As we head into a new business year, industry executives seeking to maintain competitive advantage need to assess and predict what current and emerging trends will likely shape the travel, tourism, and hospitality industry in the months/years ahead. ‘Fail to plan, and you plan to fail,’ goes the old saying, and, in a post-pandemic world, effective planning is more important than ever.
Trends are typically influenced by various factors, including, amongst others, consumer behaviour, new technology, new business theories, crisis/pandemics, and others. Due to the competitive environment of this industry, keeping up with the latest trends is simply necessary to avoid being left behind.
Indications are that travel and tourism are gradually recovering from the events of the past two years. However, there’s still a long way to go – and likely a bumpy journey ahead – especially in the face of high inflation, the rising cost of living, and the current geopolitical environment.
Travel bans, mask mandates, and occupancy restrictions may slowly be easing, but we must expect some reminders of the pandemic to stick around. The demand for enhanced cleaning/hygiene protocols and self-service/contactless technology are definitely here to stay.
Health and safety remain a priority. Fearful of being stranded at another location or contracting a new virus, travellers are cautious when making travel decisions. Most are comfortable planning itineraries with the least exposure, so the industry must continue to minimise physical contact with people or equipment. The guiding principle here is to give the traveller greater control over decisions that affect their sense of comfort and security.
At present, it’s clear that despite the stress, aggravation, fatigue, and higher costs, people generally want to travel, for leisure in particular, and catch up with what they have missed over the past couple of years. Will this last? Or is it simply a reaction to the recent lockdowns and a short-term desire?
The industry has undergone a massive shift during the pandemic (perhaps the most significant change since the advent of commercial flying). It is evolving every day, and leaders must strive to stay relevant by responding to ever-changing trends and expectations.
In this environment, organisations need to find the most efficient and practical balance between technology, expectations, cost containment, and sustainability. The goal is to deliver meaningful experiences for both internal and external customers.
Creating a seamless experience for customers and employees has become vital. Both sides expect a simple, hassle-free experience, and delivering this is essential to long-term success.
Driven by the rise of big data, the need and demand for personalisation is a major trend. A growing number of travellers want to be treated as individuals rather than just anonymous customers. As such, it is becoming critical to personalise and tailor services to the needs and preferences of travellers. Privacy, intimacy, and escape are very high on their list. As for loyalty, this all revolves around meeting the brand promises.
In line with the above, generic or impersonal organisations will struggle to survive in the future. Organisations must find ways to differentiate their brand by doing something unique that is recognised and appreciated by the consumer, including delivering highly personalised experiences.
The market is evolving fast, and today’s travellers are more discerning when selecting how to travel and where to stay. This is making pre-pandemic historical data much less relevant.
Hospitality players need to adapt to the new paradigm by building revenue strategies in line with current market trends, new demographics, new sources of business, and new channels. Forecasts and strategies must be based on the present situation, not on old data.
Business travel is projected to remain well below pre-pandemic levels. As virtual work (work-from-anywhere) will persist over the long term, corporations are significantly reducing their business travel budgets. The ongoing challenge for the business sector, of course, is that people have now discovered the efficiency and cost-saving benefits of video calls, and Zoom, FaceTime, and other similar platforms are here to stay.
While OTAs have been and will continue to be crucial partners for properties and for service providers of all shapes and sizes, we must remember that they remain one of the least profitable booking channels. An organisation’s own website will generally remain the most profitable for online bookings, though. We must also remember that luxury consumers will continue to travel despite all the instability because, unlike other markets, luxury is a recession-resistant market.
A clear trend is a strong demand for wellness and well-being experiences that go beyond the traditional pampering spa service. People are looking for health techniques and experiences that can help to heal the entire body, mind, and soul. There is a general increase in people’s awareness of their own physical, mental, and emotional well-being. We must all remind ourselves that health comes first – and this will not change.
Work-from-anywhere policies will continue influencing preferred travel dates, with traditional high-and-low-seasons becoming less relevant. Travellers are looking at destinations differently, and seasonality is becoming secondary. ‘Bleisure’ travel is becoming a significant segment and is attractive to both the traveller and the industry. Demand for extended-stay products and facilities is rising. Extended trips and flexible living are here to stay.
The desire for local experiences is also on the increase. Travellers want to experience authentic local products, food, culture, entertainment, etc., in their destinations. Healthy, responsibly sourced food and beverages are also becoming increasingly important.
As concerns about climate change, dwindling biodiversity, and the use of plastics mount, the industry also needs to respond to the rise of conscious travel and values. Sustainability is becoming part of the norm, and this trend will only accelerate over time. Travellers are becoming aware of their carbon footprint. Organisations must learn how to measure their own carbon footprint and what they are doing to reduce it. Clearly, there is a growing awareness of ESG issues and eco-conscious considerations. Social responsibility is a moral and economic obligation.
The human touch is and will remain a must-have in travel and hospitality. However, the industry has to recognise that many pre-pandemic ways of doing business have become outdated, and the industry has to react much faster to changes. This is where practical technology must come into play.
The potential of technology in this industry is limitless. Changes are coming thick and fast, and must continue to learn how to respond and apply new practical and efficient systems.
Driven by guest expectations and market forces, digital transformation is well underway. QR codes, robots, chatbots, virtual and augmented reality, big data, AI, biometric recognition, voice control, and many other systems are becoming mainstream. Organisations need to invest in these systems and the people who understand their application. But .….. digital transformation should not depersonalizing the guest experience.
Even more important is the need to address the labour and talent issue. This is one of the most challenging elements faced by the industry worldwide. Attracting, retaining, and motivating talent of all ages is an absolute priority. Job satisfaction, flexible working hours, efficient communication, personal growth and development, recognition, and, most importantly, compensation must all be seriously addressed. Organisations cannot hold back talent in restrained or antiquated working practices anymore. Expectations have changed, and companies must change accordingly.
Addressing the needs of the younger generations is also a priority. With their reliance on social media and technology, they tend to view careers as a series of different jobs, and flexible work is very attractive to them. The perception of rigidity and hierarchical ways of doing business is a turn-off. What can organisations do to attract and motivate them? Can organisations shift from traditional cultures of ‘command and control’ to silo-free models where collaboration is central? Newer generations of employees may respond positively to this.
As for investment trends, the high cost of capital and skyrocketing costs (inflation) are seeing investors stay away from developments built from scratch. Instead, they are looking to invest in existing businesses and then make the necessary physical improvements to compete at par. The functionality and efficiency of a building are more important than “nice-to-have” but potentially unessential features. In short, they are looking for more of an added-value investment.
A burning question from most in the travel and tourism business is when will China/Chinese resume international travel? Catering to this large market needs is a trend in itself.
As we move “onward and upward” the industry will always be faced with new/emerging trends, type/reason of travels and also to 3rd party services providers in the future (i.e. new version of Airbnb, co-living etc.). Responding to new consumer’s expectations, digitalization/new technology, new all-in-one platforms, redefining of MICE, extreme environmental events, labor shortage, higher operating costs, new carriers and many others, it simply “comes with the territory”.
Travel and tourism are huge industries, and each business has to find its niche and develop a strong competitive advantage based on innovation, differentiation, and consumer preferences. For the best shot at remaining relevant, organisations must identify their common and most important guests – and determine what trends apply to them.
Hospitality is a people’s business; it is about giving the respective target audience the best experience possible. In saying that, the industry has to learn to foresee, plan, and accept continuously shifting trends. Some trends can’t be ignored, and some won’t go away.
