Get Ready for… Travel in 2020
The arrival of Virgin Galactic as the first publicly traded space tourism company - under the ticker SPCE on the NYSE - provides a timely reminder of our inherent curiosity and desire to explore, writes Arif Durrani
Virgin Galactic has captured the imagination with its remit to take passengers on a 90-minute flight, to experience weightlessness, and see the Earth’s atmosphere and curvature. Tickets are selling at $250,000 and the company has already collected $80 million in deposits from 600 would-be astronauts.
Talking to Bloomberg TV, Virgin Galactic’s founder Sir Richard Branson said: “Success is creating the world’s first space company. We’ve had an extraordinary few months and next year I’ll be going to space and we’ll start to send a lot of people into space.”
Branson, of course, is just one of three billionaires currently backing space start-ups, each utilising different technologies. Branson’s space venture relies on an aircraft to carry a spaceship to high altitudes, where it blasts off. Blue Origin, controlled by Amazon founder Jeff Bezos, relies on more-conventional rockets. Elon Musk’s Space Exploration Technologies Corp. deploys reusable launchers.
It seems our thirst to explore and travel cannot be suppressed. The global travel and tourism sector is booming. Research from the World Travel and Tourism Council (WTTC) reveals the sector grew 3.9% last year—its eighth consecutive year of outpacing global GDP—and it now contributes a staggering $8.8 trillion and 319 million jobs to the global economy.
As one of the largest industries, the trends impacting travel and tourism resonate throughout our economies. It’s significant when two-thirds of marketers working in the travel sector are looking to increase their digital ad spend, as reported by Sojern in 2019. The specialist agency surveyed more than 600 travel marketers and found that personalisation is top of mind, followed closely by achieving ROI and profitability targets, targeting travellers, and keeping up with the fast-paced landscape.
The Sojern study identified three emerging media trends: an increased use of social media (55% of travel marketers plan to spend more on Facebook and Instagram this year); increased visual storytelling; and the growing use of data (61% of travel marketers now leverage data for the ability to target travellers based on intent).
But what’s the context behind this marketing activity? At Bloomberg Media Group we partnered with WTTC to identify the macro forces shaping the future of travel and tourism. By combining the travel organisation’s expertise with Bloomberg Intelligence data and proprietary quantitative studies, as well as our AI tool, AiQ, to analyse global editorial coverage of more than 30,000 publishing sites, we’re able to suggest new areas of opportunities for businesses.
The Impact of Megatrends on Travel & Tourism
Kristin Mommers, Senior Strategist at Bloomberg Media Group (pictured above), presented the report “World, Transformed,” in London this month (October) to a room of global travel clients, including travel giants British Airways, Lufthansa, Aman Resorts and Hyatt, as well as digital enablers Expedia and Wheely. The report’s findings distil how the way we travel is changing in an era defined by rapid shifts across technologies, societies, and economies.
The report identifies five megatrends shaping the tourism sector and provides a roadmap to the new imperatives for businesses operating in the space. Here are two of them...
New ideas and beliefs are emerging about how best to live a connected life. “Disruption” is no longer viewed as the Holy Grail of new technology in and of itself, and both individuals and companies are approaching connectivity with more caution. Internet users are already being more mindful about how long they are spending online, for example, with 70% of users admitting to limiting digital consumption, and 33% having instigated digital detoxes.
“We’re seeing people take more action to set boundaries for themselves and they’re recognizing some of the effects of a constantly connected lifestyle. It’s a period of re-evaluation,” said Mommers.
We see another value shift happening within the luxury segment. The growth in disposable income in markets around the globe means material wealth is no longer the only signifier of status. More than two-thirds of luxury consumers in the US, UAE and UK agreed with the statement that “luxury goods and services are about differentiating myself from others.” More than 90% of those in China and 75% of those in Mexico said the same.
It suggests a new definition of success is emerging in which we consider personal fulfilment rather than just material possessions. It chimes with the findings of Bloomberg’s High Net Worth study, where more than 60% of affluent individuals measured success in terms of personal fulfilment.
We are transitioning to an age of blended experiences, where traditional boundaries between work and leisure are breaking down. When we look at work behaviours, the shifts towards freelance or independent working practices are significant. It’s estimated that half the US workforce will be freelance within 10 years. For people under 40—millennials and Gen Z—independence and flexibility are highly valued, personally and professionally.
Across geographies in the US and EU, those who do independent work in some capacity report higher satisfaction. Among the most significant and disruptive businesses today are companies that facilitate this new paradigm.
Peer-to-peer marketplaces such as Vayable and DiDi are making travel and activities more accessible. Rental businesses like Airbnb and Lime change behaviour on small- and large-scale habits. And new services and companies have popped up helping the independent worker – from payment solutions like Stripe to upskilling with General Assembly. Significantly, 60% of tech companies planning an IPO leverage one of these business models.
As people’s lives become more fluid and self-directed, travel will become less of an escape from their day-to-day and instead become an integral and integrated part of everyday life. Mobility will increasingly become communal and service-based. Businesses will need to consider how these shifts affect both their customers and their workers.
“Travel certainly helps people to escape, but at the same time it often helps people to get closer to the reality they’re seeking, to live the lifestyles they want,” said Mommers. “One of the easiest shifts to spot, and perhaps one of the most disruptive, are the companies facilitating this new paradigm.”
So whether we’re venturing into space or exploring closer to home, it seems the rules of engagement in travel and tourism are changing. The full report offers a wealth of detail and data to guide decision-making — including infographics and a look at how businesses and destinations are already responding to these trends.
Download the full report World, transformed: Megatrends and their implications for Travel and Tourism
Arif Durrani is Executive Editor at Bloomberg Media Studios, EMEA