Opinions: 

Travel Tech

One of the most important indicators of trends in contemporary travel is the Skift State of Travel Report. The global travel industry intelligence organisation releases this report once a year, and the results always provide a massive insight into the way that travel has been conducted over the previous twelve months. The 2014 report is no exception to this, providing a huge amount of authoritative information on every conceivable aspect of the travel industry.

This latest Skift report draws on data from every sector of the travel industry in order to provide a true and accurate overview of the entire travel ecosystem. But not only does it assess every aspect of key verticals within the travel industry, such as airlines and hospitality, it also provides insight into particularly focused ideas and themes. This year's annual report includes in its themes an investigation on the rise of China as a force in tourism.

Given the remit of the Digital Tourism Think Tank, we would particularly like to look at the ‘Travel Marketing and Technology’ section of the report first. For this section, Skift examined a variety of different areas and industry sectors.

Deployment of marketing technologies

intro

Skift noted that travel businesses are increasingly deploying a wide range of different marketing technologies within their overall strategy. The average across all categories assessed by Skift was 10.8 devices, but one particular travel-related sector far exceeded this figure. Online travel agencies are deploying 18.2 devices on average, which had a massive influence over the figures as a whole.

The next issue of note that Skift examined was advertisement networks associated with five major online travel agencies, namely Priceline, Expedia, Orbitz, Travelocity and CheapOair. Skift found that the approach that each of these online travel agencies took was significantly different.

Intent Media played a role in each of these online travel agencies’ approach, but the extent to which it was focused on diverged hugely. Travelocity and Orbitz placed a particular emphasis on this, both devoting over 80 percent of their strategies to it. It was also central to the Priceline strategy. But CheapOair and Expedia both had a completely different approach, and didn't place such emphasis on intent media.

Expedia considered the Sendori software to be particularly valuable in its approach, while CheapOair relied on Google Display. Digital marketers should pay heed to the differing approaches preferred by each of these companies.

Digital advertising spend

Finally in this section, Skift also looked at the total digital advertising spend in the travel industry in recent years, as well as projecting what the organisation believed it would be in coming years. With regard to this, Skift outlined that it expected digital travel marketing spending to double in 2015 from its level just four years ago. Back in 2011, the annual digital advertising expand worldwide was $2.4 billion, but Skift believes that it will increase to $4.77 billion during the current calendar year, after the same figure was $4.15 billion in 2014.

Skift also predicts that there will be a further escalation in this figure in the coming years, and this will result in the total digital marketing spend for the travel industry reaching $6.4 billion by 2018.

Vast Chinese market

In addition to assessing general digital marketing trends, Skift also specifically examined the Chinese traveller. There are several reasons for this, most notably that China is a nation which is becoming more prominent economically on the world stage, having already reached the status of being the world’s second largest economy. And the reasons for this are quite obvious; China is the world’s most populous nation with approximately 1.3 billion people residing in this socio-economic powerhouse.

Thus, the Chinese travel market is a valuable one for companies all over the world, and one that is ripe for stringent analysis. Skift first noted that the number of outbound Chinese travellers has increased rapidly in a very short period of time. During 2013, there were 97 million outbound Chinese travellers, and this represented nearly a 17 percent increase on the previous calendar year. This figure escalated further in 2014, when during the first quarter of the year there were 26.5 million Chinese outbound travellers; a figure which would equate to 106 million if reflected over a year as a whole. This was a further 17 percent increase. To put the 106 million figure into perspective, if these people represented a nation it would be the 12th largest on the entire planet.

Aside from the sheer scale of Chinese travel, hoteliers across the world have noted that Chinese visitors are increasingly more prominent. Hotel owners globally reported that the number of Chinese visitors had increased by about 50 percent over the last 12 months, but in some economic areas this trend was even more significant. The APAC nations all witnessed a 70 percent increase in the number of Chinese people staying in hotels, and it should be evident for all travel-related businesses that attracting the Chinese market could prove extremely lucrative.

Airport increase

China airports

Further credence was given to the growth in travel out of China by the vast increase in airports in the nation over the last five years. In 2010, there were 175 airports in China, and by the start of 2015 this had increased by over 30 percent to 230. Evidence also indicates that major airlines are constructing more aircraft to be delivered to China, with global deliveries of airliners increasing by 20 percent in 2013 alone.

The report also looked at mobile marketing and searching in China. This is very much more complicated than in the Western marketplace, due to strict legislation that the Chinese government has passed. It is well known that the Internet in China is behind a massive firewall, but what is perhaps less commonly known is that no mobile devices may be used in the nation unless they are officially approved by the Chinese government.

This doesn't prevent all of the Western favourites from eventually appearing there, but, for example, the release of the iPhone 6 in China was delayed owing to tardiness on behalf of the authorities in authorising Apple’s iconic handset.

All evidence gathered by the report suggests that Chinese people are searching for travel-related items at rapidly increasing rates. The number of mobile search users increased by 25 percent in China between 2012 and 2013, reaching over 365 million (greater than the population of the United States) in the latter of these calendar years.

Mobvile use china

In accordance with this, there is clearly huge commercial potential in China, not least because the amount of people engaging in mobile payments and travel reservations is also increasing exponentially. Indeed, in 2013 there was a 126 percent growth in mobile payments in China, while mobile travel reservations increased by 54 percent.

Distinct marketplace

It is important for travel-related companies to understand this distinct marketplace, in which many of the big names associated with Western society are not prevalent. For example, Chinese people use officially government approved social media platforms instead of those familiar to Westerners.

But the commercial potential of digital and mobile for travel companies in China must not be underestimated. One of the most interesting facts about China is that even though it offers vast commercial potential based on the figures contained in the report, it is also a relatively untapped and embryonic market. In fact, the percentage of Chinese people in possession of a passport is pretty paltry, and as China becomes more worldly and open to outside influences in the coming years, the commercial potential for travel-related companies will only increase.

More from #DTTT

  • In June we present:
    Creating an Inspiring Staycation Campaign with Visit Greenland – Weekly Tourism Impact Call: Week 12
    DTTT · Creating an Inspiring Staycation Campaign with Visit Greenland With the staycation set to become the new travel trend as restrictions ease, how can destinations adapt to attract the domestic market and restart tourism? This is a key question for the industry which sees the staycation as a solution. The staycation is a movement [...]
    #Staycation #recovery #COVID-19 #strategy #tourism #Visit Greenland
  • In May we present:
    What’s the appetite for Travel? with Beautiful Destinations – Weekly Tourism Impact Call: Week 11
    DTTT · What's the appetite for travel? with Beautiful Destinations Recovery is now in sight for many destinations and much is being done to improve destinations to make them safe and ready for travellers when they arrive. Whilst the focus has been on the impact to destinations for much of the pandemic, this has now [...]
    #recovery #COVID-19 #beautiful-destinations #industry #tourism #travel
  • In May we present:
    Sustainability Opportunities for Destination Recovery with Dr Cara Augustenborg – Weekly Tourism Impact Call: Week 10

    Sustainability is a key issue for the industry as it prepares for recovery. The fast-moving pandemic has been severely disrupting tourism and its impact will change the industry, academic engagement, and customer behaviour. The question many destinations are now asking is how can we be sustainable post COVID-19? We dedicate our tenth Tourism Impact call […]

    #ecotourism #recovery #COVID-19 #sustainability #industry #tourism
  • In May we present:
    Digitalisation and Sustainability solutions for recovery – Weekly Tourism Impact Call: Week 9

    As part of our efforts to react and support the industry, the #DTTT began hosting our popular Tourism Impact calls 2 months ago. Now going into the ninth consecutive week, we reflect on what has been an interesting and insightful journey so far. In many lively discussions, we’ve shared perspectives about COVID-19 impact, destination strategy […]

    #recovery #COVID-19 #sustainability #digitalisation #industry #tourism
  • In May we present:
    The Nordics COVID-19 Response

    How have the Nordic countries responded to the crisis? At the #DTTT, we have seen different approaches throughout the Nordic region and wanted to find out more. In a highly insightful interview we brought together the Tourism boards representing the capital cities of Norway, Sweden, Finland and Denmark to discuss their response to the COVID-19 […]

    #The Nordics #Response #COVID-19 #DMOs #marketing #strategy
  • In May we present:
    What travel will look like in the future with Doug Lansky – Weekly Tourism Impact Call: Week 8

    In our highly anticipated eighth Tourism Impact call, we discussed the different approaches of destinations who are at various stages of the recovery process. Recovering destinations are now looking for innovative product solutions as restrictions begin to ease and businesses start to re-open. Whilst for other destinations their recovery plans are still at the research […]

    #Doug Lansky #COVID-19 #DMOs #industry #strategy #tourism
Show more
© 2017 Digital Tourism Think Tank