2 2 trends and prospects

8/6/2019 2 2 Trends and Prospects

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Peter Varlow

TEAM Tourism Consulting

E-marketing for Tourism Destinations

ETC and UNWTO, Budapest, 16-17 June 2008

Trends and prospectsTrends and prospects

1. Global trends

2. Travel sales

3. Packaging4. Social networking and UGC

5. Mobile6. Implications for DMOs


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but not everywherebut not everywhere

Source: eMarketer, February 2008 .

0200400600800

1,0001,2001,4001,6001,800

2007 2008 2009 2010 2011 2012

China and India now the growth areasChina and India now the growth areas

Source: eMarketer (February 2008 for US and February 2007 for other markets).

111

20

85

134

26

87

188

156

33

89

194

181

42

91

200207

51

93

206227

61

94

212

246

72

95

217

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010 2011 2012

USChinaIndiaJapan


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Internet users by world region 2008Internet users by world region 2008

Source: eMarketer, February 2008.

543.8

347.5

216.5

113.7

46.4

0 100 200 300 400 500

Asia-Pacific

Europe

North America

Latin America

Rest of the World

! "#$$%

Internet users, top 15 countries, 2007Internet users, top 15 countries, 2007

211

162

86

5042 39 38

34 33 31 28 23 22 20 20

0

50

100

150

200

250

U S C h

i n a J a

p a n

G e r m

a n y

I n d i a

B r a z i

l U K

S . K o

r e a F r a

n c e

I t a l y

R u s s i a

M e x i c

o

C a n a

d a

I n d o n

e s i a

S p a i n

Source: Internet World Stats, updated 30 June 2007.


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Top 15 marketsTop 15 markets per head of populationper head of population

88% 88%85%

78% 77% 76% 76%73% 72% 72% 71% 71% 70% 69% 69%

0%

20%

40%

60%

80%

N o r w

a y

N e t h e

r l a n d

s

I c e l a n

d

N e w

Z e a l a

n

S w e d

e n

A n t i g

u a & B a

r b u

A u s t r

a l i a

P o r t u

g a l

U S

F a r o e

I s l a n

d

S . K o

r e a

L u x e

m b o u

r g

H o n g

K o n g

F a l k l

a n d I

s l a n d

S w i t z

e r l a n

d

Source: Internet World Stats st atistics updated 31 December 2007

& #$$'

Broadband growthBroadband growth

194.2

252.2299.5

351.7 400.1447.0

497.4

0

100

200

300

400

500

2005 2006 2007 2008 2009 2012 2011

(#$$) #$**

Source: eMarketer, June 2007.


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0

500

1000

1500

2001 2004 2007

Worldwide

WirelessWireless internet use growing fastinternet use growing fast

Non-Wireless Internet UsersWireless Internet Users((eTForecastseTForecasts ))

MobileMobile broadband growing fastbroadband growing fast

Source: eMarketer, February 2008.

0%1%

0%1%2%

4%2% 7%

3%7%2%

8%4% 10%

4% 10%

7% 11%

14% 21%7% 16%

32% 53%

0% 10% 20% 30% 40% 50% 60%

PolandCanada

US

Netherlands

Germany

SpainIreland

France

UK

Italy

Sweden

Japan

+,& #$$- .

20062005


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2. Travel sales2. Travel sales

Online travel revenues growing fastOnline travel revenues growing fast

Source: PhoCusWright, November 2006.

Online Offline2005 25% 75%2008 40% 60%

44%56%2008

Online Offline2007 51% 49%

2009 60% 40%

North America/Western Europe/Asia markets

US market

Source: PhoCusWright (reported by Travelmole in January 2008).

In the USA, 40% of revenues were already online in 2005.


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80

49.3

20.4

0

20

40

60

80

100

!/ 0

Online travel sales in US, EuropeOnline travel sales in US, Europeand Asiaand Asia --Pacific in 2006Pacific in 2006

!/1

Source: PhoCusWright Inc. (2007).

Patchy growth in EuropePatchy growth in EuropeOnline share of all leisure and unmanaged business

travel gross bookings 2006

Others6%

Italy5% Spain

7%Scandinavia

11%

France16%Germany

20%

UK35%

Source: PhoCusWright (September 2007).

Europe average will approach 25% in 2007, the level in the US in 2004.


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Four travel distribution companiescontrol over half of the market.

USA

Source: Phocuswright, November 2005.

Europe

USA agency sales controlled by only four agenciesUSA agency sales controlled by only four agencies

Expedia, Sabre,Cendant and Priceline

97%

Other

Other Expedia, Sabre,Cendant and

Priceline

Four travel distribution companiescontrol 97% of the market.

European Online Agency Market

Source: Phocuswright

European agencies consolidating rapidlyEuropean agencies consolidating rapidly

Lastminute

Ebookers

Expedia

Opodo

Travelocity

Others

Travelocity andLastminute - partof Sabre

Expedia, Ebookers,Octopus - part ofTravelport

(former Cendant)


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61%

32%

7%

Hotel sales by channel2004

13%

46%

41%

Source: Phocuswright

Hotel sales by channel2007

Hotel sales in Europe: shift from agencies to hotelHotel sales in Europe: shift from agencies to hotelsites and tour operatorssites and tour operators

Onl ine t ravel agenc ies Hotel branded webs ites Tour Operators

Internet booking vital for hotelsInternet booking vital for hotels

29%33%

40%45%

0%

10%

20%

30%

40%

50%

2006 2007 2008 2010

% of all hotel bookings generated from theinternet in the US 2006-2010

Source: Merrill Lynch (reported by Tourism Exchange in February 2008).

In 2008, at least another third of all hotel bookings will beinfluenced by the internet but done offline


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3. Trends in packaging3. Trends in packaging

PackagingPackaging

Products with multiple components arepurchased less frequently online

Simple components (eg flights) are purchasedmore frequently

Source: PhoCusWright (reported by Travelmole in January 2008).


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DynamicDynamic customised packagingcustomised packaging

Enables customer to create their own package

selecting components of their own choice

paid for in one transaction

Key development for major tour operators andonline travel agents

Growing rapidly .

Dynamic packagingDynamic packaging the next battlefieldthe next battlefield


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Dynamic packagingDynamic packaging the next battlefieldthe next battlefield

45% of US package buyers booked apackage online, of which:

76% bought through an online agency 9% bought only at a supplier site

Source: Dynamic Packaging The Next Battlefield: Are you dynamic yet? 2008 Status Report, March 2008.


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4. Social networking and UGC4. Social networking and UGC


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UGC use by online travellersUGC use by online travellers

US online travelresearchers use of

UGC:

32% used it early intheir research process

56% used it to verifytheir hotel choicesprior to booking

Blogs Half of people who

read blogs read travelblogs.

Travellers who visit themost sites are likely toread traveller reviews,research destinationsand buy tickets toevents or attractions.

Source: JupiterResearchs Travel Consumer Survey, 2007, reported by EyeForTravel, March 2008.

Source: PhoCusWright Travel 2.0 Consumer Technology Survey, reported by Travelmole, Dec. 2007.

Sources used to find out where to goSources used to find out where to go

30% 69% 23% 11%6% 12%

33% 61% 35% 22% 22% 8%

36% 64% 19% 7% 5% 8%

39% 65% 22% 24% 14% 5%

42% 47% 20% 26% 23% 4%43% 60% 14% 23% 11% 7%

44% 62% 26% 9% 7% 10%

47% 31% 26% 25% 8% 6%49% 50% 25% 19% 17% 11%

49% 57% 25% 33% 26% 1%

50% 63% 29% 39% 21% 13%

50% 36% 13% 29% 13% 7%51% 65% 50% 44% 35% 11%52% 53% 33% 26% 12% 7%

54% 58% 12% 22% 16% 16%54% 55% 8% 20% 21% 15%

59% 51% 27% 32% 31% 1%59% 37% 24% 32% 13% 7%

0% 50% 100% 150% 200% 250% 300%

Korea

Italy

France

UK

PoIandNetherlands

Spain

Mexico

Canada

Germany

Australia

Brazil

China

Japan

USA

Denmark

India

Russia

Personal recommendation Web search Visit travel agent's office See TV program Read a newspaper Other

Source: Global Market Insite (GMI) Survey of 18,000 consumers globally, June 2005.


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Most trusted online sourceMost trusted online source -- UKUK

12%

5%

0%

10%

11%

12%

15%

15%

21%

0% 5% 10% 15% 20% 25%

Sites with reviews by other travellersOnline tourist guides

Local tourist guides

Travel agent sites

Search results

Airline sites

Advertising eg banner ads

Other

Don't know

Most trusted online source for reliable travel information according to UK Internet users,

September 2006 (% of respondents)

Source: Nielsen//NetRatings commissioned by Adviva and Harvest Digital, January 2007 quoted by eMarketer in June 2007

5. Mobile trends5. Mobile trends


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ConvergenceConvergence 3G speed and

capacity Phone Email GPS satnav Camera Music and TV player Web browser QWERTY screen or keys MobileMe sync with PC

3.3 billionphones,and rising(GSMA, June 2008)

Apple iPhone 3G, June 2008

Global trendsGlobal trends -- summarysummary1. Continued rapid growth

a) Asia-Pacific, especially India and Chinab) Russiac) South America

2. E-commercea) Germany soonb) Southern and Eastern Europe later

3. Shift to mobile

4. Convergence of devices and of services5. C2C and UGC becoming dominant?6. E-commerce and m-commerce will be standard7. Content more and more important - emphasis on video


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6. Implications for DMOs6. Implications for DMOs

Why do it?Why do it?

1. Massive information delivery

2. Good brand-building3. Two-way interaction

a) Destination to customer (B2C)b) Customer to customer (C2C)

4. 1 to 1, or 1 to many

5. Seamless progression from promotion to sale6. Integrates with offline marketing7. To build partnerships

a) Market intelligenceb) Contentc) Product developmentd) Brandinge) Promotion


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Ten keys to future successTen keys to future successProvide your industry with additional market reach

1. Build the brand(s)2. Segment your markets, use CRM to maintain the

relationship, upsell and cross-sell

3. A compelling website and refined email marketing4. Partnerships to achieve distribution especially satnav5. High quality content6. Encourage and use customer-generated contentCreate sales7. Deliver sales, directly or indirectly8. Engage tourism businesses to connect their inventory

9. Offer customised or dynamic packagingProve your worth

10. Measure and report your performance dynamically

and11. Business systems that enable partnerships

Leading DestinationsLeading Destinations

Are effectively e-businesses throughoutHave sophisticated CRMHave inspirational, comprehensive, timely

contentHave radically improved their websites and

email marketing over the past 5 yearsAlready use 3 rd -party and UGC content

wellHave mobile servicesHave achieved ground-breaking 3 rd -party

distribution


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InnovationsInnovations

Services E-commerce

- directly run- aggregated

Targeted e-newsletters RSS Travel planners on website

and to mobile Mobile service

- podcasts- website- SMS services

Content Mashed TripAdvisor-type

reviews Visitor videos Flights engines Taxi booking Corporate blogs Participate in wikis and

leading blogsDistribution To satnav vendors To mapping services

[email protected]


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SpainSpain -- Multimedia (1)Multimedia (1)

SpainSpain Multimedia (2)Multimedia (2)


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SwitzerlandSwitzerland video sharingvideo sharing

VisitVictoriaVisitVictoria blog/forumblog/forum


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Pennsylvania, USA:Pennsylvania, USA: VisitPA.comVisitPA.com

www.visitpa.comwww.visitpa.com

VisitPA.comVisitPA.com :: PlaylistCentralPlaylistCentral


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VisitPA.comVisitPA.com : Local: Local PlaylistPlaylist Wine & WildernessWine & Wilderness

VisitPA.comVisitPA.com :: RoadtripsRoadtrips Rugged RoadwaysRugged Roadways


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Starwood Holding CompanyStarwood Holding Company -- SheratonSheraton

Aphrodite Hills Holiday RentalsAphrodite Hills Holiday Rentals


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English Country CottagesEnglish Country Cottages

Louvre Museum, FranceLouvre Museum, France


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Soprintendenza archeologica Di PompeiSoprintendenza archeologica Di Pompei

2 2 trends and prospects

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