There will be no return to pre-crisis conditions, says a global report. The customer has changed and with it, suppliers will have to as well.
After such a fluid and turbulent year, there are few who would dare predict with any certainty what will happen in 2010. The ITB World Travel Trends Report, issued annually right before the world’s biggest travel fair is held in March, put it aptly when it released its findings in December 2009.
It concluded that “there are currently too many uncertainties to be able to predict with any real confidence the likely trends in terms of travel and tourism demand from the world's leading source regions.”
And it said “the best 'guesstimates' suggest that neither Europe nor North America will do better than achieve a flat year in terms of growth, unless the economic recovery underway in the USA is stronger than currently expected. But Asia Pacific should see at least a modest increase in outbound trip volume – mainly for intra-regional destinations – a trend also forecast for South America and the Middle East.”
Things look better in Asia…
Figures released by the Pacific Asia Travel Association (PATA) at the end of last year showed a slight recovery in visitor arrivals to the region. The number of international visitors to the Asia Pacific region grew by 2.2 per cent year-on-year in October 2009, compared to the same month in 2008. Southeast Asia recorded a strong 7 per cent growth in international visitor arrivals.
Said Mr Kris Lim, Associate Director of PATA’s Strategic Intelligence Centre (SIC), “October marks the third straight month of above the line gains for international visitor arrivals to the Asia Pacific region. The growth rate of 2.2 per cent achieved in October is by far the best year-on-year improvement in a very depressed year.
“For the first 10 months of the year, we are still some 4 per cent off the pace in terms of arrivals growth compared to 2008 levels, and about 3 per cent off vis-à-vis 2007. We are expecting stronger gains for the remaining two months of the year and the latest November results from a number of destinations support those expectations.”
…but it won’t be the same again
Amid the signs of recovery, the Pisa Forum, which issued the ITB World Travel Trends Report, warned that the market can no longer be expected to return to pre-crisis characteristics and behaviour.
“The recession, coupled with advances in technology and changing demographics and lifestyles, has had a huge impact on travellers, and destinations and suppliers need to adapt to the new marketplace if they are to prosper or even survive.”
Trends that will matter
The report identified the following underlying trends to look out for in the coming year:
- The ageing of the population in main source markets and the impact this is having on travel preferences and behaviour
- Green consumerism – increased environmental awareness and concern about issues such as climate change
- The increase in discretionary thrift and mercurial consumption, or lack of brand loyalty
- A greater focus on authenticity in terms of destinations, products and experiences
- Demand for greater value for money – at all price and market levels
- A search for simplicity
Consumers who will matter
Apart from the above travel trends that have been projected as a result of an uncertain economic landscape and compounding factors, a Harvard Business Review by John A Quelch and Katherine E Jocz said that the current downturn has also resulted in four distinct types of consumers, and their behaviour can be applied to travel and tourism.
They four types of consumers are:
The Slam-on-the-Brakes consumers, who feel the hardest hit and put all spending on hold.
The Pained-but-Patient consumers who economise, but less aggressively than the Slam-on-the-Brakes. They adjust their spending downwards in the short term but still plan ahead, in the hope of coming out of it in the foreseeable future. These consumers are unlikely to cancel holiday plans completely.
The Comfortably Well-Offs, who keep buying and travelling, but are more selective in what they buy, as well as being more conscious of value for money. They are also increasingly careful not to exhibit their travel behaviour too ostentatiously – a sign of the new 'luxury shame'.
The Live-for-Todays, who carry on as usual, though delaying major purchases. But these types of consumers are more likely to prioritise holidays over consumer goods such as washing machines, or even cars.
The consumer has landed
Indeed, travel industry watchers in Asia say that in no other year has the consumer held such sway over suppliers as travel demand plummeted, supply rose and new technologies surfaced to change the way consumers planned, shopped and bought travel.
As a result, they say, a new type of consumer has emerged out of 2009 –smarter, even more demanding, more tech-savvy and ever more conscious of the value they want out of not only their travel experiences but everything they consume.
Travel observers in Asia say it will be all about the customer in 2010 – a smarter, value-seeking, online savvy consumer who has emerged from the Year of the Deal and can now be found from emerging markets like Vietnam, to matured markets like Singapore.
