the future of travel - deloitte
TRANSCRIPT
Future confidentMadrid, May 2021
The future of travel
The future of tourism© 2021 Deloitte Consulting, S.L.U. 2
The evolution of the travel industry has been closely linked to the growth of the middle class and the flight supply available at origin
Evolution of the tourism industry
Source: Monitor Deloitte, International Civil Aviation Organization, Gapminder
Evolution of air traffic vs Size of the world middle class
1,000
1970 1995 20101975 1980 2005200019901985 2015 2020
5,000
500
1,500
2,000
2,500
3,000
3,500
4,000
4,500
# Passengers by plane
Middle class population
Rec
essi
on
Rec
essi
on
Rec
essi
on
Rec
essi
on
CO
VID
-19
0.5flight/per.
0.7flight/per.
0.7flight/per.
1.0flight/per.
1.3flight/per.
Dynamic value chain
Supply increaseAlteration of priorities by COVID-19?
Travel democratization
The future of tourism© 2021 Deloitte Consulting, S.L.U. 3
The COVID-19 crisis is accelerating the transformation of the tourism industry by altering the value chain and the relationship with the traveler, with technology as a facilitator
Crisis impact
Public administrationSuppliersTravelers Intermediaries
Capital increases
Cost reduction
Flexible rates and free cancellations
Solvency and long-term investments
Talent quality
Domestic
International
Last minute
Long stay
Price sensitivity
Participation in private companies
Mobility and occupancy restrictions
Sector protection measures
Brand recognition
Domestic travel offer
Corporate trips and groups
Virtual experiences
Market consolidation
Traditional offline agency model
Dynamic and flexible model
Mass tourism
Adventure and sustainable nature
Industrialization of the service
Focus on minimizing acquisition costs
Flexible use of assets
Templates and fixed costs
Digitization and content generation
Progressive empowerment
Flexibility in reservations
Digitization and Personalization
Business trip
Regulation in destinations and activities
Sector empowerment
Co
nju
nct
ura
lSt
ruct
ura
l / A
cce
lera
ted
The future of tourism© 2021 Deloitte Consulting, S.L.U. 4
The consolidation of technology as a travel facilitator is transforming the sector's value chain, fostering the emergence of new business models and changes in consumer habits
Forces of change
New technological
services
Mobility transfor-mation
Consolida-tion
The future of tourism© 2021 Deloitte Consulting, S.L.U. 5
The growth of the middle class and virtual experiences are the two uncertainties that can completely redesign the future tourism landscape
Uncertainties
Incertidumbre e impacto en la oferta y demanda futura
Other uncertaintiesKey uncertainties
Affordable replacement of physical experience with virtual
Middle class growth
Protectionism and public regulation
Stability (health, environmental, social and technological)
Penetration of tech giants in the industry
The future of tourism© 2021 Deloitte Consulting, S.L.U. 6
50
100
150
350
200
250
300
400
450
500
$ / Day
Wo
rld
po
pu
lati
on
The growth of the middle class in emerging economies will significantly increase the global traveler base, despite the possible delay that the COVID-19 crisis may cause in growth
Uncertainties - Growth of the middle class
Distribution of the population according to wealth
2030 Pre-COVID
2020
2030 2 years of retrogression
2030 2 lost years
Low class Middle and upper class
Increase in the middle and upper class population
vs 2020
-
+ 400 M
+ 250 M
- 70 M
The future of tourism© 2021 Deloitte Consulting, S.L.U. 7
Virtual experiences increasingly offer a real alternative to physical experiences that can change the dynamics in the share of experience spending
Uncertainties - Affordable substitution of physical for virtual experience
Live concerts
Events
Excursions
Immersive experiences
Guided visits
Therapy
Meetings
Training
The future of tourism© 2021 Deloitte Consulting, S.L.U. 8
The evolution of the middle class and virtual experiences will draw the panorama of the tourism industry, resulting in 4 possible scenarios with different needs and opportunities
The future of the tourism sector
High growth of emerging economies(Exponential demand)
Slow growth of emerging economies(Pre-crisis demand)
Ph
ysic
al e
xper
ien
ce is
no
t su
bst
itu
ted
fo
r vi
rtu
al e
xper
ien
ce(L
imit
ed s
up
ly)
Ph
ysic
al e
xper
ien
ce is
aff
ord
ably
rep
lace
d b
y vi
rtu
al e
xper
ien
ce(E
xten
ded
su
ply
)
Increase in demand and mixed supply (virtual and physical)
Physical supply and slow demand growth
Increase in physical demand and supply
Affordable virtual supply and slow demand growth
The New Happy 20s Reinvention of physical tourism
Sector slowdown Virtual tourism
Traditional players
Intermediaries not present in emerging economies
Efficient and digitized providers
Undifferentiated mass supply
Technological platforms
Traditional service providers
Technological platforms
Intermediaries and non-differential travel models
Future confident
To navigate the future with confidence, organizations need to make the right choices: clear, timely and inspirationalchoices that deliver growth in a dynamic, disrupted world. Monitor Deloitte’s strategy practitioners combine deepindustry insights with cutting edge methods to help leaders resolve their most critical decisions, drive value, and achievetransformational success
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