“If I'm an advocate for anything, it's to move. As far as you can, as much as you can. Across the ocean, or simply across the river. Walk in someone else's shoes or at least eat their food. It's a plus for everybody." - writer, traveler, and documentarian Anthony Bourdain.
As today’s world becomes more interconnected and technology makes it easier for people to travel to parts of the world previously unknown, more and more people are taking the above advice of Anthony Bourdain and traveling to and from new and emerging markets - for example, those in Asia, Eastern Europe, South America, and others. Masses of international travelers are flooding emerging markets across a wide variety of cultural spectrums such as Mexico, Malaysia, Turkey, and the Philippines, which is opening new and varied value chains for travel companies.
Known as emerging market travelers, this up and coming market within the travel industry is having a profound impact on how travel companies package, market, and appeal to customers, but also how they must operate internally to handle the increased volume of bookings, web traffic, customer engagement activities, online reputation management strategies, and more.
To put this new consumer segment into a finer perspective, the International Air Transport Association, U.S. air traffic has been growing at a rate of 2 percent while traffic in the Asia-Pacific region is growing at roughly 7 percent with double-digit growth in some European markets. Additional, investment in airport infrastructure is most focused on these emerging markets, with the top ten cities located in these countries.
It’s safe to say the travel industry is betting big on the rise of the emerging market traveler and the implications this market share will have on the travel landscape at-large. But what has accounted for the emergence of this new traveler? Why is the time now for the emerging market traveler? Here are just a few potential reasons why this new breed of traveler is garnering attention.
According to Skift, rising levels of income in these emerging markets has suddenly made the possibility of travel a viable option for what is now considered to be a burgeoning middle class. An annual income of $35,000 is considered by many within the travel industry the tipping point for families to enter the outbound travel and tourism market, a threshold which is now attainable to millions of people across several substantive regions.
While many people in BRIC nations are just now crossing into travel-viable status, a growing number of individuals are surpassing that level and quickly becoming marketable for luxury destinations and travel packages. It’s estimated in the next decade that number of households around the world making more than $100,000 will increase by 30 million, with one out of three of these households located in these emerging markets.
What does this mean for the travel industry? It means the sheer number of people who have the ways and means to spend money on travel is increasing significantly at a breakneck pace, and travel companies must be prepared to appeal to these new customers through optimizing customer-forward and operational processes in order handle the volume. But it also means there are two distinct markets developing under the emerging market traveler umbrella: emerging affluent travelers and emerging traditional travelers.
Emerging affluent travelers are more inclined - and have the means - to opt for more luxurious, packaged bookings and destinations, while emerging traditional travelers are more budget-conscious and may be looking for value destinations as opposed to high-end products and services. This means travel companies must leverage two different approaches to customer engagement and relations, as well as differing strategies on the types of products and services offered.
Cost/Ease of Travel
While the rise in disposable income is certainly one of the biggest driving factors in the growth of the emerging market traveler, sharp decreases in cost and increases in the ease of booking travel plans has also played a large role in this emergence. Because of software automation, digital technology, cheaper manufacturing, and overall drops in fuel prices - at least in the last few years - the bar to entry in terms of cost for global travel has significantly decreased, which, when coupled with the rise in disposable income, has allowed would-be travelers to become full-fledged travelers.
But technology hasn’t just made the cost of travel more affordable, it’s also made it easier, convenient, and more transparent. As we’ve discussed several times before on this blog, the proliferation of social media, customer-generated review websites, mobile technology, apps, and other digital innovations have made it easier than ever before for customers to research, book, alter, or even cancel travel plans often times with devices found in their pocket. The rise of the millennial as one of the key demographics in today’s travel industry has also helped propagate this movement as millennials are constantly concerned with the ease, speed, convenience, and personal touch across all ecommerce platforms, including the travel industry.
Just think: Ten or fifteen years ago, booking a business trip to Europe would have involved perhaps working with a brick and mortar travel agent, securing a visa, sending and receiving documents via snail mail, and utilizing a phone system or speaking in-person with a representative to change or alter bookings based on disruptions or delays. Now, our business traveler can complete each of these actions on a smartphone or tablet from the comfort of their home just hours before he is set to depart.
This has forced the travel industry to digitize, streamline, and automate a number of its operational processes, and has also placed an emphasis on online customer relations and reputation management in order to provide value added services to customer seeking expediency, responsive, and accuracy from a travel company’s entire value chain.
For the first time, today’s emerging market travelers are not just traveling for business - in fact, they’re traveling for the pleasure of it. While ten years ago outbound travelers from Asia were traveling to certain hubs in the United States and Europe - New York, San Francisco, London, and a few others - primarily for work-related reasons, today’s emerging market traveler is more and more shifting toward leisure or holiday travel to new and expanding destinations as well as those already established - tropical, Caribbean locales, and other tourists hotspots.
According to Skift, recent surveys indicate only 8 percent of travel across nine emerging markets last year was holiday-related, however, substantial increases in outbound travel from countries like Brazil, China, Turkey, and others indicate this figure could grow significantly in the coming years. In addition, holiday travel from these regions has increased by more than 13 percent since 2010, a figure that indicates leisure travel is most certainly on the minds of many in this emerging traveler market sector.
Obviously, the needs and priorities for the business or leisure travelers are somewhat varied, but core principles still remain. Both require speed, agility, and efficiency across all touch points of the buyer’s journey, especially with many of these travelers spanning great distances to and from their destinations. The ability of travel companies to provide affordable, convenient, and responsive booking and customer engagement platforms is key to retaining customers and ensuring travelers leverage their power through social media and review websites in a positive manner.
Download our eBook and explore why and how are the millenials different and find out ways to turn them into customers, by inspiring them!