Opportunity knocks for the Canadian travel industry via Chinese cruise travel, youth on the move and the collaborative economy.
Step aside Nostradamus: the Research team of the Canadian Tourism Commission (CTC) has read the runes and identified three key trends to look out for in the coming year that offer opportunities for the Canadian tourism industry.
Many factors are shaping the evolution of global travel, such as the continued expansion of travel from emerging markets, particularly China, and youth travel. The Internet and social media technologies spur new business models in travel services, while the airline industry reaches for new heights via new aircraft technologies that drive fleet renewal and the emergence of super-hubs and hub-buster aircraft such as the Dreamliner 787.
1) China starts cruising
Following its declaration of 2013 as “Marine Tourism Year,” the Chinese government’s latest five-year plan aims to encourage cruise holidays, a relatively new concept for Chinese consumers. The plan has been met with enthusiasm by consumers, leading industry sources to predict that China will become the second largest global cruise market after the US by 2017.
While a lack of port infrastructure has constrained the cruise sector within China itself, the Canadian sector is well developed. As consumer awareness increases, Canadian businesses could market luxury cruises to high-yield Chinese customers, who already spend an average of $1,776 per trip to Canada. (Sources: Euromonitor, Statistics Canada)
2) Youth on the move
The UNWTO forecasts that annual global arrivals by young travellers (aged 18-30) will reach 300 million by 2020. Globally, youth travel is expanding at 9% per annum compared with 2% for the general population. Young travellers are now aided by increased global connectivity, both in terms of transport and communications. According to recent research by Expedia, travellers aged 18-30 take an average of 4.7 trips a year, exceeding the 3.6 trips by those aged 30-45 and 2.9 trips by those aged 46-65.
Those young travellers book travel, share their trips on social networks, and read and write online reviews used for trip planning—all on their smartphones or tablets. They look to take advantage of services such as mobile concierges at hotels and peer-to-peer accommodations and travel services, such as ride-sharing, which often relies on a smartphone app.
Young travellers are big spenders and looking for an active adventure travel component to their trip, both for excitement and as a form of conspicuous consumption. Canada’s youthful, energetic brand is well positioned to take advantage of the growing opportunity of youth travel. CTC’s upcoming domestic and international youth program will drive visitation and spending to Canada, as well as turn young travellers into advocates for Canada. (Sources: UNWTO, Expedia, CTC Research)
3) The sharing economy: peer-to-peer accommodation and travel services
New business models are emerging to facilitate the sharing of travel services between individuals. Rental accommodation sites such as Airbnb, HouseTrip and HomeAway connect travellers with sellers who are willing to rent out their private residence on a short-term basis. Airbnb has been used by 10 million guests since its founding in 2008, five million of accrued in 2013 alone.
Several factors are driving this growth in the sharing economy:
Young travellers are keen users of these services, while budget-conscious families, eager to stay and cook together in home-like accommodations as well as to sample authentic experiences and local flavours, are also turning to them.
There are also economic benefits: users of peer-to-peer accommodation tend to stay in a destination longer (Airbnb), and their spending in local neighbourhoods allows tourism revenues to reach new areas of the economy.
CTC will monitor in 2014 whether the availability of peer-to-peer accommodation and travel services is attracting new visitors who might not have travelled, or might not have chosen Canada, before. (Sources: Skift, Altimeter, Euromonitor, Airbnb)