The Future Looks Bright for the Global Travel and Tourism Industry

Published by Darron Toy on

What does the future look like for the travel
and tourism industry? Let’s talk about the details. Hi, I’m Jack Plunkett. Today, we’re going to talk about the global
travel and tourism industry. And the future really looks bright, and that’s
for several reasons. First of all, the expanding global middle
class means more and more people–millions more every year–have funds available to travel. They want to go on vacations, they want to
take their children out to see the rest of the world, they want to go shopping, they
want new experiences, and they’re willing to spend the money. But there’s also a business side to travel,
which is very, very important. Business travelers tend to pay more for their
plane tickets, they tend to gather in huge numbers in hotels for conferences and business
meetings that throw off tremendous income for the hotels that host them, they tend to
spend more money on expense account on dining out and entertaining clients. This is just an incredibly important sector
to the travel industry, which of course ebbs and flows a little bit as the economy comes
and goes. One of the first things to be cut when the
economy goes soft is travel, and that is exacerbated by the fact that there are some options to
travel to a face-to-face meeting because we can now do pretty good video conferencing
online. So, the travel industry has to always maintain
itself as very vital to the business sector and do everything it can to attract those
business travelers. Now, what about the consumer side? There are a lot of really interesting things
going on here, and one of those is the very rapid growth of the cruise industry. If you think about cruises, they’re in a really
unique position because when a passenger buys one ticket that includes transportation on
the ship itself from port to port, it includes a hotel-type room, it includes all the food. So, cruise lines tend to off bargain prices
that consumers see as all-inclusive travel, they think it’s a really great deal, but once
they get aboard they’re really, really encouraged to spend more money in the bar, spend money
in the casino, buy lots of packaged tours–buying the passenger ticket is just a down payment. Now, another segment that’s of great interest
to the travel industry is the wealthy traveler, and there’s more and more competition for
true luxury hotels, true luxury dining experiences in those hotels, really first-class seats
on airlines that are trying hard to outdo themselves, building little first-class pods
or almost suite-like areas on the airplanes, and charging astronomical amounts of money
for those tickets. So, what do more mainstream or middle-class
travelers want? What do typical people want and are likely
to want over the near-future? And it’s really concentrated on a few things. More and more, they want to feel like they’re
getting a special, local experience when they go somewhere on vacation. They want to feel like they’re having less
impact on the environment as they travel. What do consumers want to do when they travel
today? They want to post about it. So, travel service providers, whether they’re
airlines, tour operators, or hotels and restaurants, are trying really hard to give people experiences
that are going to look great on Instagram, give them things they can post about on Facebook,
things that are very photo-worthy. Finally, we have to talk about the sharing
economy’s impact on travel. Think about the impact of Lyft and Uber and
Didi and similar companies, ridesharing companies, on the taxi industry alone, for instance. Why wait for a taxi when you can call on demand
an Uber car or a Lyft and get where you’re going and just pay for it with your smartphone? This is absolutely changing transportation
for travelers in a huge way. Also, where people are staying. Airbnb is having a phenomenal impact on the
hotel industry, to the extent that hotels are losing market share and trying to figure
out how to participate in new types of buildings that are somewhat sharing-oriented on their
own. At the same time, OTAs, or “online travel
agencies,” like Priceline, Expedia, have revolutionized the way people book their hotel rooms. Those companies are taking huge amounts of
revenue off the top for booking hotel rooms for big chains, which has caused chains to
really scramble to figure out how to encourage people to book directly. Frequently, a family would much rather have
a three-bedroom house they can rent with a washer and dryer and a kitchen, maybe a private
pool in the backyard, that may even be less expensive than renting two or three hotel
rooms to hold Mom, Dad, and the kids. It’s really, really a big change in the way
people book, stay, and utilize the rooms, and in the way they think about planning their
travel. And again, sharing economy technologies are
just going to continue to really, really change the entire travel industry. Now, that’s a brief overview of what’s going
on in the travel industry. For everything you need to know about the
travel industry, be sure to see Plunkett’s Airline, Hotel & Travel Industry Almanac,
which we rewrite and republish every year–it’s a standard item in corporate offices and libraries
around the world–and the related travel industry segment on Plunkett Research Online. Thanks.

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