Task Description
In this task student is required to analyse the mega trends from the CSIRO tourism futures report and write a report that identifies the underlying drivers and trends that are influencing this tourism mega trend.
You are expected to read widely (including futures literature). Your report should be of 3000 words (excluding references and appendices) and may include a limited number of tables and figures.
NOTE:Your recommendations should be tailored to a destination and at broad industry level, not at an individual firm level.
Criteria used to grade this task:
- Integrate theory and research to critically analyse the mega trends in tourism and hospitality industry
- Investigate and analyse the key drivers and trends that are influencing (or will influence) the future development of the mega trend chosen
- Examine the specific opportunities and challenges the mega trends may have on tourism-related industries
- Formulate and justify key recommendations related to the marketing and management of tourism related industries to ensure Australia will be successful and competitive in the future
- Explain the political, socio-cultural and economic factors that influence the emerging global tourism markets
- Describe the relationships between tourism and the content areas under study (e.g. commodity culture, visual culture, media culture, etc.).
- Demonstrate research, deduction and problem solving skills to predict the future direction of tourism and hospitality.
Tourism Megatrends 10 things you need to know about the future of Tourism www.horwathhtl.comwww.horwathhtl.com Tourism Megatrends 2 10 Mega trends in Tourism Horwath HTL has identified 10 global trends which will influence mid- and long-term tourism development. The first five trends will have a major influence on demand in the tourism sector but will also impact the second set of trends, which concerns changing supply. Together, they represent forces which will shape the future of tourism. The global population is aging and as a result a significant tourist segment is emerging - Silver hair tourists - with specific desires and needs in terms of customization, service consumption, security and desired products. In addition, generation Y, also known as Millennials, and generation Z, known as iGen, are likewise appearing as an influence. These are tech savvy, technology driven age groups, very different from one another, with specific needs for communication, consumption and tourist experience. The increase in average income and the fall in levels of absolute poverty are resulting in a growing middle class. The middle-class population is expected to increase further, up to 4.9 billion by 2030, where most of the growth is expected from Asia. Their characteristics will have a growing importance and impact on the tourism sector. There are also new destinations emerging, sought after by the above segments. The emerging markets will soon overtake developed markets in terms of international arrivals with 58% of the share. As it stands, in the top 20 global destinations by international overnight visitors (2015), 10 cities are from the Middle East and Asia, and half of them experienced double digit growth between 2009 and 2015. Today, there is more need than ever to secure political, economic and social stability in order to prevent terrorism and ensure safety for all tourists. Political tension, terrorism and civil riots are unpredictatble and impose a threat to the future of tourism in any destination. Technological (r)evolution in the hotel industry is a game changer, and is already dominating how the industry operates. Although this provides more possibilities to entice Millennials and iGen, the speed of change is hard to keep up with and the complexity is tough to manage. Tourism is dominated by digital channels, but growth of SoMo (Social + Mobile) is bringing a real revolution, which is disrupting the entire sector on an ongoing basis. The digitalization of tourism has made it clear that new competitors can shake up a lot of long-term business plans. Loyalty within the indutry as we know it will decline. There will be no more complicated sign-up forms in order to collect and redeem points, and no more risk of losing them over time. Physical loyalty cards are vanishing and loyalty programs now have to be integrated into the www.horwathhtl.com Tourism Megatrends 3 tourist experience. A dynamic digital environment allows for the development of new, innovative loyalty programs, which are based on precise insights through Big Data, and enhance each tourist’s experience throughout their journey. Health and healthy lifestyle will become increasingly important in tourists’ decision making. Aging tourists, the lifestyle of Millennials and iGen, a growing middle class, and the technological and digital revolution, all contribute to boosting the importance of the health trend. Health and healthy lifestyle will become progressively more integrated into multiple dimensions of tourism offerings. Global tourism will continue to grow alongside world prosperity and well-being, therefore it is imperative to ensure its sustainability. Economic, social and environmental pillars have to be balanced in order to ensure the long-term sustainable development of tourism. Sustainable tourism development requires the participation of all relevant stakeholders as well as a strong political leadership. Many tourist service providers have already changed their business model in order to meet the challenges arising from all the identified trends. Destinations, travel companies, hotel companies and other players along the value chain will have to be constantly on their toes, tracking future developments of these trends. It will continue to be a story of those who were prepared, those who were not, and those who managed to adopt the change quickly enough. 1. SILVER-HAIRED TOURISTS In keeping with the socio-demographic trend, the aging population is considered one of the fastest growing segments in the tourism market. The share of world’s population over the age of 60 increased from 8% in 1950 to 12% in 2013. According to forecasts, this share will reach 21% by 2050. The aging population will increase specifically in China, India and the US where each country is expected to have a population with over 100 million people aged 60 or above by 2050. Share of global population over the age of 60 Life expectancy varies between developed and developing regions and people tend to live longer in developed countries. Although the aging population is now increasing in developing countries, the majority is still found in Europe, the Americas and Asia, which are also the world’s major travel sources. Especially important sources are countries such as Germany, China and the US, and forecasts say that these countries will continue to be primary sources for outbound tourism. According to our market research, the aging population shows some common characteristics: Senior population is ready to spend Senior members of society can often be more financially secure, whether they are still working or have retired. This is generally true for developed countries where they have the purchasing power to indulge in travel. Those that still work, whether out of desire or necessity, can sometimes be in relatively high-paying jobs. Those seniors that enjoy the benefit of a generous pension may also have enjoyed growth in stock portfolio or seen significant gains in housing prices over the last few decades. With a satisfactory disposable income, less home responsibilities, more time to travel and relatively good health, they are an important tourist segment and are expected to spend more than all other age groups on holiday travels. They live well beyond the age of 65 With advances in science and medicine, the life expectancy of the world’s population has, on average, been extended to 82 years for females and 79 years for males. The senior population will not only live longer, they will also be healthier and more active than previous generations, especially in advanced societies like Japan, New Zealand and Switzerland. Therefore, active senior travellers will be even older in 2020, between 50 and 75. www.horwathhtl.com Tourism Megatrends 4 Global aging population, 2014 vs 2050 They are active travellers Other than the availability of funds, time and health for travel, the older population has a greater desire to travel and to explore the world than previous generations. This is motivated by the widened availability of travel information on different media and social media channels. In order to illustrate this trend and its significance, 97% of the population over 50 in the US is planning at least one domestic trip in 2015, 45% is planning at least one international trip and 47% plan to travel more than they did in 2014. Highly Personalized Services Considering the unique characteristics of travel products demanded by senior travellers, they require tailor-made services and prefer to build trust through face-to-face interaction with providers. They have different preferences and interests, expectations and needs, and their focus is often based on special interest. This ‘silver-hair’ segment presents an invaluable opportunity for travel agents, especially when they are gradually losing their competitive advantages to online agents in the increasingly digitalized travel industry. Their travel agency must offer flexibility and understanding in order to meet their needs. Soft Adventure for ‘feeling young’ The aging population is relatively fitter and healthier than previously, and they do not consider themselves too old to travel. They demand travel products that are more ‘experience-driven’. They no longer seek material goods, but rather life experiences. There are already tour operators developing niche products specifically for this ‘young at heart’ segment. Their holidays range from short breaks to cruising itineraries for up to 19 days, but all the specifics are tailor-made for small groups aged 60 and over. Despite comfort remaining their top priority, pursuing luxury may no longer be an exclusive priority for senior travellers, and instead they may prefer adopting the local lifestyle just to have a unique experience. Health and Wellness Products Health and wellness travel, especially among senior travellers, is already very popular. They will continue to travel for health reasons, from purely medical reasons to the general purposes of promoting health and well-being through physical, psychological or spiritual activities. Due to its importance, we have covered health and healthy lifestyle as one of the major trends that will shape tourism. New playground for everyone Travel products demanded by senior travellers are highly diverse and enable tourist suppliers to find their own niche segment among this growing market. For example, it is not surprising that senior travellers purchase travel insurance at a higher rate than their younger counterparts. It is also expected that in the future they might require 24/7 emergency support and travel consultation services, not only during, but also before or even after their travel. www.horwathhtl.com Tourism Megatrends 5 Products demaded by senior citizens 2. GENERATION Y AND Z In addition to the aforementioned aging population, the importance of generation Y has been recognised by key industry players as an important market segment, and not only for its size. This rapidly growing segment, the Millennials, as they are known, are expected to represent 50% of all travellers by 2025. Their focus is on exploration, interaction, and emotional experience and many brands in the hotel industry have realized that they need to rethink the service they provide to accomodate these dimensions. Millennials expect a greater link between tourism services and their everyday life and as a result many new hotel brands are arising which try to provide precisely this experience (e.g. Radisson RED, Moxy by Marriot, Tommie, AC