Jonathan Gabay | Smart Insights | Mon, 28 Nov 2016 11:00:00 +0000

3 of the most important marketing trends shaping the travel sector in 2017

It is estimated that during 2016, total retail travel sales across the globe will reach $22.049 trillion, up 6.0% from the previous year. According to Statista, by 2019, the online travel industry is forecasted to grow to 762 billion U.S. dollars.

Today, the majority of people use different websites during the travel purchase journey, either to find information about a destination, read reviews or to book travel online. August 2016 research published by the Association of British Travel Agents (ABTA) found that 76% of UK internet users had booked holidays digitally in the past 12 months. In the US, Emarketer estimates that 52% of travel bookers use online platforms to make their bookings. That makes digital marketing techniques like SEO, UX and Social Media Marketing absolutely critical to success in the travel industry. Keeping up with the latest trends in digital marketing impacting the travel sector is crucial for ensuring future success.

Our full report into 2017 Travel Marketing Trends identifies several key trends set to transform the travel industry. Expert Business members can access the full report here and get a sneak peak at 3 of the trends we’ve identified below:

Virtual Reality

Virtual Reality and ‘near VR’ offers travelers the opportunity to ‘try before you buy’.

From taking a virtual romantic honeymoon walk along a sun-kissed beach to walking through a hotel conference suite, technology brings the mountain to the would-be trekker in ways which only a few years ago would have seemed impossible.

However, in considering virtual reality and travel, it is important to separate the hype from the practical.

Travel companies taking advantage of such technology should primarily consider it as a platform for useful content, rather than an immersive multi-media channel which puts visual effects before substance.

Working with Google Cardboard technology, Virgin Holidays used VR headsets to capture the 360 video sights and sounds at one of their resorts in Mexico. Customers were impressed by the VR experience at Virgin Holidays stores, In fact, their propensity to buy increased. Virgin reported that not only did sales rise across the board, but sales of trips to the featured resort showcased by the VR technology rose significantly.

Delta and Lufthansa, two VR innovators

Airlines were one of the first to test VR as part of their marketing mix. For example, at the Global Business Travel Association conference held in November 2015, two mainstream airlines – Delta and Lufthansa drew on immersive technology to demonstrate differences between various cabin classes.

Delta demonstrating cabin class configurations via an Oculus Rift headset:

airline-vr-tech

Lufthansa VR experience

Lufthansa demonstrated their cabin classes by inviting would-be passengers to sit on a dedicated chair and control the immersive experience via a PlayStation Move Motion Controller.

lufthansa-vr-marketing

Qantas’ Samsung Gear VR headsets featured popular entertainment content and tours that showcased the airline’s network destinations.

Shangri-La Hotels was the first international hospitality brand to roll out Samsung Gear VR headsets for each of its 17 global sales offices and 94 individual hotel sales teams.

Finally, a University of Melbourne study found that 40-second-long “microbreaks†immersed in VR nature simulations increased workers’ focus.

Big Data

In 2012, Gartner updated its definition as follows: “Big data is high volume, high velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization.

Big data involves very large data sets which are analysed usually by computers to reveal patterns and trends usually relating to trying to understand human behaviour and interactions.

 

As travelers seek more relevant and trusted content, OTAs are increasing their investment in Big Data analytics. Robust data capabilities help identify visitors across different channels and devices, driving personalized marketing and customer journeys.

According to a whitepaper published by the World Travel and Tourism Council travelers are more informed than ever before.

In an American Express study, 83% of millennials said they would allow travel brands to track their habits in exchange for a better, more individual experience. Meanwhile, 85% of respondents across all age groups said that customized itineraries are far more appealing than one-size fits all solutions. As analytics become more sophisticated, travel companies are targeting different customer demographics personally in email and social media messages.

However, whilst automated real-time location based triggers sending automated updates such as “you are only steps away from a bargain in London Heathrow Airport’s Terminal Two may be welcomed by some holiday makers seeking a duty-free bargain, a location-based trigger such as “Your Facebook friend just checked in a motel in around the corner†may be taking big data solutions a step too far.

43% of travel companies named “targeting and personalisation†as the top priorities in their digital strategy. Twenty-five per cent of companies are focused on mobile optimization of their online properties.

Multi-channel marketing becomes the norm

A great deal of the traffic diverted away from Bricks and Mortar towards digital platforms is accredited to the rise in people traveling for leisure and business. Globally, the online travel sector is expected to grow at an annual rate of 3.8% over the next 10 years to $11.4 trillion – creating a marketplace four times the total size of the current UK economy.

2016 travel industry experts broadly agree that international terrorism has effected demand in air travel. Yet the International Air Transport Association (IATA) reported that during June 2015, Global passenger traffic data for the crucial travel month of June (measured in revenue passenger kilometres or RPKs) actually rose 5.2% compared to the year-ago period (2015). June capacity (available seat kilometres or ASKs) increased by 5.6%.

Driven by digitization, and consumer reliance on mobile devices OTA’s continue to remain buoyant. For example, Expedia’s second-quarter gross bookings for 2016 grew by 25% YoY (year-over-year) to $18.8 billion. Its main OTA grew by 25% to $17.1 billion. However, in regions such as the US and Europe the online travel market appears to be maturing.

Market Realist claims online booking accounts for more than 40% of total travel sales. In most countries, online bookings are seeing healthy growth. The main market drivers for OTA companies are higher digitization, mobile adoption, and international expansion.

Reportedly many OTAs are expanding in specific countries including: China, Brazil, Germany, India, Italy, Mexico, Norway, Spain and the United Arab Emirates. All such countries have an established tourism industry as well as a digitally savvy middle class.

If you want more detailed information about all the key travel marketing trends we’ve identified, Expert Business members can access the full report here.