A LOOK BACK ON TRAVEL IN 2016 AND A LOOK FORWARD TO 2017

1. A LOOK BACK ON TRAVEL IN 2016
AND A LOOK FORWARD TO 2017
David Atkins | Strategy Director | DigitasLBi Hong Kong | December 2016

2. 3 POLITICS
5 START-UPS
9 LOYALTY
7 CSR
21 CHINA
13 DESTINATIONS
11 TECHNOLOGY
15 HEALTH & FITNESS
17 SOCIAL MEDIA
19 TRANSPORT
23 CONTENT

3. POLITICS: LOOKING BACK ON 2016
SEPARATIST
SENTIMENT
[We will] “no longer surrender this
country or its people to the false song
of globalism”, President elect Donald
Trump barked in reference to a
freeloading world. Like Britain’s EU exit
vote, Turkey’s post-coup retrenchment
and China’s increasingly aggressive
patriotism, America is gripped with
combative ethic nationalism in which
nostalgic self interest is placed above
freedom and equality.
It’s inconceivable that isolationist
policies, xenophobic rhetoric and
tightening visa requirements won’t
effect traveller’s decision making
process in 2017.
Image: Economist

4. POLITICS: LOOKING FORWARD TO 2017
A NEW
THREAT
The outlook for 2017 is frighteningly
uncertain for some of the world’s top tourist
destinations. Will the ascension of Thailand’s
monarch elect remain peaceful? Will France
unite around a credible alternative to Marie
Le Pen? Will Rodrigo Duterte continue to
push The Philippines into despotism? Who
knows!
2015’s terror attacks cost Paris an estimated
€750m in lost tourism. It’s not inconceivable
that nationalist policies could have a similar
effect in 2017.
DLBi Take: For the first time consumers
may be looking to hospitality brands for
honest and impartial advice. Brands must
be prepared to take a stance and establish
processes for providing guidance.

5. START-UPS: LOOKING BACK ON 2016
A
LOSING
BATTLE
Even by the fickle standards of start-up
survival, 2016 was a bad year for
disruptive entrants into the travel sector.
Venture capital investment is expected to
fall by 50% from 2015 to US$3billion. To
put that in context, Expedia’s purchase of
HomeAway and Ctrip’s purchase of
Skyscanner saw US$4.6billion changing
hands.
The lack of significant entrants in the past
couple of years, coupled with a
strengthening of the dominant player’s
positions, has spooked many would be
investors and could hamper truly
disruptive innovation.

6. START-UPS: LOOKING FORWARD TO 2017
ONE APP
TO RULE
THEM ALL
In 2017 we expect the dominant technology
vendors to really flex their muscles. Both Google
(through Google Trips) and Airbnb (through –
you guessed it – Airbnb Trips) have recently
sought to reduce travellers’ reliance on a
multitude of different sites and applications.
By facilitating every aspect of a trip – from
planning through to experience – Google and
Airbnb are making themselves invaluable to
travellers. If OTAs get in on the act the
environment for travel brands will become even
tougher.
DLBi Take: Along with start-ups there’s a very
real danger of traditional hospitality brands
being left in the wake of the large tech
companies. To prevent this brands must
develop a tightly defined utility and niche
service that appeals directly to their
customers.

7. CSR: LOOKING BACK ON 2016
TOURIST
BACKLASH
2016 was a hot year… and not in a good
way. Eleven of the past 12 months were
the highest on record. For the first time in
5million years global levels of CO2 rose
to a landmark 400ppm. And as
demonstrated by the recent news that
areas of The Great Barrier Reef had lost
an average of 67% of its shallow-water
corals in the past nine months, tourism
will increasingly feel the impact.
Tourism now accounts for 10% of global
GDP. The unprecedented number of
visitors to popular tourist attractions is
having a negative impact on cultures and
communities. So much so that the
Seychelles has banned large hotel
developments, Santorini will enforce a
cap of 8,000 tourist per day and Koh
Tachai will now turn all tourists away.

8. CSR: LOOKING FORWARD TO 2017
CONSCIOUS
CONSERVATION
The United Nations has declared 2017 the
International Year of Sustainable Tourism.
The inexorable rise of Airbnb demonstrates
tourists’ desire to forego the conventional.
However, this creates an awkward tension
between the desire for the authentic &
unexplored and a sense of social responsibility.
Whether it’s Cuba losing its character or The
Arctic losing it’s ice caps, the long term success
of tourist destinations will increasingly rely on
limiting numbers and development.
Destinations will have to make tough decisions
about the relative importance of tourist dollar
and conservation. History states that the former
is likely to win, but at what cost?
DLBi take: Brands can get ahead of the curve
by taking a strong stance that has a
demonstrable impact on short-term sales

9. LOYALTY: LOOKING BACK ON 2016
SHAREHOLDER
OVER
CARDHOLDERS
One loyalty story dominated 2016.
Although penned in 2015, the ink on
the Marriott/SPG merger remained
persistently wet into 2016, with
members of both programmes
furiously scanning online forums for
clues of potential changes. The
acquisition of SPG was encouraged in
large part by the fierce support from
their 21million members, highlighting
the critical importance of loyalty
programmes to hospitality brands.
Both Marriott (YouAreHere) and Hilton
(Stop Clicking Around) launched their
largest ever marketing campaigns in
2016, focusing not on the core brand,
but the merits of the loyalty
programme.

10. LOYALTY: LOOKING FORWARD TO 2017
TEAR-UP THE
RULE BOOK
For all the conversation and consolidation
there has been very little meaningful
development in hospitality loyalty. While
brands in virtually every other category
are moving away from prosaic points
make prizes programmes, travel brands
remain stubbornly committed.
While most travel brands are happy to
tinker around with the value points (BA
and Marriott slashed value in 2016)
genuine innovation is very thin on the
ground.
DLBi Take: Whether it’s through tech
innovation (MyStarbucks) or loyalty
mechanics (MyWaitrose), the sector is
waiting for a brand to rewrite the rules
of loyalty. The first brand to do so will
reap the rewards.

11. TECHNOLOGY: LOOKING BACK ON 2016
VIRTUALLY
THERE
For years virtual reality feels like it’s
been on the precipice of the
mainstream. Until recently VR headsets
have been reserved for the sweaty
foreheads of men living with their
mothers and in the briefcases of
reluctant sales reps. However,
Field Trip From Mars has opened
collective eyes to truly exciting
opportunities in the virtual world (given
the budgets are large enough).
In the real world, Artificial Intelligence
feels like it’s at an equivalent tipping
point. This year, 19 year old Joshua
Browder saved motorist $4m via his
virtual lawyer chat bot, DoNotPay. AI
has become democratised and
universally accessible for brands.

12. TECHNOLOGY: LOOKING FORWARD TO 2017
AUGMENTING
EXPERIENCE
Although the utopian adult playground of
Westworld might be some way off, we do
expect to 2017 to herald a new era of
human-like machine interaction.
2017 should be the year that hospitality
brands begin to augment experience rather
than replicate it.
AI empowered travel agents (SnapTravel),
and concierge (IBM’s Connie as the new face
of Hilton Mclean) are here and we can expect
the pace of change to be pretty quick from
here.
DLBi take: Customer experience mapping
is now commonplace in the hospitality
industry. Brands that intelligently invest in
VR and AI across the experience are likely
to reap the rewards.

13. DESTINATIONS: LOOKING BACK ON 2016
CU in the NT
As this wonderful map demonstrates,
destination advertising has always
been somewhat lacklustre (It will take
more than the promise of ‘experience
to discover’ to make me visit Saudi
Arabia in 2017).
However, in 2016 we saw many
countries bucking the trend with truly
distinctive campaigns.
Perhaps the best example is Call
Sweden. Following the success of
handing their national Twitter handle to
citizens, the Swedish Tourist board
went one step further and provided
would be visitors with a direct line to
the nation’s biggest advocates.
And then there was the campaign for
the Northern Territories.

14. DESTINATIONS: LOOKING FORWARD TO 2017
BOURDAIN
NOT BORING
Beyond the obligatory support of flag
carrying airlines, destinations rarely
develop mutually beneficial partnerships
with brands. Turkish Airlines bucked the
trends by showcasing the delights of
Gotham City in the run-up to the Batman
vs. Superman movie. The film was a
spectacular mess but the sponsorship was
inspired, playful & engaging. With such
competition for consideration in 2017 real
world destinations are going to have to
work a lot harder for the attention of the
well travelled and cynical consumer.
DLBi take: In 2017 we will likely see
destinations join airlines and hotels in
developing rich journalistic content
(beyond top ten lists) that displays their
true nature and personality.

15. HEALTH & FITNESS: LOOKING BACK ON 2016
SPORTS
LUXE
2016 saw the consummation of two
unlikely bedfellows. The bloated
bourgeoisie and fitness fanatic have
come together in the form of the
$15,000 de Grisogono smart watch.
Powered by Samsung, the watch tracks
sports activity with the aid of a
diamond-set gold bezel.
In the world of travel, the Mandarin
Oriental Barcelona offered marathon
runners a package featuring
personalized coaching, spa treatments;
and a five-day training plan designed
in collaboration with a local sports
medicine clinic.

16. HEALTH & FITNESS: LOOKING FORWARD TO 2017
ARCTIC
ADVENTURES
Experience is the travel word du jour,
having moved quickly from contemporary
to convention to cliché. That said, the
increased pursuit of health tourism,
escapism & exploration means that brands
cannot ignore travellers’ desire for unique
experience.
Typically the reserve of students with trust
funds, whose temporary lapses in morals
take them to hedonistic hideouts, more and
more people are looking to take prolonged,
multi-destination trips. International trips of
two weeks or longer top the list, seeing
increased demand with a marked boost in
adventurous destinations such as the Arctic.
DLBi take: in 2017 brands will stop
playing lip service to experience and
begin to design truly differentiated
health programs and customised
adventure.

17. SOCIAL MEDIA: LOOKING BACK ON 2016
A PICTURE
PAINTS A
THOUSAND
WORDS
2016 was the year of live video. The
arrival of Facebook Live was
enigmatically marked by the
uncontrolled laughter of a middle-
aged lady from Middle America.
Visual media continued to go from
strength to strength this year, with
Instagram and Snap Chat securing
their places at the centre of the travel
inspiration eco-system.
And the importance of the travel
industry in monetising social
platforms continued to drive
innovation such as intuitive and
engaging 360° photos.

18. SOCIAL MEDIA: LOOKING FORWARD TO 2017
WE’RE LIVE
ON THE
SCENE
Facebook's focus on video will continue
into 2017 with the launch of a new
Snapchat- style camera function. However,
the really big news brings together 360
video, virtual reality and live broadcasting in
a single function. We should expect a
number of new releases in 2017 that build
towards this vision. Along with increased
functionality around stories and live
streaming, Instagram’s big push will be
based around e-commerce.
Twitter won’t die in 2017… but a medically
induced coma is likely. We also expect
Snapchat to struggle as the big boys
continue to steal their toys.
DLBi take: the adoption of new
functionality now occurs at breakneck
speed. Brands can no longer sit back and
wait to see what consumers engage with.

19. TRANSPORT: LOOKING BACK ON 2016
BABY
BOOM
It’s a cliché but also a truism to
suggest that time is a luxury. With
high-speed rail in China picking up
(ahem) steam and Richard Branson’s
plans for supersonic air travel (ahem)
taking off, the world is increasingly
small.
What's more, there is a veritable
space race continuing between
SpaceX, Virgin Galactic and XCOR
competing to create a sub-orbital
space tourism industry.

20. TRANSPORT: LOOKING FORWARD TO 2017
SIT BACK,
RELAX,
ENJOY THE
RIDE
Transport is no longer about getting from A
to B. In 2017 Airbus will be rethinking the
entire passenger experience through
modular cabins in which coffee bars can be
replaced with cabins as easily as loading and
unloading luggage.
Detroit has been having a Kodak moment
(not the picture-perfect family caught for
nostalgic prosperity type of moment, but the
agonisingly slow death type of moment) for
some years. Led by a search engine – a
bloody search engine – autonomous vehicles
will begin to be a mainstay of Northern
Californian roads in 2017.
DLBi take: in an industry preoccupied with
it’s richest customers the experience of
those in cattle class is often lacking. In
2017 we will see brands make a concerted
effort to change this.

21. CHINA: LOOKING BACK ON 2016
NǏ HǍO
WORLD
For a long time, the exponential
growth of outbound Chinese tourism
has been hard to ignore (increasing to
200million by 2020 from 130million
today). But, was 2016 the year that
Western brand sat up and really took
notice? Brands such as BA and
Lufthansa launched campaigns
dedicated to wooing more RMB.
Many Western brands will not have the
luxury of choice. Ctrip’s acquisition of
SkyScanner and China’s HNA Group
taking a 25% stake in Hilton signals a
more hostile encroachment into the
strategies of Western travel brands

22. CHINA: LOOKING FORWARD TO 2017
CONSOLIDATE
TO COMPETE
For all the domestic demand Chinese
hospitality brands have failed to build a
reputation from which to compete
internationally. We believe that 2017 could
be the year that changes.
Despite healthy domestic passenger
numbers Chinese airlines lack the reputation
of the likes of Cathay Pacific and Singapore
Airline. The consolidation of the three major
state-owned Chinese airlines has been
touted for years now. With unavoidable hit of
enormous fuel charges in 2017, it’s possible
that the powers that be decide now is the
time for a shake up.
DLBi take: Whether it’s through
acquisition, state funding or large
injections of private capital, there will be
big developments in 2017. Incumbents
must stay ahead of the curve.

23. CONTENT: LOOKING BACK ON 2016
SHOW ME
THE MONEY
With 17.2million views 2016’s most
watched online travel video was an
Arabic language infomercial. Does this
signal a cultural shift in geo-economic
power or the death of carefully
planned long form content? No, it
depressingly reiterates the requisite
need fora large media budget (as one
ex-executive puts it, “No one wants to
face the reality that [Google] is an
advertising company with a bunch of
hobbies.”).
Like Facebook, Instagram also
introduced an algorithm based feed,
rather than a chronological one this
year, making organic (free) reach all
but impossible.

24. CONTENT: LOOKING FORWARD TO 2017
Despite its explosive emergence, travel brands
have been relatively slow on the uptake of live
video. In 2017 we will see brands shrug off the
niggling doubt and dive into selfie journalism -
or rather hire a multitude of micro-influencers to
do so for them. Although it comes with
increased risk and lower production fidelity,
brands will have no choice but to work with
emerging influencers if they are to avoid the
cost & headaches associated with vacuous mega
influencers.
Finally, bands will make better use of content
across the entire eco-system and customer
journey. That will mean content that in more
customer-centric than conceptual and also
increased focus on repurposing content
DLBi take: an overarching theme of 2017 will
be content accountability. Brands must have
mechanisms and measures for tracking
content effectiveness in place.
LIGHTS
CAMERA
ACTION