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The Future of European Tourism to 2025, Riga Tourism Partners Forum, October 2015

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Presented at Riga's annual tourism partners forum, this presentation looks at the characteristics of five key outbound markets of interest to Riga (Ger, UK, Fr, NL-Be, Nordics).
The presentation also goes deep into the trends in consumer culture and city management that will shape European city tourism over the next decade.
Toposophy associates are ready to assist your tourism forum with their insights and recommendations.

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The Future of European Tourism to 2025, Riga Tourism Partners Forum, October 2015

  1. 1. THE FUTURE OF EUROPEAN TOURISM TO 2025 RIGA TOURISM PARTNERS FORUM 29 OCTOBER 2015
  2. 2. • Senior Tourism Analyst, TOPOSOPHY • Specialist in Millennial traveller trends and strategy • Over 13 years’ experience in global tourism policy (UNWTO, WYSE, PATA) • Consultancy and strategic advice on making your destination ready for next-gen travellers • TOPOSOPHY: Helping Destination Marketing Organizations become Peter Jordan
  3. 3. P E R F O R M A N C E O F K E Y M A R K E T S M E G A T R E N D S T H A T W I L L S H A P E E U R O P E A N T O U R I S M T O 2 0 2 5
  4. 4. WE REVEAL THE BEST OF WHAT EVERY PLACE HAS TO OFFER
  5. 5. PERFORMANCE OF KEY EUROPEAN OUTBOUND MARKETS OF INTEREST TO RIGA
  6. 6. GENERAL PICTURE ACROSS EUROPE PERFORMANCE OF KEY MARKETS
  7. 7. 0 20 40 60 80 100 120 140 China US Germany Russia UK France Canada Australia Italy Brazil Singapore Belgium Japan Rep.Korea HongKong Netherlands Norway UAE SaudiArabia Sweden Spain Switzerland Taiwan Malaysia India Kuwait Austria Denmark Mexico Poland Expenditure(US$billion) Source: UNWTO World Tourism Barometer, Oct 2014 The world’s top spenders on tourism in 2013
  8. 8. General picture across Europe • Post-crisis recovery is well underway • Despite economic uncertainty, there is pent-up demand from from Germany, UK, France, Italy and the Netherlands • Strong US dollar and rise in disposable income among US consumers has led to a boom year for US-outbound travel • Europe maintains its attraction for other long-haul markets such such as China and India – already seeing greater dispersal • Ongoing tension with Russia has continued from 2014 into 2015 2015
  9. 9. A C L O S E R L O O K AT S P E C I F I C M A R K E T S : • G e r m a n y • U n i t e d K i n g d o m • F r a n c e • N L - B E • N o r d i c
  10. 10. GERMANY PERFORMANCE OF KEY MARKETS
  11. 11. GERMANY – Current situation • Ranked 3rd outbound market in the world after China and the US • Weak euro has helped exports, while low oil prices, and stable wages have boosted the economy and consumer confidence. • IMF predicts 1.7% GDP growth in 2016 • Lowest unemployment level in 20 years • A mature market, highly competitive • 2015 has seen transport strikes
  12. 12. PERFORMANCE OF KEY MARKETS Source: ETC Trends & Prospects - Q2, 2015
  13. 13. GERMANY – The German traveller • Holidays are culturally very important – few Germans like to give them up • Traditional media (TV, press, radio) is losing ground quickly to digital media. Rapid rise in digi-tablet use. • Still, a high proportion of ‘ropo’ (research online, purchase offline) with a strong value on personal advice • Ageing population, still favouring active holidays • Interesting fact: 43% of German travellers are interested in doing walking & hiking during their holidays Source: VisitBritain, 2015
  14. 14. UNITED KINGDOM PERFORMANCE OF KEY MARKETS
  15. 15. UNITED KINGDOM – Current situation • Ranked 5th outbound market in the world • Economy is in recovery and unemployment is falling • Strong GBP makes the Eurozone more attractive for British travellers . • From 2015 pensioners (seniors) can access their pension funds earlier, giving them more to spend. 34% take at least two vacations per year. • Youth market is becoming more diverse and adventurous
  16. 16. PERFORMANCE OF KEY MARKETS Source: ETC Trends & Prospects - Q2, 2015
  17. 17. UNITED KINGDOM – The British traveller • Best to consider different UK regions as different markets; London is a powerful outbound market • With an ageing population with increased disposable income, seniors are expected to travel a lot more; however they value a smooth journey, clear information, professional service and a rewarding experience. • British Millennials (aged 18-35) are adventurous: UK is the top selling market in Europe for Interrail passes • ‘Last-minute leisure’ is booming, driven by smartphone bookings: 59% of British travellers have booked and travelled in the same week, 19% on the same day! Source: LastMinute Sponeneity Report, 2014
  18. 18. FRANCE PERFORMANCE OF KEY MARKETS
  19. 19. FRANCE – Current situation • Ranked 6th outbound market in the world with 25.4m outbound trips in 2014. • Similar population size and economy to the UK, but domestic tourism is more important – government has promoted this heavily during the crisis • Economic growth is slow (1% expected in 2015), shows characteristics of both Northern and Southern Europe • Strongest growth in arrivals from France has been in emerging destinations such as Lithuania, Iceland, Latvia, Montenegro, Serbia
  20. 20. PERFORMANCE OF KEY MARKETS Source: ETC Trends & Prospects - Q2, 2015
  21. 21. FRANCE – The French traveller • ‘ROPO’ is very common (71% researched online, 45% booked all or part of their travel online). • Packages are popular (54% of all trips booked in 2014), but mostly flight + hotel, not all-inclusive. • Domestic tourism highly important (68% of ‘main holidays’ taken in France in 2015) • Traditionally take long vacations (longer than 13 nights), however short breaks becoming more popular due to increase in low cost airline operations in France • Appreciates information and guidance in French language Source: French National Statistics Office, 2015
  22. 22. BELGIUM AND THE NETHERLANDS PERFORMANCE OF KEY MARKETS
  23. 23. BELGIUM & NETHERLANDS: Current situation • Ranked as 12th (BE) and 16th (NL) outbound markets in the world, though similar volume of outbound travel • Both BE & NL have been through a recession, though Belgium has been affected worst. NL is in recovery, with moderate growth (less than 5%) expected to 2018. • Netherlands outbound: 79% for leisure, 21% for business • Belgium outbound: 51% of all travel is to Fr, Ger & NL • Netherlands expects to see 23% growth in online bookings in the next 5 years, as well as a general shift from car travel to plane and train travel (especially influenced by senior travellers)
  24. 24. PERFORMANCE OF KEY MARKETS Source: ETC Trends & Prospects - Q2, 2015
  25. 25. BELGIUM & NETHERLANDS: Traveller profiles • Belgium outbound behaves more like French market, Netherlands outbound behaves more like Nordic market • In NL, over the next decade, age group 65-80 years will make up 17% of the population, increasing the amount of travellers with leisure time and disposable income. • Dutch travellers are highly independent, preferring to book accommodation only, then find their own food & activity options. VisitBritain reports the Dutch market as the most likely to want to ‘sleep somewhere unique’ • From Jan 2014 no licence needed to operate travel agency in Belgium = greater shift to travel consultants
  26. 26. NORDIC MARKETS: • DENMARK • NORWAY • SWEDEN • FINLAND PERFORMANCE OF KEY MARKETS
  27. 27. NORDICS: Current situation • Have come out of the global economic crisis relatively unaffected and with low unemployment rates: average of 6.3% across all four nations, compared to EU av. 11.5% • In 2014: • Sweden 15.5 million outbound trips • Denmark 9.8m • Norway 9.3m • (Finland tbc – smaller outbound market size overall) • Relatively high wealth across all population segments means frequent travel behaviour – highly adventurous • High travel frequency for business in the region – potential for MICE growth from Nordic markets
  28. 28. THE NORDICS: Traveller profiles • Summer is the most popular time for city trips within the Nordic region. Winter is for travelling long-haul and to southern Europe • Baby boomer generation highly important: 50+ years is the largest population segment in Sweden (38%) and Denmark (36%). Norway 39% of population is over 45 years. • Adventurous and socially competitive: like travelling to new destinations where their friends and neighbours haven’t been. • 60-70% of travel products booked online: highest category
  29. 29. GETTING SMART TO DESIGN BETTER PRODUCTS: We combine our knowledge of existing market profiles Plus....
  30. 30. MEGATRENDS THAT WILL SHAPE EUROPEAN TOURISM TO 2025
  31. 31. THE SHARING ECONOMY AND P2P EXCHANGE MEGATRENDS THAT WILL SHAPE EUROPEAN TOURISM TO 2025
  32. 32. WHAT IS THE SHARING ECONOMY? "An economic model based on sharing underutilized assets from spaces to skills to stuff for monetary or non-monetary benefit'‘ Rachel Botsman, Collaborative Lab
  33. 33. Collaborative consumption is not just a consumer trend THE SHARING ECONOMY: KEY DRIVERS FOR GROWTH
  34. 34. ACCESS Vs OWNERSHI P GUILT Vs PURPOSE THE SHARING ECONOMY: KEY DRIVERS FOR GROWTH
  35. 35. MILLENNIALS LEAD THE WAY The fastest growing customer segment in the hospitality industry, expected torepresent 50% of all 2025 THE SHARING ECONOMY: KEY DRIVERS FOR GROWTH
  36. 36. CHEAP & EFFICIENT WI-FI CLOUD COMPUTING ULTRA-PRECISE GEO-LOCATION CROUDSOURCING INTERNET OF EVERYTHING THE SHARING ECONOMY: OTHER KEY DRIVERS FOR GROWTH
  37. 37. SHAPING THE VISITOR EXPERIENCE
  38. 38. IN SUMMARY - THE SHARING ECONOMY IS HERE TO STAY • Appropriate legislation is ESSENTIAL. It affects neighbourhood life, land use, taxation, safety of visitors and employment legislation. • All partners must be at the table • Create a level (and bigger?) playing field by giving tourists what they’re looking for, while ensuring fair competition for all • New challenges and opportunities for
  39. 39. MILLENNIALS: THE NEXT GENERATION OF TRAVELLERS GOES MAINSTREAM MEGATRENDS THAT WILL SHAPE EUROPEAN TOURISM TO 2025
  40. 40. Defining ‘Millennials’
  41. 41. Millennials: • The current young generation, aged 18-34 • Also known as Gen-Y, the ‘Me’ Generation 1970 1980 1990 2000 2010 2020 Born during this period Enters teenage years and becomes an independent consumer, post the year 2000 Gen X & Baby- boomers ‘Gen Z’
  42. 42. Travellers Consumers Individuals Thinking about Millennials:
  43. 43. How do Millennials travel differently?
  44. 44. 1. More connected than any previous generation This is the generation that grew up with: • ‘Internet everywhere’ (3G, Wi-Fi) • E-Commerce • Mobile devices • Social media • E-travel (reviews, metasearch, last minute booking, group deals) • The concept of ‘personal branding’ through travel
  45. 45. Connected at every stage of their journey Dreaming Planning Booking Travelling Experiencing Reflecting
  46. 46. 2. Social media rules • For Millennials, social media is their primary source of news, information, inspiration and advice. • Social media is used throughout Millennials’ journey: when dreaming, planning, booking, experiencing, and reflecting. • Where you travel says a lot about you, and social media magnifies Millennials’ ‘personal brand’
  47. 47. 3. Millennials to collect experiences, rather than ‘things’ • Brought up with the Internet and 24- hour news, this generation is more globally aware and globally curious. • With increasingly stressful lives in the ‘fast lane’, this generation welcomes opportunities to slow down and re- connect with loved-ones • Happiness comes from collecting
  48. 48. 4. Millennials seek authenticity • Millennials’ seek to satisfy their cultural curiosity by meeting new people (easy, thanks to location-based apps, such as Foursquare and Tinder) • When travelling they increasingly look to connect with the local culture, attending events and taking classes based on language food, music, fashion and design. • If they can make a positive impact on the local society and economy, then even better
  49. 49. Your FREE guide to destination marketing & Millennials: ‘Putting Your Place on the Millennial Map’ • Available at Toposophy.com + here • Practical advice on where to start • Develop attractive products for Millennials
  50. 50. SMART CITIES MAKE SMART DESTINATIONS New technology in destination management MEGATRENDS THAT WILL SHAPE EUROPEAN TOURISM TO 2025
  51. 51. SMART CITIES MAKE SMART DESTINATIONS • The majority of the world’s population now lives in cities • In just 10 years there will be 37 mega-cities, each with a population of over 10 million people. • 600 cities will be responsible for generating 65% of the world’s GDP • The transformation towards a connected, globalised economy and modern lifestyles will make cities even more popular places to
  52. 52. SOURCE: techzine.alcatel-lucent.com:Challenges forstateand localgovernments SMART CITIES MAKESMART DESTINATIONS • Growth willbringchallenges • These challenges will have to be managed and addressed • A city that is attractive for its residents will be attractive for visitors
  53. 53. SMART CITIES MAKE SMART DESTINATIONS ‘SMART’ means: • Recognising that cities are about people • Creating spaces for people to interact, relax and learn • Using technology to solve real problems in ways that are small, practical and easy
  54. 54. SMART CITIZEN SERVICES DYNAMIC KIOSKS THAT DISPLAY REAL-TIME INFORMATION, CONCERNING TRAFFIC, WEATHER AND LOCAL NEWS, LIKE URBANFLOW IN HELSINKI
  55. 55. SMART ENERGY Solar-PoweredChargingStations
  56. 56. SMART CAN BE SIMPLEDIY – Urban Furniture
  57. 57. SMART CITIES MAKE US SMILERio Grande do Sul – Disconnect Now
  58. 58. THE NEW M.I.C.E INDUSTRY: MIXING BUSINESS WITH PLEASURE MEGATRENDS THAT WILL SHAPE EUROPEAN TOURISM TO 2025
  59. 59. BUSINESS + LEISURE = ‘BLEISURE’ • Millennials are the generation used to working remotely, meeting people and finding new experiences • Millennials like to add extra leisure days to their business trip • Business travel can be lonely. Millennials want to
  60. 60. MAKING BUSINESS TRAVEL REWARDING • For many people, business travel is an exciting proposition, shared online. Make it fun! • Business travel can be lonely – how can you help business travellers to meet local people? • Meeting rooms all look the same. How can you give MICE visitors a uniquely Latvian experience? • How can you help them to spend more time and explore further in Riga?
  61. 61. EXPLORING NEW PARTNERSHIPS FOR 21st CENTURY CITY TOURISM MEGATRENDS THAT WILL SHAPE EUROPEAN TOURISM TO 2025
  62. 62. TOURISM AND DESTINATION MANAGEMENT ARE CHANGING: • Governments expect tourism bureaux to do more work with less money • The role of a traditional DMO is changing – fast! • Being a successful DMO at the heart of a successful destination will mean growing up
  63. 63. THE TYPE OF SERVICES THAT VISITORS NEED FROM A TOURISM BOARD (DMO) IS CHANGING • DMOs need to attract visitors in more imaginative ways while managing the destination well to ensure that it meets the marketing promise
  64. 64. WHAT ARE THE SOLUTIONS? • DMOs will have to become more accountable to local government • They will be expected to play a role in promoting local economic and community development, solving problems such as youth unemployment and supporting small businesses • Encouraging greater citizen participation in tourism management • Becoming a ‘facilitator’ rather than a ‘manager’
  65. 65. MAJOR STUDY: THE FUTURE OF CITY MARKETING AND MANAGEMENT IN EUROPE Expected release: Spring 2016 +
  66. 66. NICE TO MEET YOU Acharnes, Athens, Greece | T. +30 210 8941610 F. +30 210 24 04405 | E. info@toposophy.com pjordan@toposophy.com +31 634581566

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