overcoming disruption in uk travel

ALEXANDER GÖRANSSONBRITISH TOURISM & TRAVEL SHOW

BIRMINGHAM – 22ND MARCH 2017

OVERCOMING DISRUPTION IN UK TRAVEL

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2OVERCOMING DISRUPTION IN UK TRAVEL

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UK MARKET OVERVIEW

DISRUPTING FACTORS

OVERCOMING DISRUPTION

MARKET POTENTIAL

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26%Mobiles share of UK travel sales in 2020

4 mnAdditional inbound trips by 2020 with a disorderly Brexit

73%London’s share of inbound visits


UK MARKET OVERVIEW

DISRUPTING FACTORS


MARKET POTENTIAL





Inbound 36 mn Outbound 84 mnDomestic 137 mnKey facts UK travel flows 2016

Number of trips, millions




2011 2012 2013 2014 2015 2016-8-6-4-202468

1012

UK tourism flows 2011-2016

DomesticInboundOutbound

% y

-o-y

gro

wth

Unsettled trend for domestic tourism




Outbound fastest growing despite stable inbound trend

Dom + Inbound Outbound0

2

4

6

8

10

12

14

16Balance of additional trips 2011-2016

OutboundInboundDomestic

Nu

mb

er o

f tri

ps

, mil

lio

ns


UK MARKET OVERVIEW

DISRUPTING FACTORS


MARKET POTENTIAL





Brexit TechnologyGenerations

Three key disruptors




The one thing we do know about Brexit…

Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-171.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

US

$

Exchange rate US$ vs GBP




Brexit could shift the balance from departures to arrivals

Note: Euromonitor Industry Forecast Model as at 14 March 2017




Category Inbound Domestic Outbound

Relaxation + ++ -

Heritage and culture+ + -

Business + +- -

Luxury ++ - --

Short-term rentals ++ ++ ++

Packages + +- ++

Cruise + + ++

Brexit from the eye of the beholder




Airbnb - leveraged technology to revitalise an existing market

Positioned to offer personalised lodging

Increasingly targeting business travellers and families

.

2011 2012 2013 2014 2015 2016-505

1015

UK evolution of hotels and short-term rentals value sales

Hotels Short-Term Rentals

% g

row

th


https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiBrOmI793SAhUCfRoKHS8FBJQQjRwIBw&url=https://vimeo.com/143448460&psig=AFQjCNGrz5db6sTnrJ-s9eCRwtkvJM65UA&ust=1489851264190412



2016 2020

76 68

24 32

UK Online Travel Sales by Plat-form

Desktop/PC Mobile

Val

ue s

hare

(%

)Mobile to drive growth




Hotspots

1960s to early 1970s generation

2000s inbound migration

Two age groups to drive growth

Source: Euromonitor International from national statistics/UN


UK MARKET OVERVIEW

DISRUPTING FACTORS


MARKET POTENTIAL





Technology

Personalisation

Means to overcome disruption




Travel chatbots

Mobile and wearables apps

Virtual reality

Technology is re-shaping the travel industry




Technology making personalisation possible

Data analytics

Mobile tech

Social media

Artificial Intelligence

Personalised service

Mobile assistance

Peer-to-peer comms

Enhanced experience

TRAVEL COMPANIES

TRAVELLERS




Using personalisation to enhance the customer experience

Asian creature comfortsNew concepts for millennials

Simplified booking and check-inPersonalised in-flight services

Airbnb, Google, TripAdvisor or Expedia to create and promote customised travel itineraries




Case study Personalisation 1: Kimpton Hotels

Source: www.kimptonhotels.com

Choice of bedding

Complimentary snack

Bar credits

Spa credits

Chefs taster




Case Study Personalisation 2: DUFL / UNPACK

Source: www.dufl.com

Source: www.dufl.com


UK MARKET OVERVIEW

DISRUPTING FACTORS


MARKET POTENTIAL





IndonesiaCanada

PhilippinesSouth Korea

FranceMalaysiaGermany

IndiaUS

China

0 5 10 15 20 25 30 35

Additional outbound trips by 2020

Million trips

Global source markets with most potential

Note: China excludes city states Singapore and Hong Kong

6-9 million additional UK

inbound by 2020

Sum of top 10: 84 million

additional trips




Wide And Ever Changing Offer To Tourists




Much un tapped potential outside LondonArrivals by city 2016, inbound tourists




How to encourage UK tourism - at local level

Partner with neighbouring cities to improve offer

Partner with transportation companies

Raise awareness of destinations outside London




Simplify Visa requirements

Cut Taxes; VAT, APD, Business rates

Moderate minimum wage increases

Expand airports – keep open skies

Maintain labour supply

What government can do to make UK tourism more competitive




Take advantage of new technology

Offer personalised solutions

Raise awareness of UK as a value for money destination

But be prepared if Sterling rises again in value again

How can the UK travel industry remain competitive?




THANK YOU FOR LISTENINGAlexander Göransson

[email protected]

THANK YOU FOR LISTENING
