The promise of tourism

If there's one sector that never takes a vacation, it's tourism. Constantly evolving and adapting to changing consumer habits, the tourism sector is experiencing strong growth, and looks forward to bright prospects in the years ahead. A number of factors are working in its favor. What are they? In what ways, and to what extent, are they promising for the future?

This basic economic concept is at the heart of the matter, and tourism (and the world of vacations, leisure activities and even accommodation, in the broadest sense) are indeed taking part in a veritable virtuous circle.

Effectively, the demand is there; various factors explain it (desire to discover the world, natural need for a change of scenery, "forced" travel ...), but let's simply remember that very few working people would say "no" to a getaway during their work period. Not to mention vacations, which don't necessarily involve extensive travel, but are nonetheless a coveted period and more conducive to household consumption, particularly in leisure activities - at home, or not.

"More than half of French people (55%) feel a "vital" need to get away. "

Results from Raffour Interactif's barometers and studies on tourism trends, delivered at a plenary conference at IFTM Top Résa 2018 | source: link.

The same applies to seniors (mostly retired), who are also very much in demand in this area. According to Bercy, the latter generated over 22 billion euros in tourism spending in 2014, and ¾ of people aged 62 to 71 went on a trip at least once over that same year. Finally, 62% would like to travel in France, and 30% have a budget above the French average (figures from seniors-vacances.com and SilverEco, leaders in news affecting the advancing age of our society).

The aging demographic is also taken very seriously by professionals, for whom many issues are at play; development of new intergenerational leisure activities, adaptation of infrastructures or distribution channels, different vacation needs and philosophies among seniors, other perceptions regarding the activities on offer...

A real windfall, since this clientele is diverse in terms of age, status, purchasing power, or even in its ways of consuming (from low-cost to top-of-the-range). With diverse motivations, they set out to discover large cities or unspoilt areas, and prove to be highly inclined to active leisure and activities.

So, once again, this is an opportunity for specialists, adaptations must nonetheless be numerous to matcher with these audiences, who are perhaps more capturable, but more volatile and difficult to retain, and who plan their stays through hundreds of web pages.

Finally, in addition to working households, seniors and "young people", there are multiple other extremely segmented audiences and potential customers: business travelers (to a lesser extent, but still persisting), family gatherings ("cousinades" ...), organized group trips, school groups ...

Even if vacations are a luxury for many individuals, the range of leisure activities on offer is such that there's something for everyone. The diversity of means of transport, low-cost holidays, holiday aids, destinations "close" to home, or on the other side of the world, day trips ... mean that the market is not hyper-tight, but on the other hand hyper-competitive, thus forcing retailers and operators to pull prices - once equilibrium prices - down to lower levels. Maintaining quality and lowering costs thus become vital issues for the latter, in favor of a demand which, far from these economic concerns and very attentive (or bludgeoned) commercially, is growing exponentially.

... who interact differently

The digital revolution has a lot to do with the new usages between "demand" and "supply". Facilitating immediate access to all the competition's information, an open door to unknown destinations, online advice and reviews, advantageous or last-minute booking methods, offers galore ... the Internet has enabled the emergence of new practices, new players ready to do anything to pull in the chestnuts ... and new customers (coupled with those we couldn't reach before).

"49% of French people look for tips online to pay less, and 1/3 of these have already chosen a destination or activity there that they hadn't thought of."

According to the Oui.SNCF / Institut CSA study "Les français et les sites de e-tourisme", conducted in 2017 on a national sample of 1004 major French people | source: link.

Apparently difficult to handle for some business professionals unprepared for this digital boom (which is leaving corpses behind), the main thing to remember is that e-tourism is nonetheless the leading sector for online commerce in France.

With growth of almost 7% on the previous year (18.7 billion euros), the sums generated in 2017 should reach the 22 billion euro mark in 2020 (PhoCusWright, French Online Travel Overview Thirteenth Edition). Finally, an Opodo barometer notes that 77% of French people prepared their trips online in 2016 (+6% in one year).

It's a safe bet that these new acquisition channels will absorb the variable "decline in physical or telephone bookings" as well as the disappearance of certain players, and make it possible to expect a still significant expansion for tourism.

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What makes the sector so robust is also the diversity of its pillars; more than one of them would have to give way, for its economy to be dramatically impacted.

First of all, many major fields intersect with tourism. Interdependent ecosystem or separate bricks? Both.

Customer retention becomes more difficult, for example, in an area without restaurants or bars close to winter sports slopes or beaches. Similarly, it will be harder for a music festival, to attract crowds if the hotel supply in the area is too low. The same goes for an amusement park, which would be inaccessible, without a nearby train station or airport and the plethora of services that go with it.

These gears work together, and -schematically- inter-feed each other (insofar as they're not too competitive) as the famous demand we touched on above, for one or the other, increases.

The examples of the Olympic Games or the World Cups speak for themselves. Bringing together numerous sectors (transport, construction, housing, recruitment, advertising and media, events, security...), these events are real creators of wealth, particularly for tourism.

Although some debate the real spin-offs of such events, given the colossal efforts and investments involved, a few indicators nevertheless reflect rather cheerful colors.

From studies by the Paris 2024 Olympic organizing committee are already banking -for example- on more than 5 to 11 billion euros in wealth generated, 30% of which will be allocated to tourism.

Whether it's natural and outdoor leisure and activities, artistic discoveries, cultural or sporting events ... the planet abounds with justifications abounding in the direction of tourism.

Let's not get ahead of ourselves. Nothing is ever all rosy, to the point of sometimes being ... gloomy. Social movements or new societal issues, fragilities and tensions in certain geographical areas, stagnating or falling disposable incomes, new, more "sedentary" ways of consuming ... vary from country to country.

Not exhaustive, the above points can then play on the "health" of tourism and related sectors.

The year-long Gilets Jaunes uprising in France has had unquestionable consequences, with a 2.6% decline in domestic customers in the first quarter of 2019. Sadly marked by a series of attacks over 18 months (notably in 2016), the country also saw a 4% drop in revenue per available room, in the hotel sector (Europe 1 and cabinet InExtenso).

"Tres congresos [...] salvaron el turismo de Barcelona en Octubre, cuando la ciudad agonizó durante semanas por los disturbios en la calle tras la sentencia del 'procés'. La ocupación hotelera se redujo un 1,9% comparada con el mismo mes de 2018 [...]."

According to El Español's Crónica Global media outlet, Barcelona's tourism sector still bears the scars of the days of unrest and violence surrounding the sentencing of pro-independence leaders, to the extent that trade rallies are said to have helped gild statistics far worse than in 2018 .

Finally, the toll of events underway in Hong Kong is already substantial. The politico-social mobilization that the territory is going through lends weight to the economy's recession; hotel sector hemorrhaging with occupancies at an all-time low, for a sector that represents almost 5% of the city's GDP, sales outlets or tourist information destroyed during the clashes, flight cancellations ... testify to the speed at which a crisis can impose itself and freeze an economy.

Various findings suggest that tourism is playing in the big league. Indeed, for some emerging countries or those with little industrial activity, tourism revenues can represent between 20% and 40% of their GDP (French Ministry of Economy and Finance, "Le Poids Economique et Social du Tourisme").

What's more, going on vacation or taking a break from work has almost become a public health issue, a human need. According to the study by Amit Kumar (University of Chicago) and Thomas Gilovich (Cornell University), "A Wonderful Life: Experiential Consumption And The Pursuit Of Happiness" (Journal of Consumer Psychology, 2014), when we look forward to something or some moment, our brains make 14% more dopamine than in the normal state. Vacations fall into this category of moments.

Also, with the emergence of new customer typologies, in part with the rise of digital, tourism and its related fields (though relatively successfully self-sustaining) must adapt: from new forms of holiday and ways of apprehending them are emerging, in order to satisfy ever wider expectations and demands.

The upsurge in climatic extremes depending on the geographical area (cold waves or pisodes caniculaires unpublished ...) also allow us to observe new flows of holidaymakers, in search of suitable destinations, in winter or summer.

These climatic fluctuations are also alerts, both for customers and for professionals, who are redoubling their innovations and eco-responsible and ethical, for the planet: reducing ecological footprints, "consuming local", reducing waste and wastage of raw materials ... .

Based on very solid, interlinked foundations, tourism is nonetheless vulnerable, like any other business sector. Uprisings and other crises in the four corners of the globe will always be able to take their toll on large swathes of this economy.

But one of its strengths remains in the fact that it's a global activity, facilitated by increasingly affordable travel: with the speed at which information spreads, it's much easier today to rethink one's future holiday destination, in another city, country or continent.

Theoretically, then, it would take much more than highly localized events for tourism and its global equilibrium to completely break down.

Far from such extrapolations, tourism is a highly dynamic sector, generating monumental expenditure and considerable contributions to the economy, particularly in Europe, thanks to the single currency and the free movement of people with the Schengen area. All of which augurs well for the latter, which also expects more than 760 million tourists in 2030 (joint report between the European Union and the World Tourism Organization, "International Tourism Trends in the EU of 28 Member Countries").

Finally, in France, the latter is among the fields of the future, which are recruiting, particularly with few requirements in terms of diplomas. What's more, a wide range of specialized training courses can open doors in travel agencies, hotel and catering, commerce and interpreting! Quite encouraging for a country that ranks in the top 3 of countries welcoming the most tourists! Co-co-ri-co.