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

Until the outbreak of COVID-19, the European outbound tourism market had been changing quickly. New generations with different demands slowly but surely started taking over the market. Although there were tourism decreases due to COVID-19 and the war in Ukraine, there is no reason to believe that existing trends will stop. You need to be creative to make the most of the first signs of a recovering market and pay attention to the trends in the European market.

1. European tourism slowed by COVID-19

During the pandemic, tourism came to a stop. Globally, the number of international trips declined to 1 billion. Unfortunately, the improvement in 2021 was only marginal. It is still not clear what the medium and long-term societal effects of COVID-19 will be.

Each of the scenarios has its own specific risks and/or opportunities for tourism. The future of European tourism will likely include features of multiple scenarios.

Impacts on amount of travel

When COVID-19 began to get under control in early 2022, it seemed that European tourism had only been slowed for a few years and was returning to the speed of growth from before the crisis (Scenario 1), even in a more extreme way. Already in January 2022, TripAdvisor reported a higher intent to travel in 2022 than before the pandemic in the United Kingdom and other parts of the world. Spending per trip increased as well.

Figure 1 presents the four possible futures of global tourism post-COVID-19.

Figure 1: Four post-COVID-19 possible futures for global tourism

More than half a year later, in August 2022, the UN World Tourism Organisation also reported the likelihood of a strong and steady recovery of international tourism from the impact of COVID-19. It seems that even the new challenges due to the war in Ukraine did not hurt improved growth. However, the strong growth in air travel and in destination regions across the globe has not brought tourism to the same level as before the pandemic. This has several reasons. Travel rules have become more limiting, seat capacity in airplanes still runs behind the level of 2019, and travellers are still worried about health and safety.

Impact on traveller’s booking behaviour

In 2021, the World Economic Forum (WEF) reported that COVID-19 has caused a historic and dramatic change in consumer behaviour. The WEF expects that the changes in consumer behaviour caused by COVID-19 will last forever. Consumers, including travellers, have become more interested in getting the best price, and are choosing more healthy and eco-friendly possibilities, with fewer steps in their customer journey, for greater health and cleanliness. The World Economic Forum concluded that the shift to digital channels during the pandemic will continue; that customers have become less loyal to specific companies and are much more likely to switch between companies; and that the use of smartphones for shopping is twice that of 2018.

A study by the European Travel Commission and the CELTH shows that COVID-19 has made European tourists more careful. This means they do not like to book holidays far in advance, they prefer to plan the trip more carefully and in more detail, and they want to follow COVID-19 guidelines when travelling. Also, for European tourists, it is now more likely that they use travel insurance to lower the risk of financial losses, and that they visit nearby destinations so that it is easier to return home in case of an emergency.

Problems caused by limited staff

The operation and workforce of the travel industry were under extreme pressure because the demand for travel returned more quickly than expected. During the pandemic, many employees in the travel industry lost or left their jobs, and many found a job outside of travel and tourism, while others have not returned to their job or employer yet. At many airports in Europe, this has led to too few security staff and staff to assist with travellers’ bags, resulting in serious problems. Waiting times have increased by a large amount, large traffic problems came into being, and safety could no longer be promised. In response, specific times have been introduced to enter airports, many flights (especially departing flights) were cancelled, many bags were lost, and the financial wellness of airports is at risk.

Future perspective

According to the UN World Tourism Organisation, in 2022 in Africa and the Middle East, arrivals could get to about 50% to 70% of pre-COVID-19 levels, while in Asia and the Pacific they will remain at no more than 30% of 2019 levels, due to more strict rules and travel limitations. TripAdvisor expects that it will take to at least 2024 to return to pre-COVID-19 levels.

In the medium and long term, COVID-19 likely changed more than only the booking behaviour of travellers. The pandemic has also caused an increasing demand for sustainable holidays; for customer journeys with zero headaches; for safety, security and health; and probably also for ‘modular’ travel (trends that are explained later in this study).

The pandemic has shown how vulnerable tourism businesses are to these surprises, and for many it is even unclear whether they can continue with their business at all. The future is still unclear and we do not know when the health crisis will end or when businesses will be able to go back to normal.

Due to COVID-19, it has become important for tourism businesses to:

• connect with and be supportive of the local community
• pay attention to fairness, diversity and inclusion
• be socially, economically and environmentally sustainable

These requirements are expected to affect the industry for many years to come. Nevertheless, the future impact of COVID-19 remains unclear. Although the first scenario in Figure 1 seems to become reality, there are indications of the other three as well.

Interviews with Small and Medium-sized Enterprises (SMEs) in Europe resulted in a number of tips to recover from the pandemic.

2. The war in Ukraine has caused a new slowdown for European tourism

Despite the improvement in tourism since the pandemic, the UN World Tourism Organisation warns about the negative effects that the geopolitical tensions and the economic developments in Europe may have on the European tourism market. The war in Ukraine has caused a very large increase in energy prices, making travelling more expensive. As many other products and services depend on energy and transport, inflation, interest rates and prices of many other products and services are increasing as well. For many people, spending power is decreasing fast, poverty is increasing and an economic downturn is expected.

The war in Ukraine and its effects negatively affect the continued improvement of travel and tourism in Europe. To give an indication: the OECD reported a loss of 23% in flight bookings the week after the war began. For destinations in Asia, the closing of Russian airspace has added costs and time for many European tour operators and means a lot of extra flying time for European travellers, which makes them less likely to book a flight. Ryanair thinks that the time of cheap flights has ended because of increased fuel costs, in combination with the fight against carbon dioxide (CO2) emissions and the likely use of flight taxes. There will be people who continue to fly, but they will be more careful with costs.

Future perspective

The OECD estimates that 85% of businesses in the global visitor economy are SMEs. They have faced difficult times during the pandemic. If a fast return to normal is slowed down by the effects of the war in Ukraine, the profit potential for these businesses will be even less, and for many, it means that their operations cannot continue. More creative solutions will be needed to survive these difficult times.

3. Europe’s growing market of Generation Y and Generation Z

The market of Generation Y (Gen Y) and Generation Z (Gen Z) in Europe is growing rapidly and shaping the future of travel. Globally, it is expected that this market will represent 50% of all travellers by 2025. Even the family market is increasingly taken over by families led by millennial parents.

Generations Y and Z were born and have grown up in the digital world. Both generations are tech savvy and technologically driven. Compared to older generations, Generations Y and Z travel differently. They have different needs and demands and require different kinds of holidays and related services. Although technology is essential for both groups, their needs for communication, consumption and tourist experiences are different (see Table 1).

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 2022: 27–42 years of age)	1995–2010 (in 2022: 12–27 years of age)
% of European population	EU 16%, Europe 16%	EU 19%, Europe 20%
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
Communication preference	With text (online and mobile)	With images (emoticons, stickers, Skype and Facetime)
Technology milestone	Smartphone, tablet	Augmented reality/virtual reality
Tourism demand characteristics	Prefers 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. Spends 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). 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. Focus on exploration, interaction and emotional experience	Relies 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. More price-conscious and economical than Gen Y. Focus on exploration, interaction and emotional experience.

Source: Based on: WFC, Forbes and Expressworks

Gen Y and Z both feel attracted to various kinds of holidays, activities and experiences. These activities can be extended over multiple days. Generation Y and Z travellers like to go to new, fresh places and stay away from crowds (see Table 2). Compared to Gen Y, Gen Z is more price sensitive and requires a brand to be open, fair and respectful. Travellers of Gen Z expect real-time information. They want short yet powerful messages mostly sent via pictures, videos and channels that allow them to interact, co-create and share information.

Table 2: Examples of products and services Generation Y and Z feel attracted to

Types of holidays	‘adventure holidays’ to escape from the daily hustle and bustle, such as adrenaline-pumping activities 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 surfing holidays (‘surfaris’, see for example Worldsurfaris) epic rail journeys 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 Long-distance hikes that offer travellers a once-in-a-lifetime experience and the opportunity to immerse themselves in places and get to know locals, connect or reconnect with their inner self and find peace and consolation.
Types of products and experiences	slow travel, which means that travellers invest more time to experience destinations more deeply and in a more laid-back way 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 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) ecological tours (unique experiences that educate visitors and share inside information with them on the area and how to protect it for the future)
Facilities	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

For nature-related holidays, the markets of the Czech Republic, the Netherlands and Bulgaria offer the best opportunities in Europe. For culture-related holidays, the biggest opportunities are in Spain, Malta and Estonia. To read more about growing markets in Europe, check out our study What is the demand for outbound tourism on the European market?

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

• understand their habits, preferences and values, show empathy, respect their opinion, and treat them in a personal way
• 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
• be ‘Instagrammable’. This means that your visual appeal should stimulate the travellers to take photographs that they post on the social media application Instagram. There are many websites that show you what being Instagrammable looks like. Some give concrete advice.
• be transparent about who you are, the core values that drive you, and that you are socially responsible; Do not show pictures that are made-up, and also show the downsides of tourism for the community or destination and how it looks like in the tourism season.
• create a meaningful brand
• 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 X than for Gen Y.

Figure 2: The customer journey of a millennial

To connect with the market of Generations Y and Z, you need to ensure a clear online presence on multiple platforms such as Facebook and Instagram. This helps potential visitors in these generations to find you online and to access your online information in an easy way. If you want to promote your offer online, find professionals to write reviews for you. These could be trusted bloggers, social media influencers or even reviewers from magazines such as National Geographic, Business Insider or Travel Channel (like TripAdvisor). Invite them for a free stay, and they will write about you. You can find bloggers and vloggers via Typsy or YouTube. When communicating with them, make use of images and emoticons.

A new social platform that is used by ‘centennials’ (Gen Z) is TikTok. TikTok is full of energetic videos, using effects, filters, on-screen captions and music. Hashtags are used to be discovered by users. Videos are up to 60 seconds long, usually containing very fast-paced clips. These short clips can go viral, increasing user engagement and generating high levels of content interaction. TikTok creates high levels of engagement. TikTok has a very large reach, as the number of users has grown fast since 2017, to over 1 billion in 2021. It is no surprise that the use of TikTok in travel marketing is popular. So, if youths from ‘Generation Z’ are the people in your target group, TikTok is an interesting possibility. To make a good video, it is important to pay attention to music, feeling and comedy.

Examples of tourism businesses that have used TikTok in their online marketing are as follows:

• San Diego Zoo
• Tourism New Zealand
• West Virginia Penitentiary
• Expedia
• Zambian Ground Handlers
• Melia Hotels
• In Abu Dhabi
• Delta Air Lines
• InteleTravel
• Kayak
• Booking.com
• Carnival Cruise Line
• Travel Agent Bolivia
• Sophia Your Travel Agent
• UK Travel
• Travel Rz
• The Travel Tauruss
• Crosby Grace Travels

There are also TikTok accounts that offer specific destinations or specific experiences. An example is Travel and Leisure (a platform that offers inspiration for walking tours). There are various websites and blog posts with concrete tips and recommendations to start a TikTok campaign. Three examples are A Complete Guide To TikTok Travel Marketing To Reach Gen Z Travellers, How to market your tours and experiences on TikTok, and How travel agents can get more leads with TikTok.

It is helpful to get ideas from others. Some exciting destinations include the jungles of Western Borneo in Indonesia, the deserts of Western Mongolia and Soneva Kiri Resorts’ ‘slow life’ philosophy in Thailand. Some hotel chains have developed specific hotel brands for Gen Y travellers, such as Radisson RED, Moxy by Marriott, Tommie, AC Hotels, Hyatt Centric and Hilton’s Canopy. Black Tomato is a project that helps travellers go off the beaten track.

Future perspective

The pandemic meant that both generations were not able to meet friends or go to festivals or other events and had difficulties in finding a job. Because they were stuck at home, they may want to use their time better after the pandemic and cut back on unnecessary spending. This may give an extra boost to interest in holidays where they can meet others or learn a new skill, do-good-feel-good holidays and purposeful holidays and suppress the demand for relax holidays and long-haul travel. Younger and higher educated youngsters are among the biggest target groups of long-haul travel, especially in the domain of Free Independent Travel (FIT).

Among younger generations, the interest in becoming a digital nomad is growing quickly, from 0.6% in 2017 to 11% in 2021, an eighteen-fold increase. Such considerations are boosted by the pandemic, as it offered the possibility to live and enjoy your leisure time in a different environment, where housing is affordable and the costs of living are low. Countries around the world are attracting digital nomads with customised visas and tax breaks, hostels are setting up global nomad workspaces, and Airbnb is offering them discounted long-term stays.

Since working from home has become widely accepted during the pandemic and is probably going to stay, the demand for workcations or nomadic working, a combination of working and travelling, is expected to increase. The demand for sabbaticals may also increase. Especially when sabbaticals focus on reconnecting with yourself and really getting to know a destination.

4. Demand for sustainable and regenerative holidays continues

Sustainable tourism development mainly deals with an attempt to find a balance between the economic benefits of tourism and the negative social and environmental consequences of travel and tourism. Examples are loss of nature and agricultural land, dislocation of traditional societies, concerns about excessive water usage, unsustainable food consumption, and concerns about labour practices, animal welfare, and the negative impact of ‘overtourism’ on host communities’ quality of life.

Travellers (especially Generations Y and Z) are increasingly aware of and concerned about sustainability. The COVID pandemic, in combination with worries about climate change, has made them even more eco-conscious during their booking behaviour. More than half of respondents want more responsible or sustainable travel choices. The second study showed a shift in keywords towards more nature-based, rural and outdoor ways of travelling.

European policy to fight climate change

The fight against climate change has been put high on the political agenda of the EU. Worldwide, there is evidence that the climate is changing because of pollution caused by industrialisation and the burning of fossil fuels. The European Green Deal entails a series of policy measures to fight climate change and make Europe climate neutral by 2050. Because the Green Deal includes all sectors of the economy, including travel, energy and infrastructure, it is likely that the policy measures will have a big impact on the way Europeans travel and where they travel.

Additional flight tax, excise duties and value added tax on kerosene may make flying much more expensive during the years to come. A study by Motivaction in the Netherlands shows that support for flying has decreased over the past few years, and one-third of the respondents who fly expect to fly less frequently than they used to. The study also showed that support for a flight tax has increased.

Destination Management Organisations (DMOs) play an important role in fighting climate change. At the same time, it is difficult for DMOs and SMEs in the destination to take action. This is because they do not have the expertise, the human and financial resources or the control over key assets and infrastructure in the destination. In fact, the Glasgow Declaration on Climate Action in Tourism is a recent initiative to support DMOs and SME communities in fighting climate change, which aims to lower CO2 emissions to 50% by 2030. It provides five paths for climate action: measure, decarbonise, regenerate, collaborate and finance. Each of these pathways puts together various recommendations, with a library of resources and more planning tools, including a paper on measurement and a ‘quick start guide’ for climate action planning, which is currently being developed. The Glasgow Declaration has already been signed by 700 tourism organisations across the world within the first six months, including 60 DMOs.

The World Economic Forum Global Risks Report 2022 sees the lack of action against climate change as the number one threat to the world in terms of potential effects. Signs such as rising sea levels, increasing temperatures, droughts, wildfires and extreme weather are already having an effect on many favourite holiday destinations, not only directly but also indirectly, because climate change has serious effects on the resources on which tourism depends: coral reefs, snowy mountains, beautiful islands, coastal resorts, as well as fresh water supply and food security. It even affects the willingness and ability to travel.

Regenerative tourism

Regenerative tourism is regarded as a new stage in sustainable tourism development. While the focus of sustainable tourism is on minimising negative effects, regenerative tourism aims to leave the place or the local community better than it was and to use it as a tool to improve the quality of life of the residents and revitalise the local community. The demand for do-good-feel-good holidays is increasing, and so is transparency of how travel organisations use their money for building or rebuilding communities.

Figure 3: The UN Sustainable Development Goals

If you want to develop sustainable tourism or regenerative tourism, the United Nations Sustainable Development Goals should be your source of inspiration. These goals aim to stimulate actions to end poverty, protect the planet and ensure that, by 2030, all people enjoy peace and prosperity. Because tourism is interconnected with many other sectors, even small improvements in your business can have important effects.

Inspirational examples of sustainable or regenerative tourism products are:

• Playa Viva in Mexico, the very first regenerative resort.
• The ecological tours offered by EcoZip in New Zealand: the zipline tour funds the conservation and restoration of Waiheke Island forest.
• 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.
• Fair Sayari (which means Fair Planet) decided to dedicate itself to making the world a better place and to do so based on the principles of equity, sustainability, and inclusion. The founder of the company also initiated the Good Tourism Institute. This institute ‘helps tour operators become the best version of themselves, helps them to learn how to support local communities, build long-lasting relationships with customers and employees and offer unique experiences, all in a sustainable way.’
• Countries in the Eastern Himalayas see bird-based ecotourism as important in order to protect and develop the area. A great example of this type of tourism is also provided by the village of Hanlong in Western Yunnan, China. It shows how bird photography tourism can contribute to sustainable community development and meeting the Sustainable Development Goals, as it sustains local livelihoods and biodiversity.

Fairness and diversity

Fairness, diversity and inclusion were already beginning to take hold in 2019 before the pandemic, but the death of George Floyd in May 2020 gave them an extra boost across the world. Since the pandemic, fairness, diversity and inclusion are becoming more important. At the ITB in 2022 more destinations showed how they welcomed lesbian, gay, bisexual, transgender, queer (or sometimes questioning), intersex, asexual, nonbinary and pansexual (LGBTQ+) people as singles or in groups, since they were the first to be vaccinated and ready to travel and spend money. It is expected to extend offers for these groups in the future.

New business models

If you want to become more sustainable in the way you do business and earn money, do not present your products or services as more sustainable than they actually are. This is called ‘greenwashing’. Instead, find ways to make your offering relevant for your consumers:

1. Aim for ‘ethical’ consumers, such as Generations Y and Z. These people not only have a positive attitude to sustainability, but also translate this into their booking behaviour.
2. Focus your products and services on their needs.
3. Provide ‘do-good, feel-good holidays’, where travellers do something in return for the destination, such as a beach clean-up.
4. Provide ‘purposeful holidays’ with the aim of feeling completely renewed. Examples are ‘momcations’ for mothers who want to refuel, save-your-marriage trips, ‘painmoons’ (travelling with the aim of recovering from a stressful period or a period of hard work), or a digital detox (JOMO –the joy of missing out).

If you follow the principle of Creating Shared Value, you create value for both your business and the community. Thus, a sustainable business model turns into a regenerative business model. When you fail to turn your investments in sustainability into value for your customers, employees and/or stakeholders in the community, this is called grey-washing.

Future perspective

It is expected that tourists after the pandemic will show an increased interest in two specific forms of regenerative tourism: volunteer tourism and peace tourism. Volunteer tourists (also called voluntourists) want to volunteer at a foreign destination. Peace tourists want to help a destination establish peace after a period of conflict (or study how peace is developed and celebrated by the population). This development is facilitated by Global Peace Parks.

Southeast Asia Sustainability Hub offers support for investments, capacity development and knowledge to accelerate an inclusive and sustainable improvement after COVID-19.

Pacific Asia Travel Association PATA provides a tourism destination resilience certification programme as a tool for professionals, businesses and destinations to recover from COVID-19 and win back customers and become more sustainable.

5. Seamless customer journey more and more important

Traditionally players in the travel industry are operating rather independently. However, the ongoing improvement of mobile devices, the increased dominance of digital channels, Online Travel Agencies (OTAs) and meta search engines allow travellers to access information anywhere in real time and give them more control over the subsequent phases of their holiday, bit they want these phases to be seamlessly connected. The increase in demand for a seamless customer journey cannot be regarded separately from the rise of the Gen Y and Gen Z markets.

Uber, Airbnb and CarRentals are examples of digital channels. Expedia, Priceline, Agoda and Booking.com are examples of OTAs. A meta search engine is an online service that collects, combines and integrates data from other search engines, such as Trivago, Trip Advisor and Google.

Because travellers are and will be more in control, they can make their holiday more affordable (personalised pricing), efficient and accessible themselves. They want the phases within their personalised ‘customer journey’ to be integrated and seamless. 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 contact moments, called touch points, between traveller and service providers.

The challenge for your business is to provide value at each touchpoint along the customer journey (before, during and after the holiday), and also to build a more rewarding, integrated and seamless customer journey (figure 4). 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). Implementing appropriate solutions and services at each stage of the journey are crucial to the success of your business. Basically, you need

• to ensure online presence in social media (such as Facebook or Instagram), review sites, messaging apps, chatbots, internet-enabled subscription programmes, pop-up shops, or subscribing to OTAs
• to increase the number of touchpoints and to enhance them
• to personalise and engage with the traveller at every touchpoint in ways that suit their interests and lifestyle
• to offer maximum utility and functionality at each touchpoint by giving the consumer some degree of control.

Figure 4: General outline of a customer journey, with five phases and a series of touchpoints

Source: TravelNext

The accumulation of positive and negative experiences at each touchpoint defines the overall holiday experience and the level of satisfaction. The higher the level of satisfaction, the more likely it is that the customer will come back and promotes it to their friends, fans and followers. An annoyed customer does not come back and shares his or her bad experiences with even more peers!

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.

Future perspective

Observations at the ITB (the largest tourism fair in the world, held annually in Berlin) in 2022 included that travellers will likely increasingly expect convenience and speed in the future. With the increasing market of Gen Y and Gen Z in Europe, and a continued evolution of technology,  it is anticipated that the need for personalised and seamless customer journeys will increase. New generations of mobile devices will become so powerful that they can be used for any purpose and will be able to predict travellers’ needs and solve problems in real time. They will increasingly give the opportunity to establish a seamless customer journey.

Emerging technological developments such as the new 5G network and blockchain technology will facilitate this trend even more. 5G will boost the possibilities of being connected everywhere. Blockchain technology allows cheaper, better and faster travel experiences to be created. COVID times have accelerated the shift to digital channels and to e-commerce by five years. Experts think that this will remain after the pandemic. Some even think that emerging technologies of instant check-in and facial recognition will spread throughout the travel industry.

6. Modular travel and its effect on 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 increased need for ‘modular travel’. This trend towards a demand for modular experiences suits the needs and high expectation levels concerning flexibility of travellers in these two generations. With ‘modular travel’, the journey is composed of several components or modules that are interconnected to form a personalised travel experience. The modules are expected to be flexible, adaptive and customised to the travellers’ needs and interests.

The development of modular travel and Free Independent Travel has put traditional tour operators under pressure. Travellers have become better informed than the employees of the tour operator. And what traditional tour operators have to offer can easily be copied from the internet and booked directly, often at better prices and conditions. Note that elderly generations are still interested in package tours provided by traditional tour operators, although it is foreseen that this will decrease as well in the longer term.

However, there is evidence that travellers are returning to a new generation of tour operators that offer ‘modules’ online. As the young generations enjoy their free time, they prefer to turn to specialised online platforms or portals to research, plan and book authentic and unique experiences. Here, the modular travellers can shop for experiences and book the modules from home or even during the tour itself as Fully Independent Travellers (FITs). Ctrip and Qunar are examples of such new OTAs (Online Travel Agencies).

According to a study by Booking.com, 59% of the market of travellers even prefer to hand over the decision-making process of what and where to book to technology. The tech-led recommendations provide travellers with a wide array of new experiences that they would never have noticed without the use of that technology, and it also saves them time. Such technology allows travellers to pre-plan wildcard and surprise options but also to book these in real-time.

‘Smart’ technology makes use of artificial intelligence to offer customised suggestions based on preferences, previous trips and general factors such as weather and popularity. The use of artificial intelligence and intelligent chatbots to support travellers with their booking is increasing. Companies such as Booking.com, Skyscanner and Expedia use intelligent chatbots to communicate with their clients. Also, price no longer seems to be the most important driver for bookings. Values such as health, safety, flexibility and sustainability have become more important for bookings than price. By the end of 2021, Booking.com wrote that 63% of travellers believe that technology is important to control health risks during their travel. However, customers who interact with a person during the booking process often spend more than customers who merely book online.

A consequence of the development of modular travel is that last-minute bookings are on the rise. Traditional bookings are generally made 13 days in advance, which shortens to 5 days with online bookings. Modular multi-day tours and activities, and custom tours are created in advance or even 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 shortening of booking timeframes was confirmed at the ITB 2022.

The trend to book a holiday, tour or activity at the last minute makes it difficult for businesses to plan staff capacity and resources in advance. Besides, business will be more dependent on the weather, as this will affect last-minute bookings. 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. Travel will be increasingly complex and travellers will turn to tour operators and other travel experts if they want to plan a holiday trip. This is caused by lack of clarity about travel safety, hygiene and always-changing health regulations.

Future perspective

The COVID-19 pandemic has made consumers more price-conscious in their booking behaviour. Destinations, trip components (‘modules’) and local opportunities are more carefully considered and compared based on reviews and promotions, discounts and savings. Travellers have also become more sensitive towards flexibility. This refers to, for example, the possibility to get payments refunded, to cancel or postpone a booking without extra costs, possibilities for additional insurance or last-minute booking possibilities. As a more cautious booking process may take more time, the number of last-minute bookings may decline.

7. The healthy lifestyle trend makes health, wellness and sports holidays more popular

Concerns about obesity, food sensitivity, and people affected from diseases, have resulted in a shift in attitude towards health and healthy lifestyle habits, both physically and mentally. Health and a healthy lifestyle have also become increasingly important in tourists’ decision-making, and so the demand for wellness tourism is growing.

According to a recent study by the WTA (Wellness Tourism Association) and HTWW (Health Tourism World Wide), the most important motivations that trigger demand for wellness travel are the need to de-stress or recharge, relaxation, self-healing, self-development, fitness, escapism, self-reward, rejuvenation and pampering. The study reports that what matters most are location & setting, brand & reputation, storytelling and treatments & services.

The most significant target groups for wellness tourism are couples, groups of friends, women travelling solo and ordinary guests looking for healthy options and alternatives during their holidays. People born before 1946 mainly feel attracted to natural resource-based therapies. The cohort born between 1946 and 1975 predominantly feels attracted by natural resource-based therapies in combination with medical wellness and spiritual practices such as yoga. Cohorts born in 1976 and later (including Generation Y and Generation Z) show a main interest in Sports & Fitness and Therapeutic Recreation. Both of these types of wellness are closely related to physical activities.

Globally, Europe takes the lead in the generation of wellness-focused trips, and its lead position is still increasing. A recent study by the Wellness Tourism Association and Health Tourism World Wide revealed that Central and Eastern Europe are the biggest wellness travel markets in Europe. Even online wellness retreats are increasing, which people can enjoy at their homes.

The wellness market of Europeans travelling specifically for wellness (health as primary motive) 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 well-being, 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:

The wellness market of Europeans that simply wants to remain healthy (health not as a primary reason) to go on holiday makes up the bulk of wellness tourism, accounting for 86 percent of expenditures in 2017. This market also shows a faster growth (10%) between 2015 and 2017 than the previous group with wellness as a primary motivation (growth rate of 8%). Travellers seek to combine the desire to relax, to escape from one’s mundane life (retreats), to spend time in nature, to have unique and authentic experiences, to be with family and friends, to have a digital detox (WiFi-free destinations, staying off the grid), to stay in tiny houses, with mental/physical health and wellness. Smaller hospitality businesses increasingly cater for the growing demand of health and wellness as part of a regular holiday on this market. Healing Holidays is an example of a business that offers a variety of trips to disconnect.

It is the vast rise of interest in health and wellness travellers with a secondary motivation (health not as a primary reason) which offers many opportunities for all kinds of small and medium-sized businesses to include health and wellness into their offerings. Day spas, workplace wellness, medical spas and resorts, Thalasso spas and resorts and hot spring/thermal spas/resorts are the wellness facilities with the highest growth potential. Rituals, natural resources-based therapies, spiritual practices, psychological therapies, medical wellness, nutrition/detox programmes, massages & therapeutic recreation offer the biggest potential on the European market of wellness treatments. Other relevant products, services and facilities for the European wellness market are listed in Table 3.

Wellness tourism is extremely profitable, as wellness travellers generally spend 178% more than the average traveller, according to Heritage Hotels of Europe. To attract the wellness tourists from Europe, you need to put sufficient effort into sharing information about your offering to the market. The Wellness Tourism Association and Health Tourism World Wide have reported that respondents do not know much about what many destinations have to offer.

Table 3: Examples of wellness products, services and facilities

Products and services

Facilities

wellness trips built around a specific wellness activity, from boot camps to meditation and silence retreats activities in nature in combination with wellness, such as hiking (short or long distances) to a scenic location for meditation, or yoga and tai chi in an outdoor setting 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 holistic holidays remote/off-the-grid areas with basic facilities that offer the possibility to disconnect, gain pure experiences and connect or reconnect with nature. These could be small campsites, tiny houses, lodges or log cabins exercise and fitness programmes highly focused on results life-coaching that embraces nutrition, physical exercise, stress management, goal setting and empowerment personalised health and wellness programmes that focus on digital or regular detoxing, meditation or spa or massage therapies walking therapy in itineraries extreme wellness programmes and extreme sports focusing on discomfort and endurance, in which extreme challenges are key traditional sport and recreation activities in nature (such as walks, hiking, cycling, running, boating, swimming, meditation, etc.) medical tourism (and its ‘sub-divisions’ – i.e., specialties in medicine and areas of clinical focus) dental tourism

specially furnished fitness rooms exercise equipment meditation and yoga facilities quality beds 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.

Future perspective

The pandemic has badly affected tourism from Europe. Experts think that, as soon as tourism starts to recover, the wellness sector may recover faster than other subsectors in tourism. It is anticipated that wellness travel, extreme wellness travel and spiritual travel will see a strong growth once the COVID-19 pandemic has ended. The average length of stay and the revenue per wellness guest are expected to increase at a moderate level. Extreme wellness refers to the interest in more challenging and enduring activities. Unfortunately, it is likely that, after the pandemic, wellness tourists will make more short-term travel decisions and stay closer to home. This will have a negative effect on long-haul wellness travel.

Increasingly, the industry is expected to provide wellness services as part of another service (also referred to as ‘wellnessification’). The Global Wellness Institute shows that the wellness industry is estimated to grow to 900 billion dollars in 2022, in comparison to 640 billion dollars in 2017.

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. The rise in demand for personalised experiences is boosted by technological advancements that make it possible to create them.

The travellers 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. 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. Over 63% of travellers will stop buying from companies that put little effort in personalisation of their services.

A study by Booking.com indicated that 36% of the respondents prefer virtual reality before they visit an unknown destination in order to feel at ease. Now that 5G has increasingly been rolled out in Europe, it will be easier for travel brands to create immersive digital experiences with friends and families. Of the respondents, 30% opt for acquiring virtual experiences at home without visiting a destination. This enables ‘stay-at-homers’ to experience collections from museums and galleries, destinations and tourist attractions online. Examples are going on a virtual safari while at the same time supporting conservation efforts, exploring ancient tombs or entering a simulated past living situation in a specific destination. WildEarth offers a range of live and recorded safaris to children.

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. Voice Search can, for example, be used to search for and book a holiday or to manage the details of their next trip in an easy way. Mobile assistants such as Siri, Alexa, Google Assistant and Bixby help tourism customers to use voice search. This requires well-structured web content of the tourism business or destination. Voice control can be used to turn on and off or change settings of devices compatible with voice control.

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) 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 for hygienic reasons. 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 that NFC speeds up spontaneous purchases.

The Internet of Things (IoT) refers to the digital connection of the mobile phone, 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’.

These technologies are increasingly being integrated into individual travel experiences and provide a platform for further personalisation of the travel experience. 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.

Future perspective

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, virtual reality and online presence will continue to grow. A majority of travellers believe that virtual reality and artificial reality experiences will offer them serious opportunities to help them better plan the trip.

Interest in some of the applications, such as virtual reality, contactless payments, voice search and voice control, has grown because of the COVID-19 pandemic. It is likely that these technological advancements will evolve to a next level as new levels of acceptance arise. Spontechnaity is a new word that is defined as using technology during travelling. Technology will be used to regain spontaneity and self-confidence among travellers and to ensure safe and responsible travelling, especially in the light of the coronavirus pandemic.

At the ITB in 2022 several presentations and talks were held on the use of the metaverse in tourism and travel, including advantages and disadvantages for travel and meeting opportunities. The metaverse is the next step in virtual reality. It is a graphically designed virtual space where people can do the same things as they would normally do in their daily life in a physical space, such as working, playing, shopping, socialising, having meetings and travelling.

9. Safety, security and health come first

There are various safety and security circumstances that affect travellers when they choose a destination. Think of threats of terrorism, political upheaval, excessive weather conditions. Such circumstances may lead to last-minute switching behaviour or cancellations. The COVID-19 pandemic has become an additional factor with an enormous impact on European’s travel behaviour and their attitude towards hygiene. Travel by Generation Z seems less effected, but the older generations especially show concerns about travelling and tend to stay home.

The COVID-19 pandemic has influenced the way people travel to and within destinations. Travelling to and staying within crowded places and accommodations brings more risks with it, and individual holidays and individual accommodation are perceived as more safe. Therefore, travellers have become more reluctant to travel to tourism hotspots and to travel in groups with strangers. They need more persuading to perceive a destination or your business as safe. Increasingly, they may turn to travel experts if they want to plan a holiday trip.

The pandemic has also increased the need for appropriate hygiene standards. European tourists have become more demanding and see such standards as paramount and non-negotiable. They require precautionary measures such as seat spacing, clear regulations about wearing face masks and social distancing and clear communication about how hygiene is handled in order to convince them that they will be safe within the destination, the location or your business. Guests also require care and empathy as a key element of the service in the ‘new normal’.

The increase in health and hygiene awareness among travellers and businesses has increased the demand for contactless systems. Contactless systems help to reduce the number of social interactions, not only between travellers and staff but also between staff members. The systems also reduce the fear of transmissions of the virus via surfaces touched by many strangers.

An example of such a contactless system is an app for mobile phones with which hotel guests can open the door of their room, control temperature and air conditioning and adjust the lights. Another example is a conventional menu card in hotel rooms that is replaced by a dynamically generated digital menu. Guests can see the digital menu in an app or in the browser of the mobile phone after scanning a QR code (see Figure 5). There are even examples of hotels that use robots to serve food and drinks to guests under quarantine, such as Nina Hotel Island South (formerly L’Hotel Island South in Hong Kong).

Figure 5: QR code to activate a menu in a restaurant without contact

Source: Photo by Dr Albert Postma

Contactless payment systems are also on the rise at hotels. By applying these to payments by consumers, you can show your guests that you take health and sanitation seriously. Contactless payment systems can also be used for business-to-business payments, for example by means of the platform provided by TripActions.

Your business will attract fewer visitors if your business is in a popular tourism location or a destination that is seen by travellers as unclean, unsafe or life-threatening. 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, Travellers Risk Index, Traveller’s Risk Tolerance Index).

If health safety has become a number 1 priority for guests, cleanliness, sanitation and hygiene should get priority in your business. RedDoorz is a budget hotel chain that helps its hotels to get a HygienePass certificate in collaboration with local public health organisations. Oyo is an Indian multinational hospitality chain with various types of accommodation that provides services to its accommodations. Examples are certification, audit checks, specific equipment, minimal touch procedures for checking in and out, etc. If you run an accommodation such as a budget hotel that already makes use of smart design and sophisticated technology, offering contactless travel may be a key feature to acquire a competitive advantage.

Future perspective

It is likely that travel conditions related to COVID-19 will impede holidays for the foreseeable future. Many travellers will no longer choose their holidays based on destinations or attractions once COVID-19 has ended. They will choose a trip which is more in line with their personal needs. This will make travellers more demanding concerning services, facilities and experiences, not only in relation to hygiene, but also concerning wellness, health and overall well-being.

Global vaccination and increased adoption of digital solutions for safe travel are probably the only things that could lead to the return of international tourism over the years to come. It is uncertain how long COVID-19 and its new variants will be among us and impact global travel and tourism.

Observations at the ITB 2022 show a rising need for safety and insurance in bookings. As a result, the risk is put on the destinations and its SMEs that have to deal with flexible contracts.

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

Please review our market information disclaimer.