Broad Overview of Technology & Tourism and its impact on travel agents

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Prepared by PATA Regional Director East Asia - Ivy Chee

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  • Humans always showed their support to technology, dreaming of robots in the sixties concretely embrace computers, play stations and faxes in the seventies and eightiesmobile, laptop and finally smartphones and tablets.
  • Before the internet, travel and tourism distribution networks were not clear or visible to the customer. Most transactions occurred through a travel agent or similar intermediary andmost of the activity occurred behind the scenes through custom-built technology systems. In the past, customers had limited ability to access tourism products directly.Travel agents were the ONLY Ones to know about promotions and special deals offered by airlines or hotels.
  • Offers, specialfares, discounts: they all came direct to the travel agent…
  • 2.4 billion Internet users worldwide. Almost a third of the internet users are located in Asia. From the 1.1 billion of internet users, almost half of them alone are in China while India and Japan represent 12 and 10 per cent approximately of all users.
  • Asia accounts for majority of the world internet users in the world – 44.8%.
  • There are more than 6 billion mobile subscriptions, that is equivalent to 88 percent of world population and the market growth is being driven by demand developing world, led by rapid mobile adoption in China (1 billion mobile subscribers, 400 million mobile Web users & No.1 smartphone market) and India.
  • The number of smartphones in use worldwide has now broken the 1 billion mark. In Asia Pacific, smartphones are expected to represent between 30% and 35% of all mobile devices after the end of 2016 and beyond, according to data collected by Portio Research Ltd.
  • The Smartphone Insights Study conducted across 13 Asia Pacific markets highlighted the prevalence of smartphones. In many markets, including Singapore, Korea (ROK), Hong Kong SAR and Chinese Taipei, smartphones now out-number non-smartphones. As smartphone ownership continued to increase, mobile internet usage was also on the rise, especially social networking and internet search. Mobile social networking was especially popular in Hong Kong SAR and Malaysia, where 76% and 74% of smartphone users respectively engaged in mobile social networking in the past month.
  • Facebook:1.06 billion monthly active users, 680 million mobile users, more than 50 million pages and 10 million apps Twitter: 500 million total users, 1 Billion+ tweets on TwitterYoutube: 1 billion users, 4 billion views per day,100 Million+ videos on YoutubeFoursquare: 25 million users, 1 million businesses, 10.4 million monthly users RenRen: 100 million usersQQ: 700 million monthly users SinaWeibo: 503 million users
  • The Power of Social Media: Gangnam Style by the South Korean musician Psy- the song was released in July 2012 and by December 21, the song became the first YouTube video to reach a billion views. As of April 1, the music video has been viewed over 1.5 billion times on Youtube.
  • Nielsen survey of more than 28,000 global consumers with Internet access explored social media’s global reach and impact. Social media influences on what people buy and there are noticeable differences across regions, whereas the strongest impact is on Asia-Pacific region. The findings reviewed that 72% of the Asia-Pacific users make a purchase based on social media websites product reviews for travel and leisure.
  • For all the development and advancements across Asia-Pacific, offline distribution still accounts for a majority of travel sales. But travelers are steadily shifting to the Internet in search of price transparency, variety, information and convenience, and the demand for independent travel is on the rise.
  • In the future, travel devices on smartphones/tablets will be more popular for leisure travellers than business travellers.Leisure travellers using will grow from 25 percent to almost 60 percent in 2030.Business travellers will only progress by ten points from 40 percent to 50 percent in 2030.
  • Today, consumers have the ability to connect directly with travel and tourism products through the use of the internet and social media. With access to the internet, customers now have more options available when planning and booking travel.This means they are no longer reliant on intermediaries to facilitate a transaction. While the traditional chain is still relevant in tourism distribution, the internet has made this chain more open, allowing industry participants and the customer to interact more directly.
  • What still helps travel agencies in Asia to be more resilient to OTAs and other online suppliers: generation factor. Generation X remain more dependent to travel agencies than X and Y generations, more independent.In most countries the over-65 travellers hardly use app devices at all to make bookings, relying instead on more traditional approaches such as use of travel agents. However, S generation-friendlyappdevices are likely to dent into the travelagencymarket in the near future.
  • From the 634 million of websites, number of travel bookings made on the internet each year 148.3 million. Motivation of booking online: PRICE consciousnessPercent of all travel reservations made on the internet 57 % (September 2012; statisticbrain.com)
  • With the spread of digitalisation, the sources that inform and influence the customer purchase cycle have changed.
  • 62% researched an upcoming trip31% watchedtravelvideo43% readreviewsfromothertravellers45% sourced initial trip idea
  • Couchsurfing: A social travel network that connects a global community of travelers who will host them in their hometowns and offers travel planning resources. Travelers directly communicate with the host at the destination. Trip Advisor: A site allows travelers to post hotels and destinations reviews, book air tickets and hotels.Kayak: The site compares the hotel accommodation prices from hundreds of travel sites. Also provide choices of flight, hotel, car rental and online travel agency for reservation. Bypass travel agents. A lose of business. These three examples are only the tip of iceberg. As of 2011, an estimated 17,000 travel apps crammed the virtual shelves (The Washington Post). The impact of travel apps is huge and is still expanding.
  • Influence of OTAS and direct booking tools: Traffic of unique monthly visitors for travel websites can fluctuate between 2.25 million (skyscanner) to 32 million (agoda.com) to reach over 50 million for travel websites such as Tripadvisor or expedia.com.
  • The multiplication of online websites (over 630 million) fosters tribal behaviours among travellers who look for specific niche products.
  • All the trends currently happening in the travelagency world, bothempirical and technical. GDS can help agenciesturninginto living laboratories for modern travelconsumers by specializingtheminto niche markets. - Universal content: GDS offer capacities to flip into any supplier’s content- GDS can help develop OTA tools for a traditional travel agency with both B2B and B2C sites- GDS “cleans” suppliers offer according to travel agencies or customers’ own search criteria
  • Travellers equipped with smartphones and access to online travel supply, is the ultimate decider and master all the elements of the travel chain…
  • The mobile becomes a key device for information, booking, travel formalities, travel guide or communication channel.
  • Travel Agencies best asset is their human connection and ability to think beyond the simple fact of booking a ticket (complex itineraries for example)Life style manager, termused by Amadeusin its(Travelgold rush 2020) report.
  • Technologies continue to revolutionize travel. 1. Flexible Screen2. Cloud Computing -aggregate and select offer through a single application3. Google glass -integrate web content into the real world through data, videos, reviews…4. In-flight wifi (Emirates, JetBlue, American Airlines, United Airlines…)
  • Broad Overview of Technology & Tourism and its impact on travel agents

    1. 1. United Federation of Travel Agents’AssociationsCongress Kuala Lumpur 2013
    2. 2. About Pacific Asia Travel AssociationAligned Advocacy – Insightful Research – Innovative Events-Human Capital Development
    3. 3. Airlines(AAPA, IATA)Travel Retailers(APTRA)Retail TravelAgentsGovernment(APEC, ASEAN, MCTO)Tour Operators(ITOA, USTOA)NTOs(UNWTO)Airports(ACI)Hospitality(AH&LA, IH&RA)Our Role in the Travel & Tourism SystemBuilding aligned advocacy and cross functional business building3NGOsThink Tanks(WWF,WEF)PATA is one of only 9 groups in the global “Travel Association Coalition” TAC.This includes ACI, ASTA, CLIA, IATA, UNWTO, USTA, WEF, and WTTC.
    4. 4. Engaging since 1951 | Integrating the Tourism Value Chain | Public + PrivateResponsible Development and Promotion ofTravel & Tourism to, from and within Asia Pacific
    5. 5.  International visitor arrivals to Asia Pacific will continue to grow with anaverage annual growth rate of 3.6% over the period 2013-2017.Total inbound arrivals are predicted to reach 537 million in 2017. Asia will maintain a dominant position in the inbound market of AsiaPacific, and its market share will reach 70% by 2017. International visitor arrivals to Asia Pacific from mainland China willexceed 100 million by 2016.
    6. 6. Past,Present andFuture ofTechnology
    7. 7. The evolution of Technology:An enduring love affair1960s 1990s1980s1970s 2000s 2010s
    8. 8. The Past:The Tech World of Travel Agencies
    9. 9. Easy Times for Travel AgenciesCUSTOMERS TRAVEL AGENT SUPPLIERS
    10. 10. Internet users in Asia (Top countries)Source: Internet World Stats 20111.13 BILLION INDIVIDUAL USERS28.8 %
    11. 11. World Internet Users and Population StatisticsRegionInternet Penetration inThe Region (%Population)Internet Users inThe WorldAfrica 15.6% 7.0%Asia 27.5% 44.8%Europe 63.2% 21.5%Middle East 40.2% 3.7%North America 78.6% 11.4%Latin America/ Caribbean 42.9% 10.6%Oceania/ Australia 67.6% 1.0%World Total 34.3% 100%Source: Internet World Stats (as of 30 June, 2012)Asia
    12. 12. (Source: International Telecommunication Union 2013)GLOBAL DevelopingnationsAsiaPacificMarket share ofAsiaMobile cellularsubscriptions(millions)6,411 4,872 3,290 51.31%Per 100 people 91.2% 84.3% 83.1% -Active mobilebroadbandsubscriptions(millions)1,556 768 625 40.17%Per 100 people 22.1% 13.3% 15.8%Key Global Telecom Indicators for the World Telecommunication ServiceSector in 2012 (all figures are estimated)
    13. 13. SmartphonesSource: Portio Research Ltd.3 billionsmartphonesusers by 2016
    14. 14. Smartphone Ownership in Asia PacificSource: Nielsens Smartphone Insights Study (2012)
    15. 15. 72%48%57%61%Source: Nielsen ‘s State of the media: the social media report (2012)Travel & Leisure Product Purchase Intent Based onSocial Media Website Reviews
    16. 16. Asia Pacific Total and online Leisure/Business TravelGross Bookings (US$ billion)Source: PhoCusWright’s Asia Pacific Online Travel Overview Fifth Edition (2012)
    17. 17. 25% of leisure travellers and 40 % of business travellers usetravel devices on their smartphone in 2012in Asia-Pacific.Source: Amadeus-Survey of 1,531 Asia Pacific Travellers, August 2012, Frost & Sullivan forecasts
    18. 18. Challenging Times for Asian Travel AgenciesCUSTOMERS TRAVEL AGENTSUPPLIERSONLINE SUPPLIERS/SOCIAL MEDIA
    19. 19. Travel Agencies more resilient to online booking in Asiathan in other parts of the world.The Generation Factor
    20. 20. Today: a Wonderful World Wide Web
    21. 21. Activities throughSocial Networks and MobileDreamingPlanningBookingDestinationSharing
    22. 22. 62% researchedan upcoming trip43% readreviews fromother travellers45% sourcedinitial trip idea31% watchedtravel videoSource: Compiled by FunSherpa
    23. 23. Emergence of Travel Apps Affecting TA’s business
    24. 24. OTA AIRLINES HOTELS400 60,000- 74,000300 145,000- 50,000- 40,000METASEARCH ENGINES600 400,000- 600,0001,000400 350,000Offered Supply from Online Travel Agenciesand Travel Metasearch EnginesA metasearch engine is a search engine where different OTA’s can be compared. Their revenue comes from the fee theOTA’s on which the booking is eventually made is paying to the metasearcher.
    25. 25. The surge in niche markets is favourable toonline travel consumptionS-GENERATION INDEPENDENTFEMALE TRAVELLERSPORT FAN YOUNG URBANITEMEDITATION LGBTVFR TRAVELLERMEDICALTOURISMLEARNING
    26. 26. GDS versus online worldSOCIAL MEDIAAbacus, Amadeus, Travelport or Sabre develops content solutionfor travel agencies to remain competitive.Universal contentDevelop OTA contentRationalize products on offerONLINE APPSGDS
    27. 27. Redefining Travel Experiences
    28. 28. The role of the agent: Travel Lifestyle ManagerNiche market becomes the norm requesting agents to offerhigher-margin, tailored services to consumers.
    29. 29. Get ConnectedIvy CheeRegional Director East Asiaivy@PATA.orgTwitter: @ivycheeFacebook: Ivy Chee (PATA)

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