Monday, February 24, 2020

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State of travel - trends for 2020 and beyond
February 2020 2703

Of course, if we had a few tens of millions to spare, space travel will be a viable option over the course of the decade, with Von Braun Station promising to be operational by 2025, to accommodate space tourists who want to experience life on a large space station with the comfort of low gravity and the feel of a nice hotel. But more about that in 2025.

Back on earth, Abhijit Pal, head of research, Travel Partners Group, Expedia Group, writes, “In a decade, members of Gen A – which is expected to be the most formally educated and wealthiest generation – will be turning 20 years old. In college and/or working, they’ll be making their own travel decisions as they blaze their own way around the world. Expect them to crave a fully digital, frictionless travel experience – exploring new destinations via their home virtual reality sets as they shop for their next trip, bringing loved ones along through augmented reality, advanced bots that instantly serve up one-click bookable travel itineraries that are personalised from where they’ll stay down to where they’ll eat. It’s a safe bet that this generation will be well-travelled, in both the physical and virtual sense.”

“In a decade, members of Gen A, which is expected to be the most formally educated and wealthiest generation, will be turning 20 years old”
– Abhijit Pal

 

Even while the nine to five work structure is slowly changing around the world, the art of business travel will never go away, in fact, it will become more important as companies grow and look to carve out a competitive advantage, says Expedia research. “A company’s travel policy reflects its culture and commitment to its people, becoming a core offering that attracts talent,” says Pal.

Business travel to bleisure (extending a business trip for leisure), family travel to those traveling for healthcare – all factors drive diversification in accommodations. With travel demand on Vrbo for houseboats, yachts, RVs and Airstreams up 30 per cent year-over-year, the next wave of unique accommodations has arrived. Diversification is important, as travellers should always have the choice in what best fits their travel needs, though chain and independent hotels will remain a critical piece of the ecosystem, says Expedia’s report.

Finally, it’s the age of the swing traveller – people who prioritise better fares and airport amenities, like shorter security lines and better dining options, even if it means passing on a (much) shorter drive to the local airport in their town or city. As such, to capture these travellers, airports in the coming years will increasingly reevaluate their offerings – variety of travel routes, parking options, local cuisine, shopping, etc. – ultimately redefining the airport experience.

 

“Owners hold all of the cards today and will be expecting more than just a little due care and attention in 2020”
– Mohamed Awadalla

 

Closer to home, Mohamed Awadalla, CEO of UAE-based TIME Hotels, says the environmental impact of hotels, relaxed visa regulations, maximising profits for hotel owners and the growth of online travel agents will be the top four trends for 2020. 

“Brands are now valued as much for their sustainability, social responsibility and credibility as they are for their reach and profitability. So, reduce, reuse and recycle will be the corporate mantra for all hotels in 2020 and beyond,” says Awadalla.

Reducing carbon emissions as well as water and energy consumption is no longer an option, it is now very much mainstream. “I can see this trend intensifying in 2020, with retrofitting of existing hotels and more sustainable design when building new hotels. I can foresee more international cooperation across hotel brands,” said Awadalla.

In the near term, the UAE’s five-year multiple entry tourist visa and Saudi Arabia’s new visa requirements will encourage many more tourists to visit both countries.

In the UAE, the initiative will benefit a broad range of stakeholders involved with Expo 2020, from consultants and contractors, to trade representatives and investors. It will also enable residents to host relatives more often and support job seekers.

“The UAE attracts 21 million visitors per year, the UAE Cabinet hopes to double that figure by 2030, which should generate revenues worth well in excess of $90 billion. It could also attract Muslims making Umrah, offering them options to visit both on the way to, as well as coming back from Makkah,” commented Awadalla.

“Use of digital technology is now part and parcel of a seamless guest experience, but hoteliers are not moving fast enough to ensure the journey is as smooth and personalised as it could be”
- Bani Haddad

“However, I think its greatest benefit will be to visitors who want to use the UAE as a base when conducting business meetings throughout the region or attending exhibitions, conferences and other events. The convenience, flexibility and cost-effectiveness, will be a major draw for those nationals that do not qualify for visa on arrival in the UAE, as well as those on a budget,” he added.

In Saudi Arabia, the recent visa changes will prove to be a real game-changer in 2020. The tourist e-visa, which was only launched in September last year, allows citizens from 49 different countries, to stay up to 3 months per entry, up to a total of 90 days a year. The visa is valid for one year with multiple entries.

The relaxed visa requirements are following other liberal policies such as ending family-only sections in restaurants, women being allowed to drive, women travelling without a male relative and relaxing the dress code for female visitors, making the kingdom more attractive for female tourists.

Supply and demand dynamics in Dubai have been significantly disrupted over the past decade, best illustrated by the Downtown area. When Burj Khalifa opened 10 years ago, only eight hotels with 1,952 rooms were available, ten years later, visitors can now choose between 38 hotels and 11,652 rooms.

“So, it is only natural that hotel owners and private investors are now putting increasing amounts of pressure on management companies to drive revenue and optimise profitability. Despite record numbers of visitors, across many destinations in the UAE, additional room supply continues to dampen RevPAR.

“With a series of mergers and acquisitions in the international hotel management space last year, many hotel brands are now in the same stable and in many ways are competing with each other, in a crowded marketplace, accessing similar GDS systems.

“The world of online travel booking has undergone more radical changes in the past 18 months than any time since internet bookings were introduced in the late 1990s. I believe it will be led by niche OTAs, which will offer value-led, customised experiential travel.

“As such, major GDS systems are no longer the dominant force they once were, levelling the playing field for homegrown brands such as ours. Owners hold all of the cards today and will be expecting more than just a little due care and attention in 2020,” commented Awadalla.

UAE-based independent hotel management company Aleph Hospitality also identified the rise of Saudi Arabia, prioritising of profits and putting an end to wastage as some of the key hospitality industry trends in 2020 and beyond.

According to the company’s founder and managing director, Bani Haddad, the region has still a lot of catching up to do in terms of technology. “Keeping up to date with technology remains a major challenge for the hospitality industry. Use of digital technology is now part and parcel of a seamless guest experience, but hoteliers are not moving fast enough to ensure the journey is as smooth and personalised as it could be. Typically, hotels follow the travel industry when it comes to the adoption of new technology.

“With regional airports and airlines now trialling the use of facial recognition technology to enable passport-less travel and biometric boarding, I think we will start to see some changes in 2020 when it comes to the process for hotel reservations, check-in and check-out. For travellers and hotel guests, convenience is key and ultimately, we are moving towards being able to access our hotel rooms without requiring any human contact.” 

Also, according to Haddad, the new frontier of growth is Africa. “When it comes to future growth for the hospitality and tourism industry, Africa is a continent abundant with opportunity and as a result, there is a lot of interest from GCC investors.

“Ethiopia is a fantastic example; its travel and tourism economy grew by 48.6 per cent in 2018, the largest of any country in the world, and it now represents 9.4 per cent of Ethiopia’s total economy, according to the WTTC. This is primarily driven by leisure travel and heavily weighted towards international travel, so the growth is expected to continue. The hospitality industry is a key player for communities, driving a flourishing job market and social enhancement, and we are looking forward to developing our role in this in 2020.”





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