The world in action – in few square kilometres

Posted on April 8, 2010

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In my past 15 years, I have had the opportunity to join several travel trade shows around the world. But they were all “human size”. From 10 to 12 March I went for the first time to ITB in Berlin. Several companies have tried to build theme parks showing the world in a very condensed way, for example, Disney World or Dubai-based developers. Yet none come close to presenting the world like ITB does. Walking around the show is a fantastic eye opener. Not only are all the countries represented, from large to small. Not only are all the airlines there. From big hotel chains to small hotel brands, to cities, regions, cultural associations, the worldwide press, social media players, and more, all the world is there and it is all within several square kilometres. Cultures, food, music, songs, art, costumes, wildlife and flora. A fascinating experience for anyone looking at all the pieces interlinked, working together, complementing each other. Forming a magnificent monument. For those familiar with Jatujak market in Bangkok, the feeling is very familiar. You just cannot see it all in a day or even in two days. And, like Jatujak, if by accident you take the wrong turn, you quickly realize that it will take you time before you can find your way back. It’s big, it’s beautiful and you quickly realize that the world is much larger and diverse than you ever imagined.

We often read that the travel industry is facing a crisis. This is a very simple shortcut used when we are not able to explain what is really going on. The travel industry is not facing a crisis, and given the current trend, it never will. The travel industry is only a victim of its own success. In the early 90s it was the “I can travel the world” era. In the early 2000s, we moved into the “I want to travel the world” era. We have now entered the “I want to travel the world NOW” era.

Today, when we all make decisions (and alter our decisions) with the click of a mouse, our desires and wishes are also changing in the blink of an eye. The crisis in the travel industry is really that our desires and travel plans can change quickly and on a whim. We want it now. On our terms. Some players can adjust themselves, be flexible and will win. Some are too heavy, too conservative and are trying to fight against the “Now” era. The latter will die or see their profit margins reduce steadily.

Everyone is looking for new experiences, a holiday that differs from our neighbours’. The times when we used to choose a hotel or an airline based on the so-called “security of a known brand” are over. The market requesting the security of a chain where a branded hotel in Beijing looks identical to a hotel in Madrid is shrinking. Worldwide chains with over 400 hotels based on a unique mould will face difficulties. How many years would it take for a chain of over 400 hotels to adjust its product concept to answer a new demand? From a market that wants it now? How many years would it take for a worldwide hotel chain of over 400 units to roll-out a new room concept? It would take as many years as the trend would last. This is a typical case study of a player being a victim of its own success.

Small, flexible and creative hotel chains that will be able to adjust themselves to the fast change of demand, create desire and manage to connect themselves to consumers and travel partners will win big. Some will die though. Fast. Some new ones will be created. Fast. All will happen in the click of a mouse. Some dated destinations taking past success for granted will fade away. New destinations will arise and get a slice of the pie.

Several new hotel brands that didn’t exist a year ago were launched at ITB with innovative and desirable brand concepts attracting people’s interest like magnets. New destinations that never exhibited at ITB had a stand for the first time. Because the reality is that unless destinations/countries have a stand and show their flags at ITB, a destination doesn’t exist in the tourism world. A diplomatic representation is not enough. Amazing or unfortunate but real.

Price is not really part of the equation. Exclusive products and destinations are still in high demand from a growing high-end market asking for even more exclusivity and who are ready to pay more. And mid-range and budget products will further grow to answer demand from both emerging markets and developed countries.

No one can say that the travel industry is facing a crisis while the money being spent worldwide on travel (directly or indirectly) has doubled in the past ten years. The so-called crisis is not coming from short demand but from all the players’ abilities (or inability) to handle this fast-changing demand. It’s a race. A race against conservatism and for creativity.

Airlines will of course have a big role in being able to provide the flights and seats but that’s another debate all together.

Fabrice Burtin – April 2010

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