This article captures the 5 trends shaping the future of Tourism industry. In the next two separate articles, I will cover what Private and Public sector can do at this inflexion point.
Travel – which was once considered a luxury enjoyed only by the classes, is now within the reach of billions. This has been possible with lowering of travel barriers, falling costs, the growth of disposable income, the rise of middle-class and naturally – the changing attitude of the people towards travel in India. These factors have enabled the industry to flourish, so much so, that from 25 mn international arrivals in the 1950s, it reached 1.24 bn in 2016 globally.
Through its contribution to employment generation, infrastructure development, foreign exchange revenues and socio-economic progress, tourism has become the fastest growing and priority economic sector across countries over the decades.
Even though the previous decades witnessed the domination of North America and Europe in the tourism industry, however, it is going to change with Asia, Africa and the Middle East expected to record most of the growth in the current and next decades. The top 10 fastest growing destinations for leisure travel spending during 2016 and 2031 are expected to be from the new league – led by India and followed by Angola, Uganda, Brunei, Thailand, China, Myanmar, China, Oman, Mozambique, and Vietnam.
There has been a change in the tourists’ composition as well, with millennials and new middle-class from emerging economies taking the lead. This section of travellers has a hunger for new experiences and knowledge; which they satiate by exploring new and remote destinations. These travellers will continue to lead the travel business and is expected to grow with growth in global middle class to 3 bn by 2030. By 2020, the millennial’s spending on business flights is projected to account for half of the worldwide travel and further, this trend is expected to continue for another decade and a half.
What's happening - Emerging trends
A. Experience - Is it worth Instagramming
Tourism has changed from a mere flight, food and room service to a multi-sensory, 360-degree experience; experiences about rejuvenation, fulfilment, adventure and experiences that allow you to live like a local. It is more than just flopping in the sun and ticking off the bucket list. This represents a big challenge for legacy tour operators and online travel agents even though the opportunities are vast - Experiential luxury accounts for almost half of the total luxury spending worldwide and, is growing faster than sales of luxury goods on a year-on-year basis.
B. Expectations - As high as it can get
High expectations for efficiency and low tolerance towards barriers against global mobility is what defines the 21st-century travellers’ expectations. Unfortunately, the system that travellers must navigate is from the 20th century. Barriers to mobility and inefficiencies are particularly notable in getting a travel-visa and while at the airport. These obstacles, just like any other trade barriers, impede growth and depress job creation.
But we are moving in the right direction – just to give you a perspective: in 2015, tourist destinations worldwide required only 61% of the world’s population to obtain a visa (prior to departure) vis-à-vis 77% in 2008.
Because of the new age expectations, there is a growing case to remove travel visas at the bilateral level. The benefit - it would more than triple the travel flows between countries. Several solutions, ranging from bilateral to regional agreements, have been implemented that support the reduction of travel barriers and enable economic growth and job creation. These include the Schengen Agreement, the US Global Access Programme and even the APEC Business Travel Card.
Different regional agreements are also in the process of being negotiated for the Association of Southeast Asian Nations (ASEAN) community, the Pacific Alliance and the idea of an African passport has also been proposed by the African Union.c
C. FIT (Free Individual Travellers) - Getting fitter and bigger
With alternate accommodation setups like hostels and bed & breakfasts, various low budget options are picking up to cater to the travellers, who are financially constrained. Attributed to ‘shared and competitive economy, the flight, accommodation & transportation expenses for moving around the country are getting lower, thereby making travelling a desirable choice around the globe.
D. 'Over Tourism' - Victim of your own success
Various tourism hotspots are now experiencing what has become known as ‘Overtourism’. Efforts are being made to attract the ‘right type of tourist’. Often the ‘right type’ of tourist is a responsible tourist – who creates the maximum benefits to local economies with the least possible social and environmental impact. This is being done through promoting less well-known areas, pre-booking with fixed numbers, charging for entry, subsidizing fewer flights, restricting cruise ship numbers.
E. 'Bleisure' - Making time for leisure in Business travel
‘Bleisure’ travel is on the rise over the past couple of years, thanks to the generational shift—namely, the increased presence of millennials in the workforce. Young people aspire to travel as much of the world as early as they can. They perceive vacations as unaffordable luxuries. This is where ‘Bleisure’ fills the gap. It allows them to find their own balance between work fulfilment and personal edification.