As global forces continue to converge and trigger unprecedented change, the future of travel and tourism will be shaped by those companies and destinations that offer unique and meaningful experiences.
Providing personal service to sustainability-minded customers will also be critical in the evolving travel and tourism industry of the future, as will having trustworthy and responsible leadership in place.
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These are the key takeaways from a new report from the World Travel & Tourism Council (WTTC) titled “World, Transformed: Megatrends and their implications for Travel & Tourism.”
The report, produced in partnership with Bloomberg, examined how powerful global demographic, political, economic and technological forces are impacting the travel and tourism landscape. It also covers how such forces are producing different expectations among consumers and creating different obligations for businesses and policymakers in order to succeed.
One of the fastest growing sectors, travel and tourism accounts for more than 10 percent of global GDP, the WTTC said.
Sustaining such growth and reaching industry forecasts, such as the eight billion air travelers predicted by 2037, will require continuous innovation and reinvention, according to the new report.
“We live in an era of rapidly accelerating change. Powerful, global forces are fundamentally changing the way we live, work and travel at a rate we have never witnessed before. These converging forces—or megatrends—present immense opportunities for those who recognize them and adapt their strategies,” said Gloria Guevara, WTTC president, and CEO, at the launch of the report at the FITUR travel fair in Madrid.
“The challenge is for destinations and businesses to embrace the opportunities of this changing global landscape and the expectations of tomorrow’s consumers.”
Additional key report takeaways include:
—Consumers are increasingly moving beyond experiences as social currency to seeking shared experiences to deliver meaning, self-improvement and stronger connections.
—Millennials and Generation Z have little loyalty to employers or brands and are more likely to rely on personal networks than experts.
—Consumers value technology but are uncomfortable with over-automation, which seeks to replace customer interaction with intelligent bots.
—Consumers want to be treated as individuals by companies that trust their privacy, share their values, and provide authenticity.
—Travel and tourism companies will succeed by responding to the rise of ethical consumption trends and protecting the very destinations they promote.
“As these implications converge, organizations in the travel and tourism industry will need to make investments to take advantage of the new realities,” said Andrew Benett, chief commercial officer, Bloomberg Media Group. “Businesses will need to dramatically enhance their understanding of their customers—present and future—and ensure that they are maintaining a competitive edge by establishing a voice within the global conversation.”
The report outlines five areas where change will be most profound in the travel and tourism industry.
As people, communities, and businesses become more sophisticated in adapting new technologies for analog experiences, new ideas and beliefs are emerging about how best to live a connected life.
Online and offline experiences, as a result, are becoming increasingly integrated. More than $8.2 trillion in global expenditure is forecasted for the experience economy, in addition to an increased emphasis on physical and mental wellbeing.
With experiences at the core of travel and tourism, the sector has the potential to design meaningful, unique, frictionless and even unplugged journeys that directly respond to these changing values.
The growth of tech-powered economies such as the “gig economy” and “sharing economy” continues to create new expectations for work, life and culture.
Twenty-five percent of workers in the US and EU engage in independent work today, and the independent workforce is only going to rise. As the structure of people’s lives become more fluid and self-directed, travel will become more of a lifestyle, mobility will increasingly become communal and service-based, and businesses will need to rethink their workforce.
The power of data will drive a new frontier of innovation and deliver unprecedented ability to better understand and predict outcomes.
While over 180 ZB of data is expected to be generated by 2025, consumers remain uneasy when it comes to their security and privacy. These technologies offer tremendous opportunities for the travel and tourism sector, including leveraging data to build a fluid, cohesive travel experience, implementing large-scale Internet of Things, facial recognition and use of voice assistants to streamline travel.
Businesses will need to lean into brand values to guide their innovation and prioritize transparency with their consumers.
Significant shifts in power dynamics will have dramatic effects on both local culture and global markets as technology, globalization, and population growth continue to redistribute power. These forces create new centers of social and economic influence in the East and South.
For travel and tourism organizations, merely establishing a presence in new markets won’t be enough as it will be critical to understand the future consumer. Businesses will need to invest in creating sharable moments, strive for customer service excellence and ensure their brand has a point of view in the global, social discussion.
As the availability of resources and health of our planet are increasingly threatened, there is a need for responsibly balancing short and long-term priorities.
By 2050, the global population will exceed 9.7 billion and consumption of natural resources will triple. Sustainable business practices and aligning brand stories to sustainable solutions can become the core of a robust growth strategy for the travel and tourism sector. Safeguarding destinations, environmental leadership, and community health will, therefore, be integral to the customer experience.