Embrace consumer trends for survival

 

The desire for social and environmental responsibility, social interaction, authentic travel experiences and fair trade practices.

These are the consumer trends the travel industry is being urged to consider during the economic downturn in the World Travel Market Global Trends Report 2008 complied by Euromonitor.

“During the downturn, travel and tourism companies that adapt and integrate such business practices into their product and service offer will be best placed for survival,” the report says.

“They will gain a valuable point of differentiation in the face of declining consumer purchasing power.”

The report also adds: “Consumers are willing to trade up for sustainability, thus operators should let ‘conscientious consumption’ now drive the travel and tourism industry through these uncertain times.”

The UK section of the report identifies ‘free’ is the new ‘f-word’.

It urges the majority of players in the travel and tourism industry to become more aware of the impact on profitability by taking account of variations in demand, careful market segmentation and, above all, willingness to pay.

“As well as the standard model of posting a price and then waiting for people to pay it, more and more potential customers will become accustomed to naming their own price or expecting a major portion of the product or service for free,” the report predicts

“As the level of economic activity is likely to slow until 2010, innovative means of saving money will become more attractive.

“Industry players will need to work harder to attract consumers and nothing grabs the attention better than the word “FREE”.

“Free flights” appeal to the largest section of the target market, the report adds.

It has no quality of service disadvantage over the “full fare” version, price being the only difference.

“There is no element of bargaining or auction, a style of purchasing which is not yet widespread in the travel and tourism sector, seeing as Priceline.com in the UK is a relatively low volume operation,” according to the report.

“The travel accommodation sector in particular, which undertakes more sophisticated market segmentation than low cost airlines, is a sector whose innovative products and services could appeal to younger age brackets.

“For example, the demographic for [social networking site] couchsurfing.com is overwhelming young with 75% of their members under the age of 30 and almost half represent the Y Generation under the age of 25.

“This is unsurprising, as the experience is appealing to single leisure travellers and the backpacking market.

“Operators wishing to engage with Generation Y should watch couchsurfing.com very closely to see how it engages with its key demographic.”

by Phil Davies