14 Global Trends That Will Define Travel in 2014

2013 was a year of big stories in travel, and we brought you all of the important ones. But what will drive the world’s largest industry in 2014? How will the megatrends in travel intersect with the ground realities of economies-in-upheaval and technological changes?

logoAt the start of 2013, we connected the dots to bring you the trends that were driving the business of travel last year. During the year, we also started doing a deeper dive into specific trends through our Skift Trends Reports service.

Now at the start of 2014, we’re looking at 14 trends we think will drive travel industry and consumers this year and beyond. Design, user experience, data, and ease of travel will define travel trends in 2014, and our 14 trends reflect that.

These range from the esoteric (Rise of Silent Traveler) to the practical (metasearch’s continued rise). Most of them cut across the sub-sectors in travel, affecting each and every corner of the travel industry.

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We believe these 14 trends, by no means exhaustive, will help define travel and many other interconnected sectors in 2014:

  • Rise of The Silent Traveler

The rise of digital has given rise to a new kind of traveler who is adept at all available online and mobile tools and uses them to jump across all industry-defined silos. These new travelers don’t need tons of handholding, they shun human interaction, and know their way around everywhere they go.

If the hospitality — the actual human to human interaction — part of the travel industry becomes less and less important, how does the industry define itself? How does it understand
the needs of its customers and fulfill them?

This presents the global hospitality industry a paradox: the human part of the service economy may become less and less important with the rise of the independent, digital traveler forging his or her own way. But big data and personalization offer a way for travel companies to offer that invisible pillar of support. It also allows the travel industry an opportunity to balance the inevitable expectation of personalization while simultaneously enhancing the need to remain independent.
The risk: predictive services — using data trails — may have potential risks in making too much of personalized interactions.

  • Blurring of Business and Leisure Travel

The boundary between professional and private worlds is increasingly blurred due to mobile devices, with profound effects on the traditionally defined silos between managed and unmanaged travel. It is also changing business travel as we know it.

Business travelers — especially millennials — are rebelling against their stodgy corporate booking tools and want to access the deals and tools that are readily available to them when they travel for leisure. A recent survey by Pullman Hotels talks about this blurring:

– 43% of international travelers always take their mobile professional devices with them on holiday or on weekend trips
– 89% of seasoned international travelers say mobile professional devices are a means of staying in touch with their loved ones.

While there is a real conflict between personal and professional lives of travelers, business travelers are more upfront about adding on leisure time at the end of business trips. This presents new opportunities for airlines, hotels and destinations alike, all of which have to configure their services to be flexible, and conference and meeting planners have to be cognizant of these changes. Corporate tools have to reflect these mixed realities, and most are not yet equipped to do that.

  • Curation Is Coming To Travel Listings

Travelers are overwhelmed by choices in booking online, while mobile is creating the need for better curated experience in a small form factor. Booking providers can deliver well-targeted information to travelers due to their mining and analysis of all kinds of data.

The growth of curation-centric startups like Top10.com, Room77, and HotelTonight is symptomatic of what consumers are yearning for to navigate the clutter.
Curation mostly happens algorithmically, as HotelTonight does by displaying a handful of sameday hotel deals in each market, and startup My Gola does for personalized and recommended trips.

HomeAway turned to Andrew Harper, an expert in the luxury space, for a more manual curation, and to launch an upscale site for vacation rentals, where travelers seeking vacation rentals can skip wading through countless listings for one-bedrooms with a kitchenette that they wouldn’t be interested in.

Expect a lot more intelligence to come into the listings business. It saves time and angst for users, all with the goal of better conversion for the sellers.

  • Visuals are the New Language of Marketing in Travel

Visuals are the new language of the digital era. The rise of Instagram and photo sharing on Facebook speak to this, as do the surfeit of photo sharing startups that have come since. Travel is uniquely suited to visual media. Content marketing — especially through social media — has been driven primarily by images, and now brands across the spectrum, including corporate travel brands like American Express, are adopting visuals as the primary way they speak to their users in digital media.

Technology that’s placed high-quality cameras in most travelers’ hands has also fueled the marketing evolution. Brands like Starwood and Tourism Australia are tapping travelers’ photos, videos, and social networks for their marketing materials. Travelers can lead the conversation independent of brands, too, using hashtags and geotagging to share their experiences of a place or attraction.

Moving forward brands’ challenges will be to share engaging visuals that not only portray a place, but elicit emotion from the viewer.

  • The Rise of Smart Design In Travel

The future of travel is at the intersection of user experience and design, influenced by the Appleification of the world. Hotels are becoming a more efficient place to work, airports are becoming more design-centric, and every sector in travel is becoming more design-meets-UX savvy.

Much of the evolution is fueled by travelers’ changing expectations caused by the instantaneous gratification they experience every time they order an Uber car on demand, book a hotel with a few finger swipes, or receive flight updates sent automatically via text.

The sophistication in user design gives travelers more control over their experience so, whether they ordering room service while in a meeting or booking a flight on the way to the airport, they choose how their experience will unfold. This means travel companies must introduce infrastructure that lets travelers guide themselves and that they must be nimble in the face of rapidly changing customer demand.

  • Substandard Travel Startups Abound

There is an abundance of online and mobile travel startups, and if you count adjacent verticals like social media services and photo sharing startups, the number rises even more. It could only mean one thing: a very high failure rate in the sector. The struggles of these startups are many and the majority of these companies end up hitting obstacles on the road to growth and scale. There is little money in anything targeting the airlines sector, travel inspiration is still difficult to monetize (Pinterest is already the “Pinterest of travel”) and hotel search is becoming a crowded field as founders realize that’s where the money lies. Few startups aim directly at the B2B end of travel, or even business traveler.

As for exits, there have been a few big ones, but most of the travel startups either shut down or get soft landings at companies that need smart staff, not new products. TripAdvisor has been an acquirer of choice for any failing consumer travel startup wanting a soft-landing.

Over the last few years a number of specialist venture funds have emerged, and are trying to bring domain expertise into the equation, especially for the B2B startups. But not all funds are created equal: some have had better luck investing, some have been there in name only, and some with no active investments as of yet.

  • Continued Rise of Chinese Independent Traveler

While outbound travel in China is still dominated by group tours, its growth is slowing when compared to the meteoric rise of independent tourism. That slowing was exacerbated at the end of 2013 when the Chinese government began cracking down on outbound budget tour groups. The prices of group tours have increased, drastically reducing the cost differential between group and individual travel.

Chinese travelers top almost every list of tourist superlatives. They are now the world’s biggest spenders on shopping while abroad and the most numerous overseas arrivals at global airports.

Demographic sea change is driving this: a new generation of affluent Chinese consumers has come of age that is more global, educated, and consumption-driven than their parents. Their habits are different, too. Instead of just shopping malls, younger independents are more interested in the lived modern culture of their destinations.

  • Rise of Local in Hospitality

The role of hotels has evolved over the last decade during the boom of interest in experiential travel. Guests are arriving to hotels with a wealth of previously researched information and demanding more from their stay.

In response, many independent and branded properties promote themselves as a “travel experience,” versus merely a place to sleep, to a growing range of travelers defining who they are by where they stay. Global hotel brands have more recently jumped on the trend.

Hotels are catering to these guests by becoming both a portal to the local community and by turning themselves into a living exhibit of the local culture awaiting outside their walls. They partner with small area businesses on and off site, host and promote special events, and share local travel experiences via social media and blogs.

It’s difficult to calculate the ROI in terms of increased bookings and room rates, but hoteliers view destination-specific experiences as a necessary step to remaining relevant with next generation travelers. This is partly fueled by the growth of the sharing economy, which innately provides travelers with a more intimate local experience.

  • Low-Cost Carriers Continue to Eat the World

Low-cost carriers (LCCs) are continuing their inexorable march across the world. The year 2013 marked the first time when U.S. low-cost carrier unit revenues on domestic routes exceeded that of legacy mainline carriers. In Asia and the Middle East LCCs are outstripping every other sector in aviation.

The success of Spirit Airlines and other so-called ultra low cost carriers is generating copycats and putting pressure on now-mainstream airlines such as Southwest and JetBlue.

And LCCs are moving back into long haul: Norwegian, Wow Air, and Westjet are all looking at the success of AirAsiaX. Meanwhile, LCCs such as easyJet, Ryanair, JetBlue and Southwest have upped their games in a variety of ways to attract more business travelers.

  • The Relaxation of Visa Regulations

Nations around the world are recognizing visa fees and processes as a major blockade to tourism and economic growth. This had led to the introduction of visa-on-arrivals, largely in Asia and Europe, in an effort to attract travelers from emerging destinations.

It has since become a global movement that is making travel easier and cheaper than ever before. Russia, China, Myanmar, India and other traditionally closed countries are opening up for the first time.

While historical geopolitical leaders like the U.S. and UK find themselves easing regulations, opening visa application centers, and generally making it as easy as possible for the growing numbers of tourists from Brazil, China, and others to visit and spend money.

The regulatory changes have a real impact and kickstart a boom in travel between previously unexpected source and destination countries.

  • Alternative Transportation on the Ascendant

Millennials are favoring access over ownership, and driving new trends in transportation. Bike and train, local and inter-city travel, is where all the innovation in transportation is happening. The instant-success of Citibike in NYC will help create public bike sharing programs around the world, while for the first time on record, bicycles have outsold cars in Spain.

On rail, Amtrak had its best year ever, driven by the growing success of regional rail in the Northeast Corridor.

Europe is going big on inter-city rail, London to Amsterdam and Paris to Barcelona high-speed are becoming reality. Europe’s use of high-speed rail continues to grow across the continent with new lines continuing to open through 2014. The ease of European high-speed rail has inspired other nations and regions to copy the infrastructure.

In China, transportation has been completely transformed by high-speed rail. The biggest success will come not in the long-haul, where planes will always win, but in city-to-city connections where the extra hour or two on land is a fair tradeoff for the hassles of transit to and from airports and the hassles all travelers have to deal with before and after they fly.

  • Sharing Economy Turns from Disruption to Collaboration

2013 was the year when Uber and Airbnb and the disruptive sharing economy brands went mainstream, but 2014 will be the year they go legit, and New York and California will be where the action is.

As they go legit, they’ll be shedding the “sharing” tag as they focus on collaborative consumption, which more accurately describes these companies’ smart use of resources through equally smart technology.

For years, this new breed of companies has operated with disregard for municipal and state regulations, but they now know that to go from buzzed-about company to a real business they need to get government on board. They’ve created industry groups like Peers and hired top-tier lobbyists in Washington, D.C., as well as California and New York. For Uber and its competitors, cooperation has paid off in California, where there are now statewide rules, and in New York City, where an e-hail pilot program is likely to turn permanent.

For apartment-share companies like Airbnb, the road to legitimacy is bumpier. We will see it turn over user information with states for tax purposes, but it will need to help hosts make peace with landlords and condo boards in its biggest markets, and reach an agreement with states and municipalities over the laws that limit short-term rentals.

  • Airlines and Airports Finally Deliver on Self-Serve

Do-it-yourself check-in, print-at-home baggage tags, and self-serve Global Entry are no longer a fringe experience for travelers. Indeed, flyers are increasingly on their own when it comes to air travel.

After checking in on a mobile device, flyers print boarding passes and check bags at selfservice kiosks. They receive updates on flight delays and gate changes directly to their phone. And digital signage directs them through the airport with cues on distance to the gate. In many cases, the information travelers have on their smartphones is more up-to-date than what the airline employee behind the desk can access on their old terminal.

All of this means that experienced travelers are able to move through the airport faster without waiting on staff to direct them. In the coming year, we’ll see airports saving money on ground personnel by replacing officers at security exit gates with glass portals.

  • Continued Rise of Metasearch

Travel metasearch will build on its banner year of 2013, in which Priceline acquired Kayak, Expedia bought Trivago, and TripAdvisor rounded out its user reviews with a hotel comparisonshopping engine.

Metasearch is the fastest-growing sector in travel, and will likely attract new investment and see continued consolidation in 2014. Online travel agencies and travel brands are discovering metasearch anew as marketing vehicles, and mobile is a new territory, with various monetization and user experience challenges.

Consumers will continue to view metasearch as an efficient way to get a quick and relatively comprehensive view of the market. The year 2014 will be highlighted by hyper metasearch expansion as companies spread their reach way beyond their home-market comfort zones.

Check out the 2014 trends by clicking here.

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