Camaleonte on the Go: Five mega trends that shape travel and tourism

This year has kicked off with one of the most international travel fairs, the #FITUR2019 in Madrid. The event gathered 140,000 professionals to offer their latest insights about current and future trends in the fast-growing global travel and tourism industry. Purpose, sustainability and ethical travel are among the rising interests of travelers.

One of the most interesting reports published in Madrid is the World, Transformed: Megatrends and Their Implications for Travel & Tourism” produced by World Travel and Tourism Council (WTTC) and Bloomberg Media Group. It sums up five general megatrends which are already happening and which will continue to shape the world of travel. The megatrends are linked to enhanced sense of reality, restructured life, revolution of data, redistribution of power and reimagined consumption. Rather complex concepts, but let’s go through them.

Search for purposeful reality pushes for authentic and unplugged experiences

Digitalization and the revolution of data and technologies in the travel and tourism industry are not new and the buzz has been there for a long time. With new tech surrounding us, travelers are now asking for highly personalized experiences that integrate different media applications and start even before we leave home. But don’t misinterpret the role of technology: Now that tech enables us to do and access so many things, a growing number of travelers is turning off their devices and going “digital detox” (I do it regularly myself). The trend is then to look for shared experiences that enable people to re-connect with friends and strangers (and themselves) and make them feel better. Hence the ultimate travel experience is not anymore going on a shopping spree in New York, but rather taking a course to learn new skills, going on a meditative excursion or volunteering for a social cause.

In the era of enhanced reality, destinations and service-providers are pushed to offer differentiated, highly-personalized and unplugged experiences where authenticity is at the core. Good news for low-key, thing-less travel!

Intertwining values in work and leisure restructure life and travel

With an astonishing 25 % of the EU and US workforce engaged in independent work and half of the US workforce going freelance by 2027, the WTTC and Bloomberg report argues that the borders between professional and personal/family life are diluting. Evidence of this trend is the rise of #bleisure that combines business and leisure travel. With a more mobile workforce, better global connectivity, asset-sharing and peer-to-peer marketplaces, the travel industry has to re-imagine its business models and networks. The nomadic mindset (I just raised by hand!) drives the travel industry to cater to the lifestyle traveler (yes, it’s me here!) who seeks to fit business meetings, workout, family life, cultural events and gastronomy – all in one stay.

Some of the most iconic companies of the sharing economy have edged off their original idea, bringing acute problems in housing and traffic. Despite these hiccups asset-sharing has real potential to improve efficiency and more intelligent use of resources, contributing to environmental sustainability. Also, the report states, it can enable travel and tourism companies to expand into new markets.

Responsible use of big data improves travel

As in other sectors, also in travel and tourism big data, the Internet of Things and machine learning offer amazing opportunities to streamline travel experience and services. However, with the exponential introduction of data collection in our lives and travels through facial and voice recognition, among others, many are increasingly cautious about privacy and the (mal)use of digital identities.

In the travel industry, big data and AI can help to optimize visitor influx and combat overtourism: This is being done e.g. in Amsterdam with its whopping 14 million yearly visitors. Using data stored on the tourists’ Amsterdam City Card, the city officials have gathered valuable data on visitor behavior and preferences. The city now sends real-time push notifications to suggest alternatives to the most popular attractions, such as the Museum Quarter and the Red Light District. Data use has to be transparent and trustworthy, though, because a lax attitude toward data collection together with privacy concerns can backfire, intimidate wary travelers and bash company reputation.

Shifting power dynamics change visitor profile and spread awareness

Accelerated exodus from rural areas is expected to increase the number of the world’s urban population from 55% to 68%. At the same time middle class is projected to reach four billion people by end of 2020 and 5.3 billion by 2030, with the most prominent growth in Asia. The demographic shift is pushing interest and influence, and also venture capital, to the Asia-Pacific region. According to the WTTC-Bloomberg report South-South travel is expected to grow significantly, led by a rise in outbound travel from Africa, the Middle East and Asia. This drives professionals in the travel and tourism industry to understand new visitors, including Chinese Millennials (as well as extended Halal families, I would add), and their preferences.

Together with the expansion of urban middle class, improved access to technology, and the omnipresence of social media the report talks about the new, empowered citizen. As a traveler, s/he will be looking at pressing social and environmental issues and expects to have her or his core beliefs shared by brands. In the new era of heightened awareness companies in travel and tourism (as well as in other sectors) should be ready to flag issues, take a stand and act on them. This, again, is great news for those business owners and managers working responsibly on social and environmental issues.

Limited resources and the rise of the ethical traveler call for re-design of business models

With climate change and a global population expected to surpass 9.7 billion by 2050, a growing number of people take social and environmental considerations into account when deciding over consumption – and travel is no exception. 30-50% of consumers across markets state they would pay more for sustainable products. As a result, businesses are responding to consumer demand by adjusting strategic and operational principles, even though the pace could be much faster.

Travel and tourism, accounting for more than 10 % of global GDP, can be a real game-changer in sustainability. The WTTC-Bloomberg report highlights three implications for travel and tourism: Create positive impact in local communitiesIntegrate sustainable experiences seamlessly; and Tune in to local market dynamics. Sustainable practices can (‘should’, I would add) become the core of business models in travel and tourism, and these will be integral to the customer experience.

In the next blogs, we’ll continue to dig deeper in the different aspects of #sustainabletravel. Stay on board!

Camaleonte Oy/ Maija Peltola