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Which trends offer opportunities or pose threats on the European outbound tourism market?

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The European outbound tourism market is changing rapidly. New generations with different demands are taking over the market. The concern for sustainability is increasing, health & lifestyle is becoming an even more important factor and booking behaviour is changing. As a developing country supplier on the tourism market, you need to adjust to these changes. Amongst others, this can be done by offering a sustainable choice, seamlessly integrated within the supply chain, suitable for your (new) target group and offered via a diversity of online channels.

1. The disruptive impact of COVID-19 on global tourism

The European outbound tourism market has been changing rapidly. However, the outbreak of COVID-19 in early 2020 has had an enormous disruptive effect on tourism across the globe. Because we are still in the middle of this pandemic, it is difficult to anticipate when and how global tourism will recover and what the effects might be on the trends in the European tourism market. In a study by CELTH, 4 scenarios were explored of what could happen with global tourism (Figure 1). Each of the scenarios will result in different threats and/or opportunities for the tourism sector. Because the future of European tourism may include features of multiple scenarios, it is at this point not clear yet in what direction it will evolve.

Before the pandemic started, we saw young generations with different demands taking over the market. This brought a rising interest in sustainable holidays, a seamless customer journey and a change in booking behaviour. Besides this, we acknowledge an increasing emphasis on health & wellness and multi-generational travel. Whatever scenario will come through, there is no reason to believe that these trends will come to an end. It is even likely that most of these trends will thrive – but the question is when. The COVID-19 pandemic may boost the trend of technologically manufactured personal experiences and give rise to a new trend of safety and security.

Some anticipate COVID-19 will further establish new trends such as virtual travel (fits within the scenario Business as Unusual), hygiene as non-negotiable (fits with Responsible Tourism and Business as Unusual) and care as a new service (fits with Responsible Tourism).

Figure 1: 4 post-COVID-19 scenarios for global tourism

4 post-COVID-19 scenarios for global tourism

Source: ETFI

As a developing country supplier on the tourism market, it is difficult to anticipate how the future of tourism from Europe will evolve. The scenarios offer some perspective, but despite the scenario that may evolve, you need to adjust to the trends that are probably being supressed for a while. Amongst others, this can be done by offering a sustainable choice, seamlessly integrated within the supply chain, suitable for your (new) target group and offered via a diversity of online channels. You will also need to prepare for the new trends that may arise  because of the crisis.

2. Growing European market of Generation Y and Generation Z

The market of Generation Y (Gen Y) and Generation Z (Gen Z) in Europe is growing rapidly. These generations were born and have grown up in the digital world. An often-used synonym for Gen Y is ‘millennials’. They were born between the early 1980s and the mid-1990s and constitute 40% of Europe’s outbound travel. Generation Z, also called ‘iGen’, click’n’go children, centennials, or screenagers, was born between the mid-1990s and around 2010. Both generations are tech savvy, technologically driven, but quite different in their need for communication, consumption and tourist experience. These generations are shaping the future of travel. Currently, the family market is increasingly being taken over by families led by millennial parents.

Typical for Gen Y / millennials:

  • they prefer experiences over possessions (for example they favour a holiday over purchasing the latest TV or latest fashion), and they are more demanding of experience in their orientation and purchasing phase.
  • they spend more on the things that really matter, such as high-end travel experiences, and cut back (often significantly) on those that do not, such as flying (low cost airlines).

Characteristic for Gen Z / screenagers:

  • they rely heavily on social media, reviews and influencers, but they are more careful with their online persona than Gen Y and they prefer more privacy on platforms, so privacy settings are important. Most popular among Generation Z are YouTube, Snapchat, Instagram, Facebook and TikTok.
  • they are more price-conscious and economical than Gen Y

Table 1: Characteristics of Generation Y and Generation Z

 

Gen Y

Gen Z

Synonyms

Millennials

Centennials, screen agers, iGen, click’n’go children

Born

1980–1995 (in 2020: 25–40 years)

1995–2010 (in 2020: 10–25 years)

% of European population

EU 16%, Europe 16%

EU 19%, Europe 20%

Formative experiences

Terrorist attacks, play station, social media, invasion of Iraq, reality television (TV), Google Earth, Glastonbury

Economic recession, uncertainty, chaos and complexity (global warming, energy crisis, Arab Spring, WikiLeaks), mobile devices, cloud computing

Profile

Tech savvy: 2 screens at once

Curators and Sharers

Now focused

Optimists

Tech innate: 5 screens at once

Creators and Collaborators

Future focused

Realists

Aspiration

Freedom and flexibility

Security and stability

Attitude towards technology

Digital natives

Technoholics, fully integrated into digital world, entirely dependent on information technology (IT), limited grasp of alternatives

Attitude towards career

Want to be discovered

Digital entrepreneurs: work with organisations, not for

Want to work for success

Career multitaskers: will move seamlessly between organisations and pop-up businesses

Signature product

Tablet, smart phone

Google glass, graphene, nanocomputers, 3d-printing, driverless cars, although development seems slower than expected.

Communication media

Text or social media

Hand-held communication devices (or integrated into clothing)

Communication preference

With text (online and mobile)

With images (emoticons, stickers, Skype and Facetime)

Technology milestone

Smartphone, tablet

Augmented Reality/Virtual Reality

Source: Based on: WFC, Forbes and Expressworks

Gen Y and Gen Z do both focus on exploration, interaction and emotional experience. To meet the lifestyle requirements of Gen Y and Gen Z, it is important that you as a tourism business show empathy and try to connect with them. Therefore, you should be transparent and tech savvy.

Gen Y expects a greater link between tourism services and their everyday life. They want to travel as a flashpacker, because they combine conventional social, local, simple backpacking with their enhanced lifestyle and need for flashy experiences.

If you want to be attractive for the Gen Y market, it is important to:

  • understand their habits, preferences and values
  • offer the opportunity to perform all stages of a person’s customer journey on a mobile digital device
  • place emphasis on the consumer experience and to offer opportunities for (solo) travellers who are willing to pay for an engaging experience. Examples are to personalise your offering and to provide a seamless travel experience.

The customer journey is the total of subsequent stages in a person’s travel experience. The customer journey of a millennial could look as follows:

Figure 2: The customer journey of a millennial

 The customer journey of a millennial

Suggested target groups are:

  • extended families
  • groups of friends
  • group travel for singles or for people with similar interests such as yoga, bootcamp, cooking, entrepreneurship, mountain biking, birdwatching, scientific research

Gen Y likes many different holiday types, but some holiday types that fit best are:

  • slow travel, which means that travellers invest more time to experience destinations more deeply and in a more laid-back way
  • ‘do-good, feel-good holidays’, where travellers do something in return for the destination, such as a beach clean-up
  • ‘purposeful holidays’ with the aim of returning reborn, such as a ‘mumcation’ for mothers who want to refuel (see for example the Health & Fitness Travel website), safe-your-marriage trips, ‘painmoons’ (travelling with the aim of recovering from a stressful period or a period of hard work; see for example the website of Iron Mountain Hot Springs), or a digital detox (jomo – the joy of missing out)
  • ‘adventure holidays’ to escape from the daily hustle and bustle, such as adrenaline-pumping activities
  • transformative experiences that focus on helping others as well as helping oneself. This could be a destination off the beaten track, a yoga retreat or a spartan holiday that combines a digital detox with minimalist living, whereby you travel with as little as possible. Companies such as Fuselage, Vipp Shelter and Unyoked offer forest micro hotels hidden away from the modern world.

If you like to attract Gen Z, you may need to adjust your facilities. Facilities that Gen Z would like during their holidays are:

  • space for experiences with other consumers, to make new friends
  • sleeping accommodation in a stylish, fun-loving and hipster manner with a smart design (such as AirBnB or boutique hostels)
  • hometels (hotels that give you the feeling of being at home). These are offered by, for example, Domio (across the USA and London) and Veeve (in London, Los Angeles and Paris)
  • community camping
  • opportunities to mix business with leisure, or leisure with business (referred to as ‘bleisure’) enabled by platforms such as WeWork
  • an epic rail journey where the transportation with a luxury, historical or scenic train is part of the experience, such as the Orient Express. According to a study by Expedia it seems that the younger the generation, the more interest in such journeys

Gen Y feels attracted to various kinds of activities and experiences, which might be extended over multiple days, and prefer going to unspoilt places and avoiding the masses. Such activities and experiences could include:

  • so-called second city travel, to cities beyond the well-known overcrowded tourism hot spots. Mpumalanga in South Africa is regarded as an example of a second city destination with a booming travel industry
  • ‘surfaris’ (surfing holidays, see for example Worldsurfaris)
  • ecological tours (unique experiences that educate visitors and share inside information with them on the area and how to protect it for the future)
  • authentic, unique and once-in-a-lifetime experiences (like for example hot-air ballooning over the Masai Mara)
  • opportunities to immerse in the local culture and to ‘feel like a local’, such as opportunities to stay with a local family, indulge in the local nightlife or services that connect travellers to local tastes, made accessible via platforms (examples are EatWith or BiteMojo)
  • opportunities to explore hidden gems, such as via Accor Local (an Accor initiative to get local residents more involved with hotels, recruiting them to act as ambassadors for the destinations and so indirectly also for the hotels)
  • part of the history made more tangible to visitors by means of a VR walking tour, such as the VR walking tour developed by Croatia Travel Co
  • opportunities to learn a new skill or to experience a new way of thinking
  • history and culture walking tours (where visitors have the opportunity to meet other travellers and have a destination expert at their disposal)

If you want to promote your offer, find professionals to write reviews for you. This could be trusted bloggers, social media influencers, or even reviewers from magazines such as National Geographic, Business Insider or Travel Channel (like TripAdvisor)

If you want to see how others try to attract the Gen Y market, you could take a look at hotel chains. Some have developed specific hotel brands for the Gen Y traveller, such as: Radisson RED, Moxy by Marriott, Tommie, AC Hotels, Hyatt Centric, and Hilton’s Canopy.

The demands of Gen Z are for a large part similar to those of Gen Y. What is different is that they are more price sensitive and they require a brand to be open, fair, and respectful. Travellers of this generation expect real time information, short, yet powerful messages mostly sent via pictures, videos and channels that allow them to interact, co-create and share information.

To attract visitors from Gen Z, it is important to:

  • adapt to their specific language of images, emoticons, and Skype/Face, to be able to interact and communicate with them
  • tell your story across multiple platforms
  • be instagrammable. This means being visually appealing in a way that is suitable for being photographed for posting on the social media application Instagram. There are many websites that show you what Instagrammable looks like. Some give concrete advice
  • present your core values
  • create a meaningful brand
  • be socially responsible
  • treat them as adults and respect their opinion
  • allow them to interact and to co-create (more information on how to develop new products based on your customers’ personas can be read in our report on product development in tourism)
  • customise and personalise your product and service, even more than for Gen Y

Gen Y and Gen Z constitute a rapidly growing market segment. They will be increasingly dominant consumers in the tourism market and are expected to represent 50% of all travellers by 2025. This will change the dominant pattern of the way people travel, of their needs and demands, and so of holidays and related services. The accelerated implementation of digitalisation will boost the growth of the Gen Y and Gen Z market, as technology is essential for those groups.

Tips:

  • Treat visitors from Gen Y and Gen Z in a unique and personal way.
  • Ensure a clear online presence. This means that potential visitors should be able to find you online and be able to access your online information in an easy way.
  • Invite influential bloggers or vloggers for a free stay. You can find bloggers and vloggers via Typsy or Youtube.
  • Show your identity and core values and act in a socially responsible manner.
  • Look for role models in thoroughly planned and comprehensive projects such as Black Tomato, which helps travellers go off the beaten track. Destinations include the jungles of Western Borneo in Indonesia, the deserts of Western Mongolia and Soneva Kiri Resorts’s slow life philosophy in Thailand.
  • If you want to offer nature-related holidays, the markets of the Czech Republic, the Netherlands and Bulgaria offer opportunities due to a high preference for this type of holiday. For culture-related holidays, the biggest opportunities are in Spain, Malta and Estonia. To read more about growing markets in Europe, check out our Market Statistics and Outlook Study.

3. Increasing demand for sustainable holidays

Governments of mature markets in Europe are pushing sustainability and sustainable tourism on the political agenda. Also travellers (especially Generations Y and Z are increasingly aware of and concerned about sustainability. If they choose a holiday, this is increasingly influenced by ethics, moral values, concerns about the environment, animal welfare, production and labour practices, and desires to positively impact communities and people. These travellers demand availability and affordability of ‘green’, ‘eco’, ‘climate-neutral’ and organic tourism services and products. Inspired by Greta Thunberg, flight shame is increasingly motivating these generations to use different ways of travel, boosting the demand for travel by train. The growing concern for personal well-being and the environment is also making air quality an important motivation for destination choice. Many do not only want to reduce their holiday footprint, or visit a destination, but also to enrich it (‘do-good, feel-good’ holidays, ecological tours). So, the increase in demand for sustainable holidays cannot be regarded separately from the rise of the Gen Y and Gen Z markets.

There are many reasons why European governments and travellers pay more attention to sustainability. For example:

  • climate change (sea level rise, extreme weather, food and water supply),
  • unsustainable food consumption,
  • plastic soup,
  • pollution and CO2 emission by, for example air travel and cruise ships
  • land and water usage
  • dislocation of traditional societies
  • negative impact of ‘overtourism’ on host communities
  • international agreements such as the climate agreement, and the establishment of the United Nation’s (UN) Sustainable Development Goals

Figure 3: The UN Sustainable Development Goals

The UN Sustainable Development Goals

Source: Realising Just Cities

Sustainable tourism development mainly deals with an attempt to find a fair balance between the economic benefits of tourism and the negative social and environmental consequences of travel and tourism, involving all stakeholders.

Although sustainable development is an issue for governments, businesses must address sustainability as well in order to attract travellers, for example by paying attention to:

  • community well-being, for example contribution to poverty alleviation
  • community participation
  • cultural assets
  • fair distribution of socio-economic benefits (employment, income)
  • feasible long-term economic operations
  • stable employment opportunities
  • optimal use of environmental resources
  • conservation of natural and cultural heritage
  • conservation of biodiversity.

There are several best practices in thoroughly planned and comprehensive projects that can serve as a source of inspiration for you:

  • The ecological tours offered by EcoZip in New Zealand: the zipline tour funds the conservation and restoration of Waiheke Island forest
  • Thailand’s homestay programmes: foreign tourists experience life in a small village. A few homes are used to host visitors, another home provides meals, another does laundry, and another produces locally grown products. Look at Homestay Thailand and Xploreasia for examples.
  • La Choza Chula, based in El Paredón on the Pacific coast of Guatemala, is a business that runs turtle and mangrove tours in the area, cooking classes, homestay programmes, cultural immersion programmes, volunteer programmes and weekly English classes for their guides. It has funded the construction of a library, set up a mobile library, and built a computer lab and a secondary school.
  • Buhoma Community Rest Camp of south-western Uganda, a locally run campsite created to support the local people and improve their lives through community-based tourism
  • Shewula Mountain Camp of Swaziland, which invites travellers to stay in their village and to experience the rural lifestyle of a Swazi community, to interact with the local community and enjoy the scenery of the region via walking trails, while learning about Swazi culture

The global sustainability goals set by the UN offer big opportunities for individual businesses, although they may require you to change the way you do business and earn money. Because tourism is interconnected with many other sectors, even small improvements in your business can have important effects. If you want to be sustainable in the long term, you should not take measures that only look sustainable from the outside (this is called greenwashing) or implement quick-fix solutions. Such actions could lead to adverse effects, such as antipathy or opposition of local residents to tourism or an overdependency on tourism.

Concrete opportunities for businesses to meet the increasing demand for sustainability include providing customers with:

1) Sustainable, eco-friendly and climate-neutral offerings in:

  • Design (for example, accommodation design);
  • Diets (for example, vegetarian);
  • Food production; and
  • Services, such as transportation;

2) Sustainable procurement. Procurement refers to everything you buy for your company, from groceries and food to vehicles and even consultancy services. Sustainable procurement means that all products and services that you buy are as sustainable as possible, so with minimum social and environmental impacts;
3) To involve the local community in planning and development (for example, Kura Hulanda on Curaçao);
4) To make use of modern technologies to increase the efficiency of service delivery (while at the same time facilitating the provision of enhanced consumer experiences);
5) Offering carbon credits;
6) Extended services in other areas such as:

  • Options to rent an electric instead of a conventional vehicle;
  • Opportunities to work in a nature reserve or engaging in conservation work;
  • Accessibility for travellers with any form of disability;
  • Employment for people with disabilities.

You can also try to make your business or product offer greener and get certified. Green Tourism offers several certification programmes. Becoming greener can be achieved by for example:

  • use of renewable energy sources
  • increasing energy efficiency
  • environmental protection
  • waste management and minimisation (for example by banning plastic straws to reduce plastic waste)
  • addressing carbon emission, pollution and littering
  • involving customers (for example in a beach clean-up or ‘plogging’ – picking up litter while jogging)
  • contributing to the local quality of life (economic and socio-cultural well-being, fair income)

Keep in mind that customers are reluctant to pay a premium for more environmentally sustainable products or services.

Sustainability has become a trend in tourism and its importance will evolve further in the future, boosted by the international UN Sustainable Development Goals. Currently only 10% of the market can be considered ethical travellers, 20% are not aware of the impact of their behaviour and 70% want to consume more sustainably, but do not want to give up the benefits yet. With the growing importance of Gen Y and Gen Z for the tourism market, the demand for more sustainable tourism experiences will expand, so the pressure for businesses to act will increase. Hotels might evolve into community hubs and everyday problem solvers for locals, which is referred to as ‘augmented hospitality’.

Tips:

  • Study the UN sustainable development goals.
  • Balance short-term and long-term priorities and implement a strategy that integrates safeguarding the destination, environmental leadership and community health into the travellers’ experience.
  • Try to collaborate with other stakeholders in the destination, such as local residents and businesses, also from other sectors. This could be local guides or experts, providers of local food and of local accommodation, local farms or factories, and more (look at the website of Tourism for SDGS for an example in East Africa).
  • The Global Sustainable Tourism Council provides guidelines on how to develop a sustainable business and can also mediate in certification itself.

4. Increasing need for a seamless customer journey

Traditionally players in the travel industry are operating rather independently. However, the ongoing improvement of mobile devices, the increased dominance of digital channels (such as Uber, AirBnB and CarRentals), online travel agencies (OTAs, such as Expedia, Priceline, Agoda and Booking.com) and meta search engines (such as Trivago, Trip Advisor and Google) have given travellers more control over the subsequent phases of their holiday. They want the phases of their personalised ‘customer journey’ to be integrated and seamless. A meta search engine is an online service that collects, combines and integrates data from other search engines. The increase in demand for a seamless customer journey cannot be regarded separately from the rise of the Gen Y and Gen Z markets.

The customer journey refers to the phases of a holiday from the moment of orientation, via the fine tuning of the holiday plans, booking, travel, stay at the destination, return travel and reflection and evaluation of the holiday back home. Along this journey there is a series of so-called touch points between traveller and service providers, such as illustrated in the example in figure 4.

Figure 4: The customer journey for a visitor to Utah, with 5 phases, each with clients’ thoughts (thinking), a variety of touchpoints (doing) and business opportunities (opportunity)

The customer journey

Source: Hummingbuzz

The service at each touchpoint will be evaluated by the customer as (extremely) positively or (extremely) negatively. Overall these touch point experiences define the overall holiday experience and the level of satisfaction. The more satisfied the customer returns home, the higher his or her loyalty will be. A loyal customer is inclined to come back and to promote it to their friends, fans and followers. An annoyed customer does not come back and shares his or her bad experiences with his peers!

Figure 5: General outline of a customer journey, with 5 phases and a series of touch points

General outline of a customer journey

Source: Travelnext

Figure 5 shows a general outline of a customer journey. If this is put in the context of travel, it could look like Figure 6.

There are three related developments why travellers get more and more control over all the phases of the customer journey:

  • Developments of social networks and mobile technology (SoMo) allow travellers to be with their friends, fans and followers online on a permanent basis (via Facebook, Instagram, Twitter, Snapchat, and more).
  • Development of digital channels, meta search engine and OTAs (online travel agencies) that allow travellers to access information anywhere in real time.
  • New generations of mobile devices that are so powerful that they can be used for any purpose and will be able to predict travellers’ needs and solve problems in real time.

Because travellers are and will be more in control, they can make their holiday more affordable (personalised pricing), efficient and accessible. As an individual business, you could subscribe to OTAs, which increases your online findability and bookability. The disadvantage is that you will usually have to pay a percentage of the booking costs to the agency. You could also implement actions to increase your findability on for example Google, Facebook or Instagram.

Figure 6: Examples and potential benefits of various strategies to shape the future traveller journey.

 Examples and potential benefits


Source: Amadeus IT Group SA

The challenge for both existing businesses and start-ups is to provide value before, during and after the holiday, and to build a more rewarding, connected, integrated and seamless customer journey. Implementing appropriate solutions and services at each stage of the journey will be crucial to success

  • to personalise and engage with the traveller in ways that suit their interests and lifestyle – not only during the traditional engagement phases of holiday but on an ongoing basis
  • to increase the number of touchpoints and to enhance them.
  • to make room for consumer control, and to maximise utility and functionality
  • to ensure online presence in social media, review sites, messaging apps, chatbots, internet-enabled subscription programmes, and pop-up shops.
  • to track the travellers’ online behaviour and to collect data about him/her
  • to tailor the transaction to the product and the consumer
  • to seek to enrich experiences via Augmented Reality or Virtual Reality (alone or in collaboration with other parties)

However, it should not be neglected that an increasing group of tourists want to escape from their complex digital life and want to be unplugged during their holiday – the Joy of Missing Out (JoMo), which offers another opportunity.

With the increasing market of Gen Y and Gen Z in Europe, and a continued evolvement of technology, it is anticipated that the need for personalised and seamless customer journeys will evolve. The development of SoMo and the opportunity to establish a seamless customer journey, will be facilitated by other emerging technological developments such as the new 5G-network that will boost the possibilities of being connected everywhere and gives a massive increase in data creation; and the blockchain technology, which allows to create cheaper, better and faster travel experiences. Probably sophisticated technology will become an integrated part of the tourism sector.

Tips:

  • Get to know your customer both online (via technology) and during his/her stay, and establish a relationship. There are many online instruction of how to create route map for the development of a customer journey for a specific target group. Some also explain the idea of a (seamless) customer journey quite well  with a clear description of the steps to be taken, with references to concrete tools to use. Another one provides a practical example from the perspective of an AirBnB. Personas form an important feature of your customer journey journey mapping. This is explained in the document How to start developing your tourism product. Map and understand the customer journey of your guests (see for example the website of uxmastery, or Visual Paradigm for a tutorial and online tool).
  • Understand the ‘ecosystem’ of possible partners you are part of from the perspective of your customer, because trips increasingly have a modular character (see next trend).
  • Collaborate with these parties in the value chain in order to create a seamless journey. Companies such as VisaFast, ChinaVisaApp and VisaExplore have already developed apps for a customer-friendly, fast and efficient application for visas on the go (convenient language, available 24/7, end-to-end process from filling the forms to payment and digital submission).
  • Participate in OTAs or pay for actions to increase your online presence and findability.
  • Hire a social media strategist with sufficient experience (see for example the website of Virtual Employee). You could post vacancies for such jobs on various online platforms (such as Indeed, Monsterboard or LinkedIn), on social media or with head hunter bureaus. A cheaper short-term solution could be to hire an intern.

5. Changing booking behaviour

During the past few years, travellers’ booking behaviour has changed because of the rise of the Gen Y and Gen Z markets. In the first place, there has been an increase of ‘modular travel’. This trend moves away from linear and unidirectional package tours to modular experiences that suit the needs and expectations of unprecedented levels of flexibility of contemporary young travellers. With ‘modular travel’, the journey is composed of several modules, such as a hotel room and an airport lounge. The modules need to be flexible, adaptive and customised to European travellers’ interests. The modules can be interconnected to form a personalised travel experience.

Modular travellers travel as Fully Independent Travellers (FITs), and the modules are booked from home or (rather last minute) during the tour itself. As the young generations enjoy their free time, they prefer to turn to specialised online platforms to research, plan and book authentic and unique experiences. Here, they can shop for experiences that might be out of scope of the regular Fully Independent Traveller. Ctrip and Qunar are examples of such new OTAs. This way, businesses like yours can connect almost directly with potential European customers, without an intermediary to which you need to pay a commission.

Secondly, there is increasing evidence that travellers are returning to travel organisations: direct website bookings are decreasing, while marketplace bookings (OTAs) and bookings via travel agents, affiliates and local tourist offices show an increase. This applies particularly to Gen Y, Gen Z and multi-generation (often abbreviated to multi-gen) families. Multi-generational travel and extended families refers to multiple generations within one family going on holiday together (kids, parents and grandparents.

In case of online bookings, customers make use of various platforms. In that case businesses must be present on these multiple platforms anytime and anywhere. However, the trend to return to OTAs, travel agents and local tourist offices offers the advantage of real-time possibilities to tailor to the needs of the customer and to establish a personal relationship within the customer journey. It shows that customers who interacted with a person during the booking process tend to spend more than customers who merely book online.

Thirdly, last-minute bookings are on the rise. Bookings are generally made 13 days in advance, which shortens to 5 days with online bookings. Multi-day tours and activities, and custom tours are created in advance or upon arrival at the destination. Reservation for tours and activities up to 3 hours tend to be booked locally at the destination or just before arrival.

The trend to book a holiday, tour or activity last minute makes it difficult for businesses to plan staff and resources in advance, and, besides, business will be more dependent on the weather. To overcome this disadvantage local partnerships / collaboration and live availability will be key success factors.

The trend to book last minutes has developed already for some time. There are no reasons to believe that this will change in the near future. It is difficult to foresee whether the return to modular travel via travel agents and OTAs will grow over the years to come, or whether this has been a temporary revival. It is likely that, with a lot of uncertainty about travel safety, hygiene, variety in health regulations and contradicting information, travel will be increasingly complex and travellers will turn to tour operators and other travel experts if they want to plan a holiday trip.

Tips:

  • Think modular: identify relevant modules that suit the needs of your customers throughout their customer journey. Read our report on how to get started developing your tourism product.
  • Design various flexible experience ‘packages’.
  • Try to be pro-active, to build a relationship with the customer and to educate them on booking more in advance when more product and choice is available. A new tool such as Virtuoso's Orchestrator offers the possibility for travel agents and travellers to collaborate and create a portfolio of bookings 3-5 years in advance.
  • Ensure a variety of distribution channels, both online and at the destination.
  • Collaborate with other businesses to exchange staff to ensure flexibility to respond to changes in demand.

6. Health, wellness and sports holidays

Health and healthy lifestyle is becoming increasingly important in tourists’ decision making. Aging tourists, the lifestyle of Gen Y and Gen Z, a growing middle class, and the technological and digital revolution, all contribute to the growing importance of the health trend. Wellness tourism in Europe is on the increase. In a Eurobarometer survey of 33,000 Europeans in 2015 in 33 countries 13% of the respondents said that wellness/spa/health treatments were their primary or secondary motivation to go on holiday.

Concerns about obesity, food sensitivity, and people affected from diseases, have resulted in a shift in attitude towards health care, nutrition, beauty, physical activity, and overall self-improvement. As a consequence healthy lifestyle habits, both physically and mentally, are increasingly becoming part of a normal way of life. This development stimulates demand for personalised health, mental wellbeing, clean-labels, botanicals, athleisure, and home-tech health and wearables to monitor personal health.

Two types of wellness travellers can be identified:

  1. those who travel specifically for wellness (health as primary motive) and
  2. those who simply want to remain healthy (health as secondary motive).

The market of group 1 is particularly big in countries such as Iceland, Sweden, Hungary, Portugal, Slovakia and the Czech Republic. This group feels particularly attracted to spas and medical-focused destination spas. Such spas focus on the concept of total wellbeing, and their main goal is to promote and monitor the achievement of both physical and mental health goals, complemented with other lifestyle features. Facilities include:

  • quality beds
  • exercise equipment
  • new fitness programs that are highly focused on results;
  • traditional sport and recreation (e.g. walks, hiking, cycling, running, boating, swimming, meditation, exercise programs, etc.)
  • room lighting following individual biorhythm in order to increase energy levels
  • air purification
  • water enriched with vitamins
  • fresh organic food purchased from local producers etc.
  • life-coaching that embraces nutrition, physical exercise, stress management, goal setting and empowerment.

Yet, group 2 makes up the bulk of wellness tourism, accounting for 86 percent of expenditures in 2017, and grew 2% faster between 2015 and 2017 (10%) than group 1 (8%). Smaller hospitality businesses increasingly cater for the growing demand of health and wellness as part of a regular holiday. Travellers seek to combine the desire to escape from one’s mundane life, to spend time in nature, to have unique and authentic experiences, to be with family and friends, or to have a digital detox, with mental/physical health and wellness.

It is the vast rise of interest in health and wellness travellers with a secondary motivation (group 2) which offers many opportunities for all kinds of small and medium-sized businesses to include health and wellness into their offerings. For example:

  • thematic health hotels
  • interior design (such as specially furnished fitness guestrooms)
  • sport and recreation
  • personalised health and wellness programs
  • rejuvenation and psychological well-being
  • meditation and yoga
  • healthy menus and cooking classes
  • mobile health monitoring
  • holistic holidays
  • concierges who focus on local jogging courses
  • wellness trips and retreats that are built around a specific wellness activity, from boot camps to meditation and silence retreats
  • spiritual travel with an adventure component
  • activities in nature in combination with wellness, such as hiking to a scenic location for meditation, or yoga and tai chi in an outdoor setting
  • short-haul, weekend getaways – for couples and girlfriends, and increasingly for families (including multi-generations)
  • healthy and organic food holidays, or serving meals with a view to better nutrition, or even special diets (such as keto or vegan)
  • motion-based travel opportunities, such as walks or cycling trips in beautiful places, bike-to-boat vacations in Croatia or swim-specific tours in the Maldives or the Bahamas.

Please note that integrated cooperation between the health and tourism sector, and co-branding or associations of their products with wellness, will open up new possibilities in health tourism as well.

A pitfall is to offer health and wellness as a luxury product. The majority of travellers in group 2 with health as secondary motivation is middle class. To this market, health and wellness should rather be regarded as a free or affordable environment in which a traveller can relax, can bond with others, can acquire a feeling of community of sense of being and sense of self, and where he/she can learn to live a healthier, cleaner, more sustainable lifestyle.

Health and healthy lifestyle will become progressively more integrated into multiple dimensions of tourism offerings.

Tips:

7. Multi-generational travel and extended families

The market of multigenerational (multi-gen) travel is booming. Multi-gen travel refers to multiple generations within one family going on holiday together (kids, parents and grandparents), in search of experiences that create closer bonds and shared lasting memories. This development has led to a growing demand for larger types of accommodation that can cater for bigger family groups, such as hotel suites, (semi-detached) villas and cottages. This is stimulated by the increasing number of large extended families. Look at the Covington website for more information.

Contrary to traditional family holidays with grandparents taking the kids and grandkids, the trend is that baby-boomer parents (born between 1946 and 1964, 55–73 years of age in 2019) take the adult children plus their grandparents on family trips. This results in a larger number of 20- and 30-year-olds taking more expensive trips than they would on their own. Interesting is that that the adult ‘children’ (Gen Z, born between 1995 and 2010) play a big role in the holiday planning and drive the decision on destination and type of trips, which results in more exotic or adventurous travel.

The trend is reinforced by the rise of blended or reconstituted families and the verticalisation of families. Blended families are composed of two previously divorced persons with their single-parent families, children and principally eight grandparents. The verticalisation of families means that, because grandparents live longer than a few decades ago, they have more time to spend with their grandchildren. As a consequence, the care for the grandchildren is moving from the siblings and cousins in traditional large families to the grandparents in modern vertical families. This is illustrated in Figure 7. These trends combined imply that grandparents increasingly join parents and their children on holiday (vertical families), while at the same time the number of grandparents and grandchildren doubles in case of blended families (blended family holidays). Read a Traveller column for an illustration of this holiday type.

Figure 7: The multigenerational family

The multigenerational family

Source: Tomorrow’s Tourism

The business advantage of this niche is that multi-gen families tend to book earlier and they prefer multiple holidays per year, while they tend to end the family vacation with planning the next one.

It is important for multi-gen travellers

  1. to create a balanced itinerary in which experts balance activities and exploration by means of private and customised tours with downtime, and
  2. to include accommodations that offer everyone a little space and privacy, with connecting rooms
  3. at a destination that is colourful, off the beaten track and unique for the family to explore and discover together, and of course, features plenty of chances to swim in pools or at the beach. For example, Myanmar is a new, up-and-coming destination for multi-gen families. African safaris to for example the Serengeti are also popular. Because many lodges have a minimum age, this is suitable for adventurous families with older children. Other suggestions are listed on the Africa Endeavours website.

There are a number holiday types that the multi-gen market feels attracted to and that offer opportunities for this market:

  • (Ocean and river cruises and all-inclusive resorts. Germany and the United Kingdom are relevant markets.
  • City safaris – a hotel or vacation rental in big cities within walking distance of major attractions and restaurants. Cyprus, Finland and Italy are relevant markets.
  • Heritage trips – a visit to the hometown or country the family is from
  • Beach vacations – a visit to an all-inclusive resort with contemporary facilities and entertainment such as ziplines, perfect for reconnecting as a family. Eastern Europe is a relevant market.
  • Skip-a-generation (skipgen) holidays (look at the Fifty Candles Club website and the Red Tricycle website for examples)– a holiday of grandparents with their grandkids to celebrate milestone birthdays and graduations.
  • Active or adventure trips, such as active biking, hiking, kayaking and canoe excursions (and exploring nature, underground salt mines, ascending a mountain for a climb, etc.)
  • Celebration travel
  • Mother/daughter or father/son trips (an emerging sub-market)
  • Guided or private vacations, for example to exciting cultural and natural sites (UNESCO sites, archaeological sites, ecological reserves with wildlife to spot, unique natural landscapes to experience such as lava flows)
  • Cultural immersion
  • (Guided) educational trips and special interest tours, to learn more about the destination.
  • Exclusive-use travel to a private villa, island, jet or yacht
  • Transformative travel (eco-retreats, agritourism and milk your own cows, get eggs from the chickens, therapy programs, landscape)

More and more multi-gen travellers (just as with the Gen Y and Gen Z) return to travel agents. They are beginning to realise the value of an experienced travel agent who customises a trip that is a perfect fit for their family. Therefore, experienced travel agents offer another opportunity to approach this market.

There is no reason to anticipate an end or decline to this trend.

Tips:

  • If you are an African entrepreneur, you need to explore this market. Several African countries seem to become top destinations for multi-gen trips because of their once-in-a-lifetime cachet for those who can afford it (look at NextAvenue for an example).
  • Composing a multi-gen holiday for a diversity of ages and interests requires sufficient research and planning to cater for everyone’s needs and interests
  • Have a large accommodation in a prime condition with room for privacy, such as the so-called reunion bungalow from Landal Green Parks in the Netherlands, which caters for 18 persons and comes equipped with nine bedrooms, nine bathrooms and multiple kitchens.
  • Provide activities that family members can take together.
  • Offer sufficient leisure facilities for all age groups, such as kids’ clubs for young children, game and evening entertainment for tweens, sports and spa programmes for teenagers or babysitting services for parents to go out.

8. Technologically manufactured personal experiences

Driven by the increasing impact of Generation Y and Generation Z on the European tourist market, the demand for technologically manufactured personal experiences is increasing. The rise of mobile devices such as smart phones and tablets has boosted the need among these young generations for private personalisation of their experiences along all phases of the customer journey.

They expect experiences that closely match with their personal preferences, from destinations and accommodation to fine-tuned ‘smart’ hotel rooms and activities. The better the match, the better the chance that visitors will return and share it with their friends, fans and followers. Medium asserts that 90% of travellers worldwide expect a personalised experience when they book a holiday. According to Travolution, 81% of travel respondents consider it important that they are provided with personalised experiences. The trends report from WeAreMarketing reveals that 69% of travellers will be more loyal to a service provider that personalises their experiences.

The rise in demand for personalised experiences is boosted by technological advancements that make it possible to create them. Examples of these technologies and possible applications are:

  • Augmented Reality (AR): with AR, virtual elements are projected onto real world experiences. This can help to provide targeted and specific information to customers. If the lens of the smart phone is directed at a city square, animal, attraction, historic building, etc., AR can project background information as an overlay on the screen. It can also allow visitors to a museum to see the artefacts in their original appearance. It can even be used to provide information about the menu in a meaningful way. The augmented reality app Dilly Bag connects users with the stories of Indigenous Australian servicemen via a smartphone. The Lausanne Hotel School has made a video that shows how AR may be used in the near future in hotel accommodation.
  • Virtual Reality (VR): with Virtual Reality, travellers do not physically have to be at a place in order to view and experience it. It can be used to create tours in which travellers can experience destinations and accommodation, hotel and restaurant interiors, etc. from their homes during the planning and decision-making phase of the customer journey. If the traveller owns a VR Headset (such as Oculus Rift), they will even be able to look around in all directions by turning their head, like they would do on site. Destination British Columbia has used virtual reality to promote the destination. This video explains how such a VR video is created. In other videos, you can see how it results in virtual experiences in British Columbia, such as, for example, a canyon (although you need the equipment to get the real experience of being able to move your head and look in all directions). National Geography makes you experience lions from nearby in a 3D VR video. Marriott has introduced Teleporter, which not only transports the user to a completely different environment but also makes it possible to feel it. Atlantis Dubai has created a virtual hotel tour. But there are more examples of VR that can be used in hotels. With Under the Canopy, the beauty of the Amazon forest and its wildlife can be experienced. It was introduced by Conservation International and Jaunt. Everest VR allows the user to experience what it feels like to climb Mount Everest. VR can also be a meaningful alternative when travelling itself is impossible, for example during this COVID-19 pandemic, and offers an eco-friendly alternative that can be used to experience locations suffering from overtourism. Also, museums have discovered the possibility of using virtual tours to walk through the property and enjoy pieces of art. In Denmark, there are plans to turn a virtual reality exhibition exploring Viking history and Norse mythology into a permanent theme park.
  • Humanised interfaces such as voice search and voice control. Interfaces with mobile devices are getting more and more intuitive, interactive, gesture sensitive and human. Voice search and voice control serve as examples of this that were probably boosted by the COVID-19 pandemic. Mobile assistants such as Siri, Google Assistant and Bixby help tourism customers to use voice search. For example, they can use them to search for and book a holiday or to manage the details of their next trip in an easy way. This requires well-structured web content of the tourism business or destination.

Voice control is another example of the emergence of new interfaces. It can be used to turn on and off or change settings of devices compatible with voice control smart speakers or other devices. An independent study by Development Counsellors International concluded that 54% of respondents would consider asking a virtual assistant such as Siri or Alexa to enquire about potential destinations to visit. These outcomes were largely driven by Generation Y and Generation Z respondents (64% interested) and less by older Generation X respondents and baby boomers (44% interested).

  • Near Field Communication (NFC): this allows devices to communicate with each other over a short distance (4 cm or less). NFC has a huge potential and offers a vast field of possible applications for the tourism industry. One evolving application is contactless payment, facilitated by various mobile phone apps and boosted by COVID-19 because travellers prefer to pay cashless. Apps such as Google Pay and Apple Pay allow customers to leave their credit or debit card home if they want to pay for meals, hotel stays, transport and other services. It reduces friction in the customer journey and speeds up many services such as check-ins and check-outs. Because of the ease of paying for something, it is likely to speed up spontaneous purchases.
  • The Internet of Things: some think it signals the beginning of the fourth industrial revolution. The Internet of Things refers to the digital connection of fridges, entertainment systems, heating, air conditioning, street lights, digital devices, gadgets, etc. This means they can be controlled with an app on your mobile phone via the Internet. Application of IoT is usually referred to as ‘smart’, as in ‘smart destinations’, ‘smart cities’, ‘smart hotel rooms’ or ‘smart restaurants’.

Figure 8: The fourth industrial revolution with the features of industry 4.0

 The fourth industrial revolution

Source: Shockoe

This does involve a risk. To be able to provide customers with optimised personalised experiences, they have to provide personal data in return. Data collection methods, chatbots and AI algorithms assist travellers so they spend less time researching product options and help them to create the optimal experience. But travellers show a growing concern about privacy issues, misuse of data, etc. Consumers might opt out if they do not see added values to their lives.

With the growth of the European market segments of Generation Y and Generation Z, it can be anticipated that the demand for manufactured personal experiences will continue to grow. The interest in some of the applications, such as contactless payments, voice search and voice control, has grown because of the COVID-19 pandemic. Within the scenario Business as Unusual, it is likely that these technological advancements will evolve to a next level as new levels of acceptance arise.

Tips:

  • Read more about Generation Y and Generation Z and how this market grows in the second trend of this study. To further understand their values, needs and demands, consider involving your customers in personalising the travel experience. The CBI paper ‘How to start developing your tourism product’ may help with this.
  •  Make your service offering digitally accessible. For example, you can film your facilities, attractions, etc. in 3D in an appealing way and make them available online (Virtual Reality). You may need to cooperate with educational institutes or companies with the proper equipment.
  • Develop and provide information layers to be applied by means of Augmented Reality to provide customers with specific information about the region, the national park, wildlife, your amenities, your menus, etc.
  • Cooperate with other parties in the ecosystem of tourism service providers to digitalise and integrate the modular components the travellers are interested in.
  • Reconsider your business model and try to digitalise where possible. If you want to collect and store personal data of your customers, do it with care. Anticipate the new customers’ expectations.

9. Safety, security and health

Global travel, also from Europe, is affected by global circumstances such as threats of terrorism, political upheaval, sexual abuse, overtourism, excessive weather conditions and, since the beginning of 2020, the COVID-19 pandemic. Such issues increasingly affect travellers when they choose a destination for their holidays and may lead to last-minute switching behaviour or cancellations. If your business is located in a tourism hot spot or a destination that is perceived by travellers as unsafe, unclean or life threatening for other reasons, be aware that your business may become less attractive and will attract less visitors. According to Booking.com, 54% of global travellers want to play a part in reducing overtourism, and 51% are interested in swapping destinations for a lesser known yet similar alternative. On the other hand, if your business is located within a destination that is perceived as clean, safe, unspoilt or uncrowded, try to make use of this opportunity. In that case, you may attract new or more visitors. For your benefit, indices are available that visualise the risk or risk perception (such as Travel Risk Map, Travelers Risk Index, Traveler’s Risk Tolerance Index).

The COVID-19 pandemic can be expected to have a major impact on travellers’ attitudes towards hygiene. Safety and hygiene standards have become paramount and may even become non-negotiable, because travellers simply require these to be at an appropriate standard.

Travellers will be more reluctant to travel to tourism hot spots and may need more persuasion to perceive a destination or your business as safe. Precautions and explaining how the initial outbreak was handled will help to convince travellers that they will be safe within a specific destination, location or service business.

It is expected that hygiene will impact on the way people travel to and within a destination. This applies to, for example, hygiene standards, whether face masks are compulsory, seat spacing, etc. Price may become less important than hygiene, and travelling in groups with strangers is probably becoming less attractive.

Moreover, it is likely that the pandemic has made travellers require care and empathy as a key element of the service in the ‘new normal’.

Finally, it can be anticipated that, with a lot of uncertainty about travel safety, hygiene and contradicting information, travellers will increasingly turn to travel experts if they want to plan a holiday trip

Tips:

  • Try to understand the external factors that concern travellers in order to inform them properly. Only then will you be able to gain their trust.
  • Perceive your business or service through the lens of cleanliness and anticipate that hygiene should be put at a higher level or that the design needs to be adjusted. So be transparent about your hygiene and safety policies and what you do to maintain hygiene to keep your customers safe in your communication with the market. This could be intensified cleaning, socially distanced seating, providing hand gel, providing accessories such as face masks, glasses and gloves, possibly branded with a logo of the destination or your business, offering contactless payment and driverless transport (which, according to Lifehack, also significantly minimises the emission of greenhouse gasses).
  • Care for your customers and show empathy.
  • Be familiar with the hygiene and safety policies and measures that other suppliers in the modular customer value chain apply, so that you are able to inform your customers if they ask questions.

This study has been carried out on behalf of CBI by Molgo and ETFI.

Please review our market information disclaimer.

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It is important to put trends such as described in this document into perspective. Trends in the tourism market in Europe and in the European tourism industry can be disrupted before you realise it, as has been illustrated with the COVID-19 pandemic. Therefore, it is important to not only follow the trends but to anticipate change and early signals of new trends that emerge. Scenarios, such as presented in the beginning of this document, can help you with this. They can help you with adjusting your products and services in time to become more future proof.

Albert Postma

Dr Albert Postma, professor in scenario planning at the European Tourism Futures Institute.