Where is global tourism going?
This post was written by Anneli Sits, Angela Holm, Kail Piho, and Katrin Saar as a part of a written assignment for EMCup 2020, an annual competition amongst the best European Hotel Management Schools. Their team, “Extra Mile Ambassadors”, achieved 7th place in the competition between 36 schools. All team members study tourism and hotel management at the University of Tartu Pärnu College.
Overtourism is one of the major concerns in the tourism industry – not these days, of course, when the world is locked down due to the global outbreak of COVID-19, but when the world gets back to normal, overtourism will most likely return.
In the next ten years, the travel market will be hit by a massive wave of millennial travellers from Asia, especially from China and India. This will have a major impact on the industry. Therefore, the hospitality industry should be prepared to make certain adjustments to meet their needs. The solution could lie in opening new areas and destinations that travellers have not previously considered.
We’ll be also seeing considerably younger travellers from China in the next ten years. Image credit: Oleg Afonin, Flickr CC BY 2.0
Millennials (25–35 years old) are in general the largest group of consumers who are tremendously changing the consumption patterns established by their predecessors. The majority of Millennials trust a friend’s endorsement most. About half admit that their purchases are influenced by their own experience with a brand and the reviews left on the websites. Social media helps them create brand awareness and trust. It also serves as a major platform for customer service.
Likewise, Generation Z (9-24 years old) does not trust traditional forms of advertising either. They rather rely on peer testimonials and influencers whose values and interests they share. However, they are less into Facebook and Twitter, and more into Instagram and Snapchat to showcase and search for appealing videos and images.
The influence of social media, especially Instagram, on Millennials and Generation Z should not be underestimated, because that is where they also search for the next big travel destination (Global Wellness Summit, 2019, p. 32). Moreover, the brand promotion in social media should shift from formal ads to storytelling, which is spiced up with catchy images and videos and can give the real taste of the destination.
The demand for quality social interaction is reflected in the growing importance of the sharing economy. In addition to the classic rental service, people are willing to provide tourists with free accommodation in their place of residence. Moreover, the experience of the sharing economy is moving from the accommodation sector to other spheres. There are new home-based restaurants operating and personalized “concierge” services offered, where private individuals are giving tourists their time and assistance to discover a destination through the eyes of a local1.
The reason why sharing economy platforms such as AirBnB have become so popular could lie in the changing guest preferences. It is important to understand that some travellers do not enjoy staying in a traditional hotel room, because they need much more space and flexibility. However, they would still like to experience the comfort and services of a luxury hotel. It feels so good to travel far away from home and stay in a place which feels like home.
When it comes to digital technology, it is certain that it will remain one of the biggest influencing forces in tourism and hospitality spheres. Implementing new technologies has been and still is one of the best ways to improve the productivity and efficiency of the company. Even more, it is inevitable for tourism organizations and educators to highlight their brands’ innovativeness through digital means2. Moreover, digital technology is also a great tool for customers to share their experiences and it plays a huge role in contemporary marketing. Travel activities are often shared online, whether before, during, or after the travel3.
Artificial intelligence (AI) could be the next big thing in technology to fully involve the customer journey, and it is estimated that artificial intelligence will be a part of travel very soon. Hence, it could make sense to start using AI in hotel chains too, since customers might anticipate it.
For example, there is a possibility to use AI in the personalization of hotel services. Automated hotels with AI chat robots are one of the opportunities to implement new technological solutions. Similar solutions already work when booking flights online or using self-service check-out.
Travel companies and hotel chains that are embracing the AI possibilities for personalization can take guest experiences to a new level. Those that understand the fact that automation is not going to work throughout their business and roles continue to develop these unaffected spheres in some other innovative way. It is wise to be more cautious than too brave when implementing AI technologies, as some of the customers might not be ready for that shift and expect to experience some human touch with certain services.
For the younger generations, an ever-deepening dependence on digital connection may involve some serious drawbacks. Being constantly connected may come at a high price, as some people start experiencing the so-called “Fear of Missing Out”. This term refers to social media users’ unhealthy concerns about lost opportunities when offline or unable to communicate as they wished4.
Scientific research confirms that addictive smart devices and social media networks can disrupt a healthy vacation and contribute to depression and anxiety disorders. Therefore, tourism industry companies should encourage their guests to move away from technology by increasing the potential spaces and possibilities for real social interaction between people.
This also explains why silence, time, and privacy have become the luxury of the present times. These intangible values have become a competitive advantage for hotels that want to offer their guests peace and relaxation in a comfortable and luxurious environment5.
Another big trend is the growing importance of wellness and sustainability concepts. There are numerous tools and methods in the field that can help to renew or modernize the company to provide more sustainable services or products. One of these is the Sustainability Assessment Tool. This program is designed for the spa and wellness industry by the non-profit Green Spa Network, providing educational resources and support, which assists in the implementation of sustainable business practices.
The idea of wellness has evolved far beyond the provision of spa treatments. Therefore, the wellness-oriented hotels must create an integrated wellness atmosphere throughout the hotel premises, which includes ambient design, 100% pure air, as well as healthy and eco-friendly amenities6. Sustainable and environmentally friendly business practices are also becoming the norm in the hotel industry. This development is fuelled by demand. People increasingly assess different travel destinations based on their social and environmental footprint, and companies that incorporate eco-friendly practices in their operations will be eventual winners in the hospitality business.
In the future, companies should increasingly concentrate on social media marketing and on finding the newest ways to stand out. This is essential in order to attract new potential guests and to show how much they care about those they already have. However, the “winner” is not going to be the one that masters only digital platforms, but the one that is able to find the balance between digital marketing and word-of-mouth marketing.
Nielsen has stated in his study that 92% of people trust recommendations from friends and family over any other type of advertising. This means that whether the advertising takes place on a digital platform or through traditional word-of-mouth, the real battle is about how to win guests who will be willing to share and promote their excellent customer experience with a brand to their close ones.
The Extra Mile Ambassadors, from left to right: Anneli Sits, Angela Holm, Kail Piho, and Katrin Saar. Photo from a personal archive
1. Collina, L., Galluzzo, L., Gerosa, G., Bellè, M., & Lidia Maiorino, M. (2017). Sharing Economy for Tourism and Hospitality: New Ways of Living and New Trends in Interior Design. The Design Journal, 20(sup1), S3448–S3463. doi:10.1080/14606925.2017.1352848, p. S3449
2. Chiao, H. M., Chen, Y. L., & Huang, W. H. (2018). Examining the usability of an online virtual tour-guiding platform for cultural tourism education. Journal of Hospitality, Leisure, Sport & Tourism Education, 23, 29-38
3. Balula, A., Moreira, G., Moreira, A., Kastenholz, E., Eusébio, C., & Breda, Z. (2019). Digital transformation in tourism education. Tourism in South East Europe, 5, 61-72. https://doi.org/10.20867/tosee.05.45
4. Alutaybi, A., McAlaney, J., Arden-Close, E., Stefanidis, A., Phalp, K. T. and Ali, R. (2019). Fear of Missing Out (FoMO) as Really Lived: Five Classifications and one Ecology. In: BESC 2019: The 6th International Conference on Behavioral, Economic, and Socio-Cultural Computing, 28-30 October 2019, Beijing, China.
5. Tomašević, A. (2018). Luxury Hotels: Concept and New Trends. Quality Services and Experiences in Hospitality and Tourism, 195–211. doi:10.1108/s2042-144320180000009014
6. Kanani, R.B. (2017). A Wealth of Insight: The World´s Best Luxury Hoteliers on Leadership, Management, and the Future of 5-star Hospitality. Black Truffle Press