Top Predictions for the Travel Industry in 2012
IN-DEPTH: Glenn D. Fogel, Head of Worldwide Strategy and Planning, and Executive Vice President - Corporate Development, The Priceline Group, says looking at the big macro picture, on a worldwide basis the shift from offline travel booking to online and mobile booking will continue. Fogel also lists his top 5 travel trends for 2012.
By Ritesh Gupta
One of the current highlights of the travel industry is the way geographical and technological balances are shifting.
Established online travel companies, despite the sheer size of their businesses, have been combating external factors mainly pertaining to the uncertain macro-economic environment and have been operating efficiently. Economic pressures around the world offered leisure and business travellers plenty of reasons to look for maximum value in their travel spending. Accordingly, online intermediaries, too, have been battling to deliver superior value to their customers.
An organisation of The Priceline Group’s stature believes its brands have significant opportunity ahead through innovation and new market penetration and the group intends to use its reach and resources to exploit that opportunity to better serve its customers. The Priceline Group, consisting of Booking.com, Priceline.com, Agoda and Travel Jigsaw, exhibited strong performances for the three quarters it has reported so far for 2011.
EyeforTravel’s Ritesh Gupta spoke to Glenn D. Fogel, Head of Worldwide Strategy and Planning, and Executive Vice President - Corporate Development, The Priceline Group, about 2011 and how the travel distribution business is expected to shape up in 2012. Excerpts:
How do you think the travel sector shaped up in 2011? What do you think stood out in travel distribution and also in the manner in which travel technology evolved this year?
Glenn D. Fogel:
I don’t think any one thing stood out in 2011.
The year was marked by several external challenges to tourism and the travel industry, including turmoil in North Africa and the Middle East, flooding in Asia, the earthquake and tsunami in Japan, and of course the economic instability that still grips many European countries. Even with all of the negative events of 2011, worldwide tourism continued to grow.
The Priceline Group, consisting of Booking.com, Priceline.com, Agoda and Travel Jigsaw, exhibited strong performances for the three quarters it has reported so far for 2011. Throughout the world, more people have used the Internet to book travel and more people have used mobile devices to book travel. And when we look at the big macro picture, we expect that on a worldwide basis the shift from offline travel booking to online and mobile booking will continue.
How do you foresee travel distribution to shape up in 2012?
Glenn D. Fogel:
There are some issues that might influence the travel industry in 2012 (these items have been listed in no particular order):
a. The financial stability of the Euro zone;
b. Anything that could impact the flow of oil and consequently its price (referring specifically to the continued political unrest in the Middle East and the issues related to the stand-off with Iran);
c. An economic hard-landing in China, India and Brazil (all of these countries have recently shown decelerating economic growth) on the one hand or a reacceleration of growth on the other;
d. A successful way to take advantage of social media’s capabilities vis-à-vis travel transactions; and
e. Whether the US economy continues to heal or stalls and slips back into recession.
How the travel industry shapes up in 2012 depends, in large part, on how these issues play out. And that’s something no one knows for sure. However, the successful companies in the travel space will watch these issues and adjust accordingly.
What according to you are going to be the main travel trends in the industry in 2012?
Glenn D. Fogel:
Here are some of what I think could be travel trends to watch in the New Year.
1. Mobile gaining importance;
2. More distributors trying to push more “deals” (though consumer “deal fatigue” might set in and lower the importance of deals as a channel);
3. Some people will continue to stress how important social media is for travel transactions while others will loudly dismiss it as not proven yet (thereby producing interesting debates in the travel blogs but this will not influence the business of travel);
4. Chinese and other travellers from emerging countries continuing to become a larger share of the overall international travel market which might benefit global distributors more than purely local distributors;
5. Small, incremental changes that make travel less burdensome such as more hotels having door locks that can be unlocked using your smart phone obviating the need for a key, more use of smart phones as true NFC (near field communication) boarding passes (not simply scanning a picture on the screen of the mobile phone), expansion of kiosks for immigration checks such as Global Entry in the US, FLUX in the Netherlands and IRIS in the UK, and other similar changes that are not revolutionary but do improve the travel system.