BUSINESS INTELLIGENCE - Zenith Media
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
BUSINESS INTELLIGENCE
T R A V E L
Contents
Click to jump to a section:
1 2 3
Advertising Category Consumer
Forecasts Growth Insights
Introduction
Welcome to Business Intelligence Measures introduced to control
– Travel, the ninth of Zenith’s the pandemic have increased
Business Intelligence reports, which bureaucracy and expense of
analyse the advertising, business travel, giving travel brands the
and consumer behaviour trends opportunity to strengthen their
shaping different categories. relationships with consumers
by providing digital assistance
The travel industry has suffered to smooth their journeys. Travel
profound disruption since the brands already spend more of
onset of the pandemic, probably their budgets on digital advertising
more than any other industry in than other brands, but their digital
recent history. Although demand expenditure will continue to grow
for travel is now recovering, as they aim to turn travel into an
changes in regulations, technology end-to-end digital experience,
and consumer expectations will from research and discovery to
shape the development of the navigating airports and the final
industry for years to come. The rise destination.
of video calls means airlines and
hotels groups will have to rethink Scope
their business models to adapt This report covers the airline and
to less business travel, often the accommodation/hotel industries,
mainstay of their profits. Consumers including both international and
are demanding more sustainable domestic. The thirteen markets
travel, and spending more time it includes are Australia, Canada,
holidaying in their home countries. China, France, Germany, India, Italy,
Poland, Russia, Spain, Switzerland,
UK and USA, which between them
account for 74% of total global
adspend.
TRAVEL
ADSPEND FORECASTS
Travel adspend will grow But the travel ad market won’t
two to six times faster than return to pre-pandemic levels
the ad market as a whole of spending until 2023
from 2021 to 2023
4
Travel brands spent 63% India to lead recovery with
of their budgets on digital 31% growth in travel adspend
advertising in 2020, and will between 2019 and 2023
spend 70% in 2023
5
THE LONG AND
WINDING ROAD TO
RECOVERY
Travel advertising is poised for rapid growth as
brands reset their relationships with consumers
after the great rupture of 2020. We forecast
travel advertising to expand by 24% in 2021,
twice as fast as the advertising market as a
whole, before 36% growth in 2022 and 19%
growth in 2023.
Faced with the existential threat of the
coronavirus pandemic, many brands delayed
or denied refunds to customers as travel
shut down in 2020, leaving these customers
aggrieved and open to alternatives. These
brands now have to rebuild trust, while their
rivals have an opportunity to forge new
relationships as consumers adapt to the realities
of post-COVID travel.
6
Year-on-year growth in adspend (%) – 13 key markets
36.4
24.0
19.4
11.5
6.9 5.2
2020
2021 2022 2023
-3.6
-46.1
Travel Total market
Source: Zenith
Brands will have to refocus their Travellers face a complicated
communications on different regime of COVID tests, vaccine
audiences as they adapt to the passports and form-filling,
decline of business travel, now with different requirements for
that companies know they can every country. Brands have
coordinate international business the opportunity to reduce this
with remote meetings. Airline friction by using their apps and
and hotel groups in particular will platforms to organise all the
have to develop and market new necessary information and help
services for consumers to mitigate their customers navigate each
the loss of business travellers, bureaucratic obstacle before,
which for many of them provided during and after their journeys.
the core of their profitability. By integrating this support with
Brands will also have to address tools for choosing and purchasing
consumers’ concerns about the voyages, and concierge services for
sustainability of travel, and adapt travellers when they arrive at their
to shifting demand towards low- destination, brands can turn travel
carbon journeys. into a unified digital experience.
7
Total travel adspend (US$ million) – 13 key markets
19,598
18,003
16,421
12,042
9,710
2019 2020 2021 2022 2023
Source: Zenith
Travel advertising was one of the Many consumers spent lockdown
categories hardest-hit by COVID-19. dreaming of travel, and the number
The travel ad market lost nearly half of trips taken has risen rapidly as
its value in 2020 (46%), while the restrictions have loosened. This
ad market as a whole shrank by just pent-up demand will drive rapid
4%. That’s after two solid months of growth in travel adspend over
spending in January and February the next few years, but it will be a
– key months for the industry in long road back to pre-pandemic
the northern hemisphere, when spending. Travel adspend will
families start thinking of summer be still 33% below its 2019 level
holidays after the winter break. The this year, while the ad market as
drop from March onwards was a whole will be 7% ahead. It will
even sharper, as so many people take until 2023 for travel to exceed
were confined to their homes and 2019 levels of spending, which
local areas. We estimate that travel it will do by 9%. At this point the
adspend fell from US$18.0 billion in wider ad market will be up by 21%
2019 to US$9.7 billion in 2020. compared to 2019.
8
9
TRAVEL GOES DIGITAL
Travel advertisers spend more on more important over time as the
digital advertising than the average industry’s digital transformation
brand – 63% in 2020, compared continues, rising from 63% of
to 58% on average. This is not travel adspend in 2020 to 70% in
surprising for a category that has 2023. Integrating travel apps with
been well ahead of the market in vaccine passports, and using them
digital transformation, conducting to help consumer navigate local
32% of sales by ecommerce in 2021 COVID-related rules and hurdles,
compared to 20% for retail as a will accelerate the transition of
whole. travel towards a seamless digital
experience, from initial research
Digital travel advertising aims to to enjoying the destination. This
capture consumers in the early offers brands the potential to
stage of research, through search turn travel back into a curated
advertising and display and experience, which consumers
video ads within relevant content. used to expect from travel agents,
Digital advertising will become instead of the current pick-and-mix
Share of adspend by medium, 2020 (%) – 13 key markets
Newspapers 6.3
4.6
Magazines 6.4
3.4
TV 13.2
24.1
Radio 3.1
4.7
Cinema 0.4
0.2
OOH 7.6
4.5
Digital 62.9
58.4
Travel Total market
Source: Zenith
10approach. This may lead to new to television in 2020, compared to
partnerships between airlines and the average of 24%. Effective travel
hotel groups, and an extended role advertising in traditional media
for travel intermediaries. As travel will get consumers thinking about
becomes ever more digital, digital holidays, and give them a starting
advertising will become even more point for their search, primarily
important for both brand building a website or app. This works
and conversion. We forecast digital particularly well when consumers
adspend by travel brands to grow are in unstimulating environments
by 6% a year between 2019 and like public transport, and when
2023. Online video in particular brands can display a range of
will play a key role in creating the options and prices – consumers
initial emotional connection with are looking for choice and value.
consumers, inviting them to take Print and out-of-home advertising
their first step on the digital journey. on public transport are therefore
especially effective. Travel adspend
Travel advertisers spend in print is falling as circulations
substantially more of their budgets continue to shrink, but we forecast
on newspapers, magazines and out-of-home travel to recover from
out-of-home than average, and its slump in 2020 and grow at an
substantially less on television, with average rate of 6% a year between
just 13% of travel adspend going 2019 and 2023.
Average annual growth in adspend by medium 2019-2023 (%)
– 13 key markets
Cinema 16.5
-0.5
Digital 6.4
11.8
OOH 5.9
-0.6
Magazines -7.2
-11.5
TV -7.9
-2.3
Radio -8.6
-6.2
Newspapers -13.4
-13.4
Travel Total market
Source: Zenith
11BRANDS SEEK OUT
NEW TRAVELLERS
Total change in travel adspend by key market 2019-2023 (%)
India 31.3%
Russia 21.3%
China 15.6%
Poland 14.1%
US 13.0%
Germany 9.4%
Switzerland 7.0%
Italy 3.9%
UK -0.3%
Australia -4.0%
Canada -5.1%
Spain -6.7%
France -8.6%
Source: Zenith
-8.6 -6.6 -4.6 -2.6 -0.6 1.4 3.4 5.4 7.4 9.4 11.4 13.4 15.4 17.4
12We expect the fastest growth in
travel advertising to come from
India and Russia, which will end
2023 31% and 21% above the
2019 baseline respectively. Here,
rising disposable incomes mean
more people are travelling, and
existing travellers are travelling
more frequently. The same holds
true for China and Poland, where
adspend will increase by 16% and
14% respectively between 2019
and 2023.
The robust US ad market is
pushing up media prices, which
is the main reason why travel
adspend will be 13% higher
there in 2023 and in 2019. Other
mature markets will range from
+9% to -9% growth over this
period, depending on consumer
demand, media inflation,
adoption of digital technology,
and a myriad of other reasons. In
all markets, though, the recovery
of travel advertising from the 2019
baseline will be well behind the
growth of the market as a whole.
4 19.4 21.4 23.4 25.4 27.4 29.4 31.4
13TRAVEL
CATEGORY GROWTH
Travel spending fell 51% in Airlines and hotels need
2020, and won’t return to pre- new business models as
pandemic levels until 2023 companies swap business
class for video calls
14Growth depends on making Demand for sustainability
travel a digital experience will reshape the industry
15ENTERING UNCHARTED WATERS
After the great disruption caused consumers have embraced
by the coronavirus pandemic, the limited travel opportunities
the travel industry faces a highly available to them bodes well for
uncertain future – perhaps more long-term demand for consumer
uncertain than any other category travel, especially given the extra
in modern history. After grinding expense and bureaucracy of
almost to a halt in the second navigating COVID regulations.
quarter 2020, consumer and But their heightened awareness
business travel has since started of health concerns and raised
to recover in fits and starts, but it awareness of the need for
remains far from clear how much sustainability will change the types
demand for business travel will of holiday they choose. Patterns
return now that companies have of demand for different modes of
found they can replace internal transport, travel destinations, types
and external meetings with video of lodging and relationships with
calls. The willingness with which travel companies will all be in flux.
Year-on-year growth – 13 key markets (%)
31.6 31.8
20.6
7.3 5.6 9.7 7.6
6.3 4.7 5.7
-51.4-2.9
2018 2019 2020 2021 2022 2023
Travel expenditure Consumer spending
Source: Euromonitor International
16So while this report presents half, from US$3.3 billion in 2019 to
forecasts of how the travel industry US$1.6 billion in 2020 – eighteen
will develop over the next few times faster than the 3% drop in
years, these must be read as consumer spending.
central expectations with wide
margins of uncertainty around While some consumers are still
them. This uncertainty is also an worried about flights and mingling
opportunity for the industry. At a with strangers, others are chafing
time when the old rules no longer at restrictions and embrace
apply, travel companies will have whatever travel opportunities are
to rebuild the industry from the open to them. There is clearly a
ground up, introducing new lot of pent-up demand for travel.
business models and relationships As time goes on, and infections
with travellers. The future of travel come under control, consumers
will be shaped now. will progressively move from the
first group to the second. Business
Travel was one of the categories travel is also resuming, but much
most affected by the pandemic more tentatively. While travel
in 2020, unsurprisingly for a year expenditure is recovering from
when much of the population its much-reduced base, and is
was confined to their homes for forecast to continue to do so for
prolonged periods. Spending the next few years, it won’t return
on travel dropped by more than to 2019 levels until 2023.
Travel expenditure (US$ billion) – 13 key markets
3,257 3,308
3,064
2,856 2,742
2,081
1,581
2017 2018 2019 2020 2021 2022 2023
Source: Euromonitor International
17NO MORE
BUSINESS AS USUAL
18Business travel was the backbone tourist cities and resorts. This will
of much of the pre-pandemic interact with another consequence
travel industry. Business travellers of the pandemic, the rise of remote
represented 10% of passengers and flexible working. With modern
across the major airlines, but communication tools reducing the
accounted for 55%-75% of their need for face-to-face interaction
profits. Corporate travellers were in many industries, employees
also the main source of revenues for are benefiting from reduced
many city-based hotel chains*. Any commuting time, while companies
long-term decline in business travel take the opportunity to reduce their
will therefore require travel groups floor space and rental costs. The
to restructure their operations. demand for commercial property in
city centres is therefore falling at the
Airlines will have to adapt their same time as demand for business
routes and fleets to the shift accommodation. Meanwhile the
in demand from business to price of residential property to
consumer travel, with more long- soaring to record levels. Planning
haul travel to holiday destinations or zoning regulations will make
on high-capacity planes, and fewer the obvious solution of converting
short-haul trips between business hotels and offices to homes
hubs on smaller craft. They will expensive and protracted, but
also need to decide what to do hotel groups have the potential to
with unusual space in business offer longer-term accommodation
cabins. The options here range in their existing properties. The
from leaving the space unchanged Airbnb model, which allows
and selling it to consumers at lower owners to switch between offering
price points, through reconfiguring short breaks and long-term lets
the cabins to be more welcoming as demand fluctuates, may also
to families and friends travelling become more common.
together, to converting them
to premium economy or even All types of travel companies will
economy seating. All of these have to experiment with new
options will involve a much lower services and different pricing
yield per unit area, so will require models as they adapt to the new
reductions in services provided to patterns of demand.
maintain margins.
*Source: New York Times, ‘Best
Hotel groups will reassess their Guess on When Business Travel Will
portfolio of properties, shifting Recover? It Could be Years’, 13 July
investment from business hubs to 2020
19HOME COMFORTS
AND GREEN
JOURNEYS
There is huge variation in consumer preferences
for domestic and outbound travel between
markets. The two largest markets – China and
the US – are the most domestic, owing to their
huge territories and varying climates, and, for
China, historic restrictions on travel. Europeans
are much more likely to travel internationally,
particularly from Poland, Russia, Switzerland and
the UK, where domestic travel accounted for
less than a third of travel expenditure in 2019.
In almost all markets, travel will be more
domestic in 2023 than it was in 2019. The
difference will be particularly marked in countries
that have historically been most keen on foreign
travel: the share of domestic travel in Poland,
Russia, Switzerland and the UK will be three
percentage points higher on average in 2023
than in 2019. That’s partly because, barred from
travelling abroad during the pandemic, travellers
have found domestic holidays more rewarding
than they expected, and will be more likely to
take them in future. But it also reflects consumers’
rising awareness of the environmental costs of
travel, as detailed in the Consumer Research
section of this report. As well as boosting
demand for domestic travel, these concerns
will also reshape foreign travel, with consumers
opting for shorter journeys, or deciding to visit
fewer places for longer periods. Government-
imposed initiatives to make carbon-emitting
activities like air travel more costly will only add
to the pressure for the travel industry to become
more efficient and sustainable.
20Domestic share of total travel expenditure (%)
Australia 59.4
60.7
Canada 46.2
45.3
China 84.0
82.5
France 66.3
72.0
Germany 46.1
43.7
India 76.4
79.4
Italy 60.3
64.3
Poland 32.9
36.6
Russia 32.6
35.5
Spain 48.3
51.9
Switzerland 20.5
21.8
United Kingdom 28.0
30.7
USA 84.7
86.6
2019
2023
Source: Euromonitor International
21DISTANT TRAVELLERS
NEED DIGITAL
ASSISTANTS
Across our 13 markets, most travel was domestic
even before the pandemic, as opposed
to outbound. Outbound expenditure then
thoroughly collapsed in 2020, shrinking by 75%,
while the decline in domestic expenditure was
limited to 43%. Outbound travel is forecast to
recover at much higher percentage growth
rates than domestic travel over the next few
years, but will still be 4% behind 2019 levels in
2023, while domestic will be 3% ahead.
The recovery in foreign travel will depend on
reducing the friction of measures introduced
to curb the pandemic. Ever-shifting travel
restrictions, quarantines, requirements for COVID
testing, proof of vaccination, and extensive
documentation all add greatly to difficulty and
expense of arranging a trip abroad. These are
not going to go away any time soon. To boost
demand, travel companies will have to organise
all the information consumers need to travel,
and coordinate it with all the relevant authorities.
Airlines in particular have made headway here
by integrating some of the necessary information
with their apps, but all travel companies have
an opportunity here to turn travel into an
end-to-end digital experience. By using their
digital platforms to smooth consumers through
research, purchase, travel and navigating their
destination, travel groups can build closer and
longer-lasting relationships with their customers.
22Travel has a head-start over most stalled in 2020 as the industry was
industries in transforming into a thoroughly disrupted, but travel
digital-led experience. 29% of companies have the experience
travel sales were made digitally in and the incentives to lead the way
2019, compared to 15% for all retail in digital transformation in the years
sales. The rise of travel ecommerce to come.
Travel expenditure (US$ billion) – 13 key markets
2,367 2,448
2,212 2,130
2,053
1,733
1,359
852 891 859
803
612
348
222
2017 2018 2019 2020 2021 2022 2023
Domestic expenditure Outbound expenditure
Source: Euromonitor International
Ecommerce share of retail sales (%)
31.8
27.9 28.5 29.0 28.9
19.6 20.2
15.4
13.6
11.8
2017 2018 2019 2020 2021
Travel Total retail
Source: Euromonitor International
23DIGITAL TRAVEL SCALES UP
Ecommerce has powered the have a more linear relationship
growth of travel intermediaries, between sales and profits, and
which allow consumers to search, so have not scaled up so rapidly.
compare and coordinate flights, Each of the big three travel
lodging and other travel services. intermediaries – Trip.com, Booking
Historically this was the job of Holding and Expedia – are now
human travel agents, but of course about as large as the largest airline
intermediation is now dominated and lodging group put together,
by digital platforms. These have having collectively doubled in size
consolidated rapidly in recent between 2015 and 2019.
years. Most of their expenditure,
such as investment in technology Ecommerce has also greatly
and data, is on fixed costs, so extra increased the importance of
scale leads directly to extra returns. discoverability and branding.
Airlines and lodging groups, which Search is the first step in the digital
have to physically transport or journey, and companies that
accommodate extra customers, connect with consumers the fastest
Share of global search for key travel companies (%)
35.0
25.0
20.0
15.0
10.0
5.0
0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Hilton Airbnb Marriott Expedia
TUI American Airlines Delta Airlines United Airlines
Source: Croft Analytics/Google Trends
24at this stage have a head-start in permanent reduction in demand
converting them. Since 2010, Airbnb for business travel, the need to
has grown from nothing to the reduce carbon emissions and the
most-searched-for brand among demand for digital assistance in
key global travel companies by navigating the barriers to travel.
some distance. This has contributed This will mean more partnerships
to its rapid climb up the rankings across the different types of travel
of the largest travel companies. companies – airlines, lodging
Between 2015 and 2019, Airbnb groups and intermediaries – as
rose from the eighth to third-largest well as consolidation within them.
lodgings group, and from the These companies will be best
twelfth to fifth-largest intermediary. positioned for growth by capturing
the attention of consumers early in
Now the shape of the travel the research phase and by using
industry is up for grabs and the proprietary digital technology that
successful companies will be matches them effectively with their
those that adapt fastest to the ideal destination and guides them
new reality of travel: A potentially smoothly through their journey.
Retail values of flights by the top eight airlines
(US$ billion) – global
American 35.3
Airlines 42.3
Delta Air 32.7
Lines 38.0
United Airlines 30.9
Holdings 36.4
Deutsche 23.8
Lufthansa 30.7
International Consolidated 18.1
Airlines Group 22.6
Air France- 18.3
KLM Group 21.3
Emirates 17.6
Group 20.7
Southwest 17.8
Airlines 20.0
2015
2019
Source: Euromonitor International
25Retail values of accommodation by the top eight lodging groups
(US$ billion) – global
Marriott International
30.4
56.0
Hilton Worldwide Holdings
27.3
34.9
Airbnb
7.5
33.0
InterContinental Hotels Group
19.8
23.3
AccorHotels Group
12.1
18.0
Wyndham Worldwide
9.2
13.5
Expedia Group
6.9
13.4
Jin Jiang International
1.1
10.6
2015
2019
Source: Euromonitor International
Retail values of trips booked by the top travel intermediaries
(US$ billion) – global
Trip.com Group
37.2
97.5
Bookings Holdings
49.8
93.5
Expedia Group
58.2
87.3
American Express
29.1
35.9
Airbnb
7.7
33.0
BCD Holdings
22.8
27.1
TUI Group
19.9
24.8
Tongcheng elong
3.2
19.2
2015
2019
Source: Euromonitor International
2627
TRAVEL
CONSUMER INSIGHTS
Recovery varied as markets Consumer experience of the
respond differently to the pandemic will dictate their
health crisis willingness to travel
28Brand sustainability Need for digital and
credentials are more technology solutions across
important than ever the category to improve the
customer experience
29DIFFERING GOVERNMENT
RESPONSES AND RESTRICTIONS
WILL CONTINUE TO AFFECT
CATEGORY RECOVERY IN THE
SHORT TERM
Travel has been one of the sectors challenging, particularly with the
most affected by the global lack of consensus regarding health
pandemic and its resulting impact passports and what is accepted.
on the world. As concern grew
and in order to contain the spread In the short-term, then, domestic
of the virus, governments around travel or intra-regional travel
the world were swift to close is likely to be preferable for
borders and order restrictions on consumers. In larger countries like
movement. For long stretches the US and China, the size and
of 2020 and 2021, flights were scope of the country provides
grounded and stay-at-home a great number of destination
measures enforced. options within their own borders,
and the option to travel by car.
However, the ongoing level and In Europe, EU member states
length of restrictions are markedly employed a common approach to
different by market. Some, such the virus and vaccination, including
as Australia, have employed strict the EU Digital COVID Certificate
border controls from the outset, Regulation for proof of health
experienced a low number of status.
cases throughout, and have been
slower with their vaccine roll- Given the often short distance
out. As of 01 October 2021, they between countries, and the
are still imposing a total border option to avoid air travel, intra-
closure. Other markets have lived regional travel will be quicker
with higher cases, have been to resume there. In the short
quicker to vaccinate and are now term, while international travel
opening up to certain countries remains logistically challenging,
and/or only restricting or imposing travel brands should continue to
quarantine measures on high-risk target and focus their messaging
regions. Travel between countries on domestic or intra-regional
with widely different responses is travellers.
30QUARANTINE ARRIVALS FROM HIGH-RISK REGIONS:
• Germany
• Poland
• Russia
• Spain
BAN ON HIGH-RISK REGIONS:
• Canada
• France
• India
• Italy
• Switzerland
• UK
• USA
TOTAL BORDER CLOSURE:
• Australia
Source: ourworldindata.org – international travel controls – 01 October 2021
31DIFFERENT PANDEMIC
EXPERIENCE, BUT CONSUMERS
SHARE CONCERNS WITH
RETURNING TO TRAVEL
Countries did not respond to the less affected, due to maintaining
pandemic in the same way, and employment in roles that were
so the experience of consumers more able to pivot to remote
within those countries was also working during the lockdown.
not the same. For example, risk Lower-income groups however
aversion between those markets faced greater job uncertainty and
with a ‘zero COVID’ response, are more likely to have struggled
compared to those with a ‘live with job losses or reduced income.
with the virus’ response will The GWI Zeitgeist in June 2021
understandably vary. But there is shows that 51% of low-income
also disparity in experience within consumers in the 13 markets
individual countries. described the pandemic as having
a big impact on their finances,
The financial impact, in particular, which is 15% more than high-
has been very different. Higher- income consumers.
income groups have largely been
COVID-19 Impact on Finances – Difference in Low vs. High Income
14.8%
1.4%
No impact Small impact
Big impact Dramatic impact
-8.0% -9.1%
Source: GWI Zeitgeist June 2021 – 13 Markets
32There is discrepancy, therefore, Switzerland, it will be more realistic
between those that have for some consumers than others.
accumulated savings during the
restrictions and those that are Whilst different groups will return
struggling more financially. Price to travel at different times, it is
and budget are still important already clear that the demand
considerations and given that for travel has started returning. In
according to a Holiday Barometer the UK for example, according
study published by Ipsos; Europ to Google Trends data, searches
Assistance in June 2021, the average for flights have been steadily
budget for a vacation is between increasing in 2021 as restrictions
€1,256 in Spain to €2,473 in have been lessened or lifted.
Google search trends for “flights” in the UK
100
90
80
70
60
50
40
30
20
10
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
Week
2019 2020 2021
Source: Google Trends “Flights” Jan 2019-Oct 2021
33For those looking to travel, there cancellation will be appreciated
are many similarities in attitude, as more by consumers.
to what the biggest barriers are. Similarly, anything that can help
According to CoStar; STR Global ease and simplify the process of
these are government restrictions, booking with regard to accepted
other travellers, health, and the tests, proof of vaccination, and any
uncertainty around cancellations other prerequisites for travel. Brands
and refunds. need to help and support here and
rebuild the trust that was shaken
With so much doubt in terms of at the onset of the pandemic after
new outbreaks or government many providers failed to support
conditions or restrictions, brands or communicate adequately at the
that offer flexible terms and free start of the restrictions.
Travellers’ leading barriers to travel worldwide as of March 2021
Government legislation/restrictions 77%
Potential hassle of quarantine 64%
Fellow travelers not following the rules 64%
Concerned about my own health 53%
Last minute cancellations 51%
Experience will be negatively impacted 50%
Refund challenges due to cancellation 47%
Concerned about traveling (e.g. flying) 47%
Lack of confidence in destination 38%
Concerned about cleanliness of accommodation 31%
Additional costs due to required testing 29%
Travel insurance concerns 23%
Financial reasons due to COVID-19 15%
Other 4%
Source: CoStar; STR Global
34Unsurprisingly, health and to be upfront about their cleaning
hygiene also have increased in and hygiene practices and how
importance in light of the global these have been changed or
health pandemic and this will be enhanced to safeguard travellers.
another big barrier or concern Particularly cautious travellers may
when travelling. The Hartman start to choose to travel at quieter
Group found that 54% of U.S. times or to destinations that limit
adults indicated that they have their exposure to other travellers.
become more concerned about
their family's health and safety as
of 2021, while 31% stated that they
have become more interested in
learning about health. Brands need
Changes in health and wellness views among US adults in 2021
Cautious about picking up/spreading germs 57%
Concerned about family's health/safety 54%
Concerned about current level of health risks in community 50%
Concerned about family's long-term health 46%
Focused on immunity 45%
Interested in taking care of myself (body & mind) 42%
Focused on mental health 38%
Focused on being physically active 38%
Concerned about ability of healthcare system to care for me 36%
Focused on eating a healthy diet 36%
Concerned about aging 35%
Actively seeking out information about health topics 33%
Interested in learning about health & wellness 31%
Concerned about ability to pay for health products/services 30%
Concerned about having enough food 28%
Source: The Hartman Group
35In addition to physical health, the increased on their site since the
pandemic has also highlighted start of the pandemic, and more
the importance of mental health. than half of travellers stated a
According to a survey conducted preference for a relaxing trip.
in April 2021 published by IPSOS,
around 72% of respondents The post-COVID traveller will be
were negatively affected by different, in terms of both their
the pandemic in terms of their needs and their expectations.
psychological health. As demand slowly returns, travel
brands need to target those
The pandemic caused increased showing early interest in travelling
reports of feeling anxious, stressed, again with content to inspire and
having trouble sleeping and trouble entice. They should resist the
concentrating. This may influence temptation to increase prices, and
the types of travel, destinations make sure that with any booking
or attractions travellers wish to there is flexibility to change or
visit or partake in. Consumers may adjust with changes in health or
wish to involve outdoor or nature circumstance. With increased
pursuits in their trips or choose spa, awareness and concern regarding
wellness or yoga retreats. Or simply health, consumers will expect
enjoy slower-paced holidays more guidance and support with
that involve staying longer in one booking and requirements for
destination rather than moving travel, and brands need to be
around. According to booking.com up-to-date on the requirements
the use of endorsements such as themselves, and clear in their
nature, hiking and relaxation have communication and messaging.
COVID-19 pandemic impact on life aspects in G7 countries 2021,
by country
Canada 77%
Italy 76%
Japan 72%
United States 72%
United Kingdom 70%
Germany 70%
France 66%
Source: IPSOS
3637
CONSUMERS
LOOKING FOR
TRAVEL BRANDS TO
STRENGTHEN THEIR
SUSTAINABILITY
INITIATIVES
Across all categories, consumers are now
expecting brands to consider and be more
transparent in their environmental practices,
and travel is no exception. Inspired by the
demonstrable positive effect lockdown had on
the world’s natural landscapes and concerned
by the increase in natural disasters such as
flooding and wildfires, travellers are becoming
more aware and more demanding. A booking.
com study in 2021 shows that 83% of global
travellers believe in the importance of green
travel, and an 8% increase vs. 2019 in travellers’
intention to use green lodging in the next year.
Consumers, particularly those in the younger
generations for whom the climate emergency
is particularly pertinent, will increasingly look to
use sustainability-friendly brands. It will become
the expectation that airlines and travel brands
provide information on their carbon footprint,
what steps they are taking toward carbon-neutral
travel and even provide options for offsetting
their trips. According to a Publicis Sapient survey,
48% of respondents would be willing to pay
an additional fee when booking their flight to
purchase a carbon offset credit. Similarly, off-
season travel will likely increase, with consumers
38looking for less busy, less crowded industry contribution to emissions.
and/or alternative ‘less-travelled’ Consumers want to spend, engage
destinations. and connect with brands that
are transparent about their own
For travel brands, this is an practices, but also those that
opportunity for meaningful empower them with their own
change. Governments across efforts and offer them ways in
the world are backing climate which to reduce or counter it.
action and promoting less carbon With changes in preference of
intensive travel and brands will destinations and timings, brands
need to adopt and invest in need to review and extend the
new technologies and practices products they offer and adjust to
in order to help reduce the offer new experiences.
Share of global travellers that want to use green lodging in the
next year 2016-2021
19%
27%
35% 32%
80% 38% 39%
Share of respondents
60%
40% 81%
73%
65% 68%
62% 61%
20%
0%
2016 2017 2018 2019 2020 2021
Don't intend to stay at least once in an eco-friendly or green accomdation
Intend to stay at least once in an eco-friendly or green accomodation
Source: Booking.com
39TECHNOLOGY
AND DIGITAL
INNOVATION
WILL BE VITAL
TO CATEGORY
RECOVERY
As the pandemic accelerated sustainability
attitudes, so too did it highlight the need for
digital transformation. Much of what travellers
now expect or will expect from the category
will be driven by advances in or adoption of
new technologies.
The travel category is in a better position than
many other sectors, given that many tourism
and travel sales worldwide were already made
online, prior to the pandemic. According to
Statista Mobility Market Outlook, in 2016 60%
of sales were made online and this has been
increasing steadily since. They expect it will
reach 72% by 2025. These sales are a reflection
of the rise in online travel companies and
agents, and consumer willingness to book
online themselves. In July 2020, dunnhumby
Beyond found that across all ages in the UK,
including older generations, 60% of consumers
were booking their travel online themselves.
Given the large and growing number of
consumers booking online, data analytics will be
critical to learning about new travel behaviours
and signals in order to adapt product offerings,
adjust prices and provide additional support
40when needed. Technology can digital key cards, self-service,
help ease the booking process for cleaning etc. will give consumers
consumers too, particularly in light confidence to travel again. Similarly,
of the new requirements. Differing crowd-control technology can help
government legislations and their ease queues in congested areas
tendency to change without much such as airports and train stations,
warning, make travelling logistically or even at attractions or in cities –
more difficult. Brands can use helping to avoid over-tourism.
technology to simplify this process,
but will need to collaborate with Disruptive technologies such as
others in the category to ensure blockchain can not only help
the end-to-end experience is as improve collaboration across the
uncomplicated as possible. industry in terms of transparency
and security, but can also provide
Health and hygiene concerns a way for brands to measure their
can be mitigated by providing environmental impact and to make
contact-light or contact-free trips. this information available to their
Automation of hotel check-ins, sustainability-conscious consumers.
Holiday booking methods used in the UK 2020, by age
70%
63%
61% 61% 61%
59%
60% 57%
50%
Share of respondents
40%
34%
30% 29% 30%
30% 28%
26%
20%
12% 13%
10% 11%
9% 8%
10%
0%
18-24 25-34 35-44 45-54 55-64 65 or older
Do it all myself - travel, accomodation, etc all online or direct with an operator
Through online travel agent
Through a high street travel agent
Source: dunnhumby Beyond; July 2020
4142
WHAT DOES THIS MEAN?
The pandemic has given the travel category an opportunity to reset and
improve. Business models need to change, as brands will find themselves
increasingly judged on the experience and service they provide rather than
on their products or pricing. Technology will be critical in aiding brands to
appeal to a greatly changed customer and delivering on new expectations
regarding health, hygiene, flexibility and sustainability.
43You can also read
