Top megatrends shaping the future of travel in MEA

Over the past few years, the Middle East and Africa region has managed to successfully transform into a global hub for tourism and leisure.

Offering a wide variety of attractions such as varied retail offerings, hotels, beaches, and unique experiences, the region continues to draw scores of visitors.

Travel is booming, but also ever-changing, which means the region's travel and tourism industry will need to further transform to continue to attract travellers.

Megatrends can help make sense of shifts in consumer behaviour and attitudes. Through extensive research and input by over 1,000 expert analysts, Euromonitor International has selected the top megatrends with the furthest-reaching impact on industries and consumers in the future.

A megatrend is not a short-term fad, but rather a trend with longevity, one representing a fundamental shift in behaviour that is defining consumer markets.

For the Middle East and Africa region, Euromonitor International has identified two such megatrends - Seamless experiences and Trading down.

Seamless experiences
The Middle East and Africa region - the UAE in particular - has been at the centre of innovation in an effort to make the travel journey completely frictionless.

Biometrics and facial recognition are becoming increasingly common in airports, arguably one of the travel spaces with the most friction. Technology is being used to reduce it. Dubai Airport, for example, has installed a face-scanning Virtual Aquarium, a tunnel equipped with over 80 facial recognition and retina cameras, replacing traditional border gates.

Seamlessness in the destination is also of utmost importance, whether it is facial recognition cameras in hotels, online check-in and keyless entry, holistic mobility solutions and other smart city initiatives, or frictionless payment facilities.

Near-ubiquitous mobile connectivity has contributed to expectations of seamlessness through technology. Travellers will increasingly expect to find such solutions in the destinations they visit.

Case Study: Emirates’ seamless luggage processing

Emirates Airlines has developed an in-house Baggage Management System called Wasla to provide full control of its global baggage operations.

This has already resulted in a considerable fall in levels of lost and delayed luggage, but Emirates has much grander plans for the future.

Tim Clarke, the company’s CEO, said that building works on the new Al Maktoum International Airport, which will become one of the largest airports in the world and Emirates’ main hub, have been halted, as a redesign is needed to introduce more cutting-edge technology, including robotics and IoT, all to make the customer experience increasingly seamless.

The company sees a future in which robots take care of all luggage handling, from check-in to plane, and plane to belt. Travellers can walk through security without the need to take off items of clothing or empty bags. All phases, from check-in to immigration to boarding, should become easier.

Case Study: SnapScan offers new-world digital payments

Near-field communication (NFC) technology is becoming common around the world, and SnapScan has paved the way in South Africa for proximity payments.

SnapScan’s development in Africa allows travellers to benefit from a mobile, cashless and cardless payment product.

The technology was launched through a partnership between tech start-up FireID and Standard Bank. Using QR codes, the initiative is available to a wide range of businesses, including market and street vendors and charities.
 
In August 2018, Samsung SA also entered the country with Samsung Pay. According to the company, acceptance and take-up has been higher in South Africa than it was during the US launch in 2015.

These payment technologies, and the concept of a cashless society, have great potential to make travelling to foreign countries far more seamless. Travel players will need to ensure they cater to tourists looking to use this technology.

Trading down
While the middle class is in retreat in many developed countries, struggling to maintain the economic position they enjoyed for the last half a century, the middle class is booming in developing
regions such as Asia and Africa.

This translates into a greater desire to travel for leisure purposes, and the stronger economy boosts business travel.

The tourism industry, particularly in Africa, has historically catered to the wealthy international traveller, resulting in a strong focus on inter-regional flight networks and high-end lodging.

Today, a shift in demand and improving infrastructure means a strong increase in low-cost carrier flights and a drive to increase hotel segmentation.

With long-term sustainability of the region in mind, however, it is important that this does not become a race to the bottom, as illustrated by the struggles of some European countries today.

Case Study: Radisson Hotel Group sees mid-scale opportunities

Early in 2018, Radisson Hotel Group announced plans to grow its portfolio in sub-Saharan Africa to 120 hotels by 2023, an increase of 60 per cent on current stock.

While its past focus has been on its Radisson Blu brand, moving forward, 65 per cent of the new hotels will be upscale and mid-market hotels.

The company has recently introduced the upscale Radisson brand in Africa, with the first opened in
Dakar, Senegal, in January 2018.

Andrew McLachlan, senior vice president, Development, Sub-Saharan Africa at Radisson, told Euromonitor International that Africa is now ready for midmarket hotels, as infrastructure to support hotel operations has improved and the market has matured and is ready for segmentation.

McLachlan suggests that South Africa, in particular, is ready for trendy economy brands such as Radisson’s Prizeotel, which he believes will be introduced in the country in the near future.

Case Study: Etihad wants to cater to the masses

The Emirates have some of the most high-end airlines catering to wealthy travellers from the region. However, in an effort to cater to a bigger audience, Etihad Airways—often seen as the most luxurious airline in the world—introduced payment instalment plans. Residents of the UAE, Saudi Arabia and Egypt can book flights and pay back in monthly instalments ranging from three to 60 months.

In September 2018, the company also introduced hand-baggage only fares. Called the Deal Fare, the new policy offers more choice and a cheaper alternative for Etihad customers.

Meanwhile, Dubai-based Emirates Airlines announced a code-sharing partnership with its sister brand, low-cost carrier flydubai. There is talk of a potential merger between Emirates and Etihad.

The steps taken by these players indicate how trading down can help luxury brands carve out opportunities in the affordable luxury space. - TradeArabia News Service