Travel & Tourism Industry
ANNUAL REPORT 2017
International Travel & Tourism
The Travel & Tourism sector continues to experience robust growth. According to the latest UNWTO World Tourism Barometer, destinations worldwide received 1.1 billion international tourists in the first ten months of 2017. This represented a 7% increase or 70 million more international arrivals than the same period in 2016. This strong momentum is expected to continue in 2018 at a rate of 4%-5%.
The strong tourism demand of the earlier months of 2017 was maintained through October. This was led by travel to Mediterranean destinations, including a rapid recovery in Turkey and double digit increases for most of the regions’ destinations. Europe recorded extraordinary results for a large and rather mature region with 8% more international arrivals than in 2016. Africa rebounded in 2017 with 8% arrivals. Asia and the Pacific had 6% growth, the middle East 5% and the Americas 3%.
2017 was marked by a strong pickup of expenditure on international tourism in Brazil (+33%) and the Russian Federation (+27%) after some years of declines. Most of the other source markets continued to grow at a sustained pace and emerging markets appear to drive growth in international tourism arrivals and international tourism expenditure.
India has the potential to disrupt the global travel industry in the future. UNWTO predicts that India will have 50 million outbound tourists by 2020. There has been a 3.7-times increase in the total spend of customers travelling to international destinations compared to domestic destinations with about 39% more Indians travelling this winter compared to 2016. The average spend on travel is likely to increase too.
The head of China’s biggest online travel service Ctrip is predicting the number of passport-holding Chinese citizens will double to 240 million by 2020, a trend that could fuel an explosion of mainland tourists exploring the world. China’s economic boom fuels growth in household expenditure which is an important driver behind the nations’ desire to travel. Data released at the Arabian Travel Market 2018 predicts Chinese arrivals to the GCC will increase by 21% to 2021, rising to 2.5 million visitors annually.
International travel continues to grow strongly, consolidating the tourism sector as a key driver in economic development. As the third export sector in the world, tourism is essential for job creation and prosperity for communities around the world, UNWTO Secretary-General Zurab Pololikashvili. “Yet as we continue to grow, we must work closer together to ensure that this growth benefits every member of every host community and is in-line with the sustainable Development Goals.”
The year 2017 had a number of positive contributing factors for business travel. New technology to make travel more efficient were unveiled, such as biometric identification to speed up security such as facial recognition technology checks at airports.
‘Bleisure’ travel segment, a combination of business and leisure travel is also increasing, which presents new sales opportunities. Research from VisitBritain looked at business event delegate spending and travel behaviours and found that business delegates attending a business event in the United Kingdom, and who extended their trip for leisure purposes, would on average spend double the amount of money (£1,942) than if they travelled home immediately after the event (£991).
Research by Carlson Wagonlit Travel (CWT) found that despite global airline capacity increasing 7% in 2017 and forecast 6% rise in 2018, airline prices are expected to rise along with oil prices in 2018. This can potentially make business travel more expensive for corporate buyers. Globally, air price projections are set to increase 3.5%.
On the other hand, American Express predicts that in 2018, improvements in the high-speed rail networks may offer business travellers an attractive alternative to short-haul air travel in Europe and Asia. The trains are increasingly upgraded and equipped with amenities such as power sockets and Wi-Fi.
Travel and Hospitality Megatrends
In the 2018 Skift Travel Megatrends reported that the coming year will be about travel’s continued rise and macroeconomic growth despite following two years of geopolitical tensions and extreme natural events. With the arrival of modern technologies, brands are focused on strategic expansion beyond traditional boundaries. Operators are finding new ways of bundling in travel while new unbundling continues to change how travel gets sold. Innovators are taking novel approaches to creating immersive experiences in hospitality in the face of increased digitization. Blockchain looms on the horizon and has the potential to disrupt travel.
A mobile-based revolution in travel services will bring personalization to the forefront. With the convergence of emerging tech tools like artificial intelligence, machine learning, locations service and cloud-based data, mobile usage will shift from a device used reactive to one that proactively handles an issue before a traveller even knows they have one.
Personalization will be essential to building loyalty. With the rise of big data and customer centricity, delivering a personalized end-to-end customer journey will be enabled by customer intelligence. Consumers are much more likely to make a purchase when they are recognized, remembers and receive relevant information.
The hotel of the future will become more immersive as consumer demands and mobile technology evolves, hoteliers are becoming smarter about designing spaces that can deliver a true sense of community, blurring the lines between residential, commercial, retail and hospitality.
City leaders in government, tourism, and economic development are collaborating more strategically to grow their leisure and business travel sectors in alignment with the interests of their local communities and industries.
Travel and hospitality brands are excepted to develop a strong Diversity and Inclusion position. Larger issues of immigration and restrictions placed on it in various countries also have a direct impact on the travel economy. The industry relies on immigrant labour market for their daily operations and in 2017 restrictions have had a negative effect on overall travel. This trend will likely continue in 2018.