Rohit Talwar - The Future of Airport Retail - ACI Airport Exchange - Abu Dhabi 30/11/11

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Rohit Talwar's presentation on the future of airport retail, given to the ACI Airport Exchange conference in Abu Dhabi, 30/11/11

Rohit Talwar's presentation on the future of airport retail, given to the ACI Airport Exchange conference in Abu Dhabi, 30/11/11

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  • 1. The Future of Airport Retail ACI Airport Exchange 2011 Commercial Conference Abu Dhabi - November 30th 2011 Rohit Talwar - CEO - Fast Futurerohit@fastfuture.com www.fastfuture.com
  • 2. ContentsPresentation p3About Fast Future p 58Background Materials p 69Image Sources p 209
  • 3. Demographic Destinies 2 billion more people in 40 years –Demographics is Driving Economics 448 739 691 5231 344 1998 4157 729 1030 585 2010 2050 Source : United Nations
  • 4. Life Redefined – Lifespans are IncreasingUnder 50’s have 90%chance of living to 100.Aubrey de Grey suggestswe could live to 500 or 1000What are the health,consumption and resourceimplications?What kind of opportunitieswill be created?
  • 5. Size of Global Middle Class
  • 6. Millions of Asians with $3,000 Disposable Income1000 945900800700600 570500400300200100 0 2010 2015
  • 7. Asian Consumer Spending - $32 Trillion by 2030?
  • 8. Redistribution of Aviation Profit Pools
  • 9. Retail Innovation Trends
  • 10. 1. Chain vs. Independent
  • 11. 2. Green Retail –e.g. Dubai Marina Mall
  • 12. 3. Stores as a Brand Experience
  • 13. Kuwait’s Alghanim Electronics - Retailment
  • 14. 4. Segmentatione.g. The Male Mall – Czech Republic
  • 15. 5. Pop-up Stores e.g. Boho
  • 16. 6. Mixed Format
  • 17. 7. Art and Installationse.g. Edible Furniture - Lithuania
  • 18. 8. Pure Leisuree.g. The Slide@T3 Changi Airport
  • 19. Airline Strategies –From Cabin to Cash Register
  • 20. Rethinking the Experience e.g. Korean Air
  • 21. Airline Retail Innovation e.g.Air Sahara / Jetlite / Virgin / Emirates / Singapore
  • 22. In-flight Technology
  • 23. Tie-ins with Airport Retaile.g. Booking / Boarding Pass Offers
  • 24. Outsourcing In-flight Duty Free e.g. BA / Tourvest
  • 25. Technology and Airport Retail
  • 26. Store and Product Locators -Kiosks and Interactive Surfaces
  • 27. Digital Signage – Unirea Romania
  • 28. The Power of Play - Nordstrom
  • 29. Body Measurements Scanning –New Look – Westfield Stratford
  • 30. Luton Airport - ‘Virtual Assistants’
  • 31. Integrating Physical and Virtual
  • 32. Catalog Extension Kurt Geiger
  • 33. Augmented Reality atCopenhagen Airport
  • 34. Tablet Equipped Shopping Carts– Lotus Supermarkets Shanghai
  • 35. Virtual Grocery Shopping – Tesco South Korea
  • 36. Online Brands Appearing Offline
  • 37. House of Fraser – Catalogue Store
  • 38. Amazon Drop Box
  • 39. Daily Social Media Offers e.g. Twitter
  • 40. Burberry Launch First Ever Twitter Catwalk Show
  • 41. Burberry and Social Media
  • 42. Social Shopping in Estonia
  • 43. TMT – Convergence and ImmersionTelephony Connectivity• Voice • Cellular• Messaging • Up to 14 bands• SIM card • WLAN/BT• Phonebook • GPS• Ring Tones • NFC• Security • FMData/ MultimediaEnterprise • Camera 8-16M • Camcorder• 100Mbps • 24M Color Display• Email • Memory (160GB)• IMS • Multiformat A/V• Browsing • HD Video/TV out• VPN • Games• PIM• Ecommerce Software (50-100M Tps) • Protocols • DRM• Payments • Middleware • Applications • User Interface • Minimize fragmentation
  • 44. Near Field Communications -Mobile Contactless Payments
  • 45. Mobile EnabledPersonalised Advertising
  • 46. Next Generation Interfaces
  • 47. Haptics / Holograms / Interactive Surfaces
  • 48. 3D Printing – True Personalization
  • 49. 3D Printing Store - Brussels
  • 50. Business Model Innovation –Where are the Opportunities?
  • 51. Building Insight and Trust
  • 52. New Business Models - Auctions £3088 £8791.50 £81
  • 53. Customer Defined Pricing / Guarantees
  • 54. Partner Tie-insPullman Bangkok King Power Hotel
  • 55. Conclusions• Expect Turbulence• Understand Trends and Scenarios• Embrace Innovation rohit@fastfuture.com
  • 56. Thank YouRohit TalwarCEOFast Futurerohit@fastfuture.comTel +44 (0)20 8830 0766Mob +44 (0)7973 405145Twitter http://twitter.com/fastfutureLinkedIn http://www.linkedin.com/in/talwarwww.fastfuture.comwww.convention-2020.comBlog http://widerhorizons.wordpress.comSignup for our newsletters / Download past editions at www.fastfuture.comWatch a short video of Rohit at http://www.travelmole.tv/watch_vdo.php?id=14300Download the Hotels 2020: Beyond Segmentation Report athttp://www.amadeus.com/hotelit/beyond-segmentation.html
  • 57. About Fast Future
  • 58. Fast Future – Aviation and Travel Industry Services• Live Events - Speeches, briefings and workshops for executive management and boards of airlines, airports, hotels, venues, CVB’s and associations• Future Insights - Customised research on emerging trends, future scenarios, technologies and new markets• Immersion - ‘Deep dives’ on future trends, market developments, emerging issues and technology advances• Strategy - Development of strategies and business plans• Innovation - Creation of business models and innovation plans• Engagement - Consultancy and workshop facilitation
  • 59. Fast Future• Research, consulting, speaking, leadership• 5-20 year horizon - focus on ideas, developments, people, trends and forces shaping the future• Clients – Airports - Aeroports de Paris / Schiphol Group – Vancouver Airport Services – Industry Associations – ICCA, ASAE, PCMA, MPI – Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange, O2, Siemens, Samsung, GSK, SAPE&Y, KPMG, Amadeus, Sabre, Travelport, Travelex, ING, Santander, Barclays, Citibank, DeutscheBank – Governments - Dubai, Finland, Nigeria, Singapore, UK, US – Convention Bureaus – Seoul, Sydney, London, San Francisco, Toronto, Abu Dhabi, Durban, Athens, Slovenia, Copenhagen – Convention Centres – Melbourne, Adelaide, Qatar, QEIICC – Hotels - Accor Group, Preferred, – Intercontinental – PCO’s - Congrex, Kenes
  • 60. Hotels 2020 – Objectives• Identify key drivers of change for the globally branded hotel sector over the next decade• Examine the implications for:  Hotel strategy  Brand portfolio  Business models  Customer targeting  Innovation
  • 61. Convention 2020• Global strategic foresight study to help the meetings industry prepare for the decade ahead - Industry-wide sponsors• Multiple outputs Nov 2009 – December 2011• Current studies on future strategies for venues and destinations
  • 62. Future Convention Cities Initiative• Members - Cities aiming to be global leaders in delivery of business events• Focus - Maximising long term economic benefit of events• Core Activities - Research, sharing of expertise and best practices• Engagement Model - Meet four time a year prior to major industry events• Management - Initiated and co-ordinated by Fast Future
  • 63. Rohit Talwar• Global futurist and founder of Fast Future Research.• Award winning speaker on future insights and strategic innovation – addressing leadership audiences in 40 countries on 5 continents• Author of Designing Your Future• Profiled by UK’s Independent Newspaper as one of the Top 10 Global Future Thinkers• Led futures research, scenario planning and strategic consultancy projects for clients in telecommunications, technology, pharmaceuticals, banking, travel and tourism, environment, food and government sectors• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis, OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell, Siemens, Symbian, Yell , numerous international associations and governments agencies in the US, UK, Finland, Dubai, Nigeria, Saudi Arabia and Singapore.• To receive Fast Future’s newsletters please email rohit@fastfuture.com
  • 64. Designing Your Future Key Trends, Challenges and Choices• 50 key trends• 100 emerging trends• 10 major patterns of change• Key challenges and choices for leaders• Strategic decision making framework• Scenarios for 2012• Key futures tools and techniques• Published August 2008• Price £49.95 / €54.95/ $69.95• Email invoice request to rohit@fastfuture.com
  • 65. Our Services Bespoke research; Identification & Analysis of Future Trends, Drivers & Shocks Public Speaking, In- Company Briefings, Accelerated Scenario Seminars and Planning, Timelining & Workshops Future MappingPersonal Futuring forLeaders and Leadership Expert Consultations &Teams Futures Think Tanks Identification of Design & Facilitation of Opportunities for Innovation, Incubation Innovation and Strategic & Venturing Strategy Creation & Investment Programmes Development of Implementation Roadmaps
  • 66. Example Projects• Public and private client research e.g. : – Airport 2025 - Ongoing – Development of Market Scenarios, emerging trends and strategies for key clients – Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector, Family 2030 – Scenarios for the global economy for 2030 and the implications for migration – Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The Center for Association Leadership – Global Economies – e.g. The Future of China – the Path to 2020 – The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers – Winning in India and China – The Future of Human Resources – Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises – Convention 2020 – the Future of Business Events – Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events – One Step Beyond – Future trends and challenges for the events industry – Hotels 2020: Beyond Segmentation – Future Hotel Strategies – The Future of Travel and Tourism in the Middle East – a Vision to 2020 – Future of Travel and Tourism Investment in Saudi Arabia
  • 67. Example Clients
  • 68. Background Notes
  • 69. Macro Drivers
  • 70. We need to Prepare for Alternative Scenarios 8-10% Suspicious Love is in Minds the AirGDPGrowth Dancing inIndia 6-7% the DarkandChina Road to Nowhere 1-2% Recession 0% 1-2% 2-3% GDP Growth Europe, the USA and Japan
  • 71. Derivatives – Market Value vs. Global GDP 800 760 700 700 605 600US$ Trillion 500 400 300 200 100 69.8 14.2 4.33 0 Richard 2010 est Bank of World GDP US GDP Chinese GDP Duncan (June International 2008) Settlements June 2009 estSource: BIS, 2009 BIS - http://www.roubini.com/financemarkets-monitor/258502/___swap_tango________a_derivative_regulation_dance__part_12010 - http://www.newsmax.com/deBorchgrave/BankforInternationalSettlements-BIS-derivatives-MerrillLynch/2010/05/11/id/358672
  • 72. Public debt in 2020 (% of GDP)Source: Deutsche Bank Research ‘Public debt in 2020’ March 2010http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000255134.pdf
  • 73. Economic Power Shifts The Top 20 in 2025?GDP US$ Source: IMF WEO 2009, PwC ‘the World in 2050 March 2008 edition
  • 74. Reorientation of Global Markets • Some 647 million air travelers — more than a quarter of the 2.2 billion passengers who flew worldwide — took to the skies in Asia in 2009, compared to the 638 million air travelers in North America, hitherto the traditional leader in global aviation. • By 2013, an additional 217 million travelers are expected to fly within Asia to push the region’s aviation market share to about one-third of the world market. • In the U.S. there are three aircraft seats per year for each of the 300 million people who live here. • China’s population of 1.3 billion is served by only 0.3 seats per person and India’s 1.1 billion population has only 0.1 seats available per person. • When Asians reach the stage of traveling as frequently as people in the U.S., that alone will triple the size of today’s global aviation industry.Source: Bay Area Travel Writers ‘Travel Trends: Asia Eclipses America in Aviation Markets — by Lakshman Ratnapala,’ March 2010http://www.batw.org/news/industry-news/travel-trends_mar-2010/
  • 75. Current Spending Patterns • Reinforcing the appeal of duty free Top Asia-Pacific Amount US$ duty free spenders savings, 43 percent of all respondents said they shopped at a duty free store Korea 358 during their last overseas trip. China 333 • Travelers from Japan (73 percent), Hong Kong 224 Korea (71 percent) and China (49 percent) were the region’s most Malaysia 195 frequent duty free shoppers while India 180 Korean and Chinese travelers also Thailand 178 made it to the biggest spender list. Japan 164 Australia 153 Singapore 153 New Zealand 134 Taiwan 125 Regional Average 212Source: China Travel Trends, September 2009 http://www.chinatraveltrends.com/2009/09/16/chinese-travellers-top-list-of-duty-free-spenders-in-asia-pacific/
  • 76. Future Regions of Multiple StressSource: Ministry of Defence ‘Strategic Trends Programme, Global Strategic Trends out to 2040,’ February 2010http://www.mod.uk/NR/rdonlyres/D70F2CC7-5673-43AE-BA73-1F887801266C/0/20100202GST_4_Global_Strategic_Trends_Out_to_2040UDCDCStrat_Trends_4.pdf
  • 77. Source: Tourism Futures http://www.tourismfutures.net/insights/demographic
  • 78. Source: Tourism Futures http://www.tourismfutures.net/insights/demographic
  • 79. Source: Ministry of Defence ‘Strategic Trends Programme, Global Strategic Trends out to 2040,’ February 2010http://www.mod.uk/NR/rdonlyres/D70F2CC7-5673-43AE-BA73-1F887801266C/0/20100202GST_4_Global_Strategic_Trends_Out_to_2040UDCDCStrat_Trends_4.pdf
  • 80. Climate Change
  • 81. The Climate Change Challenge• How fast can CO2 emissions be reduced per unit travel?• How can we move towards convergence on the most effective way to reduce aviation climate change impacts?• How can we best address non-CO2 climate impacts?• Where are carbon emissions owned?Source: Henley Centre Headlight Vision ‘Managing the environmental challenges of growth in aviation Draft report of stakeholderevent, Cambridge’ October 2006
  • 82. Future Customers
  • 83. Changing European Ethnicity
  • 84. Preference for Rail over Air 66% - Europe 18% - USA
  • 85. Trends• Concierge services are set to make a rise across the mid market travel sector according to Euromonitor International, who released their results for the 2010 global travel trends at the World Travel Market in November 2009• Kuoni are one company set to offer customers concierge options. Andrea Mueller, Communications Manager for Kuoni said; "Today people are overwhelmed by information on travel and tourism services and need more guidance. Concierge services will play and important role in helping them make intelligent choices based on their individual needs". Source: World Travel Guide, November 2009 http://www.worldtravelguide.net/news/3551/news/Global-travel-trends-2010.html
  • 86. Simple Identity• The Global Financial Crisis (GFC) plummeted the value of the High Net Worth population by US $32.8 trillion or 19.5% according to the World Wealth Report (2009) published by CapGemini and Merrill Lynch, so the rich are less rich.• Writing in the Harvard Business Review, Paul Flatters and Michael Wilmott argue that in most developed economies pre GFC, that the precession consumer behaviour was the product of 15 years of uninterrupted prosperity, driven by growth in real levels of disposal incomes, low inflation, stable employment and booming property prices.• As such, new consumer appetites emerged in which the consumer could afford to be curious about gadgets and technology, in which tourists shelled out for enriching and fun experiences on exotic locations. Where they could afford several holidays a year and rent premium experiences such as hiring a Ferrari for the weekend in exotic locations like Japan.• The GFC changed that, propelling tourist trends into slowdown, halting or even reserving the trajectory of growth in world tourism. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 87. Simple Identity• So, is this a sample of the future, an era of the pension crisis, scarcity of oil, inflation and falling levels of disposal income in which tourism expenditure falls year on year?• If so, what will the future tourist look like? Rather than having a fluid identity it will be more akin to simplicity.• During an economic slowdown, tourists tend to travel less, stay nearer home (increase in domestic tourism) and seek simplicity such as exploreworldwide.com value based holidays focusing on basic facilities, meeting locals, lots of free time and cheap in exotic locations throughout the world. This trend is accelerated in a scenario of falling incomes as a simple and functional product that will suffice. A simple identity means that offering advice becomes extremely important, whether its websites farecast.com’s ,which advises travellers of the optimal time to purchase an airline ticket or price comparison technologies which are found on many online booking services. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 88. Simple Identity• Research by the Trajectory Group highlights that affluent consumers have revealed mounting dissatisfaction with excessive consumption. Many desire a wholesome and less wasteful life. As such, there is a desire to get back to nature, something that is tranquil, basic, rooted, human and simple (Yeoman 2008). As a consequence, the desire for more authentic and simple luxury experiences accelerates. An example of simple luxury, are tree house hotels which offer a unique experience in a natural setting. A new experience which is not seen as conspicuous consumption, but overtly inconspicuous.• In a simple identity, ethical consumption declines as paying a premium for a Starbucks coffee falls by the wayside, even if they use organic coffee which supports children in a third world country. From a tourism perspective, many of the ethical tourism projects in third world countries such as Africa and India which depend on independent travellers will suffer. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 89. Simple Identity• Tourists also have become canny at searching for bargains which economists call mercurial consumption, whether it is using price comparison software, or grabbing last minute offers from websites such as grabaseat.co.nz which offer last minute air travel deals to New Zealand consumers, or 5pm.co.uk which offers diners the chance of discounted meals after 5pm that evening. Technology and social media network enabling purchasing strategies, further accelerate this trend of mercurial consumption.• Attitudes to travel also change, as tourism has to compete with other forms of leisure expenditure, whether it is the latest technology gadgets or virtual holidays. There is a generation of Japan youth who prefer their X-Box than climbing Mt Fuji. The desire for new experiences is more about insperience, where technology provides a better experience than in which consumers desire to bring top level experiences into their domestic domain.• A simple identity is all about simplicity seeking, thrift, green yet mercurial tourists will hold tourism business and brands accountable. In a world of scarcity of resources this scenario becomes the norm. Source: Tomorrow’s Tourist ‘Simple Identity,’ 2009 http://www.tomorrowstourist.com/simple_identity.php
  • 90. Market Pain Points
  • 91. Market Pain Points • Research on passenger dissatisfaction reflects the obvious issues that make air travel difficult. Three main areas represent the majority of passenger complaints: service disruptions, long check-in lines and baggage issues. Through the adoption of new communication techniques and internal systems that take advantage of advanced technology and shared information, airlines and airports can improve their delivery of services focusing on these three primary passenger pain points. • Airlines and airports are challenged with updating their operational systems to eliminate unnecessary manual step whilst interconnecting existing information silos to better manage the entire passenger experience. Integration between Departure Control Systems (DCS), Passenger Service Systems (PSS), Baggage Reconciliation Systems (BRS), and airport services can provide improved passenger processing. Delivering services on advanced mobile devices will help all entities be more efficient and operate with lower costs.Source: Amadeus, 2011 http://www.amadeus.com/airlineIT/navigating-the-airport-of-tomorrow/docs/Amadeus-Navigating-the-Airport-Of-Tomorrow-2011-EN.pdf
  • 92. Market Pain Points
  • 93. What Passengers Want • As a result of social media-inspired discussion, and with the assistance of London City Airport’s sales director, Bernard A. Lavelle, Future Travel Experience reveals the views of passengers themselves on what they really want from the airport of the future. • As outlined in the chart, the aspect that can most improve the passenger experience on the ground is high-quality signage, communications and staff, with almost a third of all respondents highlighting this as a vital passenger requirement. • The second most common request was free Wi-Fi in the terminal building, while improved facilities, processing and queues, and an enhanced security process are also prominent on the passenger wish list. Airport layout was also identified as an area that can make a telling difference to the overall passenger experience.Source: Future Travel Experience, May 2011 http://www.futuretravelexperience.com/2011/05/what-do-passengers-really-want/
  • 94. What Passengers WantSource: Future Travel Experience , May 2011 http://www.futuretravelexperience.com/2011/05/what-do-passengers-really-want/
  • 95. Emerging Customers
  • 96. Tracking the rise of the middle class across the BRICs and N-11:Share of population with incomes between $6,000 and $30,000 in PPP terms (Goldman Sachs) 2009 (%) 2015 (%) 2025 (%) 2040 (%) Brazil 46 52 59 57 Russia 71 71 56 29 India 6 16 46 89 China 37 59 75 53 Korea 67 46 23 7 Bangladesh 0 1 5 38 Egypt 39 57 84 82 Indonesia 16 29 57 87 Iran 70 77 73 41 Mexico 61 65 65 49 Nigeria 6 9 18 42 Pakistan 9 13 22 49 Philippines 15 23 40 69 Turkey 79 81 70 35 Vietnam 7 21 51 84 Source: Goldman Sachs, August 2009 http://www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf
  • 97. Primed for More TravelSource: Airbus Global Market Forecast 2010-2029, December 2010http://www.airbus.com/fileadmin/media_gallery/files/brochures_publications/Global_Market_Forecast/Airbus_Global_Market_Forecast_-_2010-2029.pdf
  • 98. Source: Airbus 2009 http://www.airbus.com/en/gmf2009/appli.htm?onglet=&page=
  • 99. Online Bookings in Asia-Pacific, 2008 and 2011 2008 2011 Australia / New Zealand $6.2B $10.9B China $6.9B $13B India $3.1B $5.5B Japan $11.5B $17.7B Source: PhoCusWrightSource: PhocusWright cited by Travel Weekly ‘China, India will lead regions online bookings boom’ January 2010http://www.travelweekly.com/article3_ektid209470.aspx
  • 100. China Consumer Report • By the year 2020, China will have a population of more than 1.4 billion people that will make up a significant portion in the worlds consumer market. • The annual disposable income of Chinese consumers is forecasted to increase to 65.4 billion Yuan (US$9.57 billion) by 2020 compared with 15 billion Yuan (US$2.19) in 2008. • The National Bureau of Statistics of China announced that the country would be considered a moderately affluent society by 2020, if development trends since the year 2000 continue. The estimate was made taking into account progress in the fields of the economy, social harmony, quality of life, democracy and law enforcement, culture and education, as well as resources and the environment. • Zheng Xinli, Vice-Minister of the Communist Partys central policy research office, said that taking price changes into account, 55% of the population will be middle class by 2020, with 78% of city dwellers and 30% of those in rural areas reaching that status. • Middle class is currently defined as having an annual household income of between RMB60,000 (US$8,700) and RMB200,000 (US$29,215). In 2008 prices, the annual disposable income per household will be RMB98,956 (US$14,900) in 2020.Source: Euromonitor 2009 http://www.euromonitor.com/Chinese_consumers_in_2020_A_look_into_the_future
  • 101. China and India Entering Era of Travel• Dun Jidong, spokesman for the China Travel Service notes that GDP per capita has hit $3,000 in China, ‘…a level that industry experts agree sends a signal that the country is entering a stage of explosive growth in travel consumption.’ (1) Share of population with incomes between $6,000 and $30,000 (PPP terms) (2) 2009 (%) 2015 (%) 2025 (%) 2040 (%) Brazil 46 52 59 57 Russia 71 71 56 29 India 6 16 46 89 China 37 59 75 53 Source: (1) China Daily January 2010 http://www.chinadaily.com.cn/china/2010-01/15/content_9323567.htm Source (2): Goldman Sachs, August 2009 http://www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf
  • 102. Source: Goldman Sachs ‘Is this the ‘BRICs Decade’?’ May 2010http://www2.goldmansachs.com/ideas/brics/brics-decade-doc.pdf
  • 103. Travel Retail Trends
  • 104. Green Retail - Dubai Marina Mall • Dubai Marina Mall has achieved a 25% reduction in electricity use and 30% water conservation compared with 2010. Currently 70% of the malls common areas depend on natural daylight when possible; and by 2012, all fluorescent lighting in the common areas will be phased out, replaced with efficient LED lighting. • The mall uses 100% environmentally friendly cleaning products (inclusive of biodegradable packaging) and recycle bins for clothing have also been installed in the car parks, while only grey water is used for irrigation and landscaping.Source: AME Info, 23/10/2011, http://www.ameinfo.com/278975.html
  • 105. Green Retail - Dubai Marina Mall • Setting new trends in green mall management, Dubai Marina Mall has set up a roof garden to reduce heat transmission and improve absorption; and the windows have been tinted to reduce heat transmission, in turn lowering cooling costs. • The malls commitment to environmental sustainability is underscored by the day-long exhibition Future Green 2011, in partnership with Goumbook on November 1, 2011. Featuring 100% biodegradable and recyclable kiosks, Future Green 2011 will host green companies, eco-friendly businesses and environmental organisations showcasing their products and services.Source: AME Info, 23/10/2011, http://www.ameinfo.com/278975.html
  • 106. Kuwait’s Alghanim Electronics - Retailment • Retail plus entertainment equals ‘Retailment’ according to Kuwait’s Alghanim Electronics. • Alghanim operates X-cite stores in Kuwait and has invested in running high- profile events in Kuwait to raise consumer awareness and build customer loyalty. X-cite positioned itself as organiser of two special events: an exclusive concert by Nancy Ajram for X-cite customers; plus a performance by Cirque du Soleil and Moscow Circus also for X-cite customers. X-cite by Alghanim Electronics was the only sponsor for both events and tickets were given free to customers purchasing from the retailer. [1] • The two events both created significant incremental sales growth, with mobile and IT sales up more than 40% year-on-year during the promotion period. In total, approximately 60,000 people attended the two events. • For its efforts Alghanim took home the Middle East Retail Academy 2011 award for Retailer Marketing Initiative of the Year, and was named Retailer of the Year in Kuwait for the third year in succession. [2]Source 1: Channel EMEA, 12/05/2011, http://www.channelemea.com/spip.php?article4131Source 2: Channel EMEA, 09/06/2011, http://www.channelemea.com/spip.php?article4226
  • 107. The Male Mall • Launched in June 2011, Pánská Pasá which roughly translates as Gentlemen’s Arcade is billed as the first shopping centre in the Czech Republic dedicated primarily to men. • Developed by Metrostav, the 800-square-meter venue features 19 luxury shops including Ralph Lauren, famed Austrian tailor Knize, a gourmet food market, a shoe shop, a parfumerie for men, a traditional barbershop and a tobacco store.Source: Retail Future Experience, 27/06/2011, http://www.retailfuturexperience.com/apps/blog /
  • 108. Czech Pop-up Store• Pop-up stores have recently become a phenomenon in the Czech Republic.• The Boho Pop Up Store opened in a space adjacent to the Czech Inn in Prague 10-Vršovice and is the brainchild of Patricia Madarova.• The Boho Pop Up Store is homey, with old used furniture as a backdrop to the clothing and accessories.• Suitcases with their original clasp closures are priced from 390 CZK ($22).• Pop-up stores, and this one included, are only open for a short period. The Boho pop-up stores closing Bang-Bang party was August 11, 2011. Source: Prague.tv, 2011 http://prague.tv/articles/shopping/boho-pop-up-store
  • 109. Edible Furniture Innovative publicity stunt: • In February 2011 a store called Adventures in Retail in the Akropolis shopping mall in Lithuania created an entire chocolate dining room. • The store transformed 183-square-foot space into a full-blown chocolate dining room set. • The entire room weighing in at 661 pounds of chocolateSource: Trend Hunter, 17/02/2011, http://www.trendhunter.com/trends/lithuania
  • 110. Airport Innovation: Pester Power?• Reminiscent of artist Carsten Höllers wildly popular installation in the Tate Modern a few years back, The Slide@T3 at Changi (Singapore) bills itself as the worlds tallest slide in an airport.• That may well be true, for the thrill-seekers dream stands four stories (a full 12 metres high) permitting top speeds of up to six metres per second.• To encourage visitors to experience the thrill, Changi gives consumers two slide tokens for every SGD 30 they spend at the airport in a single receipt at duty free stores. Source: Springwise, June 2010 http://www.springwise.com/tourism_travel/slide_t3/
  • 111. Looking to Airline Retail
  • 112. The Future – From Cabin to Cash Register• The Airline Weekly GXI Onboard Retail Benchmark 2009, the world’s largest collection of aggregated data for onboard retail sales, has been released.• Onboard retail service can mean very different things depending on where a carrier is based. According to the benchmark analysis, while North American carriers have shifted their models to selling food, drinks and so-called comfort items—blankets, pillows, headsets etc.—the Asian market remains resistant.• Only 10% of passengers boarding Asian carriers can purchase food or beverage on board. That figure compares with 68% in the Americas. In Europe, the Mideast and Africa (EMEA), 32% of carrier traffic has made the leap.• The numbers are almost opposite when it comes to duty free sales. In Asia, 74% of carriers have a duty free onboard retail component on their international flights. In EMEA, it’s 79%. In North America it’s only 54%. Note that these numbers are weighted on total passengers and duty free offerings only apply to international flights. Source: Airline Weekly, February 2010 http://www.airlineweekly.com/AWSR1.pdf
  • 113. The Future – From Cabin to Cash Register• Apparently it’s tough to squeeze an extra dollar out of a passenger. Across the industry, the average carrier with an onboard retail component (that is, selling any combination of food, beverage, IFE, and comfort items) earned $.72 per passenger in 2009.• However, when looking at carriers in the top 10 percentile, that average climbs to nearly $2. What are the top performers doing differently?• Industry wide, 6% of buy-on-board sales are from soft drinks and other non- alcoholic beverages such as juice, water and coffee. Among top performers, the number rises to 31%. When looking at beverage sales only, top performers earn more than three times the industry average of $.29. The key factor, according to the report, is that top performers are charging for non-alcoholic beverages. Source: Airline Weekly, February 2010 http://www.airlineweekly.com/AWSR1.pdf
  • 114. Rethinking the Experience e.g. Korean Air • Premium passengers on Korean Airs upcoming Airbus A380 superjumbo jets will be able to take advantage of an onboard duty-free shop, reports FlightGlobal. • The Korean carrier will begin operating its first A380 jet on June 10 of this year, with nine other aircraft entering service soon afterward. Korean Air will reportedly become the first airline in the world to feature a flying duty-free shop. • "The shop replaces 13 seats on the aircraft so youre losing a lot of revenue, but the Korean mentality is that they buy all the duty free on every flight," said Chris Wetter, the sales director for AIM Aviation, the company that designed the new duty-free stores. • Each onboard shop will be equipped with five display units, each of which can hold up to 66 pounds of merchandise. Overall, the store has room to display up to 64 different individual items. • Once the jet is off the ground, full-time sales staff will take products out of storage and set up the store. First class passengers are then given access to the shops wares, after which the business class travelers are allowed to peruse the merchandise.Source: Access Fares, April 2011 http://www.accessfares.com/news/airline-cabins/korean-air-to-offer-onboard-duty-free-shop-to-premium-passengers-3753.html
  • 115. Rethinking the Experience e.g. Korean Air • Premium passengers on Korean Airs upcoming Airbus A380 superjumbo jets will be able to take advantage of an onboard duty-free shop, reports FlightGlobal. • The Korean carrier will begin operating its first A380 jet on June 10 of this year, with nine other aircraft entering service soon afterward. Korean Air will reportedly become the first airline in the world to feature a flying duty-free shop. • "The shop replaces 13 seats on the aircraft so youre losing a lot of revenue, but the Korean mentality is that they buy all the duty free on every flight," said Chris Wetter, the sales director for AIM Aviation, the company that designed the new duty-free stores. • Each onboard shop will be equipped with five display units, each of which can hold up to 66 pounds of merchandise. Overall, the store has room to display up to 64 different individual items. • Once the jet is off the ground, full-time sales staff will take products out of storage and set up the store. First class passengers are then given access to the shops wares, after which the business class travelers are allowed to peruse the merchandise.Source: Access Fares, April 2011 http://www.accessfares.com/news/airline-cabins/korean-air-to-offer-onboard-duty-free-shop-to-premium-passengers-3753.html
  • 116. Leveraging Wi-Fi• Row 44 provides inflight broadband connectivity for the passengers, cockpit and crew of commercial aircraft.• Howard Lefkowitz, Row 44’s chief commercial officer says he thinks that airlines, eager for new revenue, will sign onto a new ‘private labeled portal,’ the details of which Row 44 will announce sometime in 2011.• It’s a ‘walled garden,’ branded and designed by Row 44 for a particular airline.• It will offer live interactive concierge and retail services, including destination-specific reservations for hotels, restaurants and shows says Mr. Lefkowitz. Source: New York Times, May 2011 http://www.nytimes.com/2011/05/24/business/24road.html
  • 117. What Will the Future of Onboard Retail Look Like? • In surveying travellers globally, GuestLogix found that more than half would take advantage of destination-related offers onboard a flight. The company expect items such as tickets to entertainment, ground transportation, attractions, tours and other offers that add immediate value to a trip to be in demand, not just in Asia, but around the world. • ‘In response, leading onboard duty-free concessionaires will evolve their business models to include broader shopping categories with the convenience of home delivery. This will represent the next wave in onboard innovation that will usher in other important changes in the onboard experience.’ • ‘Airlines will need to upgrade their existing POS systems to meet more stringent global payment standards. As connectivity slowly takes its place onboard aircraft, payments will incorporate real-time credit card authorisations to support higher-value transactions.’Source: Retail in Asia, April 2011 http://www.retailinasia.com/article/tech/retail-systems/2011/04/boardroom-inflight-retail-20-catching-asia-says-guestlogix
  • 118. Future of In-flight Retail • By Brett Proud, GuestLogix • ‘The new in-flight retail environment will be distinguished not by the reselling of once-included products and services, but rather by embracing and extending the relationship between airline and passenger. It will be marked by accurate assessments of consumer needs and wants and by the fulfillment of these at any (and every) touch point of the journey. It will be defined by customer experience and framed by retail-informed strategies of merchandising and product mix.’ • ‘Creating and promoting a successful customer relationship may be second nature for ground-bound retailers but for airlines it means re-conceptualising the passenger.’ • ‘While the unbundled airfare relies on presenting fee-or-no-fee options to passengers for basic, almost compulsory, products and services – a checked bag, a seat assignment – the new approach to in-flight retail puts the emphasis on the passenger.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 119. Future of In-flight Retail • ‘While the customisation of a flight experience during the booking process certainly leverages the power of choice to deliver ancillary revenue, it does not extend through the duration of the flight, much less after disembarkation’. • ‘The onboard store attempts to answer the questions: ‘Beyond the basics, what does a customer on an airplane want? And what will they want or need before and after their flight?’ That answer is found in research and data mining but ultimately it is found in a relationship with a passenger.’ • ‘This is not to say that airlines have no relationships with their passengers; on the contrary, much effort has been spent over the years in promoting loyalty and extending the airline brand beyond the flight (with cobranded credit cards etc). What the new in-flight retail approach does, however, is apply different principles to the business of onboard retailing to extend that relationship with the customer beyond the core product offered by the airline (a ticket) – which is precisely why this approach is the future of the industry.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 120. Future of In-flight Retail • ‘Within the onboard store, virtual shelves replace physical shelves with great effect. Products are offered based on predetermined tastes and preferences, flight duration and destination. A brand can be established and extended through interaction with this onboard store – much as it has for most of the retail success stories in the past decade. But in a controlled Wi Fi-enabled environment or through the use of smart wireless point-of-sale devices, passengers can explore the onboard store from the comfort of their seat as well as interact with in-flight entertainment systems through their own personal electronic devices.’ • ‘Airlines also have information on their passengers’ demographics, itinerary and immediate purpose (i.e. business or leisure) readily available. Traditional retailers would have to spend countless weeks collecting data – and probably paying market analysts to interpret it – to get the sort of valuable information airlines have at their fingertips. Utilising this data to develop a compelling retail experience is central to the onboard store approach and bound to become industry standard very soon.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 121. Passenger Centric Retail • Australia’s Qantas Airways is set to deploy a touchscreen technology solution for use in its onboard store. • “Speed and ease are fundamental in enabling us to deliver a new level of customer service to our travellers,” said Mr. Eric Jelinek, Head of In-flight Services at Qantas. “We believe the implementation of an onboard retailing technology and merchandising platform, through Alpha and GuestLogix, will help us to enhance the in-flight experience for our customers.” • In addition to enhancing its current onboard duty free program, the GuestLogix deployment provides Qantas with tools to create, manage and control a more comprehensive branded onboard store. • Qantas will be able to develop strategic offerings that evolve standard onboard retailing initiatives into much more passenger-driven, travel-relevant, destination based programs.Source: Enterprise Innovation, October 2010 http://www.enterpriseinnovation.net/content/qantas-airways-use-touchscreen-onboard-store
  • 122. Passenger Centric The Virgin Red Store • Virgin America’s award-winning Red™ entertainment platform, has been updated to allow travelers access to a host of new amenities, including next generation, enhanced terrain view Google Maps, an open tab service for the airline’s one-of-a-kind on-demand menu and the first ever seatback in-flight digital shopping platform. • With the Red store, Virgin America and SkyMall have teamed up to give flyers the chance to shop from their seatback at 35,000 feet from hundreds of top brands like Sony, Canon, Sharp and Michael Kors. • The debut of the Red Store marks the first time that SkyMall has developed a product line designed specifically for purchase through an airline seat- back entertainment system. In addition to a unique in-flight shopping experience and a range of best-selling products, purchases made in the sky via the Red store will allow guests to earn two points toward the airline’s Elevate Frequent Flyer Program for every one dollar spent.Source: Virgin America, July 2010 http://www.virginamerica.com/press-release/2010/Virgin-America-Upgrades-Red.html
  • 123. Passenger Centric The Virgin Red Store • The system also includes: • Google Maps upgrades: Virgin America’s previous Google Maps platform led the industry with interactive maps with multiple levels of zoom. The enhanced system will feature terrain view maps with fresher images and eight levels of zoom functionality, so travelers can see the actual topography over which they are flying. • An "open tab": Guests can now swipe their credit card just once per flight and order food, cocktails, movies and more – and keep a tab running during the flight. With one swipe, travelers can peruse and purchase items, including bar hopping (or ordering drinks for the plane), order from the food menu and watch latest release Hollywood movies on demand. • Premium food pairings: Virgin America is now providing suggestions on pairings that come at a discounted price via their Red in-flight menu system. Pairing examples include a Pacific brie and turkey sandwich, paired with PopChips and Peach White Honest Tea available for $13.60.Source: Virgin America, July 2010 http://www.virginamerica.com/press-release/2010/Virgin-America-Upgrades-Red.html
  • 124. Air Sahara/Jetlite • Jetlite, in its previous iteration as Air Sahara, started an onboard auction named ‘bid n win. • One form per passenger was handed out and a booklet displaying various products divided into three categories. • One passenger can bid for one product only. • The bidding started from one - fifth of the market price of the product. The auction involves writing your bid down on a from and handing it to the crew. The highest two bidders won the prize. • The product was then collected at the airport upon payment of the submitted price. The practice has carried over to Jeltlite (2). • JetLite is effectively facilitating a value added service for its guests.Source: MouthShut, June 2005 http://www.mouthshut.com/review/Jet-Lite-formerly-known-as-Air-Sahara-tqoqttpqsSource (2): JetLite, retrieved June 2011 http://www.jetlite.com/in/tnc_onboardauction.aspx
  • 125. Attracting Brands e.g. Virgin / Courvoisier • Maxxium Travel Retail has announced a new inflight partnership with Virgin Atlantic which will see Courvoisier served to the carrier’s Upper Class passengers both onboard and in the airline’s Clubhouse at London Heathrow Airport. • Courvoisier will become the new pouring Cognac onboard and bottles of Courvoisier VSOP will be available for purchase, with a pre-order service for Courvoisier XO and L’Essence de Courvoisier. Marketing support includes a 3D film about the heritage of Courvoisier on the inflight entertainment system. • At the Virgin Atlantic Clubhouse bar, passengers can enjoy Courvoisier XO and Courvoisier Exclusif, served neat or in cocktails. Bartenders will undertake training on the Courvoisier brand and specifically Courvoisier Exclusif, the marque designed specifically for cocktails.Source: Moodie Report, January 2011 http://www.moodiereport.com/document.php?c_id=31&doc_id=26155
  • 126. Attracting Brands e.g. Virgin / Courvoisier• A dessert paired with Courvoisier has been specially created for passengers dining in the Clubhouse, which will also feature a competition to win a bottle of L’Essence de Courvoisier.• Virgin Atlantic Director of Sales and Marketing Paul Dickinson said: ‘We are delighted to be working with Courvoisier. We are always looking for ways in which to enhance the passenger experience and are sure that the addition of this premium brand will be popular in our Clubhouse and onboard.’• Maxxium Travel Retail Managing Director Glen Williams added: ‘Together with Beam Global, we are delighted to offer its customers a unique travelling experience with Courvoisier from the Clubhouse right through to the flight. Travel retail is a key market for Courvoisier and our aim is to become the number one Cognac by 2013. This alliance will play an important role in achieving that goal.’ Source: Moodie Report, January 2011 http://www.moodiereport.com/document.php?c_id=31&doc_id=26155
  • 127. In-flight Partnership• Emirates has partnered with Montblanc to offer customers the opportunity to win a luxury trip to Hamburg and an exclusive Montblanc Skeleton A380 limited edition writing instrument worth US$19,640.• Customers on board all Emirates flights who purchase the Montblanc StarWalker A380 fineliner from Emirates’ Duty Free, can register for a raffle draw to win a trip to Hamburg, Germany, where they will receive the Montblanc Skeleton A380 Limited Edition.• "Once again, we are delighted to team up with Emirates for another prestigious onboard campaign,” said Karl-Heinz Handke, President Western Hemisphere, Montblanc. “With its premium services and exclusive customer base, Emirates is the ideal partner for Montblanc to showcase a precious and unique writing instrument.” Source: Travel Trade New Zealand, January 2011 http://www.traveltrade.co.nz/LatestNews/NewsArchive/tabid/342/articleType/ArticleView/articleId/1284/Default.aspx
  • 128. Brand Marketing Partnerships • Diageo Global Travel & Middle East Managing Director Phil Humphreys believes that the inflight channel can be a key driver of his vision to double travel retail liquor sales in the next five years. • The DFASS-produced Singapore Airlines inflight shopping guide for September–November features a stunning five-page section on Diageo’s Johnnie Walker portfolio, complete with an exclusively produced two page insert, culminating in an opportunity to win two flights to Singapore for the F1 race, plus event tickets and a lavish accommodation package. “We paid for the flights, Diageo paid for the passes,” FASS Singapore President John Garner says of the collaborative approach. • Singapore Airlines’ set-up ensures that carts can be tailored to individual routes – Korean and Indian flights, for example – opening up all sorts of possibilities for the star-studded Diageo portfolio. “I can work with John to specifically target certain profiles,” explains, Mr Humphries, noting that such an approach had led to a six-fold growth in inflight sales of Ketel One vodka.Source: Digital PC, retrieved June 2011http://mag.digitalpc.co.uk/Olive/ODE/themoodiereport/LandingPage/LandingPage.aspx?href=VE1Sb2RlLzIwMDkvMTAvMDE.&pageno=MjUy&entity=QXIyNTIwMA..&view=ZW50aXR5
  • 129. Brand Marketing Partnerships • So can a ‘strategic partnership’ really make such a difference in volume terms? “Totally,” Humphreys replies. “Already since we commenced our strategic partnership we have seen volumes grow significantly, and value enhanced. This gives me even more confidence that this business is built on stone, and early investments will reap their rewards going forward. • “We have some amazing ideas to drive purchase, working side by side with John Garner and his team,” he says. “I am very excited about this channel – to me it’s the hidden jewel of travel retail.”Source: Digital PC, retrieved June 2011http://mag.digitalpc.co.uk/Olive/ODE/themoodiereport/LandingPage/LandingPage.aspx?href=VE1Sb2RlLzIwMDkvMTAvMDE.&pageno=MjUy&entity=QXIyNTIwMA..&view=ZW50aXR5
  • 130. New Technology
  • 131. Digital Signage • Cisco has announced the deployment of Cisco Digital Signs at Unirea Shopping Centre, one of the largest retail complexes in Bucharest. • At Unirea, Cisco Digital Signs, part of the Cisco Digital Media Suite (DMS), are used to provide a centralised streaming of graphics and video over the Internet Protocol (IP) network to 85 wide-screen displays located across the mall. • The Cisco Digital Signs solution is used to run in-mall advertising for tenants. It helps the mall operator create a differentiated offer, retain a rental premium, and generate new revenue streams. • Carmen Adamescu, president and chief executive officer, Unirea Shopping Centre, said: "Unirea stores are keen to advertise their products, and in-mall advertising is probably the best way to reach customers in a targeted way. “Source: Retail Technology Review, 14/07/2011,http://www.retailtechnologyreview.com/absolutenm/templates/retail_supply_chain.aspx?articleid=1201&zoneid=1 g
  • 132. Attention Grabbing Innovation • Fashion retailer Nordstrom harnessed the gesture tracking capabilities of a Microsoft Kinect to create an engaging digital window display at its Seattle flagship, allowing shoppers to virtually paint on the glass. • The technology captured customer hand gestures and converted these actions into corresponding white streaks that appeared on the window. • The interactive display was designed as a tie-in with an accompanying print catalogue that promoted the ability of gesture-based interfaces to help create rather than control content.Source: PSFK, 05/08/2011, http://www.psfk.com/2011/08/passers-by-invited-to-virtually-paint-the-glass.html
  • 133. Body Measurements Scanning
  • 134. Body Measurements Scanning • The first Body Mapping scanner is now available at a New Look store in Londons Westfield Stratford City shopping mall. • London-based Bodymetrics and 3D machine vision company PrimeSense have developed a full 3D body scanner. Its "Body Mapping" platform uses eight PrimeSense 3D sensors to take all of a clients necessary measurements and map their body shape. • This data is then accessed by retailers, to find the clothes which best fit that client. Initially the scanner is going to be used by Bodymetrics "Fit Stylists" to suggest the best-fitting jeans for female customers. • The next step is to make this machine scanned information available online and revolutionise online retail.Source: Gizmag, 25/10/2011, http://www.gizmag.com/bodymetrics-body-mapping-for-clothes-fitting/20270/
  • 135. Paris – Virtual Boarding and Beyond? • An airport in Paris is tinkering with boarding staff that are not, in fact, real people, but holographic images of people. • The project is being piloted at the Orly airport in the French capital and over the past month the virtual staff have received a mix reception from air travelers. • The semi-holographic agents appear seemingly out of thin air at the beginning of each boarding process and give instructions to passengers much like any human agent would. • The “holograms” are actually pre-recorded, two dimensional projections set against human-shaped silhouettes made of Plexiglas. Three real live humans pre-recorded the virtual agents’ messages and mannerisms in a studio earlier this summer. • Depending on passenger reaction and a number of other factors, the concept could spread to other parts of the airport in 2012.Source: TMC Net.com, August 2011 http://telepresence.tmcnet.com/topics/telepresence/articles/209747-airport-employs-holographic-staff-paris.htm
  • 136. ‘Virtual assistants’ • London Luton Airport has introduced two ‘virtual assistants’ – Holly and Graham – to communicate important security messages as passengers move from the check-in area to the departure lounge. • The next-generation digital signage utilises the latest holographic imaging technology. Already in place at a number of UK airports, there is growing interest, both within the UK and globally, and the range of applications for the ‘virtual assistants’ looks set to grow. • The aim of the two holograms – Holly and Graham – installed at London Luton was to deliver a compelling “how to prepare” message, which, if successful, would result in fewer passengers needing to be stopped and searched. Since their introduction, the number of bags identified as being packed incorrectly has been reduced by 5%. • A customisable solution, looking ahead, the holograms could be deployed throughout the airport in both operational roles disseminating passenger information and for use by retail or catering outlets.Source: FTE, August 2011 http://www.futuretravelexperience.com/2011/08/virtual-assistants-simplify-security-and-improve-passenger-experience/
  • 137. Technology in Aviation: Holograms • To shorten security lines, improve customer service, and make passengers feel like they are in a Star Wars film, Manchester and London Luton airports have introduced holograms at their bag check queues. • Manchester unveiled their two holograms “John” and “Julie” on January 31st and a few days later “Holly” and “Graham” were introduced at Luton. • The goal of both is to brief passengers on security rules which will hopefully decrease wait times. The airports claimed to not be aware that the other was developing such similar technologies. • The virtual staff will improve check in time etc by reminding them of security requirements like the ban on most liquids.Source: Nile Guide, Travel News, by Morgan DeBoer, February 2011http://www.nileguide.com/blog/2011/02/07/the-future-of-airport-customer-service-holograms/
  • 138. Virtual Products Answering the Call of the Passenger Global Research Study – Identified High Merchandise InterestSource: GuestLogix ‘Opportunities Abound in Virtual Products’ presentation, June 2011
  • 139. Virtual Products Answering the Call of the Passenger Global Research Study – Identified Strong Consumer BenefitSource: GuestLogix ‘Opportunities Abound in Virtual Products’ presentation, June 2011
  • 140. Virtual Products Support Access at all Travel Touch PointsSource: GuestLogix ‘Opportunities Abound in Virtual Products’ presentation, June 2011
  • 141. Augmented Reality • Copenhagen Airport has updated its CPH Airport iPhone app, available for free download in the Apple’s iTunes store, to enable users to view the distances and locations of restaurants, information desks, lounges, shops and gates. • This Live View feature comes through augmented reality technology and was developed for the airport by SITA Lab and Novasa. Augmented reality has been around for awhile, but the CPH Airport app is special because it claims to be the first augmented reality application that works indoors. • Most augmented reality apps use GPS technology to determine a user’s location, but concrete terminal buildings make that untenable indoors. So, instead the CPH Airport app uses signal strength and triangulation from Wi- Fi access points around the airport to determine the location of each traveler’s mobile phone.Source: Business Insider, April 2011 http://www.businessinsider.com/copenhagen-airport-gets-augmented-reality-app-2011-4
  • 142. Augmented Reality • Of course, the airport plans on commercializing the whole thing as soon as possible, meaning you’ll probably have the choice of opting in to receive special promotions from retailers when using the app. • Other upgrades to Version 2.0 of the app include the capability of viewing your location at the airport on maps, and the parking map shows the number of available spaces.Source: Business Insider, April 2011 http://www.businessinsider.com/copenhagen-airport-gets-augmented-reality-app-2011-4
  • 143. Tablet Equipped Shopping Carts • Launched at the Shanghai Lotus Supermarket by SK Telecom in China, the system consists of WiFi-enabled, tablet PC-equipped shopping carts and a smartphone app that can be synchronized with the tablet. By utilizing indoor positioning technology and augmented reality, the shopping "Smart" cart becomes a virtual shopping aide. • The Smart Cart application allows customers to search for shopping and discount information, store coupons, as well as to create a shopping list. After getting to the market, the app synchronizes with the tablet PC mounted to the carts handle, uploads the shopping list and authenticates the user. Wandering through the stores aisles, customers get product and discount information linked to their current location within the store, which is established to within three feet via a WiFi network. • Provided the trial period in China is successful, SK Telecom is planning to build even more personalized service. The carts tablet PC could gather wide information on the clients habits, including analysis of their shopping history, to make product recommendations more accurate. /Source: Gizmag, 28/07/2011, http://www.gizmag.com/smart-cart-sk-telecom/19368
  • 144. Virtual Grocery Shopping • In a trial run Tescos South Korean supermarket chain Home Plus has plastered a subway station with facsimiles of groceries, labelled with a unique QR code for each product. • As commuters pass by on their way to work, they can use a mobile-phone app to take pictures of the products they want, then check out. The groceries are automatically delivered to their doorstep by the end of the work day. • The virtual grocery store has been a hit among more 10,000 customers, with Home Plus reporting a 130 percent increase in online sales.Source: MIT Technology Review, 05/07/11, http://www.technologyreview.com/computing/37966/?p1=MstRcnt&a=f
  • 145. Online Brands Appearing Offline Google • The world’s first Google store, ‘The Chromezone,’ had a low-key opening in London, England inside a branch of PC World on Tottenham Court Road. The temporary 285 square-foot store will be there until Christmas, selling Google’s Chromebook laptop and a range of accessories. Another pop-up store will open in Essex and more around the world in the coming months. If this experiment is successful then Google could follow its rival Apple in opening a large number of permanent stores. [1] eBay • eBay has teamed up with designer Jonathan Adler to launch a ‘shoppable storefront’ in New York City. • The storefront features various products chosen by top trendsetters who were asked to compile their fall shopping wishlists. Items are accompanied with QR codes, which shoppers scan using the eBay app. Scanning a code brings the user to a buy page in the app. [2]Source 1: PSFK, 08/10/2011, http://www.psfk.com/2011/10/google-opens-store-in-london.htmlSource 2: PSFK, 25/08/2011, http://www.psfk.com/2011/10/spotted-ebay-inspiration-shop-on-park-avenue-nyc.html
  • 146. Online Brands Appearing Offline Richelle Parham, chief marketing officer of eBay North America: “Consumers today expect to shop how they want, when they want – and mobile technology is blurring the lines between online and offline retail to meet this demand. The Inspiration Shop brings to life how eBay enables people to immediately act on their passion for shopping in this new commerce environment.”Source: PSFK, 25/10/2011, http://www.psfk.com/2011/10/spotted-ebay-inspiration-shop-on-park-avenue-nyc.html
  • 147. Online Brands Appearing Offline Paypal • To help make better businesses for merchants, Paypal has announced that it will be opening a pop-up store in New York on November 1 2011. This venue, situated within Manhattan’s Tribeca neighborhood, is intended to showcase the latest in online payment technology. • Merchants and interested entrepreneurs may soon come into the Paypal store and get info and product demos to improve their business payment methods. Among the new technologies Paypal is set to launch within the next few months, is a means for in-store owners to use the online system for mobile checkouts.Source: PSFK, 05/10/2011, http://www.psfk.com/2011/10/paypal-pop-up-store-is-coming-soon-to-manhattan.html
  • 148. Burberry Launch First Ever Twitter Catwalk Show • Burberry is recognised as the 13th most innovative company in the world by Fast Company magazine, and received the Inaugural Innovation Award at the 2010 British Fashion Awards. [1] • Known as one of the most digitally advanced of the fashion houses, Burberry was the first label to stream its runway shows live and sell directly from the runway in-store via iPad. • For the first time, the label "live tweeted" from its fashion show on the 19th September 2011 from backstage, posting photographs of each look on Twitter moments before the model stepped on to the catwalk. At 4.15pm Burberry was the third most popular topic globally on the social media, as fashion-watchers compared notes. • The show was also streamed on Facebook, U Tube, on Chinese social media Sina and Youku and people were directed to download music used in the show from iTunes. [2]Source 1: Burberry, http://www.burberryplc.com/bbry/corporateprofile/strmis/Source 2: The Guardian, 19/09/2011, http://www.guardian.co.uk/fashion/2011/sep/19/london-fashion-week-burberry-twitter
  • 149. Burberry and Social Media • The company is also the most popular FTSE 100 company on Facebook. This is due in part to the launch of its own social media site, Art of the Trench launched in 2009. • The photo sharing forum is a shrine to Burberry’s iconic belted jacket. To launch it, Burberry commissioned photographer Scott Schuman of The Sartorialist to take portraits of trench wearers all over the globe. • Visitors to the site are invited to share their pictures of themselves and their friends wearing the coats via Facebook. The Burberry team then chose their favourites and publish them to the site. Users are also invited to comment and vote for their favourite shots. • In an interview with The New York Times, Burberry Designer Bailey said: “Our objective is to make sure we’re talking the language that our generation uses today. It’s just another channel to talk to the Burberry community…technology is about speaking to the right people at the right time.”Source: London Loves Business, 19/09/11, http://www.londonlovesbusiness.com/burberry-launch-first-ever-twitter-catwalk-show/536.article
  • 150. Social Shopping in Estonia • WhosRich.me is a social shopping platform from Estonia that gives consumers a way to share their latest purchases and comment on those of their friends. • WhosRich.me is a social utility that aims to make it easy for people to track their friends’ shopping habits. Users enter their purchases via a simple interface, including a photo along with the date, time and price; for updates on the go, a mobile iPhone app is also available. From there, other members can view and comment on each other’s purchases. The site’s search tool also lets consumers sort results by country or keyword for a look at trends of interest to them. • WhosRich.me is free for users. No word yet on its business model, but as with other such ventures, there’s clearly the potential not just for advertising but also for referral fees from vendors whose products get highlighted on the site.Source: Springwise, 01/02/2010, http://www.springwise.com/lifestyle_leisure/whoisrichme /
  • 151. Fits.MeFits.Me is a virtual fitting room for online retailers. The technology has beendeveloped at two Tallinn based universities and a German company providinganthropometrical data.(1)• “Lack of a fitting room is the biggest problem for apparel eCommerce. Fits.me is helping clothing retailers increase the sales, and decrease costs associated with returns”• Fits.Me has designed a robotic mannequin that exactly replicates the buyers dimensions and allows the buyer a far better preview of how the items will look when delivered. It is hoped the technology will help to increase sales and minimise returns(1) Fits.Me, [no date] http://fits.me/content/about-us 12/07/11
  • 152. Fits.MeThis has come to the market on a backdrop of surging online sales. A reportfrom Forrester Research noted that online sales of apparel, accessories andfootwear reached $27bn in 2009 on 17% year-on-year growth. Double digitgrow this forecast for online apparel sales over the next several years.“Online apparel sales to date have been exceptionally challenging due to thelack of a fitting room. However, it is also the fastest growing e-commercecategory and will produce an estimated annual revenue of $31 billion dollars inthe US in 201. Only 8% of clothing is currently sold online, and Fits.me VirtualFitting Room is the disruptive technology that will enable online apparelretailers to successfully compete with traditional brick-and-mortar clothingshops.” - Heikki Haldre, CEO and co-founder of Fits.meFits.Me, 22/12/10, http://fits.me/news/fitsme-virtual-fitting-room-closes-%E2%82%AC13-million-second-round-funding 12/07/11
  • 153. Smart Mobility Strategies that Will Transform the Industry
  • 154. Smart Mobility Strategies that Will Transform the Industry • Airline Mobility Evolution • Traditional airline business models are evolving rapidly to exploit the growth of mobility, and many airlines are beginning to experiment with mobility- enabled personalized services. • Solutions such as websites optimized for mobile access and bar-coded boarding passes sent to smartphones are seeing double-digit growth. Based on the survey, SITA forecasted (2010) that by the end of 2010, mobility optimization for websites will grow from 15% currently to 51%. • Mobile phone-based boarding will increase from 7% today to 31%, and other paper- and card-based applications such as baggage receipts, card access to premium lounges, and cash and credit card payments are also expected to be replaced by mobile applications. In the meantime, use of wireless devices by airport staff to support aircraft maintenance will grow from 17% currently to 31% by the end of 2010.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 155. Smart Mobility Strategies that Will Transform the Industry • Airport and airline operations are also seeing innovative mobility enhancements in the areas of “operational messaging” (between the aircraft and airline headquarters), maintenance, pre- and in-flight services, flight planning, and asset and spare parts management • Mobility 3.0: The Future • While Mobility 1.0 and 2.0 have enabled airlines to move beyond basic and maturing services, Mobility 3.0 will ultimately empower airlines to combine 1.0 and 2.0 capabilities with context-aware applications to transform their business models, enhance their relevance to customers, and provide passengers with greater control over every aspect of their travel—anytime, anywhere, through any device.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 156. Smart Mobility Strategies that Will Transform the Industry• Examples of Mobility 3.0 services and applications include: – Personal travel assistant—for travel-related interactions such as alerts pertaining to all aspects of the journey, including drive time to the airport, flight times, and security line status – Mobile marketing—dynamic packaging of personalized offerings and discounts – Mobile concierge service—with the push of a button, access a virtual concierge whose familiarity with the user’s profile (likes, dislikes, etc.) enables delivery of a highly personalized experience – Mobile payment—smartphone as a secure e-wallet, taking advantage of context aware security capability – Augmented reality—context- and location-aware applications enable an immersive, context-rich environment for the passenger – Real-time business intelligence for airlines—rather than conduct analytical yield management on a batch basis, airlines can perform optimized real-time yield management based on passengers’ location, what they are doing, and what they might want
  • 157. Smart Mobility Strategies that Will Transform the Industry • Mobility 3.0 solutions enable passengers to make far more intelligent and precise decisions about their travel to and from the airport. When combined, such capabilities create a mashup that offers context-aware, location-based services that can notify passengers of whether they need to leave for the airport earlier or later based on real-time and predictive data of traffic, airport, and airspace conditions.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 158. Smart Mobility Strategies that Will Transform the Industry • New Business Models • Mobility 3.0 will permit new business models that enhance customer experience, facilitate new services, increase revenues and profitability, streamline airport operations, lower sales and marketing costs, boost employee productivity, and encourage further service-level differentiation. The impact of Mobility 3.0 capabilities spans the various business models of network, regional, and low-cost carriers. The picture on the following slide depicts a high-level smart mobility vision that, through successful execution of a mobility strategy, enables new business models and benefits.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 159. Smart Mobility Strategies that Will Transform the Industry • These capabilities can streamline and unburden the travel process by empowering passengers with enhanced self-service, real-time data, and context-aware services. Such services can dramatically expand the airlines’ value chain with multiple opportunities to shape a rich, personalized passenger experience, creating new ways to drive profitability. • Mobility 3.0 will further accelerate the airline industry’s current migration to direct sales and ticket/product distribution. Airlines expect to increase the proportion of tickets sold through online channels from 26.7 percent to 41.4 percent by 2012, and through their own websites. • Smart mobile devices are a key driver of this development. This is especially true in emerging countries, where low penetration of fixed Internet access hampers direct airline ticket sales. Here, mobile phones can play a critical role in delivering new services and enabling airlines to interact with customers.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 160. Smart Mobility Strategies that Will Transform the Industry • Offering smart, mobility-enabled, personalized services and products can generate new revenues, in addition to monies from the sale of core products and ancillary services/products. Such new revenues may include the sale of perishable products (for example, empty seats) through real-time auctions for aisle or window seats, or sales of overhead storage as space becomes available; commissionable products such as food, drinks, music or movies, premium airport parking and car services; or use of frequent flyer points.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 161. Smart Mobility Strategies that Will Transform the Industry • New Operations and Processes • Airlines traditionally operate in a highly siloed fashion where specific processes necessary to support extremely efficient operations are departmentally isolated. Because of this, sharing cross-departmental information is typically not a priority. To extract maximum value from smart mobility, airlines must achieve a greater level of information sharing. To achieve this, they must retool their operational processes to support a passenger-journey-centric framework instead of the existing “seat- production” model. Airline operations that can benefit from smart mobility include: • Collaborative ramp management—Mobility 3.0 solutions can enable employees to collaborate based on real-time information such as gate changes, leading to a reduction in aircraft turnaround times.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 162. Smart Mobility Strategies that Will Transform the Industry • Innovative asset management—Smartphone solutions can provide ramp workers with up-to-date information required for their specific task. For example, lost luggage is an ongoing concern for passengers. Using smartphones to manage luggage along its journey, airline baggage agents can trace baggage by accessing and logging real-time information about the luggage’s location. This capability leads to faster problem resolution and asset identification, and improved passenger satisfaction. • Workforce management—Using smartphones, employees working on the ground, for example, can access real-time information from flight crews to handle passenger requests (such as flight delays) more efficiently. • Airport footprint—Smartphone capabilities will also allow airlines to reduce their airport footprints (personnel, counters, kiosks, real estate, and more). Airlines typically have relied on self-service capabilities delivered by the web and airport kiosks to lower costs and, in many cases, improve customer experience. Kiosks are expensive systems to deploy and maintain, and web solutions address only a narrow portion of the passenger journey.Source: Cisco, ‘Airline of the Future,’ July 2010 http://www.cisco.com/web/about/ac79/docs/pov/Airline_of_the_Future_PoV_FINAL0712.pdf
  • 163. Online Brands Appearing Offline Google • The world’s first Google store, ‘The Chromezone,’ had a low-key opening in London, England inside a branch of PC World on Tottenham Court Road. The temporary 285 square-foot store will be there until Christmas, selling Google’s Chromebook laptop and a range of accessories. Another pop-up store will open in Essex and more around the world in the coming months. If this experiment is successful then Google could follow its rival Apple in opening a large number of permanent stores. [1] eBay • eBay has teamed up with designer Jonathan Adler to launch a ‘shoppable storefront’ in New York City. • The storefront features various products chosen by top trendsetters who were asked to compile their fall shopping wishlists. Items are accompanied with QR codes, which shoppers scan using the eBay app. Scanning a code brings the user to a buy page in the app. [2]Source 1: PSFK, 08/10/2011, http://www.psfk.com/2011/10/google-opens-store-in-london.htmlSource 2: PSFK, 25/08/2011, http://www.psfk.com/2011/10/spotted-ebay-inspiration-shop-on-park-avenue-nyc.html
  • 164. Online Brands Appearing Offline Richelle Parham, chief marketing officer of eBay North America: “Consumers today expect to shop how they want, when they want – and mobile technology is blurring the lines between online and offline retail to meet this demand. The Inspiration Shop brings to life how eBay enables people to immediately act on their passion for shopping in this new commerce environment.”Source: PSFK, 25/10/2011, http://www.psfk.com/2011/10/spotted-ebay-inspiration-shop-on-park-avenue-nyc.html
  • 165. Online Brands Appearing Offline Paypal • To help make better businesses for merchants, Paypal has announced that it will be opening a pop-up store in New York on November 1 2011. This venue, situated within Manhattan’s Tribeca neighborhood, is intended to showcase the latest in online payment technology. • Merchants and interested entrepreneurs may soon come into the Paypal store and get info and product demos to improve their business payment methods. Among the new technologies Paypal is set to launch within the next few months, is a means for in-store owners to use the online system for mobile checkouts.Source: PSFK, 05/10/2011, http://www.psfk.com/2011/10/paypal-pop-up-store-is-coming-soon-to-manhattan.html
  • 166. Internet of Things
  • 167. Interactive Surfaces (2011 onwards) • Interactive Surfaces • 2011 onwards • Even skin has become an interactive surface, with scientists able to create a system that allows users to use their own hands and arms as touchscreens by detecting the various ultralow-frequency sounds produced when tapping different parts of the skin. Skinput uses microchip-sized projectors to allow for interactive elements rendered on the user’s forearm and hand.Source: ZDNet, March 2010 http://blogs.zdnet.com/emergingtech/?p=2146
  • 168. QR Tags
  • 169. Mobile Commerce
  • 170. Tie-ins with Airport Retail e.g. Booking / Boarding Pass Offers• Pullman Bangkok King Power hotel, the first Pullman hotel in the world, is offering more value for travelers to enjoy upscale lifestyle and shopping experiences with the Shopping Spree Special promotion. Commencing today, travelers will enjoy a complementary 1,000 Baht King Power Duty Free Shopping voucher for every night they stay at the hotel. The promotion was first valid from June to September 30, 2010 with a minimum 1-day advance purchase (1).• Valid from 15 February to 30 June 2011 is a variant whereby every 5000 Baht spent at duty free gives 1000 Baht cash-back to use at the hotel (2).• The hotel is attached to the city’s only duty free shopping mall.Source (1): PR Syndacast, June 2010 http://pr.syndacast.com/gb/press-releases/3767-pullman-bangkok-king-power-hotel-offers-duty-free-shopping-spree-special.htmlSource (2): PR Web, February 2011 http://www.prweb.com/releases/2011/2/prweb8141693.htm
  • 171. Future of Retail ?
  • 172. Future of Retail • By Brett Proud, GuestLogix • ‘The new in-flight retail environment will be distinguished not by the reselling of once-included products and services, but rather by embracing and extending the relationship between airline and passenger. It will be marked by accurate assessments of consumer needs and wants and by the fulfillment of these at any (and every) touch point of the journey. It will be defined by customer experience and framed by retail-informed strategies of merchandising and product mix.’ • ‘Creating and promoting a successful customer relationship may be second nature for ground-bound retailers but for airlines it means re-conceptualising the passenger.’ • ‘While the unbundled airfare relies on presenting fee-or-no-fee options to passengers for basic, almost compulsory, products and services – a checked bag, a seat assignment – the new approach to in-flight retail puts the emphasis on the passenger.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 173. Future of Retail • ‘Within the onboard store, virtual shelves replace physical shelves with great effect. Products are offered based on predetermined tastes and preferences, flight duration and destination. A brand can be established and extended through interaction with this onboard store – much as it has for most of the retail success stories in the past decade. But in a controlled Wi- Fi-enabled environment or through the use of smart wireless point-of-sale devices, passengers can explore the onboard store from the comfort of their seat as well as interact with in-flight entertainment systems through their own personal electronic devices.’ • ‘Airlines also have information on their passengers’ demographics, itinerary and immediate purpose (i.e business or leisure) readily available. Traditional retailers would have to spend countless weeks collecting data – and probably paying market analysts to interpret it – to get the sort of valuable information airlines have at their fingertips. Utilising this data to develop a compelling retail experience is central to the onboard store approach and bound to become industry standard very soon.’Source: Travel Tourism Middle East, June 2011 http://www.ttnworldwide.com/GeneralNews.aspx?artid=10521
  • 174. Travel Outlook
  • 175. Multi Speed Recovery Leading to many Types of Tourist • The global travel and tourism industry will experience a “multi-speed” recovery taking up to a further four years to fully recover to pre-global downturn levels, reveals a report launched on June 16th 2010. • Euromonitor International’s Forecast Update – Recovery In Sight? - reveals the global travel and tourism industry will experience a “multi-speed” recovery kick started by the developing economies as high unemployment and debt in developed countries holds back their growth. • Global international arrivals will not recover to pre-crisis 2008 levels until 2012, while incoming tourism receipts will not recover until 2013. • Furthermore, the hotels sector will not fully recover to 2008 levels until 2014. • The hotel sector in Australasia, Latin America, and Europe will take the longest to recover. • Asia is again driving force behind the hotels recovery, due to the continued expansion of international and local chains. Source: World Tourism Directory, June 2010 http://www.worldtourismdirectory.com/news/4325/global-travel-industry-to-experience-multi-speed- recovery.html
  • 176. Travel in 2023• A report by KPMG released in April 2008 ranked transport and tourism as the sectors least well prepared for climate change and among those most commercially exposed to the physical risks it presents.• Forum for the Future in its ‘Tourism 2023’ report of October 2009 partnered with companies like British Airways, Carnival UK, and Advantage Travel Centres to analyze the impact our ever-growing ecological footprint will have on travel.• The four scenarios under which we could progress: – 1) Boom and Burst – 2) Divided Disquiet – 3) Price and Privilege – 4) Carbon Clampdown Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 177. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 178. Boom and Burst• A booming economy and high disposable incomes have fuelled a growth in travel worldwide. People travel further, more frequently, and at faster speeds than ever before. There are many new reasons to go abroad as global political stability and prospering economies have opened up the world to more commerce and visitors.• Rapid advances in technology have been crucial, such as the breakthrough in algae- based fuels. Dramatic improvements in efficiencies have allowed the transport sector just about to keep pace with new regulations and their impacts, such as the steadily rising global price of carbon.• Legally binding carbon targets are being met – but many are asking how long this can continue. Many destinations are suffering from serious overcrowding. Wilderness is perhaps the scarcest resource as road, rail, sea and air routes have brought mass tourism to the last corners of the planet. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 179. Boom and Burst highlights• Tourists flock to see the ancient shrines and archaeological treasures of Iraq.• Massive protests spoil the opening of the Mount Everest Theme Park.• Tourism puts huge strains on infrastructure in popular destinations like New York, Paris and London. Visitors are herded between attractions with timed tickets.• High-tech ‘carbon scrubbers’ installed on the ground ‘clean the air so you can travel’.• Overcrowding in popular destinations has led to the rise of glamorous ‘campsites’, ‘pop up’ hotels with stackable modules, and floating resorts.• Fastest growing destinations: the Democratic Republic of Burma, Yemen, Beyond Botswana Plc (Privatised Special Economic Zone), Somalia, Argentina, Brazil, Antarctica, Near space voyages, Papua New Guinea, Kazakhstan. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 180. Divided Disquiet• A toxic combination of devastating climate change impacts, violent wars over scarce resources and social unrest has created an unstable and fearful world. This has made travelling overseas an unattractive proposition.• Many destinations were unprepared for the impacts of a changing climate. More extreme weather events, rising sea levels, increased flooding and frequent droughts have battered some places, while food shortages and malnutrition, malaria, and conflict over resources like water and oil have wreaked havoc in others.• Visitors are highly selective in where and when they travel, cramming into a small number of destinations where overcrowding compounds the problems.• A breakthrough in affordable telepresence technology has proved surprisingly popular with businesses that are keen to cut costs. This resulted in drastically reduced numbers of certain air routes, closing them to many holidaymakers. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 181. Divided Disquiet Highlights• ‘One flight per year’ policy for major US company encourages executives to cut costs with telepresence technologies.• Tour guides with a military background hired as part of a holiday package for extra protection abroad.• Rising sea levels force Government of Maldives to step up relocation plans to India.•• Latest ‘hot’ holiday craze is massive resorts offering golf and skiing across sand dunes.• Eiffel Tower auctioned off to a multinational corporation as part of sponsored heritage plan.• Fast growing destinations: Norway, Ireland, Latvia, UK, Greenland Doomsday Park, Canada, Denmark, France, Sweden, The Estonian Army Base Experience. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 182. Price and Privilege • A dramatically high oil price has made travel punitively expensive. Dwindling supplies and rising demand from the new economies of Asia have pushed energy prices into a series of sharp and unpredictable spikes. • The travel industry worldwide has been badly hit and aviation has shrunk dramatically. Fleet replacements have been slower than anticipated and the predicted efficiency gains could not keep pace. There have been mass redundancies across the travel industry and a period of dramatic consolidation across the world. • Although a small, elite market continues to fly regularly, the vast majority of people simply cannot afford the experience. The days of affordable travel are now just a nostalgic memory. • People who want to holiday abroad either save up for years and fly overseas or join the new mass market of overland connections. Pan-European rail, bus and sea networks offer the most cost-effective means of travel for most people. State-of-the- art super-hubs provide seamless connections between different parts of the comfortable and affordable system of overland travel.Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 183. Price and Privilege Highlights• Demonstrators take to streets in cities across the world demanding the ‘right to fly’.• Ukraine positions itself as the ‘Gateway to the East’ with new Kiev bus-rail megahub plan.• ‘Absolutely no frills’ airline sector from some non-EU countries offers standing room only and no cabin crew.• Banks offer holiday credit schemes allowing family and friends to save together for the annual trip.• Fastest growing destinations: Montenegro, France, Lithuania, Portugal, Germany, Central Europe Lakelands, SailRail breaks to Greece, Morocco, The Tropical Island Experience (Jersey), Ukraine. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 184. Carbon Clampdown• Governments introduce tradable carbon quotas for all households as part bold plans to tackle climate change. Individual allowances are seen as the fairest way of allocating the ‘right to pollute’ equally.• The public has clamoured for tough action. Environmental impacts are increasingly felt. Although there has been no great shift in cultural values, support for regulation is high.• The economy is more localised, and disposable incomes are low.• Many holidaymakers are still keen to travel abroad, but perceptions of the purpose and real costs of travel have changed. Although distance is a key consideration, the reason for the holiday is crucial: what you are doing is more important than where you are.• Ethical travel is a new mass market, and the government encourages this with the carbon rebate for volunteering whilst abroad. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 185. Carbon Clampdown Highlights• Major travel firm goes bust after massive boycott coordinated by a popular website over its environmental policy.• Red Cross Swarm uses social networks to send volunteers to disaster zones faster than official agency staff.• Peer-to-peer holidaying allows people to ‘swap lives’ with another family and spend a year in another part of the world.• Fastest growing destinations: Cornwall, Ukraine, Sweden, Mozambique Special Volunteer Zone, Lithuania, Northumbria, Cork, France, Slow Boat Community (registered to Guyana), Liverpool. Source: Forum for the Future ‘Tourism 2023,’ October 2009 http://www.forumforthefuture.org/files/Tourism_2023_full_report_web_version.pdf
  • 186. What does this mean?• Fast Company notes that ‘…the reality of vacationing in 2023 will probably be a combination of these scenarios, with high oil prices, disappearing wilderness, carbon quotas, and advances in air travel (i.e. biofuel-powered planes).’ Source: Fast Company ‘Tourism 2023 Imagines the Future of Vacations,’ October 2009 http://www.fastcompany.com/blog/ariel-schwartz/sustainability/tourism-2023-imagines-future-vacations
  • 187. Predictions • Charles Goddard, Asia Pacific Editorial Director, Economist Intelligence Unit, speaking at the ALTM Ultratravel Forum, said that ‘…China, despite the crisis, and because of economic stimulus packages, had continued to grow in the last 18 months by between 8% and 9%. This shift would be even more dramatic if China became more consumption driven as opposed to export led, and this was beginning to happen.’ • ‘Asia was the growth market ‘par-excellence’ with 50% of global consumption being centred in the region in the next 4-5 years. An explosion in travel would be an offshoot of this phenomenon,’ he said.Source: Travel Daily News ‘Bullish growth for inbound and outbound travel in Asia Pacific and China,’ June 2010http://www.traveldailynews.com/pages/show_page/37535-Bullish-growth-for-inbound-and-outbound-travel-in-Asia-Pacific-and-China
  • 188. Future of Travel and Tourism• 1. Keeping it local. If trends in energy, economy, and environment continue, then traveling long distances for recreation will become more rare. In order for the resort community to maintain a market, they will need to cater more to a local clientele. This is captured in the concept of the 10-kilometer hotel, one whose prime customers come from the local area for a respite.• 2. Alternative transport. In 2009 a newspaper in Seattle featured a photo of a local organic farmer delivering his wares via sailboat to the docks in Seattle. He calls it the no-oil food. In the travel and tourism industry this kind of move will be and is being mirrored as people seek out non-motorized experiences like biking through France, or taking trips by sail. Over the longer term, again depending on how energy, environment, and economic trends play out, it is likely that tourists will seek out slower, less energy intensive, even zero-fossil fuel energy experiences. Source: Futurist ‘Future of Travel and Tourism ,’by Glen Hiemstra on 01/07/09 http://www.futurist.com/2009/07/01/future-of-travel-and-tourism/
  • 189. Future of Travel and Tourism• 3. Destination evolution. This trend is underway, as destination resorts focus on becoming greener and more sustainable, more local in their attraction, more astute in their use of information technology for advertising and for management, and more knowledgeable of market trends via research.• 4. New whys of travel. It is said that there is graffiti from ancient tourists on the monuments in Egypt. People have always and will always travel to see new places and people, even if they have to walk or ride an animal to do so. That is not going to change. But, one more time depending on how the converging trends play out, we may see a return to the why of travel being for two primary purposes – to visit family, and to seek new adventure. Business travel may decline as 3D-net technologies become robust, and distance travel may decline as economic and environmental imperatives demand. Local travel may fill the need for reconnecting with yourself and recharging the batteries. In fact making that a focus of what you offer in the travel and tourism industry may be one key to the future. Source: Futurist ‘Future of Travel and Tourism,’ by Glen Hiemstra on 01/07/09 http://www.futurist.com/2009/07/01/future-of-travel-and-tourism/
  • 190. Aviation Industry Outlook
  • 191. International Passengers in 2014Source: IATA 2010, Markets in 2014http://www.iata.org/ps/publications/Documents/Example%20-%20Projected%20Top%2010%20International%20Markets%20in%202014.pdf
  • 192. Freight in 2014Source: IATA 2010, Markets in 2014http://www.iata.org/ps/publications/Documents/Example%20-%20Projected%20Top%2010%20International%20Markets%20in%202014.pdf
  • 193. Aviation in 2029Source: Airbus Global Market Forecast 2010-2029, December 2010http://www.airbus.com/fileadmin/media_gallery/files/brochures_publications/Global_Market_Forecast/Airbus_Global_Market_Forecast_-_2010-2029.pdf
  • 194. Future Demand• Passenger air traffic is forecast to double by 2030 as 12 billion of us take to the skies. So what will the massive airports of the future look like?• One theory being discussed is that the future city will be an “aerotropolis”, with the airport at its heart rather than stationed far away from the centre – important if the city is to connect effectively to the global economy. In much of the western world, airports were developed years ago, when air travel was a luxury form of transport for the privileged. Now, of course, it’s a mode of mass traffic, requiring different capacity solutions.• Songdo, South Korea, is an example of a city built from scratch at a cost of $40 billion with an airport in the centre.• Dubai is rapidly expanding its airport for A380 traffic, where first-class passengers on the building’s upper level will be able to transfer direct to the upper level of the A380 aircraft. Source: TTG Nordic, 2011 http://www.ttgnordic.com/news/item/429-a-look-at-the-super-airports-of-the-future
  • 195. Future Demand• Nearby in Dubai, another gigantic airport, Al-Maktoum International, will eventually have five runways and enough capacity to make it double the size of the biggest airport around today. The first runway is already operational for cargo and passengers will be able to fly there by the end of 2011.• But developers are wary of building a future airport that is too big, creating long distances for passengers to walk between flights and concerns over the logistics and security of having large numbers of people crammed together. The key to this is to arrange connecting transport links such as trains or cars to be as close as possible to the plane.• In the Middle East there seems to be an airport capacity race. In Europe, it’s the contrary; it is extremely difficult for many airports to develop enough capacity to handle the forthcoming explosion in air travel. Projects like Berlin Brandenburg Airport, due to open in 2012, are few and far between. China, by contrast, plans to build 78 new airports by 2020. In Europe, there are plans for five new airports by 2030. Source: TTG Nordic, 2011 http://www.ttgnordic.com/news/item/429-a-look-at-the-super-airports-of-the-future
  • 196. IATA Launches Vision 2050• The International Air Transport Association (IATA) called on industry leaders to look beyond the crisis that buffeted the air transport industry over the last decade and to strategically define a sustainable future.• Giovanni Bisignani, IATA’s Director General and CEO, outlined his vision for aviation in 2050. “We will be very near to zero accidents. We will emit half the carbon. We will have eliminated queues with integrated systems ensuring security as we process more passengers. We will operate with almost no delays in globally united skies. We will share costs and profits equitably across the value chain. We will be a consolidated industry of a dozen global brands supported by regional and niche players. And we will deliver value to investors.” Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 197. IATA Launches Vision 2050• “In just over a decade, I can see $100 billion in industry profits on revenues of $1 trillion. As we move towards 2050, this 10% margin will become even more robust. This is not just a crazy dream. Before the recession, at least a dozen IATA members already had 10% margins. We must make this a much broader reality. Change in all areas is possible. This vision—including sustainable profitability—can be our future,” said Bisignani.• Bisignani’s vision for 2050 rests on four cornerstones of change: – Profitability – Infrastructure – Powering the industry – Customer Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 198. IATA Launches Vision 2050• Profitability: “Efficiency gains never make it to the bottom line because airlines are deprived of the commercial freedom to operate their businesses like a normal business. Our poor profitability makes every shock a fight for survival,” said Bisignani. He laid the blame on the industry’s hyper fragmentation with 1061 airlines as a result of the bilateral system which regulates the global aviation industry. The restrictions on international capital prevent consolidation across borders. “The restrictions of the bilateral system are a dam that holds us back. It is time for that dam to burst. Governments must act responsibly to ensure safety, security, and a level playing field. And airlines need the freedom to build efficiencies across borders, better serve their customers, and achieve sustainable profits to fund growth and innovation,” said Bisignani. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 199. IATA Launches Vision 2050• Infrastructure: “Infrastructure must be reshaped around the needs of airlines—the core of the industry’s value chain. Airports should compete for airline business based on efficiency. Commercial revenues will drive their business. I can see airports paying airlines to bring shoppers and airport revenues funding the air traffic management system,” said Bisignani.• Air traffic management must also change. “I can see ten global air navigation service providers (ANSPs) replacing the current 180 at half the cost,” said Bisignani. The Single European Sky (SES) would be the first of the ten global ANSPs. “But we need real leadership to replace the uncoordinated bureaucratic mess that Europe is today,” said Bisignani, pleading for a date to achieve the $6.5 billion (EUR 5 billion) cost savings that the SES promises. “After 20 years of waiting, we are fed up. Heads of governments must set a date and deliver,” said Bisignani. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 200. IATA Launches Vision 2050• Powering the Industry: “Today’s jet fuel cannot sustain air transport in the long-term. We must find a sustainable alternative and our most promising opportunity is bio fuels, which have the potential to reduce our carbon footprint by up to 80%,” said Bisignani. After successful testing by airlines, certification is expected within a year. Bisignani urged greater support from governments. “Too often governments are only committed to environment when it means grabbing cash. Governments should be investing in biofuels and green technologies. Local production with jatropha, camelina, algae, or even urban waste will open up economic opportunities in virtually any location. Not only will this secure a future power source for our industry, this will also break the tyranny of oil and drive economic development in all parts of the world. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 201. IATA Launches Vision 2050• The Customer: “The customer is at the center of our future vision. By 2050, we will have 16 billion travelers and handle 400 million tonnes of cargo. In just a couple of decades, we will see the middle class nearly triple from the 1.3 billion today to 3.5 billion people—a quarter of which will be in India and China. Accommodating that growth efficiently will be a challenge for all parts of the value chain—airports, air navigation service providers, manufacturers and governments. The solution must be strategic and aligned,” said Bisignani.• Bisignani noted that the air transport industry must engage its 2.4 billion passengers to change government’s “over-regulate and under-appreciate” attitude. “To turn our customers into industry activists, we must improve the value proposition of price, speed, and quality. We have reduced the price of flying by 40% since deregulation. But as we made travel more accessible, speed and quality suffered. The infrastructure has not kept pace, resulting in delays both in the air and on the ground. New security procedures created new hassles. Our challenge is to gain the support of customers in demanding change from the governments,” said Bisignani. Source: IATA, June 2010 http://www.iata.org/pressroom/pr/pages/2010-06-07-02.aspx
  • 202. EUROCONTROL: Long Term Forecast• Future air traffic will be limited by capacity at the airports, 0.7-5.0 million flights will not be accommodated in 2030, 5%-19% of the demand. The congestion is now lower than in the forecast two years ago. The recent drop in traffic has given the system some extra years to react and adapt but once the limits are reached the number of unaccommodated flights increases quickly. Congested airports create pressure on the flow of operations in the network and will exacerbate delays.• Even with airport capacity restrictions airports will grow. In 2030, there will be 13-34 airports as big as the top 7 are now. Some of the faster growing East-European airports will join the top 25. European hubs will be faced with competition from hubs outside Europe, primarily in the Middle-East. Source: EuroControl, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 203. EUROCONTROL: Long Term ForecastSource: Eurocontrol, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 204. EUROCONTROL: Long Term ForecastSource: EuroControl, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
  • 205. Source: EuroControl, 2010 http://www.eurocontrol.int/statfor/gallery/content/public/forecasts/Doc415-LTF10-Report-Vol1.pdf
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