The Inbound Report

Covering the Inbound Tourism Industry Since 1996

As UK Residents Are Intent on Traveling, They’re Turning More and More to Online Booking

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Two Tour Operators Provide the Best Digital Customer Experience, Says Study: Online bookings now dominate the travel industry. Despite political and economic uncertainty, Brits appear unwilling to sacrifice travel plans, with 86 percent taking a holiday at home or aboard in 2018. Eight out of 10 UK holiday makers now book their travel plans online, whether direct with an airline or hotel (47 percent), a booking website (41 percent) or via a travel agent (40 percent).

With 4 out of 5 holidays booked online, the digital customer experience is key to ensuring travel companies drive sales and grow market share in the coming twelve months—this according to the results of a study by Toronto-based Maru/Matchbox, a communications and brand research firm.

A great customer experience – including online interactions – is a major driver of both customer loyalty and future revenue. Our own insight reveals sites who are regarded better than their rivals enjoy much higher brand advocacy ratings, while supporting market analysis demonstrates that when a brand improves its customer experience, revenue can – and will – increase.

Maru/Matchbox has been benchmarking the digital travel landscape since 2008. By benchmarking top hoteliers, airlines, booking sites and travel agents, the company says, “we can identify the autonomy of a leading site and uncover best practice so others in the industry can replicate leading digital customer experience.”

Without revealing specifics, the company says that its effectively documents the impact of new technology and emerging trends on consumer expectations. Using independent digital shoppers to assess the end-to-end online booking experience, results have helped guide the travel industry over the past eleven years as it looks to continuously adapt to rapidly changing needs.

Holiday habits are changing, Maru/Matchbox indicated, noting that industry reports suggest more UK holiday makers are sacrificing minibreaks for one longer, extended holiday. It means thorough research and careful budgeting have never been so important to online bookers.

So, What Makes a Great Digital Customer Experience in 2019? The takeaways:

—A consistent and seamless digital customer experience is key to driving online bookings.

Yet, results demonstrate industrywide variability across the digital customer journey, including with Travel Digital Experience Benchmark leaders TUI and Thomas Cook.

—While brands are delighting with enticing homepages, many are failing to meet user expectations when it comes to inspiration, search and booking processes.

—It represents a huge opportunity for the market. When hoteliers and airlines are investing in campaigns to encourage booking directly and win back market share from intermediaries (Hilton’s ‘Expect Better, Expect Hilton’ campaign debuted in September 2018), it is essential that brands deliver exceptional digital experiences that drive on-going relationships and reduce barriers to purchase.

—Notably, tour operators and booking agents continue to drive best-in-class digital travel experiences, highlighting the development still needed by travel brands to effectively capitalize on campaign messaging.

 

Other notes:

—Despite consumers becoming more invested with researching holidays before booking, the initial research stage of the customer journey recorded the lowest benchmark average with a score of just 71 percent.

—Almost all online booking decisions are driven by ratings and reviews. Users expect to see review listings, especially for accommodation. Despite the importance of reviews to the travel industry, surveyors scored an average of just 56% for customer ratings. It is essential that reviews are easy to access and browsers have the ability to read all reviews, not just a select few.

—Customers want to be inspired and expect sites to sufficiently inform them about destinations, resorts and experiences. Product photos and videos – where available – also help customers to make informed booking choices yet scored an average of just 77 percent and 22 percent respectively. It represents a huge opportunity for brands to not only differentiate, but to improve online conversion rates.

—Customer reviews and product photos will become increasingly important to digital travel customer journeys with the impending end to high-pressure selling tactics by hotel booking sites.

—Two thirds (66 percent) of online travel bookers feel pressure-selling messages, such as the number of people looking at a hotel, has influenced their decision on where and where to book. Without these messages, users will put their trust in reviews, with two thirds (68 percent) saying they would use as part of their decision-making. This was significantly higher than both “prices” and “promotions” indicating even the best prices and offers cannot overcome a poor review experience.

It Could Have Been Worse as Summer Blahs Signal a Blah Year

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Notes from Here and There—2020 Should be Better: About this time of the year, in the midst of the peak summer travel season, travel suppliers and DMOs who market abroad know very well the wisdom of the old adage, “If it ain’t done yet, it ain’t gonna get done.”

Judging by random news notes in the global trade press, along with anecdotal accounts from tourism sales and marketing professionals, it’s clear that the focus is on prospects for 2020 and beyond, while data points here and there suggest that the key measures for success tell us that 2019 is going to end up being a flat year. Some notes:

—The latest issue of US Travel’s Leading Travel Index (LTI), covering activity through May told us that “International inbound expanded 1.2% (year-on-year) in May, falling closer to its six-month trend following three months of wider fluctuations. The Leading Travel Index continues to project that inbound travel growth will be slow, registering just 0.4% over the next six months.”

Leading tour operators in Germany are already taking bookings for summer 2020 holidays at the same time as trying to stimulate bookings for this summer.

An item in the German travel trade publication FVW, reported that, midst weak sales for summer 2019, the country’s top tour operator, TUI, has opened up for travel agency reservations for some destinations for summer 2020.

At the same time, No. 2 Thomas Cook has also opened up its summer 2020 program for reservations of package and hotel-only bookings. And No. 3 DER Touristik has also made many destinations offered by its tour operator brands available for bookings for Summer 2020

—For the first four months of 2019, came the news from Destination Canada, that the number of Canadians who had visited the USA drop by 5.8 percent for the same period in 2018—a drop-off of nearly 390,000.

—Meanwhile, the U.S. National Travel & Tourism Office (NTTO) recently released arrivals figures for the top overseas inbound tourism source markets which showed that visitor traffic to the United States for the first five months of the year (January-May) was mixed. While it was up year-on-year for the UK (+8.2%), Japan (+6.5%),, France (+4.1%), India (4.0%), Italy (+1.4%), Colombia (+12.5%) and Spain *.2%), it was down for China (-3.1%), Brazil (-2.1%), South Korea (-4.4%), Germany (-0.9%), Australia (1.9%) and Argentina (-23.3%).

South American Market is Blossoming

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While it is the number three world regional market, behind Europe and Asia, South America has been steadily increasing the number of visitors it sends to the United States over the past eight years. Data made available by the U.S. Department of Commerce’s National Travel and  Tourism Office (NTTO) show that, during this period, visitors to the USA South American countries have increased at a rate that is more than double that of total international visitors (including neighboring Canada and Mexico) and almost 50 percent greater that visitors from long-haul overseas markets—even though the regions of Europe and Asia dwarf South America’s population. Currently (2018), arrivals from the three regions look like this:

In Context: While economic conditions seem to have helped cause a slump in the South American market and other world regional markets, South America seems poised to continue its steady increase this year—Argentina excepted. Even Venezuela, whose economy is a virtual basket case and which gets no direct air service from U.S. legacy carriers, has stopped negative growth in visitor numbers.

For a quick read of what the data in the two tables below show, INBOUND has prepared brief takes on factors that have had an impact on the growth numbers of the top South American source markets over the past eight years.

—Since Chile became part of the USA’s Visa Waiver Program in May 2014, traffic to the U.S. has been on a non-stop growth curve, more than doubling from 2011 to 2018.

—From mid-2014 through most of 2016, Brazil experienced a severe economic crisis … so severe that Brazilians referred to it—and still refer to it—simply as “La Crise” (“The Crisis”). The economic crisis became coupled with a political crisis in Brazil that resulted in the impeachment of president Dilma Rousseff and in widespread dissatisfaction with the political system. By the beginning of 2017, the country’s GDP has grown for two consecutive quarters, marking the end of the recession. Inbound travel to the USA has staged a recovery, though its levels have yet to reach 2014 levels.

—Colombia, more than any another nation in Latin America, has borne the brunt of the political and economic disruption taking place within neighboring Venezuela. According to a report early last month (June), the United Nations said that more than 4 million refugees and migrants have left Venezuela, with 1.3 million of them settling in Colombia. One of the secondary impacts on Colombia has been a check on the desire to travel.

 —Argentina is experiencing what seems to be an unchecked slide into a recession that “launched” last year. One measure is the value of its currency, which fell by more than 65 percent since the beginning of 2018. Retail travel agents and tour operators have suffered greatly from the impact.

—Uruguay, which is sometimes referred to as the “Switzerland of South America,” has an export-driven economy that is among the most stable in the western hemisphere, and its banks are an attractive place for foreigners to keep their savings. Geographically the second smallest country in South America (Suriname is the smallest), it is also the smallest major country in the continent in population, with some 3.5 million people. Its above-normal levels of travel-able people makes it a reliable—if modest—source of inbound travel.

 

 

Air Travelers Still Prefer to Deal with Humans at Airports

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While remote ticketing, check-ins and other technological improvements have made the air travel experience a little smoother for passengers, airline patrons like to deal with humans when problems arise. This is the main takeaway from a just-released survey report from OAG, “The Airport Delight Report: Humans vs. Machines.”

Yes, high-tech changes and automation have improvement the airport experience, but these don’t take care of some of the issues confronting travelers. For instance, outside of ticketing and check-in, passengers prefer human customer service vs. automation for virtually everything else:

—Baggage handling (54 percent vs. 45 percent) for automated customer service;

—Security (55 percent vs. 45 percent);

—Boarding (64 percent vs. 36 percent);

—Security (55 percent vs. 45 percent);

—Concierge (83 percent vs. 17 percent); and

—In-flight services (80 percent vs. 20 percent).

Also, OAG, in its survey of 2,000 travelers, found that …

—Travelers don’t mind being tracked– if it leads to a better experience. Nearly 60 percent of travelers would let airports track their location through a mobile or wearable device to redeploy staff to cut down on wait times.

—Only 19 percent of travelers said they see value in interactive robots that provide information and concierge services. In comparison, 40 percent want more baggage loading zones to expedite security lines, 54 percent would value in-airport, turn-by-turn directions for navigating terminals and gates, and 75 percent want real-time updates on expected boarding times.

—More and more airline passengers prefer automated retail operations in airports: 54 percent of millennials, 37 percent of business travelers and 35 percent of all travelers reported interest in self-checkout retail options at the airport.

For those who thought that airlines and airports had exhausted all potential source of revenue through add-ons … Surprise. In evaluating traveler sentiment around two untapped airport revenue opportunities (on-demand, gate-side delivery and pre-ordering through mobile), OAG found that, while only six percent of travelers have pre-ordered food or drink for pickup at a gate-side restaurant, 66 percent would consider taking advantage in the future. And while only 9 percent of travelers have ordered gate-side delivery of food and drink, 62 percent are willing to try it out.

For Nearly 25 Years, Which Long-Haul Destination has been the Favorite of Brits?

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A new ABTA research report that reviewed the travel habits of UK holidaymakers over the past quarter-century has had findings of particular interest to U.S. travel suppliers and DMOs who sell to the largest overseas source market for U.S. inbound tourism:

  1. Data from 25 years apart show that the USA is still the favorite long-haul destination of British travelers; and
  2. Packaged travel is still preferred travel mode of half of all UK holidaymakers—despite the emergence and growth of other types of travel.

While the numbers prepared by ABTA showed that the USA has slipped from its position as the 3rd most popular international holiday destination for Brits from in 1994 to 6th most popular in 2018, there is no other overseas/long-haul destination that is more popular, although Mexico has grown in favor, as have some Caribbean destinations.

ABTA’s analysis of the International Passenger Survey (IPS) air travel figures also showed the diversification of destinations people are visiting. That is, while there is still a strong market for traditional package holiday destinations – almost 25 million visits were made to Spain, France, Italy, Portugal, Greece, Cyprus and Malta combined last year, a big increase from just over 13 million in 1994– today’s holidaymakers are branching out and going further afield.

For in instance, UK holidaymaker visits to Mexico in 1994 stood at 18,778 whereas in 2018 visits were up by 3,500 percent to 676,734, that’s more than the number of visits to Malta (559,677).

Repackaging the Package Holiday: Package holidays continue to dominate the overseas UK holiday market, despite the emergence of other types of travel, with half of the holidays2 people take each year being package breaks—a figure that has held steady since 2014. However, the first package holidays of the past are quite different from some of the package breaks people are taking today.

ABTA said that travel companies have responded to holidaymakers’ changing preferences—offering packages that include tailor made trips, tours that take people off the beaten track, adventure holidays, river and ocean cruises, well-being breaks and all-inclusives. Holidaymakers also have the chance to personalize their package – upgrading transfers, choosing their own room and even booking a specific sun lounger.

Interviews with ABTA members revealed that customers now often want to be “the first to visit” a destination or particular resort, whereas, in the 1970s, many people chose a holiday location based on where their friends or family had been.

Similarly, a package holiday was often sold with the promise of a “home-from-home” (like the UK but with better weather), but many UK holidaymakers are now keen to experience the best of the local culture.

Travel experts also highlight that—as people have become more seasoned travelers and the UK restaurant scene offers a wider range of cuisines—trends of the past such as packing tea bags, cereal, cleaning products and tinned food for their holiday abroad (as well as confusing prosciutto for raw bacon), have become a lot less common.

¹ ABTA analyzed the International Passenger Survey (IPS) air travel figures for the purpose of a holiday (excluding visits for Business, Visiting friends or relatives or Miscellaneous) from the ONS from 1994 (the first set of full online data available) to 2018 (the most recent set of figures), with three-year intervals, focusing on 16 of the most popular destinations for UK holidaymakers. Visitor numbers are survey estimates and are subject to sampling errors.

The tables above, ABTA points out, show the approximate number of visits for a holiday made to each destination by air travel in 1994 and 2018. It is worth noting that there are fluctuations of visitor numbers in years between, often in response to external events.

A note about ABTA: Founded in 1950 by 22 travel companies as the Association of British Travel Agents, and has grown to be the largest travel association in the UK. The organization changed its name to ABTA The Travel Association in July 2007. In July 2008, it merged with the Federation of Tour Operators (FTO). ABTA has around 1,200 Members, with a combined annual UK turnover of £38 billion (almost $48 billion).

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Tom Berrigan, Managing Editor/Producer
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