trends. Furthermore, the rapid pace of technological change also meant by the time strategies had been discussed and approved they might be outdated, some participants pointed out.