The travel industry is constantly being disrupted by new technology and we’re seeing the shift to a mobile-first world. Technological upheaval is having a profound effect on traditional brands and giving rise to new business models such as the sharing economy. Caroline Bremner, Head of Travel at Euromonitor International, takes a look at what the future may hold for travel brands in an omni-channel, multi-device world where consumers demand ever greater personalisation.

1. Disruption and Shifts in
Future Travel Booking
Euromonitor International
Caroline Bremner

2. Future Travel Booking
Digital disruption
Future for intermediaries
New business models
Future trends

3. • North America and Australasia are close to saturation for internet
• Emerging markets expected to remain largely underserved by 2030
Technology as an enabler of change
2016-2030
Up to 2015
Percentage of population using the internet
Asia Pacific
MEA
Australasia
Eastern Europe
Western Europe
North America
Latin America

4. Moving towards a mobile-first world
• Mobile broadband dominates with 80% of global internet subscriptions
• Internet.org aiming for ubiquitous connectivity

5. Google
TripAdvisor
Facebook
Twitter
iPhone
Airbnb,
Android
Uber
Cloud,
Internet of
Things, VR,
AI…
Disruptors gain scale quickly
• Breath-taking speed of change since the Millennium
• From zero social media to 90% penetration expected by 2030
• Internal chip technology a future reality…

6. 0
5
10
15
20
25
30
35
40
0
200
400
600
800
1,000
1,200
1,400
Asia Pacific Australasia Eastern
Europe
Latin
America
Middle East
and Africa
North
America
Western
Europe
%shareofpopulation
Numberofpeople(mn)
Millennial Population by Region 2014
2014 Millennial population (15-35 year old)
Millennial % share of total population
Millennials lead fast adoption of technology

7. Interaction with brands across multiple devices
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Units,million
Global Consumer Electronics Devices in Million
Units 2010/2015/2020
2010 2015 2020
1.6 bnWorld smartphones 2020
160mnLatin America
smartphones 2020
130%Brazil smartphone penetration per
household 2015

8. Future Travel Booking
Digital disruption
Future for intermediaries
New business models
Future trends

9. 0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2005 2010 2015 2020 2025 2030
%period(5-year)growth
Trips(million)
Global Inbound Arrivals Forecast Performance
2005-2030
Inbound Arrivals % Period Growth
Future tourism demand – robust growth but challenges
Source: Euromonitor International, UNWTO
Source: BBC

10. 0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2015 2020 2025 2030
US$billion
Global Travel Sales Shift to Mobile 2015/2020/2025/2030
Offline Travel Sales Online Travel Sales ex Mobile Mobile Travel Sales
Travel booking landscape
Source: Euromonitor International
Note: Sales to Residents
 Irreversible shift in power from offline to online but there is a ceiling
 Mobile the clear winner – creating a mobile strategy critical for future success
 Trending towards 80% online vs 20% offline by 2050…

11. Brazil opportunities and threats
• Rio 2016 Olympics minimum impact
• Low season so less displacement effect
• Huge global platform but Zika challenge
-30
-20
-10
0
10
20
2014 2015 2016 best case 2016 worst case
%y-o-ygrowth
Brazil Best Case vs Worst Case Inbound Growth Performance 2016
Arrivals
Receipts
Source: Euromonitor International from UNWTO
Note: 2015 and 2015 actuals , 2016 projections

12. Brazil bucks trend with resistance to online bookings
 Big digital inclusion gap with high levels of unfamiliarity with digital sales channels
 Lack of trust in security, prefer bank slip payments
 Preference for using travel agencies as security net and social status

13. Increased fiction between intermediaries & suppliers
OTAs
Hotels
- Additional revenues
- Web marketing/promotion
- Source also of direct bookings
- Access to new markets
- Access to advanced technologies
- Significant commissions
- Competition on advertising platforms
- Competition for brand loyalty
- Risk of commoditisation of hotels
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
World
US
Brazil
Intermediaries vs Direct Suppliers % Sales 2015
Offline direct Online direct Offline intermediaries Online intermediaries
Source: Euromonitor International

14. • Multi-channel and highly fragmented
• Future challenge for who will control the overall customer journey & experience
Increasingly busy and complex competitive landscape
Search engines &
Meta search
Consumer
Social media
Affiliate websites
Online travel agents
Travel agents
Supplier's
website
Supplier
Peer to peer

15. • Expedia and Priceline are world’s leading intermediaries
• Metasearch acquisitions with Expedia’s Trivago and Priceline’s Kayak to drive OTA traffic
• Expedia’s Decolar acquisition in 2015 to expand in Latin America as new focus area
The Big Two dominate and apply pressure
Source: Euromonitor International

16. Future Travel Booking
Digital disruption
Future for intermediaries
New business models
Future trends

17. Rise of peer to peer and sharing brands
0
1,000
2,000
3,000
4,000
5,000
6,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Valuesales(US$million)
Airbnb and HomeAway Value Sales
2005-2014
• Value for money and authentic experiences big draw for travellers
• Rise of online micro entrepreneurs fuels peer-to-peer travel services
• Social media ensures trust
Source: Euromonitor International

18. Demand
Online advertising
SEO
Supply
Vast inventory
Best price
guarantee
Booking
Flexible payments
and cancellation
policies
Service
Reviews and
ratings
Seamless service
Demand
Targeted
advertising
App push messages
Supply
Personlised offers
In-destination
tourist services
Booking
Multidevice
bookings
Last minute
reservations
Service
Mobile assistance
Seamless travel
experience
• Shift to mobile changing traveller behaviour and expectations
• Big shift to real-time customer service & engagement with opportunities for in-trip bookings
• Danger that operators are caught off guard in emerging markets
Travel business models transform in the mobile era
Online Travel Business Model Mobile Travel Business Model

19. • TripAdvisor, Google and OTAs lead personalisation
• But mobile web/apps low barrier to entry – platforms for independents and SMEs
• In Brazil, high prices & personal security are barriers to growth for wearables
Holy grail of personalisation
Consumer
preferences
Consumer
past
behaviour
LocationTime
Online
inventory of
travel
services

20. Leading Global Instant Messaging Platforms 2015
Company Users (million)
Whatsapp 800
Facebook Messaging 600
WeChat 550
LINE 205
Snapchat 100
Source: Mary Meeker Internet Trends 2015
• Instant messaging platforms have seen a phenomenal rise in popularity
• Use messaging to chat to friends, send photos and videos and increasingly shop
New booking platforms emerge quickly

21. • World’s social media base over 2.0 billion users
• Huge potential to drive s-commerce in Brazil, away from advertising to sales
• Twitter & Facebook making serious moves into s-commerce
Brazil highly social nation - opportunity for s-commerce
Buy Items via Social Media Platform by Market 2014
Source: Euromonitor International, Hyperconnectivity Survey 2014

22. • TripAdvisor and Google to leverage their huge traffic to generate direct bookings
• Both launched hybrid models allowing direct hotel bookings, but not likely to become OTAs
• Amazon may try again to crack the travel industry
Future travel booking giants?

23. Future Travel Booking
Digital disruption
Future for intermediaries
New business models
Future trends

24. • Blending of the physical and digital worlds
• Channels acting in complement not in conflict
• Reinvention of old school - Thomas Cook launches “Hi Tech, Hi Touch” store
‘Physital’ fusion

25. •Virtual reality set to take the travel industry by storm
•Allowing consumers to try before they buy
•Robots a gimmick, but automation a threat to job creation
Technology to enhance the in-store experience
Source: Marriott HotelsSource: Business Wire

26. • Convenience through multiple channels & devices
• Mobile in the mix
• Personalisation
• Seamless user experience
• Sustainability a given
Success criteria – experience will trump all

27. Thank you for listening
Caroline Bremner
Head of Travel
caroline.bremner@euromonitor.com
@carolinebremner