New Travel Research: Key Findings

Euromonitor International is pleased to announce that our new Travel research will be published this week. The new research provides the latest insights into how the travel industry performed over 2014 and future expectations to 2019.

In this article we provide a sneak preview of trends and expectations. Check back throughout the week for more travel market research and subscribe to our email bulletins for more travel information.

Tourism flows hampered by geopolitics

Growth in the travel industry was tempered in 2014 by ongoing geopolitical tensions as regional conflicts took their toll on tourism demand. Russian outbound demand declined sharply in 2014 by over 15%. This downward trend is expected to continue in 2015 as the Russian economy contracted in the first quarter of the year and consumer confidence fell to its lowest level in six years as a result of the conflict in Ukraine and ensuing international sanctions, compounded by falling oil revenues. Falling outbound Russian demand had a knock-on effect on destinations far and wide, including Turkey, Greece, Switzerland and Thailand.

In the Middle East, turmoil is constraining tourism demand as the conflict in Syria rages on and its effects spread across the region, with sporadic violence and terrorist attacks undermining consumer confidence in destinations such as Egypt which is in recovery, and some travel advisories remain in place.

Mobile transformation

Travel continues to be disrupted by new business models and technology. Mobile is now very much a reality of how consumers digest travel information and, more importantly, how they book.

Online travel agents are driving the charge, with mobile sales responsible for one fifth of all sales worldwide, having experienced exponential growth since the launch of smartphones.  Mobile penetration is highest for OTAs, with countries such as Sweden, Japan, the UK and Australia expected to see mobile penetration rates exceed 50% by the end of the forecast period.

Airlines, hotels, car rental, transport and activity providers risk falling behind the curve and losing valuable share to intermediaries if they fail to keep up with the mobile trend that is taking the travel industry by storm.

“To respond to changing consumer behaviour driven by the rise of mobile, travel companies need to adapt their business models to become real-time providers of travel services and assistance for always-connected consumers on the go.” Angelo Rossini, Online Specialist

Pricing pressure from private rentals

The Airbnb model has taken on a life of its own, with sharing a fact of life for many consumers – sharing their homes, cars, food, skills and time. This not-so-new concept has undergone a total transformation thanks to mobile technology, shaking up the lodging category in terms of consumers’ expectations and challenging brand loyalty.

Private rentals account for a mere 6% of value sales, but their presence in terms of supply is set to double to over two million private rental outlets by 2019, flooding the market and exerting further pressure on prices for the lower-to-mid-end lodging market, especially the private rentals category itself.

“With private rentals reshaping the hospitality landscape, hotels need to decide whether to fight or collaborate with peer-to-peer platforms in an effort to benefit from changing consumer demands.” Wouter Geerts, Lodging Specialist

Airlines strive for personalisation in travel

Against a backdrop of record low oil prices, airlines in emerging markets led the way in terms of incremental sales in 2014, with players in Latin America, Asia and the Middle East at the front of the pack. In advanced markets, the battle lines have been drawn around personalisation as airlines attempt to decommoditise the product, drive sales through direct channels and engage with consumers throughout the passenger journey. Mobile sales for airlines direct to country residents already account for 12% of global online sales.

“Personalisation of the product and service offer will become the next big strategic direction for carriers in a bid to improve competitiveness and boost profitability.” Nadejda Popova, Airlines Specialist

Interested in learning more about the global travel industry? Download The WTM Global Trends Report. New edition released every November.