YEAR IN REVIEW & THE YEAR AHEAD 10 KEY TRENDS FOR DESTINATION & TOURISM MARKETERS
DECEMBER 13, 2017 WEBINAR RESOURCES Webinar Recordings, Slides, Research and Additional Resources
Available within 24 hours/by December 14th 2017 www.MilesPartnership.com/Phocuswright
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Chris Adams Douglas Quinby +1 303-842-3394 +1 404-760-9182 [email protected] [email protected] Social: KiwiColorado Twitter: twitter.com/douglasquinby Meet Miles 100% travel 240+ travel 7+ year marketing average client Meet experts relationship Miles
90+ 70 million travel brands visitors to clients’ websites Meet our clients In Association with: How to participate in today’s webinar
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Today’s webinar is being recorded and will be made available for later viewing Top 10 Digital Travel Trends for DMOs in 2018
Douglas Quinby SVP Research, Phocuswright [email protected] @douglasquinby 1) The Era of Online Travel Is Over These days, just about every traveler does something online.
© 2017 Phocuswright Inc. All Rights Reserved. Percent of Travelers Who Do Anything Trip-Related Online
100%
80%
60%
40%
20%
0% India U.K. Germany U.S. France Australia Brazil Korea China Japan Southeast Asia*
Note: *Singapore, Thailand, Malaysia, Indonesia Base: Online Travelers: (U.S. N = 857; U.K. N=795; AU N=786; IN N=777; FR N=762, DE N=760; BR N=740; JP N=811; KR N=753) Sources: Phocuswright’s Google Travel Study 2017; Phocuswright’s The Southeast Asian Traveler; Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions © 2017 Phocuswright Inc. All Rights Reserved. In the U.S., Online Travel Has Reached Maturation, If Not Saturation As online became mainstream, growth has slowed, mapping to the total market
120% Total Travel Annual Change Online Travel Annual Change 100%
80%
60%
40%
20%
0% 2000 2005 2010 2015 2020 -20%
-40%
Source: Phocuswright’s U.S. Online Travel Overview Sixteenth Edition © 2017 Phocuswright Inc. All Rights Reserved. 2014-2017 CAGR for Select Digital Travel Markets
35% Bubble size reflects relative 25% online market size in US$.
15%
5%
-5% China Indonesia India U.S. U.K. Japan Italy Brazil
Source: Phocuswright’s The State of Digital Travel 2017 © 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: Online travel isn’t over – it’s everything. Digital should be at the center of your marketing strategy and spend.
© 2017 Phocuswright Inc. All Rights Reserved. Recommendation & Resources RECOMMENDATION & RESOURCES
Hyper Informed Traveler o Media usage has surged across all channels o Includes >120 website visits prior to booking
PRIORITY: Planning for content & campaigns that works across a complex & fragmented media environment
Source: State of the American Traveler 2014-2017. Destination Analyst Resource: Blog: ‘The Rise of the Hyper Informed Traveler’ 2) There is Nothing That Can’t Go Digital Source: Wired and Sabre - http://www.wired.com/2012/07/sabre/
© 2017 Phocuswright Inc. All Rights Reserved. 22 Today: Sabre averages 164K fares shopped every minute
Source: Sabre © 2017 Phocuswright Inc. All Rights Reserved. 23 The digitization of everything means the data of everything Beyond Pricing: Winner of the Best Startup Award at 2016 Phocuswright Conference
© 2017 Phocuswright Inc. All Rights Reserved. © 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: The future of our industry will be driven by data, and winners will be determined by data-driven decision- making. Every travel company must become a data company. What decisions are you making today without good data?
© 2017 Phocuswright Inc. All Rights Reserved. RECOMMENDATION & RESOURCES
Metrics that Matter o The rights skills, technologies & partners o Leverage the data that matters
PRIORITY: Define Online Goals/Conversions (Signals of Intent To Travel) that are meaningful indicators of active trip planning behavior
Resource: Summary of 13 CVB Website Conversion Study 3) The Big Story in Mobile Mobile Share of Online Gross Bookings by Region
70% 60% 50% 40% 30% 20% 10% 0% 2015 2016 2017 2018 2019 2020
APAC* Europe U.S.
Note: *Mobile bookings calculations for APAC includes China, India and Japan only. Sources: Phocuswright’s Global Mobile Market Sizing: Focus on U.S., APAC and Europe, 2017 © 2017 Phocuswright Inc. All Rights Reserved. And it’s mostly China.
Source: Phocuswright’s The State of Digital Travel 2017 © 2017 Phocuswright Inc. All Rights Reserved. Top Five Travel Markets in APAC, 2018 (US$B)
180
160
140
120
100
80
60
40
20
- China Total Japan China Mobile Southeast Asia Northeast Asia Travel Bookings
Source: Phocuswright’s The State of Digital Travel 2017 © 2017 Phocuswright Inc. All Rights Reserved. 2018 Mobile Share of Online Travel, by Market
80%
70%
60%
50%
40%
30%
20%
10%
0% China Japan U.K. India U.S. ANZ
Source: Phocuswright’s Global Mobile Market Sizing: Focus on U.S., APAC and Europe, 2017 © 2017 Phocuswright Inc. All Rights Reserved. Source: Google Images © 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: Asia and especially China are leading the world in mobile innovation, as Chinese travelers increasingly to everything via mobile. If you are not mobile, you’re not ready for China.
© 2017 Phocuswright Inc. All Rights Reserved. RECOMMENDATION & RESOURCES
Telling Your Story on Mobile
o Over 60% of Destination & Travel website interaction is on mobile
o Research shows modest usage of Destination websites in market
PRIORITY: Develop a responsive website with the content & features that tells your story from inspiration to the in-market experience.
Resource: 6 Best Practices for Mobile Design in 2018 4) The Big Get Bigger (and other breaking news) Other OTAs Global Gross Bookings
PCLN of OTAs & 66% Priceline/Expedia EXPE* Combined Share 38%
2011 2016
Note: *Excludes gross bookings for Egencia, Expedia’s corporate travel business. Includes Travelocity, Wotif and Orbitz in 2015. Source: Phocuswright Inc. © 2017 Phocuswright Inc. All Rights Reserved. Airbnb vs. Hotels: Total App Downloads
50
45 Wyndham 40 Club Carlson 35 Best Western 30 Choice Hotels 25 Hyatt 20 SPG 15 IHG 10 Marriott 5 Hilton Cumulative Downloads(M) 0 Accor Airbnb Hotel Brands
Source: Phocuswright & Apptopia: The Travel App Landscape © 2017 Phocuswright Inc. All Rights Reserved. This is a growing debate that spans all industries: Too much power in the hands of too few?
Sources: The New York Times, TechCrunch, The Guardian DMO Takeaways: 1) SEM/online ad costs will continue to rise 2) Organic search traffic will get harder 3) Brands of all segments and sizes need to work smarter with the big brands, and where possible leverage scale through associations and industry partnerships
© 2017 Phocuswright Inc. All Rights Reserved. 5) Visual & Personal: The Future of Online Travel Advertising Source: Google Images © 2017 Phocuswright Inc. All Rights Reserved. What Travelers Remember of Online Travel Ads
49% 41% 37% recalled a recalled a recalled a visual or picture price or deal personalized ad
Question: What do you remember most about the travel advertising you saw online? Please select up to three. Base: U.S. travelers with online access (N = 1,662) Source: Phocuswright and Microsoft, The Travel Marketer’s Guide to the U.S. Digital Travel Landscape, 2017 © 2017 Phocuswright Inc. All Rights Reserved. Influence of Travel Advertising Platforms
Very/extremely influential Somewhat influential Not/slightly influential
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Snapchat* Instagram* YouTube* Bing* Pinterest* Google Travel Search Website/App OTA Website/App Facebook
Base: U.S. travelers who clicked ads online access (N = 1,183); *Small sample: Bing (N=36), Youtube (N=86), Instagram (N=60), Pinterest (N=30) Source: Phocuswright and Microsoft, The Travel Marketer’s Guide to the U.S. Digital Travel Landscape, 2017 © 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: Online travel advertising is impactful, and it is possible to cut through the clutter. But keeping it visual – and personal – is the key.
© 2017 Phocuswright Inc. All Rights Reserved. 6) The Real Revolution in Tours & Activities $147B in 2017
Source: Phocuswright’s Tours & Activities Come of Age: Global Travel Activities Marketplace 2014-2020 © 2017 Phocuswright Inc. All Rights Reserved.
80% of gross bookings are offline. . Source: Phocuswright’s Tours & Activities Come of Age: Global Travel Activities Marketplace 2014-2020 © 2017 Phocuswright Inc. All Rights Reserved. Tour & Activity Suppliers with Third-Party Reservation System
45%
11%
2011 2016
Base: 2011: 340 companies; 2016: 980 companies Source: Phocuswright’s Tours & Activities Come of Age: Global Travel Activities Marketplace 2014-2020 © 2017 Phocuswright Inc. All Rights Reserved. More than $220M Raised in this Sector this Year
$90M $75M $17M (two rounds)
$12M $10M $6M
$6M $4M $1.8M
Source: Phocuswright’s The State of Digital Travel 2017 © 2017 Phocuswright Inc. All Rights Reserved. Easy
Source: Expedia, TripAdvisor © 2017 Phocuswright Inc. All Rights Reserved. Beautiful
Source: Expedia, TripAdvisor © 2017 Phocuswright Inc. All Rights Reserved. Bookable
Source: Tiqets © 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: This is why people travel in the first place, but the sector is still very fragmented and has enormous marketing challenges. DMOs can play a critical role in helping local attractions and tours reach travelers “when they get there.”
© 2017 Phocuswright Inc. All Rights Reserved. RECOMMENDATION & RESOURCES
Role of Visitor Centers o 32% of US travelers report using an official Visitor Center o Numbers are declining in many markets
PRIORITY: Modernizing its role to service visitors in a digital & mobile centric marketplace
Source: State of the American Traveler, July 2017. Destination Analyst 7) Artificial Intelligence & Voice-Activated Search The Future of A.I.?
© 2017 Phocuswright Inc. All Rights Reserved. The Future of A.I.?
Welcome to Declan Suites San Diego! Text us if you need anything! On a scale of 1-5 (5=best), how is your experience so far?
1… you guys booked me in a single king and I requested a double queen.
Mr. Jones, we apologize for the inconvenience. A bellman will be up shortly to escort you to your new room.
Ok. Thanks.
Please text us if you need anything else, we’re here 24/7.
Wow, thanks for the bottle of wine, I was not expecting© 2017 that. Phocuswright 5 star recovery Inc. forAll Rights Reserved. sure! Online Traveler Interest in Using a Digital Assistant to Plan Travel
50%
40%
30%
20%
10%
0% U.S. U.K. France Germany
Base: Leisure Travelers: (U.S. N=857; U.K. N=795; FR N=762, DE N=760 Source: Phocuswright’s Google Travel Study 2017 © 2017 Phocuswright Inc. All Rights Reserved. The Not-So- Sexy Present of A.I.
© 2017 Phocuswright Inc. All Rights Reserved. “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”
— Roy Amara, researcher and futurist
© 2017 Phocuswright Inc. All Rights Reserved. Artificial Intelligence for Travel Part 1 of a 4-Part Series on AI in Travel from Phocuswright 1. Introduction and discussion of how AI works 2. Speech recognition and natural language processing 3. Machine learning and neural net functioning 4. Opportunities in the travel industry • Dreaming, searching and shopping • Bots • Customer service
© 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: A.I. is not just another tech fad, but the next big platform shift. But it is very early days and will take time. The near-term impact is significantly overhyped, while the long-term implications will be profound, if not yet clear. Keep self-educating!
© 2017 Phocuswright Inc. All Rights Reserved. RECOMMENDATION & RESOURCES
Voice Raises the Bar on Content & SEO
o Longer, more complex searches
o Reassess your content strategy
PRIORITY: Structuring Content (Schema/Rich Snippets) so they can appear as Quick Answers is critical.
Resource: Read our collection of blog posts on what’s new in SEO 8) Enough with Millennials Millennials.
© 2017 Phocuswright Inc. All Rights Reserved. Boomers
© 2017 Phocuswright Inc. All Rights Reserved. Not as many Seniors as Millennials Millennials
Boomers
Gen-X
Source: Phocuswright's 2017 U.S. Consumer Travel Report © 2017 Phocuswright Inc. All Rights Reserved. The kids are gone
© 2017 Phocuswright Inc. All Rights Reserved. And they’ve already bought everything
© 2017 Phocuswright Inc. All Rights Reserved. Boomer trips Fewer, but longer, & more planning
Source: Phocuswright's 2017 U.S. Consumer Travel Report © 2017 Phocuswright Inc. All Rights Reserved. Last Trip Spend >$3K 40% 30% More spend
Millennials Boomers
Source: Phocuswright's 2017 U.S. Consumer Travel Report © 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: Don’t be so millennial obsessed that you overlook the big boomer wave ahead. They are wealthy, with time on their hands, and planning their travel.
© 2017 Phocuswright Inc. All Rights Reserved. Bonus Trend: Family Travel
© 2017 Phocuswright Inc. All Rights Reserved. 9) The Next Big Thing is Blockchain, Right? What is Blockchain?
Source: 123RF © 2017 Phocuswright Inc. All Rights Reserved. What Makes It Special?
1. Distributed or decentralized ledger (no tollgates) 2. Unbreakable / un-hackable 3. Application: establishing contracts and transferring value
© 2017 Phocuswright Inc. All Rights Reserved. © 2017 Phocuswright Inc. All Rights Reserved. “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”
— Roy Amara, researcher and futurist
© 2017 Phocuswright Inc. All Rights Reserved. This is a platform that will require development. Companies will have to invest to build beautiful applications on top of it. Think of…
© 2017 Phocuswright Inc. All Rights Reserved. Blockchain Update: How and Why Blockchain Can Transform the Travel Industry from Phocuswright
© 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: As with A.I., it is very early days for Blockchain, and it will take time. It is just plumbing that will need investment by travel players to become impactful for travel, but the opportunities are significant, especially for contracting, payments, identity and fraud management. Keep self-educating!
© 2017 Phocuswright Inc. All Rights Reserved. 10) How Real Is Virtual Reality? My Next Trip?
No thanks.
Source: Retail Innovation © 2017 Phocuswright Inc. All Rights Reserved. Planned Tech Investments by Travel Brands
100% A little planning 90% Small development/experimentation 80% Active/heavy development or investment 70% 60% 50% 40% 30% 20% 10% 0% Customer support Chat bots Artificial Voice Virtual Augmented via messaging intelligence search reality reality
Base: Travel Companies who spend on online advertising: (N=165) Source: Phocuswright and Microsoft, The Travel Marketer’s Guide to the U.S. Digital Travel Landscape, 2017
© 2017 Phocuswright Inc. All Rights Reserved. DMO Takeaway: Augmented reality in fact offers the most near-term opportunity to engage travelers in destination, while virtual reality may hold more promise in influencing that destination decision to begin with – but reach is still limited.
© 2017 Phocuswright Inc. All Rights Reserved. Polling Question
Which of these selected trends we presented today do you think will have the biggest impact on your strategy and operations in 2018 and beyond? 1. The digitization of everything: leveraging data 2. Mobile Innovation 3. The big getting bigger 4. Boomers 5. A.I & Voice Activated Search
© 2017 Phocuswright Inc. All Rights Reserved. Resources WEBINAR RESOURCES Webinar Recordings, Slides, Research and Additional Resources
Available within 24 hours/by December 14th 2017 www.MilesPartnership.com/Phocuswright RESOURCES
Stay Connected: o Follow our blog www.MilesPartnership.com/Blog o Explore White Papers & Research www.MilesPartnership.com/ how-we-think o Sign up for upcoming webinars o Watch past webinars UPCOMING WEBINAR: JANUARY 25, 2018, 2PM EST
Meetings and DMOs • Major Industry Research Study • How Meetings are Changing • What Meeting Planners Need • How DMOs can Add Value https://budurl.me/FutureofMeetings The Travel Marketer’s Guide to the U.S. Digital Travel Landscape prepared by Phocuswright with Bing
Download your free copy today
Source: Phocuswright and Microsoft, The Travel Marketer’s Guide to the U.S. Digital Travel Landscape, 2017 © 2017 Phocuswright Inc. All Rights Reserved. Free Research Relevant for Destinations
1. Mobile, Millennials and Emerging Markets: The Next Wave in Global Travel 2. Learning from Your Customers: Smart Machines Have Arrived 3. The Perfect Path: What Travelers Want - and Don't Want - in Their Digital Journey 4. 2017 Phocus Forward: The Year Ahead in Digital Travel 5. User-Generated Content Has Moved Into the Marketing Mainstream 6. The State of Travel Startups 2017 Preview 7. Consideration Phase: Travel's Untapped Opportunity 8. Redefining the Travel Customer Experience
© 2017 Phocuswright Inc. All Rights Reserved. Phocuswright
Research & Upcoming Events 2018
Cees Bosselaar Vice President, Business Development and Destination Specialist Phocuswright Inc.
© 2017 Phocuswright Inc. All Rights Reserved. See you in Amsterdam!
15-17 May 2018 Amsterdam, The Netherlands phocuswrighteurope.com November 13 – 15, 2018 Los Angeles, California
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Chris Adams Douglas Quinby +1 303-842-3394 +1 404-760-9182 [email protected] [email protected] Social: KiwiColorado Twitter: twitter.com/douglasquinby