*NEW* Destination Marketing 2.0 – How can you put agility and personalisation to work to know your customers better, predict what they want, and delight them to take away friction?
For the tourism board and travel industry players in Asia Pacific and beyond, destination marketing in the current climate presents both challenges and opportunities.
Asia Pacific (APAC) already constitutes the world’s largest regional travel market, and the sector continues to develop at a rapid pace. Improvements in tourism infrastructure, high mobile adoption, expanding access to digital payment platforms, and rising levels of disposable income are driving increased tourism and the growth of the online ecosystem that supports it.
While many of the region’s diverse travel markets are achieving strong gains, the rapid changes occurring in the travel and hospitality sector have also brought fresh challenges to Asia Pacific tourism organisations.
Travel marketers must adapt and develop innovative approaches to address dramatic shifts in customer behaviour, as the demands for mobile, social media, and personalisation grow amongst travellers. At the same time, popular tourist destinations in some markets are struggling to cope with the rise in visitor numbers. Destination marketing practitioners are also having to deal with bigger issues such as climate change, natural disasters, matters of security, and sustainability.
Destination Marketing In A Global Context
Tourism continues to be one of the main drivers of growth in the world economy. According to UNWTO data, it’s the third largest international trade sector, accounting for 10.4% of global GDP, and generating a total of 313 million jobs.
Over the past several years - and following the financial crisis of the previous decade - the global tourism industry has enjoyed a period of relatively sound health. The global travel market reached $1.4 trillion in 2018, with gross bookings projected to rise to $1.6 billion by 2021. Even allowing for potential slowing growth over the next two years, Phocuswright projects a Combined Annual Growth Rate (CAGR) of 6% for the travel market, from 2016-2021.
(Image source: Phocuswright)
As a shift to digital channels continues worldwide, online travel grew nearly twice as quickly as the overall market, with online CAGR at 11% over the same time period. Online gross bookings are expected to rise from $642 billion in 2018 to $838 billion by 2021, accompanying a rapid rise in mobile transactions.
In Asia Pacific, the past decade has brought dramatic changes, with economic, infrastructure, and technological development fuelling rapid growth in the travel market. An expanding middle class and rising disposable incomes in APAC markets such as China, India, Indonesia, and Malaysia are driving increased demand. Domestic travel is on the rise, at the same time that a growing number of travellers venture abroad - many for the first time. In the region as a whole, China’s large and growing outbound travel population is fuelling visitation growth.
Destination Marketing Trends
The worldwide travel population is expanding as economic development fuels growth in emerging economies, and newly prosperous travellers get to experience international travel for the first time. In China and other developing markets, many travellers are discovering the joys of booking online, using mobile devices. At the same time, social networks, online chat and traveller reviews are enabling travellers to learn and share experiences in new ways, replacing offline sources of information.
One of the main trends driving Destination Marketing 2.0 is Experiential Travel 2.0. Today’s consumers are looking for a travel experience that’s simultaneously immersive, engaging, inspiring, and in some way transformational. Destination marketing organisations, resorts, or tour operators must now push authentic local experiences more appealing and unique than those offered by competitors, in order to attract visitors.
Attractors and differentiators in this field include food, and any experience that allows visitors to get a true flavour of a destination from its local cuisine. Interactive experiences that allow the traveller to participate in the preparation of the dishes they consume, would fit this category. Other options may capitalise on the connection between a particular destination and popular culture, such as the location for a well-known television series or movie.
Personalisation and the custom-tailored visit are another major trend. Throughout the travel process (initial research, to planning, to booking, to travel, to consuming) destination marketers and travel providers can collect relevant information about the traveller, which can be used to deliver personalised messages and hyper-relevant offers during their stay - and in the course of their continuing relationship with the brand.
Many travellers are embracing customised content. For instance, two thirds of South Korean travellers would be interested in receiving personalised hotel recommendations, and interest is also high for personalised recommendations or offers for in-destination activities (60%) and destinations to visit.
(Image source: Phocuswright)
According to the Association of British Travel Agents’ (ABTA) Travel Trends Report 2019, 45% of travellers say that the sustainability of their travel provider is important, compared to just 24% who responded this way in 2014. Environmental concerns, fair treatment for indigenous populations, and responsible labour practices are high on the list of considerations for many travellers. And with Millennials and Generation Z consumers flooding the travel market, responsible tourism now plays a major role in their choice of destinations.
In this same vein, the desire to make a positive impact on the communities they visit is driving a multi-billion dollar industry in volunteer tourism, or “voluntourism.” Destination marketers wishing to break into this sector do however need to exercise due diligence, in deciding on the organisations with whom they partner, or the causes they endorse.
Technology is itself becoming a driver of the tourism industry, as customers become more digitally sophisticated, and the tools available to them evolve. Tourism boards, destination marketing organisations, and travel providers are already having to contend with the “commoditisation” of their respective functions. In a situation where an individual traveller can research prospective venues, book tours, make restaurant reservations, buy attraction tickets or do just about anything else direct from the comfort of their smartphones, operators are having to find new ways to prove their relevance and value to the consumer.
In an online and mobile ecosystem dominated by increasingly sophisticated apps, operators are themselves turning to technologies such as Augmented Reality (AR) and Virtual Reality (VR) to market their travel offerings to consumers.
The converse to technology is also driving the travel market, as a certain section of the travelling population look to turn their backs on the pervasive presence of all things digital. Opportunities to go offline, off the grid, or “digitally detox” are creating a separate - and growing - breed of travel experiences and offers.
Tour operators in this field are taking groups on journeys off the beaten track, to destinations without Wi-Fi, phone service, or even electricity in some cases. Some hotels and resorts are now offering creative incentives to lure guests into unplugging from their devices, while other providers enforce outright bans on phones and electronic equipment. For destination marketers these digital detox efforts, while promoting health and relaxation, do present obstacles - most especially in the lack of opportunities they offer for data gathering and the collection of user-generated content like social comments, video, or photographs.
The Challenges Facing Destination Marketing Organisations
As we’ve seen, travel consumers are becoming increasingly independent and technologically sophisticated, and are demanding experiences that are ever more authentic, immersive, meaningful, and personalised. With improvements in travel technology and the connections made possible through digital, new tourist destinations are emerging, increasing the number of competitors that a territory must confront when it comes to attracting potential visitors.
Mobile apps, social networks, virtual tours, and online booking systems are now exerting influence on the planning, purchasing, and enjoyment processes of the tourist experience. In Asia Pacific, it’s estimated that 55% of online travel bookings in the APAC region in 2019 will be made via a mobile device. Traditionally reliant on tour operators, the destination marketing sector and tourist distribution system are having to incorporate online booking pages, metasearch engines, recommendation pages, and user opinions into the travel selection and promotion processes.
In consequence, destination marketing organisations must now develop and implement new strategies and tools to get the attention of an increasingly demanding consumer, in a world that’s saturated with options and products.
Tourism boards in Asia Pacific and other parts of the globe have been meeting these challenges in various innovative and successful ways.
Singapore Tourism Board Is Meeting A Rising Demand For Curated And Unique Travel Experiences
For the growing number of adventure travellers in Singapore, an air of mystery and excitement is essential to the holiday experience. The 2018 Skyscanner APAC Travel Trends report revealed that nearly one in two Singaporeans are adventurous travellers.
While the top destinations have remained constant for the last several years, travellers from Singapore are now more eager to explore new destinations and try out new activities, while travelling abroad. Off-the-beaten-track destinations like Ethiopia, Guatemala, Iran, and Yemen feature highly on the list of preferred venues for travellers in 2019.
Even the 18% of Singapore travellers who planned to revisit a destination said they would like to experience it differently, including doing a road trip to explore parts of the country previously unknown to them.
This trend spans various demographics, with some tour operators experiencing greater numbers of young female solo travellers, in addition to more seniors, families with children as young as four months, and newly-weds going on their honeymoon.
The new market is forcing a rethink among tour operators, with agencies that offer a “checklist” travel experience themselves experiencing a downward shift in numbers. Customisation and personalisation are now ingredients for success, with technology as the enabler for more interactive, personalised, and relevant experiences for the traveller.
Both for inward and outward-bound tourism, information and data analytics are essential to such efforts, and in June, International Data Corporation gave the Singapore Tourism Board the 2019 Top Smart City Project award in the category of economic development, tourism, arts, libraries, cultures and open spaces. The board has created a network to collect and analyse tourist data, to help create better tourist experiences.
More recently, Singapore Tourism Board (STB) has partnered with Trip.com to boost tourist experience and destination marketing. As a result of this partnership, Ctrip Group, Trip.com and the Singapore Tourism Board will analyse users, technology and data, explore product research and development, and brand marketing in order to promote increased tourism in Singapore.
Online travel agencies like Ctrip and Trip.com are important channels for reaching out to a wider audience, particularly the free and independent travellers.
According to Keith Tan, chief executive of the Singapore Tourism Board, "Our partnership with Ctrip and Trip.com reinforces our latest campaign efforts to target post-90s Chinese consumers who tend to book their holidays on their own. We look forward to working with Ctrip and Trip.com to show travellers a different side of Singapore."