2012 At a Glance: Travel Trends by Region
January 18, 2012
Note: AdventureTravelNews offers the following piece as a general geographic overview of global tourism trends as we begin 2012. The trends and themes mentioned here will be covered in more detailed reports in the coming months, along with new topics of interest as they arise. Please submit to firstname.lastname@example.org relevant trend ideas, resources, reports and other information you believe the ATTA should consider to better inform the adventure tourism industry.
2011 was a turbulent year for the world, and thus for travel. Disruptions in weather, politics, economics, fuel prices and technologies stole the scene. While economic recovery appeared to steady itself early in the year, since then, the far-reaching, European debt crisis and financial stagnation in the U.S. economy continues to cast shadows and uncertainty.
The World Travel Market (WTM) 2011 Global Trends Report, released in November in conjunction with Euromonitor International, predicts slowed global growth and arrivals “as rising fuel and commodity prices, taxation, austerity measures, political turmoil and social unrest take their toll.” However, 2012 will see one billion arrivals – worth just under $1 trillion U.S. – coming from emerging markets from the BRIC (Brazil, Russia, India & China) and SLIMMA (Sri Lanka, Indonesia, Malaysia, Mexico & Argentina) economies. This burgeoning sector of travelers, and their evolving preferences and patterns, will change the face of the global industry.
Technology will also continue to play a center role in how travel is advertised, booked, shared and experienced. The WTM 2011 Report predicting that nine out of ten consumers will own a mobile subscription by 2015, leading the report to summarize that “digital convergence, social media and smartphones are key to building brand loyalty.”
Strategies around multichannel touchpoints, social media and mobile technologies will likely remain at the forefront throughout the year. These co-align with major shifts in public relations and advertising towards content and social sharing, as consumers’ increasingly sophisticated online usage translates into more sophisticated demands of brands – issues around sustainability, transparency, personalization, and authenticity will be at the forefront of business and travel trends for 2012.
Now, a regional overview of market transitions:
Despite the grim possibility of another economic hit, according to a recent TripAdvisor poll, Americans are planning to travel and in steady and growing numbers next year. According to the study, half of those polled in TripAdvisor’s 2012 Travel Trends Forecast plan to spend the same amount in 2012 on travel, with another third planning to spend more:
Seventy-nine percent of respondents plan to spend a minimum of $3,000 on vacations in the coming year, 57 percent will pay out at least $5,000 and 21 percent will invest $10,000 or more on 2012 leisure travel. Ninety percent of respondents are planning to take two or more leisure trips next year, and 24 percent are planning five or more getaways.
Just under 70 percent of these travelers expect to leave the country – 54 percent to Europe, 52 percent to other places in North America and 12 percent Asia. Cultural holidays and beach travel are on the rise, with hiking, lake and theme park trips declining.
Marian Salzman, CEO of ERWW Public Relations, made several long-term consumer predictions for the national outdoor industry at Outdoor Retailer’s 2011 Summer Market (see full video or written overview, which is the source for quotes below). Salzman suggests that in the U.S., the “soft rugged” market is poised for growth, as fitness consumers such as the yoga / pilates crowd become more interested in outdoor activities and travel but need help making the transition; anxiety around the perceived dangers of the outdoors (ranging from extreme weather worries to things like Lyme disease and animal attacks) also bolsters this trend, with people seeking more ‘controlled’ outdoor experience, such as tours and outdoor adventure parks. “Gritty chic” will trump displays and brands that are more polished and tied to themes of excess in the coming year:
Many Americans are broke and know they are broke and thus will favor value, simplicity, function and durability over prestige. Brands that are authentic and speak honestly will prevail in this environment.
The outdoor retail and recreation trend mirrors what we in the adventure tourism industry have noted – a continued shift towards soft adventure; opportunities are ripe for selling experiential travel with high value propositions, where operators and guides can help bridge the gap between enthusiasm for and participation in active outdoor recreation from ‘wanna-be’ adventurers.
Another trend that might seem counter-intuitive for travel guides and professionals is the new consumer demand for constant connectivity – even while engaging in “get away from it” outdoor and adventure activity. As technology changes the way that we socialize and interact with media:
Most Americans will not tolerate being disconnected from their online social network for more than 24 hours at a time. Sharing that solo adventure online is increasingly integral to the outdoor experience. Brands that facilitate that will have an edge.
More and more, modern travelers are craving locales that are way off the radar – and in most cases, that actually means ‘under the radar’… These include rarely visited European countries such as Albania and Serbia, the Russian Far East, and Greenland; Central Asian spots such as Uzbekistan; and offshore destinations such as the Falkland Islands and Papua New Guinea.
Driving this trend is both the desire for novelty, the growing desire for authenticity as well as the influx of social media, which leads consumers to wanting more unique stories and experiences to display when they come home. Stanley is also seeing an influx “Your Money Matters” travel – when it is important to the consumer to know their money is benefiting or preserving the object of their attention, be it a community, a historic or environmental site, or animals in the field – an observation consistent with earlier reports revealing that both American and European travelers are increasingly aware of social and environmental ethics and impacts when they travel.
Other niche travel trends on Stanley’s radar are holistic and spiritual trips, ancestral family travel and themed tours accompanied by experts.
According to the ITB World Travel Trends Report for 2011/2012, outbound European travel exceeded expectations in 2011 with four percent growth, a number that is expected to drop back down between two and three percent for the coming year due to regional financial uncertainty. Still, 64 percent of Europeans polled said the current financial and economic crisis would not impact their travel plans in 2012; 27 percent planned to travel more:
Most confident for next year are Poles, Finns and Norwegians while the Spaniards and the Italians are the most pessimistic. Overall, IPK’s ‘European Travel Confidence Index’ lies at 103 points for 2012, indicating 2–3% growth next year. This would represent solid growth and would mean a new all-time high number of trips, ahead of the previous record year of 2008.
But while Europeans are taking more trips, they’re traveling for shorter periods and spending less overall; for example, British travelers are expected to forego their neighboring countries and travel domestically until currency issues improve. Other trends listed for Europe, also from the ITB report, include:
- Smaller outbound markets such as the Spanish, Nordic, Benelux and Alpine markets will continue to grow much faster than their larger German, British, French and Italian counterparts.
- If Arab countries continue to experience sociopolitical turbulence or fail to effectively re-brand themselves quickly, Mediterranean countries – Greece, Portugal, Spain, Italy will continue to benefit from tourists seeking alternate destinations. However, Greece itself may struggle with similar issues depending on how the crisis evolves, as “Footage of violent demonstrations and airport employees on strike is not conducive to improving a tourism destination’s image.”
- Inbound numbers to Europe from China, Russia and India have been up double-digit rates in 2011, with a high single-digit rise in U.S. visitors – generally, smaller Eastern European countries are seeing more of these visitors than their larger Western neighbors.
As far as the consumer temperature, the WTM 2011 Global Trends Report suggests that Europeans are seeking “Luxury without guilt” – leisure experiences that revolve around authenticity and ethical, responsible luxury experiences. As the wealthier of Europe’s travelers look to environmentally aware travel and trips that “give back,” hotels respond with green initiatives like organic, kitchen gardens and symbolic shifts in decor (such as ‘living walls’ full of plants) while destinations and travel companies aim at European holidaymakers through packages teeming with language around sustainability, best practices, and helping local communities.
The ITB World Travel Trends Report reveals continued strength in the Latin American travel market as a global hotspot, with a 13 percent increase of international visitors – compared to only four percent in the Caribbean and Central America in 2011. Outbound travel will continue to rise but should see some stabilization in 2012, with Brazilians in particular taking advantage of a strong currency and growth by engaging in international travel:
Their international tourism expenditure soared by about 45% over the first eight months of 2011 which came on top of a 50% increase last year.
While Latin American travelers have some key similarities, their travel patterns are quite different, according to Gabriela Espinosa, Research Director of the Mexican Tourism Board. Brazilian, Argentinian, Chilean and Mexican outbound tourists all tend to be relatively young, well-educated and well-off, and quite amenable to guided sightseeing tours. But the Brazilians focus more on long-haul trips and spend higher amounts, while Argentines and Chileans travel mostly within South America, and Mexicans continue to focus on the United States. Espinosa also pointed out that there’s a gap in the airline market in the region for low cost carriers, which would make stronger long-haul growth more widespread.
It’s also important to note that Brazilians are very sophisticated online users; according Jens Thraenheart of Dragontail, 86 percent of the population participates on social networks and six out of seven users consume online video; the country is the second most dominant on Twitter, with one in five Brazilians participating on the site.
While Brazil gets a lot of attention as part of the well-touted BRICs economies, a new report from senior travel executives has identified Mexico and Argentina as key players from the region who could provide competition for Brazil. According to Espinosa:
Mexico… continues to invest in its infrastructure to grow its inbound business, while disposable incomes are quite good. Both inbound and outbound tourism potential is helped by a generally low tax regime for investors, visitors and its population… Argentina has the benefit of being a new destination on the global tourism map. It is one of the few major economies in the world to be seeing strong economic growth, meaning it has more flexibility on pricing than many destinations.
According to the 2011 WTM Global Trends report, Africa experienced GDP growth of more than five percent in 2011, due to both economic development and a growing middle class with increasing disposable income. This trend gives rise to the “M-commerce,” or mobile technology commerce boom, across the continent. With 489 million mobile phone users (7 million smartphone users), Africa is leading the world in mobile commerce – 60 percent of users there make mobile purchases – particularly in the travel industry. Technology companies have made it possible for consumers without bank accounts to purchase electronic funds and use SMS to send them to mobile devices – and now that travel companies such as national airlines and lodges / safari chains have teamed up with them, customers without bank accounts are able to purchase travel products via their phones.
As the continent’s regional local market grows stronger, destinations are amping up their mobile offerings domestically and to their neighbors. South African Tourism launched a mobile app offering travel deals to people in Angola, Kenya, Nigeria, the Congo and Mozambique; wakanow.com, a Nigerian OTA, has created Africa’s first mobile travel application that allows search for accommodations, airfare and car rental. Meanwhile, Facebook has launched a free mobile platform for African mobile users in three major African languages.
As WTM asserts, the laser focus on mobile on the continent means 2012 will see increased optimization and customization for operators and companies in the region. Social media will also play a key role in Africa across the mobile platform, and bookings through Facebook and other networks are likely to be the next step here.
The ‘Arab Spring’ swept through the Middle Eastern region in 2011, as several countries saw protests and campaigns for political reform – some which turned violent – resulting in a sharp decline in tourism that some worry may linger. The WTM 2011 Report summarizes:
Tunisia and Egypt started to reinvent themselves in a new democratic era with a successful transition in place, however, Libya and Syria are far from recovery. The tourism re-branding process is complex due to each country’s unique political, economic and social conditions, with the major challenge being how to send a positive message… Campaigns launched by the Egyptian Ministry of Tourism on satellite TV in April 2011 targeted European and Middle East visitors: “Welcome to the country of peaceful revolution”. Tunisia opted for a provocative campaign by Memac Ogilvy targeting the UK and France: “They say Tunisia is nothing but ruins”, whilst depicting ancient ruins… Post-Gaddafi, Libya offers untapped potential, but much of the country’s tourism infrastructure was destroyed during the war and a period of reconstruction needs to occur. Syria’s booming tourism industry has been brought to a standstill while the bloodshed continues.
However, despite the wide-range impact the turmoil had on international perspectives on the Middle East, the World Travel & Tourism Council (WTTC) predicts a recovery based on swift communication from these nations to the global travelers, as well as pursuing a regional travel strategy to increase profits while awaiting the resurgence in global demand.
In contrast to the U.S. and Europe, travel demand in Asia continues to rise due to a thriving economy driven by a large, “relatively” well-off middle class, according to the ITB 2011 Global Travel Trends Report. Disposable income is increasing in China, South Korea, South-East Asia and India and the 2011 World Wealth Report from Capgemini and Merrill Lynch Global Wealth Management reveals that Asia Pacific now houses more wealthy people than all of Europe. The Asian Travel Monitor reports that 32 percent of survey respondents said they would travel more in 2012 than this year, with 37 percent reporting similar travel plans. ITB predicts the Asian region will experience five percent outbound growth in the coming year.
Mason Florence, Executive Director of the Mekong Tourism Coordinating Office (MTCO), expands:
Asia’s more sophisticated urban life will create demand for more specialised products, such as heritage and culture, ‘edutainment’ theme parks, soft adventure, luxury holidays and sports tourism. There will be further growth in outbound travel from China and India due to their rising purchasing power. Indonesia and Vietnam should be watched as major outbound markets and also the Philippines‚ to a lesser extent. What’s more, Japanese outbound travel will start to grow again and the market will be stimulated by the arrival of low-cost carriers next year.
The world has been keeping a close eye on Japan, as the world’s third largest tourism economy, as it works to recover from the massive Fukushima disaster that left the nation shocked and devastated – and saw inbound travel plummet to -50 percent by April 2011 (by September it was -25 percent). The ITB Report credits the quick recovery to the fact that the affected region in Japan was only a small share of the outbound market, only slightly affected national flight capacity, a strong currency and a cultural shift post-disaster that encouraged people to travel more as experiences and community life become more important than consumption and ownership. However, much of this travel is short-haul and occurring in Asia and not out to traditional Western vacation spots – a trend set to continue in 2012, along with a four percent increase in outbound travel.
The same World Tourism & Travel Council report that predicts Middle Eastern recovery is imminent also indicates that Japan’s recovery is underway, predicting a return of normal international arrivals in early 2012. President and CEO David Scowsill adds:
If we track the recovery of most cites that have been affected by a natural disaster, it usually takes about eight to 15 months for travel and tourism to bounce back, depending on the severity of the crisis and how it is managed by the country. It’s about sharing the best practices of what other countries did in different situations, so that each country can learn from its peers.
Another trend in Asia to watch carefully will be the increasing dominance of China and its travelers as the most dynamic growing force in the region – one expected to have massive global impact. Global consumer trends firm Trendwatching.com has indicated that
In 2012’s global consumption arena… department stores, airlines, hotels, theme parks and museums, if not entire cities, around the world are going out of their way to shower Chinese customers with tailored services and perks, and in general, lavish them with attention and respect.
The site indicates total outbound Chinese tourists will hit 100 million by 2020, and current levels of Chinese outbound are close to challenging U.S. outbound market levels. The WTM 2011 Report echoes these numbers, stating that Chinese travel accommodation expenditure alone in 2011 is expected to reach US$57 billion – the third highest behind the U.S. and Germany. The report goes on to detail the efforts already underway by major hotel brands such as Hilton and Starwood to capture the Chinese market by employing tactics such as front-desk staff fluent in Mandarin, congee at breakfast, and in-room benefits like Chinese TV programs, tea, kettles and slippers. Many experts agree that Western markets are ill-prepared to cater to Chinese guests – expect that huge shifts will be taking place across all types of travel brands and companies in the coming years as Chinese numbers – profits – continue to arrive.
We know the world is moving faster, changing more and feeling smaller as countries and cultures collide and commingle more than ever before. As we enter an increasingly competitive era, one of strained resources and huge challenges for markets once considered stable, and of tremendous changes in the daily lives of billions of people – we aim to keep an eye on the over-arching trends affecting the world of adventure tourism and will continue to look for opportunities as much as potential pitfalls – and remember the adage of American shipbuilder Henry J. Kaiser: “Problems are only opportunities in work clothes.”
Roll up your sleeves, expect in the coming year more in-depth articles based on many of the themes above, and please communicate to [email protected] any topics and/or research resources/reports you would like to see more coverage on from AdventureTravelNews in 2012.