• What’s in store for the travel industry?



    Summer time has always been the season for travel. In our own firm, the different units are now deep into planning their company-sponsored summer outings, with some even looking at overseas destinations for their trips. In this age of social media, the desire to visit a new place – and to tell the rest of your network about it – is stronger than ever.

    A couple of months ago, the World Travel & Tourism Council (WTTC) released its 2017 report on the impact of travel and tourism on the Philippine economy, and despite serious challenges such as safety and security concerns and persistent infrastructure woes, the outlook for the local travel industry remains rosy.

    Last year, the sector’s direct contribution to the economy amounted to $25 billion, and WTTC forecasts that share will grow by 7.6 percent this year, and by 5.2 percent annually until 2027, at which point the travel industry is expected to account for 8.5 percent of total GDP and 5.7 percent of total employment.

    In the intervening years, what trends will influence the direction of the travel industry and its path to growth?
    The Deloitte Center for Industry Insights issued its 2017 travel and hospitality industry outlook with a view to helping travel businesses prepare for the evolving consumer mindset. According to the report, travelers’ expectations are changing around four key factors: authenticity, personalized experiences, removal of friction, and on-demand functionality.

    Authentic personal experiences

    Just as organic, locally-sourced food, craft beer and artisanal ice cream are gaining popularity, so are unique and real travel experiences. Cookie-cutter hotel rooms and amenities are losing ground to private accommodations that more accurately reflect the local culture and lifestyle and that allow travelers to experience the destination as natives would.

    This shift is partly driven by the influence of picture- and video-based social platforms. Younger generations are using Instagram and Snapchat to document and share their travel experiences, and – more importantly – to define their individual brands. Travel companies would do well to pay close attention to how their brand is represented in these platforms and then make it a point to create experiences worth “liking” and “sharing” in order to capitalize on the exposure these platforms provide.

    Personalizing the travel experience goes a long way toward building loyalty, but it remains a big challenge for travel brands.

    Infrequent travelers make it difficult for businesses to capture enough behavioral data to craft an effective marketing strategy around. While mobile devices are helping digital travel companies establish customer identity, most online clients are still anonymous. Also, consumers tend to be different travelers on different trips: when you travel for business, you look for experiences and amenities that may be vastly different from what you would look for if you were traveling for leisure with your family.

    Deloitte proffers that the key to personalization may already exist in social networks such as Facebook and Instagram. Every day billions of users reveal intimate information about themselves on these platforms that could give travel brands a clear idea of customer preferences. Leveraging this data will require a shift in how companies break down data siloes in ways that are beneficial to everyone involved and which do not impinge on consumer data privacy rights.

    Seamless service through technology

    As in other sectors, technology is playing a big part in removing existing pain points from travel and giving travelers what they want when they want it.

    Delta Air Lines’ app allows passengers to track their bags using radio-frequency identification (RFID) technology. Even though the number of flyers who lose their bags is actually quite small, this feature gives customers that peace of mind that could be a major consideration when choosing a carrier for their next flight.
    Other travel brands are looking to artificial intelligence (AI) as a means to minimize the friction in online travel planning and booking. Because AI now has the ability to become smarter the more users interact with it, virtual travel agents that can handle all travel logistics without making a customer jump from one website to another may be closer to reality than we think. One obvious issue here, though, is whether travelers are ready to trust robots to recommend and book the perfect vacation.

    This year, the Department of Tourism is targeting 7 million tourist arrivals to the Philippines, a million more than last year’s visitors. To make sure those visitors have a positive experience and a desire to return, local travel companies may want to conceptualize their brands as platforms that can scale across the travel experience instead of forcing customers to transact with a variety of suppliers and businesses. Brands that can do that and offer unique experiences that are responsive to customer expectations will be better able to take advantage of the growing interest in the Philippines as a travel destination.

    The author is a partner at Navarro Amper & Co., the local member firm of Deloitte Southeast Asia Ltd. – a member firm of Deloitte Touche Tohmatsu Limited – comprising Deloitte practices operating in Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.


    Please follow our commenting guidelines.

    Comments are closed.