IT’S that time of the year again – the start – and chances are you’ve seen an article or two predicting what the year will be like for business, the economy, politics, and of course, travel and hospitality. While analysts and industry experts try to map out the next twelve months and sift through the uncertainty, the core of these think pieces is to understand one thing – consumer behaviour.
Everything from the success of Marvel’s latest blockbuster to the volatility of cryptocurrency, to the adoption of Artificial Intelligence, relies almost purely on collective consumer demand. How do we feel about [insert 2023 concept] today, and how much do we want it? Needless to say, predicting consumer behaviour has become tricky over the last two years.
Supply, demand, rinse and repeat
Supply and demand is the name of the game, and in 2023, brands will need to identify emerging gaps in the market as more travellers begin to take to the roads, seas, and skies.
For example, data from Travel Market Report shows that a significant number of millennials prefer to travel alone. Overseas Adventure Travel, a small-group travel company in the US, has seen such a boom in solo travel that they upped the number of single spaces 2021 by 76% compared to 2019. Not only that, according to Emerald, “consumers will pursue authentic experiences, distancing themselves from mainstream tourism providers and venturing into pastimes that feel more meaningful”.
What’s more interesting is how brands like Airbnb and Withlocals are betting on this trend by allowing travellers to personalise their experiences by booking private tours and activities with locals around the world.
In fact, key findings from open hotel commerce platform SiteMinder’s 2022 Changing Traveller Report, which surveyed more than 8,000 travelers from 10 countries, points to “a new type of traveler” with higher expectations has emerged during the travel industry’s recovery, and “hoteliers need to be ready” to meet their needs. Sankar Narayan, managing director and CEO of SiteMinder, says “we can see that – more than ever – travelers now have ambitions to book, travel, work, connect and experience the world with the greatest flexibility and security possible.”
The report recommends hotels offer targeted add-ons, such as early check-in for families with young children and last-minute room upgrades onsite. Post-stay, hoteliers can send offers to incentivize future visits. “Making it feel personal at every step is key,” the report says.
Understanding how consumers interact with products online
At the ‘Hello, New Travellers & Trends Shaping The New World panel at WiT Singapore 2022, Michael Trauttmansdorff (Director, Product Management, Travel Ads Google) was asked about product enhancement and optimisation, to which he responded, “What we’re seeing that’s working really well is what we’re calling ‘property promotion ads’, so really shifting the hotel ads product from one that’s focused on booking links and booking clicks on the placesheet to really helping brands [and] suppliers really promote themselves further up the funnel.”
While these changes may not have been directly caused by the pandemic, it’s indicative of the way brands display their products online needs to be constantly tweaked and modified for the changing consumer.
Think about the last time you clicked on an ad – what did it say, what did it contain, what did it promote, and what caught your eye? Since ads are a prominent customer-facing aspect of any brand, it’s important to understand what travellers are looking for before crafting a product copy, or risk creating a disconnect.
While Michael doesn’t term it a “crash and burn”, he elaborated on the “Book on Google” product which didn’t take off the way the company thought it would. “It’s something that we had in the flights-and-hotels space, and we recently went forward with sunsetting those products.”
“We found that ultimately, while our belief was that it would help consumers more easily navigate the online world, transact, and really make their bookings, we found that ultimately the online ecosystem is caught-up and experiences have gotten so good that the need for that product isn’t there anymore. So it’s been interesting so move back and simplify our model a bit.”
Intention, inflation, and traveller ideology
“Every time I turn on CNBC or Bloomberg, there’s this saying – inflation, interest rates going up, everyone’s feeling the pinch! Well, not travellers.”
This was said by Charuta Fadnis (Senior Vice President, Research & Product Strategy Phocuswright) during her panel at WiT Singapore 2022, based on a Phocuswright survey that polled 7000 participants from around the world. “37% of travellers said, this is not going to impact us. We’re going to spend what we’re going to spend on travel – we’re still going to take that trip. 27% actually said, we’re going to spend more. And then about 19% said, we’re going to take a little bit of a hit, we’re feeling this in our wallets, so we’ll spend a little bit less”, she added.
According to Charuta, that consumer confidence can be seen across various parameters, including for long-haul trips, all of which display a positive sentiment that’s higher than the negative.
It’s an important observation because it proves, once again, that “revenge travel” isn’t a buzzword or a fad. It’s a real collective mindset that’s driving more travellers to travel more. On a similar note, Clayton Reid, Executive Chairman of MMGY Global recently shared his thoughts on travel in 2023 via LinkedIn and had this to say:
Travellers aren’t concerned with safety; they’re concerned with price. Our traveler surveys have shown a consistent rise in the focus on price and that will continue. Covid and global conflict are no longer in the top five considerations. Instead, a desire for value and price to come back in line are the headline. Even for affluent travelers ($250kUS HHI), who will index at 220% of overall 2023 leisure travel, value will be more important. Discounting will be necessary in most supplier segments to build volume increases from 2022 levels.
We’ve uploaded WiT Singapore in its entirety on YouTube. Check out more panels here.
