Tom Jarvis, chief executive and founder at Wilderness Agency.
We’ve seen huge investment in innovation across the travel sector recently, with an estimated £4bn funding for travel-based start-ups last year and more to come in 2018. The explosion in technology over recent years has ignited a whole new range of consumer behaviour and trends and it seems the snowball effect of advancements in technology generating increasing demands is set to continue.
Online spending on travel is set to exceed £65billion this year, according to an ADI forecast, and mobile activity is set to rise. Currently 80% of all research and booking is made via mobile in China and India, and 40% elsewhere where we are set to see an increase – so a key area for travel brands to be exploring.
Another result of the trends toward online is the strength and buying power that millennial travellers – increasingly willing to spend their money on experiences rather than ‘things’ – have. The ‘nownership’ generation is definitely shaking things up for travel brands – many within the luxury sector where spend is increasingly coming from this demographic, as they come with slightly different expectations to the traditional luxury travel customer.
This tech revolution does not come without its challenges – the two main trends we are seeing brands and businesses trying to tackle are around convenience (travel disruptions, cancellations, price changes) and discovery (reviews, recommendations and spontaneity).
Established online players like Kayak and airlines such as KLM and Easyjet are starting to tackle some of the issues around convenience. Whilst start-ups such as LuckyTrip, from London, and TRVL and srprs.me, both based in the Netherlands, are answering the discovery needs of millennial travellers. LuckyTrip allow travellers to the easiest way to find great trips. App users simply state they are looking for somewhere to go, somewhere to stay, or something to make you happy, set their budget and let LuckyTrip decide. Srprs.me surprises bookers with city break trips based on their preferences where they find out where they are going via a scratchcard at the airport.
TRVL is a community-based travel agent service, giving power back to the traveller. TRVL pays users for their research, information and recommendations. This is a growing market and, given that HuffPost reports that over 95% of leisure travellers read at least seven reviews before booking their holidays, potentially highly lucrative.
Younger travellers are not just sharing these experiences through reviews but increasingly in the moment across social media, behaviour which has been the basis of a huge change in direction in marketing strategy for travel brands. There is an inherent belief from Gen Z travellers that if there isn’t an Instagram photo or Snapchat story to prove it, ‘did it even really happen?’
Undeniably this demographic is becoming more and more influential in the travel market and expect personalised, unique experiences, on-demand and on their mobile devices.
Meanwhile, original travel tech disruptor AirBnB continues to flourish by again adapting to demands and trends set by the new travel consumer demographics. AirBnB recently set itself impressive growth targets of hitting 1 billion guest arrivals in the next 10 years. It hopes to achieve this by engaging with and creating communities for target groups of audiences – with the launch of products like of AirBnB Plus, announced by Co-Founder Nathan Blecharczyk last month at ITB Berlin, in their quest to capture an older, more affluent, safety conscious market. By beginning to really understand the new target audience sectors through new products and communities it will be really interesting to see how this offering develops, particularly as AirBnB begin to build highly desirable data and insight into these specific groups – something all successful travel brands will be looking to achieve.
In short, it’s a buoyant and exciting time within the sector when it comes to innovation. Travel is one of the first industries in taking exciting steps to listen and react to new customer groups and expectations, particularly in the luxury market.
Whether it’s a full on luxury trip or adding luxury elements to their plan, Millennials are doing luxury – even if they are doing it differently. With 61% of Millennials choosing luxury travel compared to 48% of Gen Xers and 35% of Baby Boomers (according to L.E.K research) they are an audience making an impact, and their tastes are beginning to influence other generations too.
So whether its providing experiences rather than pampering, or helping to enable and activate these ‘moments’ on social media travel brands and operators in this space that are looking outside of traditional offers and services to understand and engage with audiences will gain the most and grow with this shift in travel trends.