The past three years have been characterized by a global pandemic accompanied by extensive lockdowns and travel restrictions. Travel and tourism were among the hardest hit economically and whilst there are still many challenges to overcome, the industry has shown promising signs of recovery.
Globally, there is a clear shift in the behaviour of travellers. Radisson Hotel Group’ Chief Operating Officer Middle East & Africa, Tim Gordon discusses 5 trends he believes will shape the travel landscape in 2023.
Experiential tourism is on the rise
According to Cordon, modern travellers believe that excursions, attractions, events, and activities make their travel experience better at an emotional level. As such, experiential travel and adventure activities are now crowned as the next big growth segment.
Experiential tourism is a form of tourism in which people focus on experiencing a country, city or particular place by actively and meaningfully engaging with its history, people, culture, food and environment.
“The industry has witnessed a shift in consumer behaviour away from investing in goods to investing in experiences. This comes as no surprise after the pandemic, which has taught us all the value of time and new experiences,” said Cordon.
Travel spending will go up again
Despite record-high inflation rates being experienced globally, travel spend is predicted to increase this year.
“This could be for a number of reasons,” said Cordon said.
“But perhaps most obvious, is the fact that during the pandemic many individuals were not able to travel as readily as before. Having saved money during this period, these individuals have a large sum of capital at their disposal and are eager to spend on unique experiences,” he said.
A survey issued by Booking.com found that 49% of its respondents reported that they were likely to spend more on their next trip to make up for lost time, whilst 43% of respondents shared that they were willing to go all out when it came to cost.
Perhaps more interesting, is the fact that according to Expedia, 80% of younger travellers are willing to spend more to upgrade their experience.
Exchange rate volatility and impact will not go away
Fluctuating exchange rates and the impact thereof will continue to determine where people travel to. Destinations that have big exchange rate volatility are often less frequently visited than those with more stable currencies and economies. In many instances, the countries that are hardest hit by exchange rate volatility are viewed in a negative light.
According to Cordon, Radission has hotels in locations across the world, many in destinations that have currencies that often fluctuate due to what may be happening in the country or the world at the time.
“For example, our hotels in South Africa are currently witnessing an increase in the number of international bookings and enquiries due to appeal of destination, which comes as a result of the declining rand value. This makes travel into the country a lot more affordable for international visitors,” said Cordon.
He also noted these were world-class destinations worth visiting so during instances of extreme fluctuations and volatility the sector takes a somewhat different approach, highlighting the strong value-for-money aspect where possible in order to continue travel to these countries and cities.
AI and tech will play a big role in enhancing travel
Artificial intelligence is continually improving to become increasingly more reliable and attractive as a business solution. Businesses within the travel industry heavily depend on the delivery of excellent customer service to build their reputation and AI technology was a strong tool to do this.
“For hotels, one of the most exciting uses for artificial intelligence is providing assistance to customers online, through the use of chatbots and instant messaging apps. With a growing demand from consumers for faster response times on online platforms, artificial intelligence is able to respond to this demand at a rate that is almost impossible for humans to do,” said Cordon.
In addition to this, he said the industry was witnessing an emerging trend in which the technology was being used for face-to-face customer service interactions, and as a result being able to cut queues at information or reception desks and ultimately improve overall efficiency.
“Beyond customer service, AI can be applied to collect and process data to draw conclusions about customers, business practices and pricing strategies,” said Cordon.
“Of the many lessons that the pandemic has taught us, spending more quality time with our loved ones is arguably the most important,” said Cordon.
He said whilst our months of quarantine may seem like a thing of the past, many of us are still trying to make up for time lost, missed milestones and delayed or cancelled plans.
“Families who have not been able to get everyone together for quite some time are now taking some much-needed time to do longer trips together. Grandparents, parents and children are all travelling together and are looking for hotels and destinations that will cater to the needs of all generations,” he said.
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