The world economy has been stuck in a period of slow growth, with occasional false dawns, since 2011. However, in the face of this overall gloom, the travel and tourism sector has outpaced growth in the broader global economy for eight consecutive years.
Last year continued this trend. According to the World Travel and Tourism Council (WTTC), in 2018 worldwide travel and tourism generated USD 8.8 trillion in revenues, as the growth of +3.9% outpaced that of global GDP (+3.2%). The sector reportedly accounted for 10.4% of all global economic activity, supporting 319 million jobs.
The term "travel and tourism" of course encompasses a wide variety of services from airlines, hotels, car rental companies, railway operators, travel companies, and cruise operators to restaurants, theme parks, casinos and more. To maintain the sector's growth trajectory, industry leaders must always be in tune with changing customer expectations and behavior. They need to continually create innovative attractions that appeal to a wide variety of consumer segments. At the same time, in this highly competitive market, pressure on the bottom line is constant.
Tourism Shapes Hong Kong’s Economy
The direct contribution of travel and tourism to GDP in 2017 was HKD 118.7 billion (4.5% of GDP). The 2018 figure, when finalized, is forecast to rise by 1.5% to HKD 120.5 billion. This represents the economic activity generated by industries such as hotels, travel agents, airlines, and other passenger transportation services, as well as the restaurant and leisure industries directly supported by tourists.
Hong Kong’s close neighbor, Macau SAR, benefits like Hong Kong from increasing numbers of mainland visitors. Gambling revenue in Macau grew by 12.5% in June, thanks to robust demand from Chinese bettors keen to play in the country's only legal casino hub.
Future of Travel
In this highly competitive market, technology is the key to continuing success. As in all industries, technology is driving innovation. In the hospitality industry, it is crucial to improving the customer experience through segmentation and personalization. The effect on leisure, hospitality, and travel is being felt at every touchpoint. Travelers are expecting more in terms of personalization, choice, and responsiveness.
Hong Kong’s travel industry has not been slow in adopting advanced technology, such as big data analysis. According to an article in the South China Morning Post, this is crucial to its survival, as people today are increasingly doing transactions online, such as searching, planning, and booking holidays. The “holy grail” of big data analytics in the travel industry is personalization – giving each traveler his or her own unique experience. The “one-size fits all” model no longer applies in modern travel.
Personalizing Experience at Scale
Thanks to technology, the travel industry is, in fact, on the verge of an evolutionary leap where the relationship between customer and brand becomes truly real-time and relevant. In the era of constant connectivity, customers have very high expectations and demand a personalized experience.
What are the personalized moments that matter to the consumer? They are the manifestation of brand interaction, in the digital or physical realm, that demonstrates the willingness of a business to go above and beyond to provide their customers with experiences and services tailored to individual needs and preferences.
For example, it’s a frequent business flyer who finds their favorite drink waiting at their seat after they are greeted by name when they board. It’s the hotel loyalty member that finds the temperature in their room already set to their liking before they enter. It's a push notification about a jazz show downtown sent to a premium hotel loyalty member with a passion for live music.
In the years to come, technology can enable large brands that serve millions of travelers each year to interact with their customers as small businesses do.
Luring High Net Worth Individuals
Seven of the 11 nominees for Asia’s Leading Fully Integrated Resort in the 2018 World Travel Awards are based in Macau.
With such fierce competition both domestically and regionally, luring high profile visitors and high rollers is still a key priority to remaining competitive in this sector.
Several of Macau’s leading integrated resorts have deployed data analytics platforms to do just that, breaking down their legacy silos of data collection and reporting and developing business intelligence systems that help management identify their key customers – the high-rollers – and personalize programs for them.
Right now, many casinos are using basic analytic functions for revenue management, including managing casino sales, hotel rooms, and popular dates and times.
Implementing advanced analytics will help determine the best rates for hotel rooms as well as segmenting and profiling patrons to target the right customers. Once customers are in the door, customized offers are put in place to get them to stay. The goal will be to keep patrons engaged and to spend money outside gambling in areas such as dining, events, and tourism to build return patronage.
Artificial intelligence (AI) will allow casinos to get a real-time view into their floor to see where their patrons are and how they are moving about the casino.
Augmenting the Human Touch
At its heart, travel is still very much a people-to-people experience. But for the travel brands of today and tomorrow, technology must be leveraged to produce elevated, authentic experiences without losing sight of the human connection.
The future of the travel experience must be a seamless blend of talent and technology, where machines are tasked to do more of the 'machine' work – freeing (and empowering) humans to provide better service experiences, and more meaningful connections.
Erich Gerber, senior vice president for EMEA & APJ, TIBCO Software contributed this article.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends.