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Trends

Some of the trends that will shape the future of World Tourism to 2030

 

Once upon a time, overseas holidays were only for the rich and famous. In 1939, it cost US $79,000 in today's money to fly across the Atlantic on the world's first scheduled crossing with Trans Atlantic Airways. Today, Virgin Galactic are offering flights into outer space from New Mexico for US $200,000 and by 2030, this should fall too US $20,000 making flying into outer space cheaper than flying the Atlantic Ocean in real terms.

 

In 1950, 25 million tourists took an overseas holiday; by 2005 this had risen to 803 million, representing an annual growth rate of just over 6%. By 2030, we expect this figure to reach 1.9 billion international arrivals, spending US $2 trillion. By 2030, markets will have shifted eastwards based upon cost, travellers' desire for new experiences in far-flung destinations and the rising level of disposal incomes in Asia. By 2030, every part of the globe will have been visited by tourists and new destinations will have emerged which had not even been considered in 1950. By 2030, more than $5 billion will be spent by tourists every day, from US $2 billion in Europe to US $1.5 billion in Asia.

 

 

Why are holidays important?

 

Trends:

Globalisation and Competition

Prosperity and affordability

The Middle Class Squeeze

Accessibility

Events

Cultural Capital

Climate Change

Age and Longevity

Science and Discovery

Anxiety about Health and Safety

The Experience Economy

Perceptions of Luxury

 

Why are holidays important?

Holidays will always be important, even during the present credit crunch. Why? Leisure time and holidays are increasingly thought of as indispensable to people's lives. According to the Future Foundations Changing Lives survey, 47% of Europeans consider having at least one holiday a year as absolutely necessary to live properly. After a good job, a good relationship or a good education, leisure activities and holidays rank as top priorities for today's Europeans.

 

The chart below shows there are differences between countries than by age or income when it comes to the value people ascribe to holidays. It appears that holidays are more important in countries with higher levels of wealth such the Scandinavian region. Taking a holiday seems like something people often take for granted. Holidays are more appreciated in Ireland, a country whose disposable income growth has the highest showing in Europe over recent years. However, in France, Germany, Spain and Italy, it is especially the younger generations who shout more loudly about the importance of escaping at least once a year.

 

The macro-economic background triggering the aspirations of European consumers is, of course, growing affluence. Affluence is more than an economic condition. In line with rising incomes, in the last decade, consumers' aspirations and expectations have diversified and increased hugely, with leisure time emerging as an increasingly important activity.

 

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Trends

 

Globalisation and Competition

The openness of the world's economy means that the tourist has more choices; increased competition means better value. Basically the world has opened up to tourism. Today there isn't any country in the world that doesn't offer a tourist proposition – whether it is Albania, Libya, China or the USA. | Back to Top

 

Prosperity and affordability

According to research by the Future Foundation, consumers perceive holidays as the number one luxury product. They desire holidays over houses, fast cars, expensive perfumes and designer clothes. This desire for holidays has being driven by consumer prosperity and affordability. According to the World Travel and Tourism Council, in 2005 10.4% of all expenditure in the world was spent on travel and tourism and this is expected to rise by 4.6% per annum to 2015. | Back to Top

 

The Middle Class Squeeze

 

 

Rising inflation and a slow down in average weekly earnings means stagflation, thus is real terms consumers don't have as much money as they have had in the past. Today, food inflation, rising taxes and higher oil prices are all impacting on the levels of disposal income amongst UK (and the rest of the world) consumers. The chart above highlights that over the last two decades real disposable income has risen at 2.7% per annum but today that growth has been limited to 1.5% as inflation erodes spending on travel and tourism. | Back to Top

 

Accessibility

The tourist's world is shrinking because of technological advances, the ability of the internet to inform and break boundaries allows consumers to search any destination in the world and subsequently make bookings for hotels and travel. Travel is much easier, with more direct and cheaper flights in real terms. The world has now opened up to the tourist, whether it is Afghanistan as the 'last unconquered mountains of the world' or the citizens of Russia and China who decades ago couldn't have imagined travelling outside their village – international travel has now transformed itself from a dream to a reality for many of these consumers. | Back to Top

 

Events

With the worldwide expansion of accessible tourism destinations, people are increasingly exposed to and influenced by events, whether sporting occasions or environmental disasters. Arbitrary acts of violence by terrorists and increasing occurrences of extreme weather disrupt tourist flows, and the increasing popularity of sporting and cultural events such as the Edinburgh International Arts Festival or the Olympic Games are increasingly influencing destination choice. | Back to Top

 

Cultural Capital

As wealth and education attainment increase, culture becomes more important as a destination driver. Today's consumer distinguishes himself by what they have done or where they have been rather than material wealth. The cultural capital of a destination is how consumers talk about a place, whether it is the food, people, scenery, heritage or tranquillity. | Back to Top

 

Climate Change

In 2030 the global average temperatures are likely to rise by between 1C and 21C, and global sea-levels could be 72mm higher. However, the accelerated melting of Greenland and the West Antarctic ice sheets could lead to sea levels increasing by 25cm. Every 1mm rise in sea-level translates into a 1.5m retreat of the shoreline. This means that by 2030 shorelines in many areas could have retreated by at least 108m, possibly by up to 375 m. This would wipe out beaches across the world and threaten coastal amenities such as hotels, golf courses and retail facilities. Global warming is expected to have the most impact on the Northern Hemisphere, leading to more temperate climates in Canada, the United Kingdom, Scandinavia and Russia. These destinations could benefit from an increased appeal for travellers seeking to escape the sweltering temperatures forecast for parts of continental Europe and the United States. Florida and the Caribbean are likely to suffer from more frequent and severe hurricanes. Retreating shorelines and coastal flooding could lead to the subsidence of seaside property and erosion in tourism 'honey pots' such as Venice, which already faces uncertainty about its future. The Maldives will not exist as a country because it will have been submerged by the sea. By 2030, the number of ski resorts with good-quality skiing and snow-boarding slopes will have been reduced by 40%. In Europe the Alps will have 30% less snow.

 

With changing work practices and traditional work-leisure boundaries blurring, the trend is increasingly towards escapism and indulgence. Several shorter breaks are replacing the established long breaks because as greater pressure is put on time, stress increases in the work place. Increasingly, people want to capture the experience of a place through relaxation or by overloading their senses with adrenaline-charging activities. Tourists want holidays that offer physical and mental recharging in a short time, before they must return to their normal way of life. | Back to Top

 

Age and Longevity

Age and lifecycle stages are key demographic variables influencing tourism demand. People in Europe are living longer and retiring sooner. It is estimated that by 2030, nearly 50% of the world's population will be over 50, enjoying good health with a more informed perspective. One example of this change will be the restructuring of the families from a horizontal to a vertical model, this will mean less children but more aunts and uncles.

 

Therefore in the future there will be greater emphasis on multi-generational holidays where destinations have to cater for everyone from grandparents to grandchildren.

 

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Science and Discovery

 

According to VisitScotland Business Tourism Unit, 53% of delegates to conferences in Scotland are from the science and healthcare industries. Why? The rate of discovery in medicine means doctors have to meet more frequently to keep abreast of these trends which means medical congresses are being held every two years instead of every five years. So, as the world searches for cures and biotechnology solutions are discovered, Moores Law of Technology Innovation is applied to the meetings industry, in which the frequency of meetings and conventions increases with scientific discovery. | Back to Top

 

Anxiety about Health and Safety

Since 9/11 and the London bombings, terrorism has influenced and shaped tourist flows and destination choice. This backdrop of anxiety forces the consumer to decide between two courses of action. Fear leads to risk minimisation so that perceived dangers will be avoided. However over time, a sense of complacency develops and people think that 'whatever happens, will happen' so a wider choice opens up again. From a macro political point of view, anxiety leads to a dual crisis of security and trust as organisations change their vision of the world. In Shell's Global Scenarios of 2025, this trend plays out that individuals and companies have to prove who they are. The state plays a major role in providing security to the nation and overseeing the process whereby trust in the market is preserved through the duration of market abuses or dysfunctions. This involves a stronger coercive and discretionary power for the state and independent regulatory agencies. Regulators themselves are not trusted and they must demonstrate that they take the interests of investors, consumers and other stakeholders into proper consideration. It is against this background that the post-9/11 world has emerged, of which tourism in the United States is a symptom.

 

In this scenario, tourists have to prove themselves to the authorities. Tourists are either preferred or regulated visitors. Preferred visitors have secured entrance requirements through a Visa Waiver Program whereas regulated visitors require visas from embassies as well as undergoinging lengthy interviews and intrusive processes. There is a sense that regulated visitors are not trusted as their values and religions are not the same as in America. The creation of barriers to entry means the loss of business due to the lengthy time process and costs associated with entry. In a world where time is precious visitors from emerging economies feel the hassle is not worth it, therefore do not want to do business with the United States. In retaliation they have created their own regulations for US businesses in their market. | Back to Top

 

The Experience Economy

The growing number of vacations is closely related to the expanding social quest for new experiences, as an alternative to the routine of everyday life. In an era of prosperity, more material needs are taken for granted by more people. Consumers are therefore demanding something more: newer, richer and non-material activities. Since tourism is all about selling the experience behind the holiday, this trend is of particular importance for the sector.

 

Activities such as extreme sports and exploring remote cultures have seen significant growth in recent years. The western world has become more fascinated with the exotic and the adventurous. This is manifest in the fact that, for instance, international arrivals to countries like Zambia, Botswana, Lao or Cambodia have grown at a rate of double the world average, as reported by the UN WTO. Closely related is the idea that people are becoming more individualistic in their approach to life, seeking to be differentiated by what they do, rather than what they buy. Instead of spending their money on products that everyone owns such as cars and household goods, consumers now also spend money on things that give them personal enjoyment or fulfilment, no matter how short-lived and transient. The twin desires of individualism and experience present some interesting challenges for the travel industry. As the experience economy matures, authenticity emerges as an important trend. Authenticity is about real and rooted experiences that are not manufactured or false. | Back to Top

 

Perceptions of Luxury

Luxury is becoming less about materialism and increasingly about self-enrichment and time. The consumer is increasingly aware of the importance of luxury as a concept of fulfilment. Destinations are adapting to this demand by diversifying into niche areas where traditional perceptions of luxury and opulence share the market with wellness and self-fulfilment. On one hand, the polarisation of luxury is about consumers dealing with their middle class anxiety of affluence, which Oliver James calls Affluenza and dealing with it through the pursuit of happiness. Here destinations like Scotland and New Zealand position themselves around the concepts of tranquillity, authenticity and escapism. One country has taken the concept of happiness to heart and as a measure of development. The Himalayan kingdom of Bhutan is introducing a metric known as Gross National Happiness. Considerations will include how people use and balance their time, the health of the culture and community, and the quality of governance.

 

On the other hand, the importance of materialism, especially amongst the emerging economies of the world, focuses on 'bling' and opulence, to the extent that leading restaurants and hotels are selling designer mineral water. Bling H20 is bottled water that comes in limited edition, corked, 750 ml frosted glass bottles, embellished with Swarovski crystals. Established in 2005 by a Hollywood writer-producer who noticed that "you could tell a lot about a person by the bottled water that they carried," Bling H20 aims to be the "Cristal" of bottled water and is spotted at everything from the MTV Awards to the Emmys. The bottles cost from US $17 to US $480.

 

And Finally,...Fluid Identity

 

Consumers can no longer be labelled by socio–economic group or by attitudes and behaviours. According to Michael Wilmot, tomorrow's consumers will live a complicated life. They will preach the virtues of the environment and take holidays in Africa with an eco friendly flavour but at the same time will be found on a stag weekend in some dodgy lap dancing establishment.

 

For further details about many of the trends mentioned on this web page and consumer reports from the Future Foundation, click here or buy the book. | Back to Top