Tourism

Opinion: Here’s how the industry will change to meet millennial expectations

Peter Allen

Peter Allen

There is no question that the growth of the sharing economy and millennial traveller expectations are disrupting existing norms.

Travellers are increasingly looking for accommodations, travel services, and activities that better cater to their unique situations and needs, whether they are travelling in groups (including families with children), have specific dietary requirements, or are looking for customized itineraries.

Even business travel will be affected, as more travellers combine leisure activities and add excursions to their business trips.

With this in mind, how is the travel sector responding?

Local experiences and customization

While travellers’ expectations of comfort, convenience, and reliability have not changed, more and more people are looking for customized and local experiences.

Many of them are also looking for alternative ways of staying in and exploring foreign destinations.

Local home rentals are an increasingly popular choice, as the growth of this sector clearly shows.

Travellers look for features like kitchens, shared spaces, and laundry, essential for parents travelling with children or any travellers staying longer than just a few days.

Interestingly, we see hotels responding to the growth of this new sector by providing more of these features.

We also see a growing demand for experiential travel, such as niche-oriented services that connect locals and visitors through sports-game outings, crafting, classes and guided tours.

For example, we’ll see more companies such as Eatwith and BonAppetour that focus on ‘social dining’ by offering home-cooked meals, food tours, classes, and other food-related experiences.

Instead of looking to scale the same offering across multiple locations, the greatest opportunity lies in creating curated, distinctive, local experiences and amenities that give a sense of the destination, and the more local and innovative, the better.

Personalised, data-driven travel

Hotels, digital travel companies and other travel businesses will incorporate more big-data analytics and machine learning algorithms to create personalised services based on traveler profiles that include information such as the type of travel (business, leisure, or “bleisure”), which airlines the traveller is taking, their itinerary, dietary preferences and restrictions, and disability requirements.

This will result in the emergence of highly personalized services and recommendations such as automated door-to-door pick-up from the airport, custom dining menus, reservations, and itineraries.

Travel companies and local businesses will increase collaboration.

For example, a hotel may link up with nearby restaurants that cater to specific dietary needs (halal, vegan, gluten-free, etc.) to expend its room-service dining options; digital travel companies may partner with local gyms or personal trainers to offer wider range of fitness classes and experiences to travelers, which will further increase the personalisation that hotels and other travel businesses will be able to provide.

Accommodation providers that don’t want to be left behind should take the time to understand their customers’ preferences and purchasing decisions, anticipating and catering to their needs. Creative partnerships will help to fill gaps where preferences don’t fit the current offerings.

For example, a hotel with less-than-stellar gym facilities could partner up with boutique gyms in the area to offer guests access to daily fitness classes and amenities.

Winning over ‘bleisure’ travellers

The Global Business Travel Association forecasted that total business travel spend will grow between 6 and 7 per cent annually until it reaches US $1.7 trillion in 2021.

This accelerated growth may partly be attributed to the blurring lines between business and leisure travel (i.e. ‘bleisure’ travel) as more travellers are combining their business trips with weekend stays.

Businesses that aim to cater to this growing travel segment should consider flexible spaces and services that can work equally well for business and leisure travel purposes, from working and living spaces to amenities, apps and services.

For example, we will see resorts that have dedicated communal working spaces, extra ‘home-comfort’ facilities or hosting networking activities specifically for businesses travellers.

There will also be peripheral services catering to ‘bleisure’ travellers, such as easy expensing that can differentiate personal versus businesses expenses from each trip and billing relevant bills directly to the employer.

What’s next for the travel industry

The travel industry for the next generation will change in ways that we can only begin to imagine today.

Travellers will require a huge array of choices – no longer just one to-five-star hotels, resorts or B&Bs, but also private houses and apartments.

They will be able to select familiar experiences (a hotel that can prepare for specific requests based on traveller profiles) or unfamiliar ones – cuisine prepared to order through a local host, cultural or sporting events or airport pickups.

Businesses that are willing to evolve and in anticipation of these trends will be the most successful players in this new era of travel.


Peter Allen is Agoda’s VP of Public Affairs, and an alum of McKinsey and Google

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