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Some Travel Predictions for 2011
As the snow falls and yuletide is upon us, one Christmas-time tradition is that it's the time of year when industry experts within Travel try to predict the emerging trends for 2011. Cutting my teeth with my first post, this is a commentary on that, together with some of my own observations. I've had a lot of conversations with tourist boards, hoteliers, Online Travel Agencies, and industry contacts. I've already noticed that two themes are beginning to emerge; mobile markets, and driving direct business to hotels.
Direct business to hotels
2010 was very much the year of the Online Travel Agency, (Expedia et al). We saw high profits being posted by the likes of Expedia and Priceline, driven predominantly by their uptake in the online hotel booking space. We also saw growing prominence for players with a strong proposition in the price-conscious space, with the likes of Laterooms, Travel Republic and Travelzoo all gaining momentum. This heightened the need for hotels to engage more with third parties - often to the detriment of driving direct hotel bookings. In a market where occupancy and roomrates have both fallen, hotels have needed to rely on whatever channels can drive them volume. For 2011, one main influence may swing this pendulum back towards the hotels directly - Google and the constant raft of changes they are rolling out, which promise to give hotels more direct visibility.
It's true to say that this is a rapidly advancing technology as we enter the cusp of 2011. Ofcom reports that from Jan 09 to Jan 2010, smartphone subscribers in the UK were on a 70% growth curve. This trend will continue - the iphone is ever popular, and Android phones are now accessible like never before - take me for instance, I recently landed a free one on a fixed contract with full internet access. I can now take the web with me wherever I go, like never before. It's fair to say that this growth in adoption of mobile internet handsets will continue. However, will it spearhead a new uptake in travel bookings? In the interim, I'd say unlikely. Mobile apps are great for browsing but the market for a fully mobile travel product transaction still has some way to go maturity-wise. So next year we'll certainly see more apps, and more users using them, but don't expect actual conversion rates into bookings to rocket anytime soon.
The Royal Wedding will grab headlines as people look for some positive news, and also as it gives people an extra bank holiday. This means we’ll see domestic tourism boosted around Easter and into June. The staycation may have peaked by 2011, as people begin to want to venture out of the UK more again, but the royal wedding will help to keep domestic destinations buoyant.
A mixture of a harsh winter and VAT going up in Jan will mean people respond well to positive, inspirational messaging and ideas during Quarter 1. However, free spending during the winter sales in December will mean people remain cautious for January and February when it comes to spending, so the late booking market should remain a constant factor. The ski market will help fuel this as operators reduce prices to drive volume in what is currently a struggling market. We'll see some resurgence of the city break market - traditionally busy during the Easter and May period - helped by the media interest in the Royal Wedding, again.
I expect I'll be back with some more predictions next year. Merry Christmas!