Actual Trends of Travel Industry in 2018-2020

Here are trends of travel industry which, in our opinion, will be actual in 2018-2020.

First of all, please note that in 2018 travel industry will continue its stable growth. According to the preliminary forecast, the amount of holiday costs per person will make up USD 940. As for the sales volume, booking of places of accommodation and purchase of air tickets will remain far ahead.

According to Google and Phocuswright, a leading travel industry research company, 55% of tourists go on holiday one or two times a year, planning a trip beforehand. 59% start looking for information about the forthcoming trip one or two months before. The tendency to prepare beforehand will persist. However, 30 % said that they are ready to spontaneous trips if they get a favorable offer.

The growth of search queries and bookings from mobile phones became an impressive trend of 2017. According to Google, 70% of users entered search queries about tourism from smartphones, 79% made their bookings after searching on mobile devices. Mobile channel has become a popular way of getting information. Thus, 50% of millennials found new travel companies from mobile phones. 30% of search queries were related to objects’ location.

In 2017, inhabitants of China traveled more often, in 2018 this tendency will persist.  According to forecasts of Mastercard, the number of traveling people in the Celestial Empire will increase by 8.5%. Last year, Russian destinations started gaining ever-greater popularity.  Thus, for the first 9 months of 2017, 900 thousand Chinese tourists visited Russia, which is 24% more than for the same period in 2016. Despite the fact that for most Chinese travelers Moscow is the main purpose of travel to Russia, the largest tourist flow is noted in the Amur Region (36% increase). There are some changes in preferences of the Chinese that are worth mentioning – if in previous years they did shopping during most of the time, in 2017 they became interested in touristic activities and entertainments (excursions, short tours).

In 2018-2020, the market of travel services will face the growth of blockchain technologies.  Thus, in 2017 Lufthansa Group declared cooperation with Winding Tree – a non-commercial Swiss blockchain startup. With a decentralized B2B platform for booking transactions, based on blockchain technologies, srartups and companies will have a direct access to offers of tourism providers. Thus, there is no more need in noneffective cooperation with lots of mediators like travel agents, aggregators or distribution systems.

TUI, the largest German travel company, is developing its own project BedSwap – all hotel rooms of the company will be included in the blockchain.  The Russian company S7 Airlines together with Alfa-Bank have partnered with Ethereum with the purpose of business automation.  Thanks to the technology, the time of money receipts from agents for S7 tickets purchased has reduced dramatically – the process used to take about two weeks, whereas now it is about 23 seconds.

In the future, airlines, hotels and other tourism providers will be able to place their offers on the platform Winding Tree, which will make it possible to improve the service quality and will prevent extra charges.

There is a tendency in the travel market of the focus shifting to one’s own channels.Huge tourism providers (hotel chains, airlines) are becoming more interested in the development of own sales, especially resales. Another new trend is the growth of the market of excursions and impressions. For instance, Airbnb and Expedia have already launched services in this segment. The project Voyagin from Rakuten is gaining popularity, offering to the visitors a large number of activities (excursions, entertainments, unique tours, transfer) at an affordable price.

Let’s look in the direction of Russia

In 2018, the Russian market of travel services will continue its steady growth. In 2017, the sales of online tours increased by 60% compared with the previous year. The return of Turkey to the Russian market played a large part in this fact: the sales of tour packages to this country made up 30% of the total sales volume. The increase of online sales volume was also due to the actions of Onlinetours and Travelata – huge Russian tour operators, rapidly developing the online destination.

Besides, the growth of the air ticket market can be noticed. According to Aviasales, in 2017 the number of international flights increased. At the same time, the amount of an average bill began to increase – now it makes up RUR 22,077 for international flights and RUR 9,783 for domestic flights.  According to the online travel agency Kiwi.com, the top international destinations of the summer 2017 were Cancun – Havana, Moscow – Milan, Bangkok – Phuket.

There are no dramatic changes in the hotel market and other variants of accommodations.  According to Booking.com, the top-five of tourist cities remained the same in the last 5 years: Moscow, St. Petersburg, Adler, Kazan, Sochi. Today, there are 22 international hotel operators in Russia managing 179 hotels (38,705 rooms) in 38 cities. The largest market share (80%) is distributed among five companies:  Accor Hotels, Hilton Worldwide, Marriott International, Carlson Rezidor Hotel Group, InterContinental Hotels Group.

The distribution of the current hotel room capacity, managed by international hotel operators, over Russian cities (the data for October 2017):

One of the main events of 2018 will be the world football championship, which will give impetus to the development of Russian tourism and will provoke an increase of prices for tourism services. Admitad believes that first of all the price increase will concern air tickets and places of accommodation. According to Aviasales, as late as in November 2017 the prices for air tickets Moscow – St. Petersburg – Moscow increased by 40% and made up RUR 10,370 instead of regular 6,000. The tickets from Ekaterinburg went up by 5%, from Sochi – by 14%. The accommodation cost during the world championship 2018 has increased, too. For the duration of the championship, 40,000 rooms have been already booked in Moscow, which makes up 60% of the hotel room capacity of the capital. Hostels and cheap hotels are of the highest demand. At the same time, dwelling services may become a good alternative for the visitors of the capital, such as Sutochno.ru and Tvil.ru.

We will give you more information in a separate article about what programs are worth лить, to make money out of the world championship 2018.

The online sales market of travel services in the CIS countries is now at an early stage or thereabouts, but it is very likely to show a steady and strong growth from year to year. It is profitable to work with travel segment – with the correct approach it will bring you high profits not only in 2018.   

The main travel news 2017 in brief:

• Ctrip, the largest online travel agency of China, has bought Trip.com
• Airbnb has launched 2 new services: “Impressions” and “Restaurants”
• Emirates has been found the best airline of 2017 by the users of TripAdvisor
• OZON.travel has started to sell dynamic tours. Other large online travel agencies are likely to follow their example (although, some of them has already tried)
• In February 2017, a new airline appeared in Russia – Azimut. Since December 2017, its base airport is Platov in the Rostov Region.
• OneTwoTrip will start selling bus tickets throughout Russia and Europe since 2018.
• The hotel chain Hyatt (one of the largest in the world) has declared the intention to break off the cooperation with Expedia. To our mind, this is because service providers are seeking to get more sales (including resales) via their own channels rather than via ОТАs
• Since January 1, 2017 the visa requirements between Russia and Japan has been relaxed. Before the introduction if this changes, a Russian citizen had to submit a letter from the invitor (guarantor) from Japan and other documents. As a result, a Japan entry visa has become easier and free of charge
• Russian Railways will permit to buy tickets 90 days prior the departure of a train. The new ticketing rules entered into force on December 10, 2017.
• German Lufthansa has got five stars in the rating of Skytrax, becoming the first airline in Europe with such a high mark. Thus, the total number of companies rated five stars has grown to 10.

Follow trends, choose profitable niches, test new ideas and find the best offers for your audience – and take your place in the world of online travel!

The report includes data of admitad, Google, Euromonitor International, Aviasales, Phocuswright, Skift, TripAdvisor, Ernst & Young, Kiwi.com.