Big Data Mining Previews 2019's Hottest Vacation Trends And The Future Of Online Travel
Peter Lane Taylor
The future of experience travel is here
Big money follows big data in almost every segment of the consumer economy these days, especially when it comes to quantifying intangibles like “trustability” and what makes a product or experience “authentic”.
So when a big data travel goliath like TripAdvisor crunches its numbers and pulls the trend lines, it’s a safe bet a lot of people are paying attention. The travel and tourism industry had a total global economic contribution in 2017 of over $8.27 trillion dollars, amounting to 0.4% of global GDP. The direct economic contribution of the industry in 2017—namely the gross value of all accommodations, transportation, entertainment and attractions—totaled $2.57 trillion dollars, supporting 313 million jobs, or 9.9% of total, global employment, making it one of the fastest growing segments of the economy worldwide.
Seafront Flat For Rent. Nice, France
Courtesy of TripAdvisor Vacation Rentals
Jungfraujoch — Welcome to the top of the world, carefully crafted in Switzerland
Courtesy of TripAdvisor
Those are big numbers, with outsized economic, social, and environmental impacts that trickle all the way down to the smallest family-owned vacation businesses, like outfitters, tour guides, short-term rental operators, and restaurants. It's not coincidental that travel multinationals like IHG and Marriott International, as well as dozens of private equity firms, sovereign wealth, and pension funds which are invested in the tourism sector, carefully watch the dials when they move. It takes years, sometimes decades, of political and financial maneuvering to bring a new resort or destination online, which is why companies and investors love aggregate data from actual travelers and seeing things like positive year over year growth charts. It’s the kind of grounded information that provides proof of concept for a hotel or travel model that might otherwise sound absurd. No one in Japan or Finland predicted twenty years ago that people would pay to spend the night in an igloo or watch Sumo wrestlers train.
Northern lights shining in the night sky seen from Glass Igloos, Kakslauttanen Arctic Resort West Village, Saariselkä, Lapland, Finland
The ceremonial attire of a Yokozuna. Tokyo Sumo Wrestling Tournament, Japan
As 2018’s peak travel season recently drew to a close, TripAdvisor took the opportunity to crunch all of their data and identify the top experiential travel trends from this past year based on millions of independent worldwide traveler reviews as well as their own internal booking and data capture algorithms. Here are some of the key takeaways that are poised to shape the travel industry in 2019 and beyond:
Experiential Travel Is Here To Stay
In 2018 travelers continued to experience destinations differently. Bucket lists and box checking, like visiting the Vatican and Eiffel Tower, still remain wildly popular. But more and more travelers are seeking to actively experience destinations on a local, cultural scale, while simultaneously bringing something home that’s lasting and sharable, like being able to cook Tuscan poached eggs or teaching your friends to dance the samba that you learned in Little Havana.
Compared to 2017, 67% more travelers in 2018 chose to book an outdoor activity like glacier hiking, bungee jumping, scuba diving, or mountain biking. Cooking classes and immersive workshops in subjects like painting and architecture jumped 61% (the best travel experience in the world, according to TripAdvisor reviews, was a Tuscan cooking class), while 59% more travelers decided they’d rather engage in a cultural excursion or an historically-themed tour than sit by the bar or get sunburned on the beach, though those two activities still remain wildly popular as well—food, wine, and nightlife experiences in 2018 were also up 45%.
“The experiential sectors are exploding,” says TripAdvisor’s President of Experiences, Dermot Halpin, a seven-year TripAdvisor veteran with deep personal travel experience of his own. “It’s not a new trend. It proves what we’ve been seeing for a while. Since 2015, year-over-year growth in categories like outdoor activities, cultural and theme tours, and food, wine and nightlife has ranged from 40% - 100% and shows no signs of slowing.”
This cooking class and lunch at a Tuscan farmhouse includes a local market tour
“Experiences aren’t the sole purvue of Millennials. Home sharing is taking off. The gig economy of taking off—in all demographics,” explains Halpin. “For us, making experiential travel easier is about giving comfort to anyone who wants to try new and different things, like perfume making or glass blowing. People’s disposable time is their most important thing these days. And they want to make those moments matter.”
Nothing makes you feel alive like diving with Lemon sharks in the Bahamas
Not surprisingly, the go-local, experiential travel sector is on fire, with global bookings predicted to exceed $183 billion by 2020. Epicenters for outdoor activities like New Zealand, Costa Rica, and Iceland are positioned to be the inevitable beneficiaries. Other emerging economies like Kenya, however, which experienced the highest growth in luxury travel in 2018, are also poised for a boost, along with other regions heavy on wilderness, adventure, and historical and cultural opportunities like China, the Balkans, the Caucuses, and South America.
“Experience is now driving how people travel,” Halpin notes, “Far and away more than anything else.”
Online Bookings Are Increasing, Mobile Is Exploding
The other big news from TripAdvisor’s data is more confirmation that the inevitable has arrived. Experience travel, along with every other aspect of the industry, is moving increasingly to digital and mobile platforms.
“The genie is out of the bottle on this one,” Halpin explains of the migration towards online and mobile bookings. “People want to control their travel. That’s not something we’re causing, or any other tech company is causing. That’s something we’re reacting to and serving because consumer habits are changing across the board.”
In 2017, it was estimated that only about 20% of experience bookings were made online. In 2018, TripAdvisor saw that number double. More importantly, the trend towards online travel points to a number of major industry shifts that are going to drive adaptation for a while to come.
The ultimate Hoover Dam tour for engineers and history buffs
Flowers at an Indian farmer market
First, experiences and attractions, especially at the local level, are finally coming online in a real, bookable way. For travelers who want to take control over their entire trip, not just reserving their flight and their hotel, this is huge, especially when traveling to foreign countries or remote regions where language barriers, access to critical on the ground information, cultural misunderstandings, and differences in expectations can be common.
“Attractions have been slow to come online,” explains Halpin, “Leaving many travelers to book in-person after arrival. That’s risky. There’s no ‘big picture’ overview of what’s available, no reviews . . . And no way to get the kind of information on an outfit that you can get beforehand online now. Waiting lists can also be problematic on short notice. We now have over 140,000 bookable experiences live on our site now, which is great for travelers since they can find, compare, and book every part of their trip in one place alongside thousands of reviews before they even leave. In this way the Internet is bringing liquidity to the market for experiential travel providers that are smaller and more boutique. Now people can find them. No guidebook, no ancient brochures.”
Skip the line at the Catacombs of Paris in a small group walking tour
Visitors to the famous Huangshan mountain, a world cultural and natural heritage site in China
Second, travelers appear to be willing to take greater risks on their own. Most people have been agreeable to booking their flights and hotels online for years by themselves. But when it came to which local outfitter to trust to take your family on horseback up the side of a volcano, that was better left to the professionals. That’s all now changed with the availability of bookable online experiences, putting travelers in complete control of their trip design.
“Travelers are changing how they research and plan,” Halpin explains. “They’re taking more responsibility on their own. Most people travel the path of least resistance, which meant for years that they wouldn’t take the risk doing certain things unless someone else took responsibility for it. We’re making these experiences less difficult to find, less scary, and easier to do.”
TripAdvisor relies heavily on its user community to build a trusted network of reviews that other users and new customers in turn can rely on, which in many ways makes their model no different than AirBnB or HomeAway. “Trust on TripAdvisor is user generated,” says Halpin, “It's not based on what we’re telling to people to do or where we’re telling them to go.”
Now anyone can learn to make French fish soup Bouillabaisse with seafood, salmon fillet, shrimp
Third, bookings are going mobile at a dizzying rate, which means that every business, hotel, restaurant, and tour provider that wants to stay relevant must stay technologically current.
“Mobile bookings are dramatically outpacing desktop growth,” notes Halpin. “In July 2018 TripAdvisor's mobile bookings growth tripled desktop’s growth. From these insights, we know travelers are increasingly looking for on-the-go, flexible experiences that they can quickly and easily book.”
Fourth, the most important criteria for travelers booking experiences online is what Halpin calls “cancelability”, as insignificant as that might sound. Travelers apparently change their itineraries as often as they change their minds or lose their sense of courage or inspiration. So being able to design a trip and then change it on the go is a crucial part of what travelers’ expect from an experience booking platform.
“We heard from travelers all over the world that having a flexible cancellation policy is an important factor when deciding to book an experience, in case anything comes up that requires a change of plans,” Halpin says.
Volcano tour anyone? Landmannalaugar geothermal area, Iceland
User generated content and reviews are predicted by many experts to be the future of online travel
Last, but far from least, big data still rules. But trust rules more.
“We have hundreds of millions of reviews that consumers have provided on TripAdvisor," Halpin says. "We use that data to constantly learn and fine-tune our site. There's so much information available that gives us insight into what travelers today are demanding, how they’re demanding it, and how they want it delivered."
In the end, however, Halpin reminds me that it’s never just about the data. Travel is a human experience that will always be about person to person trust—in no small way referencing some other tech companies who are fighting to get trust with their customers back after recently losing it.
“Trust is everything for us,” says Halpin. “Yes, it’s about having navigable content. Yes, it’s about using data to provide a better customer experience. But it’s the fact that if people can’t trust our brand what’s our value?"
The store frontage of Trailfinders Travel Experts on Broad St, Reading, England
Everyone needs a good guide. Guidepost in the centre of Sibenik, Croatia showing various world cities
Considering the trend lines in online bookings, it wouldn’t be crazy to think that the travel agency’s extinction isn’t far away, dying with the same kind of slow chokehold online retailers have had on bricks and mortar stores for years. Halpin, and TripAdvisor, take the opposite view.
“Travelers today have more access to information and tools to plan their own trips than they ever have before,” he explains. “So it’s never been easier for travelers to own their travel planning from start to finish. But there’s also still high-demand for more personalized, direct services.
Integral to TripAdvisor’s belief that online bookings and travel agents are far from mutually-exclusive is the company’s Travel Agent Platform, which allows agencies to tap into TripAdvisor's massive data banks to instantly compare different itineraries across multiple criteria including cost, travel time, and starred reviews, as well as to tap into industry resources and agent training tools.
“Travel agents are still an integral part of the industry and our suppliers’ businesses, and a popular choice for many travelers,” Halpin says. “So we want to make them a part of our business."
The day I started writing this article, I saw a billboard thirty feet tall and eighty feet wide on the side of the highway for a local travel agency that specialized in trips to Italy. It said simply: “Knowledgeable Agents. Better Experiences”, superimposed over a dramatic photo of the Roman Colosseum. It grabbed my attention. It sounded "trustable".
“Travel agents used to sell travel at people. They can’t do that any more,” says Halpin. “People can travel entirely on their own now. There’s a democracy to travel these days that’s changed the entire landscape. We all have to sell on knowledge, experience, and trust now.”
All of which is great news for travelers.