Last month it was reported that travel and tourism makes up more than 10% of worldwide GDP – the industry has come a long way. In this in-depth report, Click. explores how travel got to where it is and whether we’ll see past trends reappear
by Ben Lerwill, Click. Travel Writer
We’re in an online world. Mark Zuckerberg claimed last year that Facebook Messenger and WhatsApp were responsible for 60 billion messages daily. Postcards never had that sort of effect.
The mammoth statistics don’t stop there, of course. We’re also travelling more than ever, helped in no small part by the digital revolution of the past 25 years. We check in online. We think nothing of pulling out a phone to check our whereabouts on a street map. We know in advance exactly what gripes recent customers have had at restaurants we’ve never been to.
According to a March 2018 study from The World Travel & Tourism Council, the global economic impact of travel and tourism now makes up some 10.4% of worldwide GDP. So how did the travel sector get to where it is now – and where does it go from here?
In the beginning was the World Wide Web. Before then, travel existed in a form that now seems impossibly dated. The planet was a bigger place. Things took longer. Our gatekeepers to new destinations were either physical travel agents, well-thumbed guidebooks or glossy holiday brochures. Bookings were done over the phone, in person or in writing. On-the-road experiences might be shared (often long after the travels themselves) via wads of colour photos. Search engines, social media and smartphones were all still half-formed ideas, waiting somewhere over the horizon.
How things have raced on. In less time than it takes to mix a cocktail, we can now reserve a hotel suite in Brooklyn, book tickets for a Berlin art gallery, or post a picture (of the cocktail, perhaps) for the instant admiration of followers from Beijing to Buenos Aires. Tech firms have not only made the world smaller, but more joined-up too. Connectivity levels are unprecedented.
The start-line for the growth of the online travel industry was the mid-1990s. This was the era of the Spice Girls, Bill Clinton and Nintendo 64s. In 1995 internet usership was estimated at just 0.4% of the world’s population (it’s now well over 50%), and travel agents and tour operators were largely bricks-and-mortar operations. Then came the arrival of brands like Viator, Priceline – which would later acquire Booking.com – and the Microsoft-founded Expedia, all of which helped prise open the possibility of booking travel online.
“At the start of the dotcom bubble, these companies were pioneers in the space,” says Erika Richter of the American Society of Travel Agents (ASTA), the world’s largest association of travel professionals. She explains that these early front-runners, and those that followed in their footsteps, began to show signs of the powerful effect they would have. “Their ascendancy came from competitive pricing alongside the volume of bookings they could deliver to partners.”
I remember booking my first easyJet flight between London Luton and Liverpool for less than the cost of a rail ticket – Lee Hayhurst, Travel Weekly
At around the same time, low-cost airlines – which, then as now, tended to rely heavily on the internet as a business platform – began to grow in prominence. For some people, their bargain prices seemed too good to be true.
“I remember booking my first easyJet flight between London Luton and Liverpool for less than the cost of a rail ticket,” says Lee Hayhurst, Head of News at longstanding travel trade publication Travel Weekly. “I was so astonished that I had to phone up to check that the booking had actually happened.”
Power to the consumer
As growing numbers of people became internet-savvy, online travel companies found themselves with readymade – and very willing – customer bases. “For consumers, by far the biggest positive was access to the ability to travel,” continues Hayhurst. “Both in terms of being able to find and book products, and also bringing it within the reach of most people’s budgets.”
Over the early years of the new millennium, things developed further. Influential travel review sites emerged, most notably TripAdvisor, while metasearch brands like Kayak and Skyscanner – comparison sites that essentially trawled other booking sites for fares and information – also became more prominent, placing yet more control in the hands of consumers.
Benji Lanyado, a former Guardian and New York Times travel writer and founder of open-to-all photography marketplace Picfair, sums it up. “Package holidays were gradually being deconstructed,” he says. “People could break their holiday up into bits that they could manage themselves, save a bit of money and really work out exactly what it was that they wanted, rather than having to accept the bits of a package that they weren’t that keen on.”
And then, of course, came the advent of game-changing handheld mobile devices. “The launch of Apple’s iPhone in 2007 marked the moment when people would start to think it perfectly natural to carry a super-computer around in their pocket,” remembers Hayhurst, “and the world changed forever”.
…mobile devices (both smartphones and tablets) now account for at least a third of all global bookings for hotels, car hire, apartments and holiday activities
One of the knock-on effects was that social media became an even more potent tool in the travel industry, with real-time implications for the way knowledge, tips and advice were shared. “Twitter rendered the idea of travel advice being a one-to-many flow into being a many-to-many flow,” says Lanyado. “It opened up this world of authentic tips and real-world experience, rather than just having to dig around and see what people before you had done.”
Smartphones also enabled travel bookings to be made on the go, a trend which shows no sign of slowing. Criteo’s Winter 2018 Travel Flash Report showed that mobile devices (both smartphones and tablets) now account for at least a third of all global bookings for hotels, car hire, apartments and holiday activities. As travel technology becomes increasingly sophisticated, this figure continues to rise.
The arrival of Airbnb in 2008, meanwhile, helped to introduce the travel industry to peer-to-peer rentals. Alastair Mackenzie, Chair of the British Guild of Travel Writers, believes its impact has been far-reaching, particularly for the millennial and experiential travel market. He says: “All the big hotel companies have reacted to that and produced their own versions – so Starwood came up with Aloft, Hilton came up with Canopy, Marriott came up with Moxy. Generator Hostels is another example. It’s all about creating spaces that are much more flexible, and more plugged into the local neighbourhood.”
Looking for more
Traditional tour operators have been forced to adapt to the digitalisation of the industry, making their platforms mobile-friendly, their SEO rankings strong and their social media presence accessible. Just as importantly, they’ve also been forced to adapt to changing tastes. “Consumers are traveling now more than ever for experiences, for adventure travel and to learn something new,” says ASTA’s Richter.
The past few years have partly been defined by the fine-tuning and augmentation of existing technology, as brands adjust to the shifting demands of the market. Personalisation has become a major factor in online travel, for example, whether through targeted advertising, interactive marketing or even predictive analysis – in other words, using the data on a particular consumer to anticipate exactly what sort of trip or hotel they’re going to be looking for.
The theory of the undiscovered gem gets harder and harder when there are more people travelling and more people sharing information on the internet – Benji Lanyado, PicFair
“I was at ITB Berlin in March, and the thing that struck me there was the growth of Artificial Intelligence,” says Mackenzie. “Already, they’re beginning to use big data to fuel AI. They can see what it is that somebody might want. If someone follows a particular pattern they can start to infer what it might mean, and where they might want to go, and they will show you what it is that they think you’re going to do. That’s going to be a huge revolution.”
It’s important too to remember the major role that business travel plays in today’s industry. With millennials comprising an ever-expanding proportion of the global workforce, the dependence on mobile-friendly technology, time-saving apps and instant access to relevant information is only going to increase.
It would be wrong to paint the continuing evolution of online travel as a purely positive thing. It may be comparatively cheap to put together a holiday these days, but Richter points out that low-cost deals don’t always represent the best option. “Price is still the main decision driver, but price does not always equal value,” she says. “A low price is easy to find online, but great value is harder.”
And Hayhurst concurs. “The web’s failure to find a way to sell on value rather than on pure price has been a huge negative,” he explains. “It remains at the heart of many issues that businesses face in travel.”
The sheer ubiquity of the internet – a day without access to Wi-Fi is a rarity now, wherever in the world you are – has other consequences for modern travellers too. As Lanyado says: “The theory of the undiscovered gem gets harder and harder when there are more people travelling and more people sharing information on the internet.”
And the future? According to Hayhurst, there may be change afoot. “We’re going to see a paradigm shift from the DIY approach where customers stipulate what they want and then have to trawl through thousands of offers, to a more curated, inspirational online experience,” he says. “At the mass-market, high-volume level this will be done by increasingly intelligent algorithms, but human beings will continue to hold their own and prove their value to customers looking for expert advice, security and peace of mind.”
This is something echoed by Lanyado. “I do wonder actually if we might come full circle back round to the experts,” he says. “There is that element of too much noise on the internet, so I think finding small pockets of expertise that aren’t too mainstream and aren’t too well covered might come back into fashion. We might see paid-for private mini-concierge type services where you can literally pay one person and get private advice. Would I pay someone if I knew what was coming back was a list of 10 amazing things to do in a city that were unlikely to be in other guides? Yeah, sure.”
Unsurprisingly, ASTA’s Richter also takes a similar approach, highlighting one way, perhaps, in which technology might always be flawed. “Travel advisors are armed with local knowledge, access and connections to open doors to those hidden experiences or places that you just cannot Google.”
But this surely presents an opportunity for the industry too? One thing that is for certain is that innovation in travel shows no signs of slowing down.
Want to read more like this? Find out what 2017 taught us
Hero image: credit to Jesse Bowser
Ben Lerwill is an award-winning freelance travel writer based in Oxfordshire, EnglandMore by Ben Lerwill
Popular around Click.
Travel trends: what 2017 taught us
Insider tips on boosting your review score
What I wish I knew: lessons in holiday rentals
Adapt or die: surviving in the era of digital Darwinism
Spotlight on: the impact of food tourism
Five travel trends that will shape customer experience in 2018
Understanding remote working to attract millennials