Digitalisation has left no segment of the travel ecosystem untouched

A catalyst for the explosion of the sharing economy

Travel is essentially about connecting people and places. Leveraging technology such as near-universal high-speed internet connectivity, search and geolocation technologies, mobile payments and social platforms, these connections have evolved and one industry-changing development has been the explosion of the sharing economy.

Tourists worldwide now have a bounty of localised and personalised options for where to stay, what to do and how to get around. Looking for accommodation? There’s Airbnb, Tujia, HomeAway, 9Flats, Wimdu or FlipKey. Transport? Share a ride through Uber, Grab, Didi or Lyft, share a car through iCarsClub or ZipCar, or share a bike through MoBike or Ofo. Crave local experiences? Discover a unique tour on Vayable or ToursByLocals or find a home-cooked meal on EatWith or VizEat. If you’re in Europe, you could even fly by private plane at surprisingly cheap prices through Wingly.

This list is hardly exhaustive and continues to expand rapidly. The sharing economy’s revenue is forecast to rise from US$15 billion in 2013 to US$335 billion by 2025, according to PriceWaterhouseCoopers, with the travel and tourism sector experiencing much of this growth. The UNWTO-GTERC Asia Tourism Trends report in 2016 noted that “technological developments in transportation and accommodation (sharing economy) infrastructure will also impact on the investment requirements to 2030.”

The sharing economy has also forced tourism industry stakeholders to rethink their definition of tourism and reconsider the travel experience of the future.

“A closer look suggests several deeper unmet customer needs that sharing economy leaders have identified and built their businesses around solving,” said Alex Dichter and Nathan Seitzman of McKinsey & Company.

These unmet needs, they say, include a desire for authenticity, active discovery and being connected; distrust of many large institutions and brands; expectation of transparency and flexibility; appreciation for feedback loops; and eagerness for simplified interactions and payments.

 

Zooming in on hyper-personalisation

One big advantage of digitalisation is the ability to harvest data and analytics. Consumers want to feel special and expect personalisation of service and experience. By capturing personal data from customers and learning more about their behavioural patterns, companies are increasingly optimising services across the customer journey.

For example, Australian airline Qantas, in partnership with unified customer data platform Umbel, has created a data hub centred on customer preferences and behaviours to improve customer experience and loyalty. In-flight entertainment and services, as well as real-time ticket booking and check-in processes, are personalised. A smartphone app acts as a full-service travel companion that anticipates customers’ needs.

According to Song Yu, secretary-general of the World Tourism Cities Federation, diversified, personalised and customised tourism is gradually replacing traditional group tourism. Among outbound tourists from China in 2014 and 2015, for example, 66 per cent chose free travel, semi-free travel, self-help travel or customised travel; the remainder opted for group tourism.

 

Breaking boundaries and establishing bridges

In previous decades, North America and Europe have dominated the travel markets, but this may not be the case for much longer. By 2030, most of the growth in international travel will come from Africa, Asia and the Middle East, according to the World Economic Forum.

China in particular is a major driver of growth in global tourism- a powerful factor in shifting usage of technology as the Chinese middle class travels farther to unexplored destinations. "The rise of Chinese travellers as well as travellers from other emerging Asian markets like India should be considered another disruptive force driving transformation,” said Pansy Ho, Chairman of Global Tourism Economy Research Centre, which organized the annual Global Tourism Economy Forum, coordinated by GTERC. 

“As these hundreds of millions of travellers have travelled out of their regions, yearning to see and experience cultures they now know from social media and internet, the question therefore is how to anticipate and prepare for their needs and interests,” Ms. Ho said during the World Travel and Tourism Council Global Summit 2017 in Bangkok.

 

Redefining destination marketing strategy

“Digital disruptors like social media, mobile devices and accessible information enable destination marketers to engage with consumers and stakeholders on a larger scale than ever before,” said Frank Cuypers of tourism consultancy and marketing agency Destination Think.

To stay relevant, destination marketing organisations (DMOs) need to change from a consumer model into a hosting model, from broadcast to engagement, and from marketing to management.

Mobile platforms and communication are key: it allows DMOs to engage with a visitor through all stages of their experience, from awareness to interest to booking to visiting to post-visit. Digital social networks also allow word of mouth to reach exponentially larger audiences. This societal shift has turned content consumers into content producers, which makes the individual the foundation of any destination marketing strategy. According to TCI Research, 31 per cent of sharing economy users regularly share their travel experiences on the web, even outside their circle of friends and relatives.