The future of travel: the real impact of mobile and social media

Even with social media and mobile technology showing incredible rates of adoption, skeptics remain. Everyone has a friend or family member who “doesn’t do” Facebook or thinks Twitter is somewhere between worthless and moronic. That said, marketing teams in the travel industry are watching these trends closely. In fact, the intersection of mobile device and app adoption with slowing social media market penetration could lead to interesting developments for the travel industry … and thus for you.

Okay, let’s start with social media take-up in the United States. Right now, 63 percent of online Americans use social media. This is only expected to hit 67.5 percent by 2013. What does this mean? The marketing folks who use social media need to do a better job of mining the online communities they already have. As you probably know, hotels, airlines and such are all over Facebook and Twitter, so they definitely fall into this trend.

Mobile device and app adoption by the travel industry’s target market is what makes this even more interesting. eMarketer reports that “nearly 25 million US mobile users will research travel information on their mobile devices before making a trip this year.” And, close to 12 million will use mobile to actually pull the trigger and book their trips.

This is just the beginning.
eMarketer forecasts that, by next year, 34 percent of smartphone users and 31 percent of mobile internet users in the United States will exploit these channels to research travel. This will extend to bookings, too, which will be made by 18 percent of smartphone users and 16 percent of mobile internet users.

“Mobile has dramatically altered the travel experience,” according to Noah Elkin, eMarketer principal analyst and author of the new report, “Mobile Travel Takes Off: Emerging Trends and Best Practices for Marketers.” Elkin said, “From pre-trip planning to in-flight and on-property services to context- and location-aware destination information, mobile devices promise to transform every phase in the travel process, putting vital information-and new marketing opportunities-within hand’s reach.”

Travelers – people like you and me – are making a profound statement through our behavior. We use social media, and travel companies need to figure out how to engage us there more effectively. We use mobile devices, and they are stuck with the same challenge. We’re seeing these two trends converge, which poses an interesting problem for the travel industry. It needs to find ways to engage with us where we are most comfortable in order to get in front of emerging trends.

This is clear from Elkin’s further observations on eMarketer’s blog:

“An integrated, comprehensive approach will serve brands best,” said Elkin. “The more flexibly brands can offer to help their customers manage their travel-using a mobile-optimized website, apps and integration between mobile, online and offline channels-the more effective they will be. Mobile travelers, especially those carrying smartphones, are demanding, and expect suppliers to get it right the first time.”

On the surface, this may look like just another business trend in the travel industry, but what’s beneath it is far more important. How we travel – and plan for it – is changing. It’s nice to hear the platitudes about mobile and social media bandied about, but all that is meaningless until money changes hands. Talk is cheap, as they say, and it’s consumer behavior that provides the best indicator of what the future will look like.

Travel and tourism markets on the rebound?

It’s no secret that the poor global economy has hit the travel and tourism markets extremely hard over the past couple of years. Fewer people in general are traveling these days and those that are, have tended to stay closer to home. But it seems that the industry may be ready for a rebound, as a new report indicates that consumers are starting to spend more money on travel once again.

The report, which was conducted by the U.S. Department of Commerce, found that U.S. travel and tourism spending, adjusted for inflation, increased at an annual rate of 8 percent during the third quarter of 2010. That increase marked the largest quarterly growth in U.S. travel and tourism spending in six years, dating back to the first quarter of 2004. The good news didn’t end there either, as tourism related employment also rose by two percent in that same quarter as well.

The largest growth, according to the report, came in the area of air travel, which increased by 29.8 percent in the third quarter alone, spurred on by a sharp decrease in the price of air fare. Spending on accommodations also increased in the same quarter, raising 9.5 percent. That marked the third straight quarter that that segment of the travel industry saw an increase in spending too.

All of this bodes well for 2011 of course, when the travel industry is expected to continue to bounce back nicely. Forecasters are predicting that more Americans will take a real vacation this year and international arrivals are also expected to continue to rise steadily.

So, have you curtailed your travel spending due to the economy over the past few years? Are you planning a trip for 2011? What destinations are back on your list now that the economy is showing signs of life again?

4 reasons why you need a Travel Expert in your pocket

This is the person you want to have on your side when planning travel. Not a Travel Agent, many of them are order takers who fill in the blanks on computer screens. Others try to be everything to everyone and that is just not possible.

Your Travel Expert specializes in one particular area of travel. It might be cruise vacations. They will know what cruise line will work best for you, keep on top of commodity-like cruise pricing and add a great deal of value to your vacation experience. It might be trips to Russia your Travel Expert specialized in. That person will know all there is to know, have been there a bunch of times (if not lived there) and probably speak a good amount of Russian. That’s the person I want helping me plan my vacation. Here are five reasons you need one of those people.

They know what to do in an emergency. You can bet that travelers on the ground in Egypt who have a Travel Expert on their side that knows the lay of the land are glad they do. Any travel agent with the right credentials can book a trip to Egypt. Someone who has visited there a lot or lived there will know specifically what you should do. You will be one of the people that made it out of the country while others lagged behind.

They will be honest with you. Any Travel Expert will tell you without hesitation if what you are looking for is not realistic. The last thing you want is a journey planned by a “yes” man who will say anything to get a sale. If you ever feel you are getting anywhere close to that situation you are not dealing with a Travel Expert. Look for your Travel Expert to speak at functions, teach classes, be involved with travel organizations and be easy to find publicly, like via Facebook, Twitter or a simple Google search.

They will insure a rich experience for you. That same knowledge that can give you an advantage if you had to evacuate a travel destination much more commonly works to enrich your travels. A Travel Expert knows people on the ground where you are going. Regardless of how you get there and what you want or need to see, its the people that will make the difference. A Travel Expert’s recommendation will get you in the door of places you might not ever see without his or her thumbs up.

They will encourage education. Everybody wants to talk about the fabulous places you will visit and things you will see. A Travel Expert will want to give you the knowledge over time that will allow you to appreciate what you will see and experience when you travel. In the olden days they would have given you a travel guide to read, maybe one printed by AAA, a leader in those sort of things. Today they will point you to sources like specific blogs, travel guide sites, and maybe send you a copy of the book they wrote.

You may end up paying one of these people for their expert advice. Be sure that advice comes gift-wrapped with that is called an Errors and Omissions insurance policy backing. That is insurance against loss if something goes horribly wrong directly due to advice you may have received from pretty much anyone in the travel business. Travel agents have it, so do Travel Experts who make a living selling their advice.

Photo: Wiki Commons

Foreign visitor travel spending over $100 billion in United States

Visitors from outside the United States brought close to $12 billion with them in October, making it the tenth month in a row that spending by this group grew year over year. On average this year, total travel and tourism exports have increased $1.4 billion a month. People are visiting us again!

According to data from the U.S. Department of Commerce, travel– and tourism-related exports reached $11.9 billion in October 2010, an 18 percent ($1.8 billion) gain relative to October 2009. The money foreign visitors spent on fares surged $709 million to $2.8 billion for the month, an increase of 34 percent. Travel receipts (i.e., everything but flights, boats, etc.) amounted to $9.1 billion for October 2010, up 13 percent year over year.

For the first 10 months of 2010, international visitors spent $111.5 billion on travel to the United States and on travel-related goods and services once in the country, up 11 percent year over year. Meanwhile, Americans spent $85.5 billion abroad during this period, up 4 percent year over year.

[photo by law_keven via Flickr]

When airlines pull out of travel websites, who loses?

It’s been a busy week. The action with airlines and online travel agencies has been brisk, and in the end, it affects you as much as it affects them. Sure, there’s plenty of money involved for the travel sites and the airlines, but in the end, it all comes down to what you experience during the buying process. These changes – with American Airlines and Orbitz and Delta and CheapOair – will have an effect on you and on which airline you fly next.

Doubtless, the numbers are big. Orbitz generated $800 million in revenue by selling flights on American in the first nine months of 2010, though some of it came from ancillary services. While CheapOair’s revenues from Delta aren’t available, let’s not lose sight of the fact that it’s the largest airline in the United States, so the impact can’t be trivial.

Are the airlines eyeing all that business and trying to claim it for themselves? There’s a flaw in that thinking, according to the Business Travel Coalition. In a statement released last night, it noted that American Airlines may lose some of the revenue it books through Orbitz, and you’re the reason why.

The dynamic is pretty straightforward. According to data from travel industry research firm PhoCusWright, the BTC says, 87 percent of travelers turn to the internet when they start shopping for tickets. Also, around 28 percent of the would-be travelers who visit online travel agencies wind up buying their tickets on the airlines’ websites instead.In practical terms, let’s say you’re looking for a flight, and you go to Orbitz. On Orbitz, you notice options from American Airlines. There’s a one-in-four chance, roughly, you’ll just go to American’s site to buy your ticket.

Now, what happens if you don’t see American on Orbitz (or Delta on CheapOair)? Well, you may see a flight on United, and go to that airline’s website to make your purchase. That’s a lost opportunity for the airline that pulled out of the online travel agency.

As Kevin Mitchell, BTC chairman, puts it: “American acts as if it’s the country’s biggest airline when it’s really number four and falling. Consumers may not even know American’s flights are missing. The ones who will gain the most here are American’s competitors who will enjoy feasting this Christmas on turkey served up by American. Delta, United, Southwest and others should be grateful for this early Christmas present.”

He adds: “American’s decision to immediately pull its flight information from Orbitz shows that it has near-zero interest in preserving an open and transparent marketplace. It is an outrageous act that will negatively impact consumers nationwide who are in the midst of comparison-shopping for their holiday travel. Moreover, American is tacitly acknowledging that if a consumer booked an American flight on Orbitz, and now needs to change it, she will need to work through American Airlines. That’s a recipe for huge consumer confusion and frustration right in the heart of the holiday season.”

The same, of course, could be said about Delta in regards to CheapOair, though on a much smaller scale, given that CheapOair forecasts 2010 total revenue of $1.2 billion (compared to $800 million in revenue related to American Airlines alone for Orbitz).

So, it all comes back to you. The airlines want you. The online travel agencies want you. This is why the battle for the consumer is intensifying. And, with fares on the rise and economic conditions stabilizing, the stakes are getting higher. For the airlines, direct ownership of the consumer certainly has its perks, but it also comes with a handful of risks. They may be serving business up to the competition, as Mitchell said.

Airlines and online travel agencies are king some pretty big bets on how you will book your tickets. Ultimately, however, the decision is entirely yours.

[photo by cliff1066 via Flickr]