The retail revolution
Mobile satellite company Inmarsat believes inflight retail innovations, driven by improved onboard connectivity, will lead to new ancillary revenue streams.
Retail Week recently calculated that the potential extra inflight spending based on terrestrial online shopping habits is as much as US$2.7 billion.
“Improved broadband could mean everything from a better range of goods to real-time card transactions, stronger third-party affiliate programmes, and an increased choice of video on demand,” said Ben Griffin, vice president, aviation, MEA and Asia Pacific, Inmarsat.
Looking further ahead Griffin said the possibilities are the same as those offered by the meeting of super-fast home broadband and other technologies, from the use of VR headsets to arranging for airport pick-up to taking passengers home where an automated grocery or meal delivery, booked mid-flight, is timed to coincide with their arrival.
On the ground, too, the retail revolution is gathering pace as airports around the globe tempt shoppers with luxury stores.
In Singapore the Jewel retail complex at Changi Airport, launching in the first half of this year, is a 10-storey complex consisting of five storeys above ground and five basement floors. It will be home to more than 280 shops and food and beverage outlets.
Among them, Tiger Beer will be launching a first-in-the-world Tiger Street Lab at Level 5 offering exclusive seasonal brews, while Nike is planning its largest store in South-east Asia, spanning 1,000 square metres.
More seating options
More airlines will offer passengers a variety of seating choices, including premium economy cabins.
For example, Etihad Airways has unveiled its Economy Space seats that feature an increased pitch of up to 36 inches, with new flexible seating such as a neighbour-free seating option, enhanced ‘buy-on-board’ dining and amenities products.
Etihad’s country manager for Singapore, Jeffrey Lim, said that the carrier “is moving away from a ‘one size fits all’ approach to introduce a range of unbundled products so that guests can curate every aspect of their experience.”
Rival Emirates will add premium economy seats to its new Airbus A380 fleet from 2020. Airline CEO Tim Clark says the premium economy cabins will feature ‘sleeperette’ seats with an exclusive-to-Emirates design and 38-40 inch pitch to be fitted fleet-wide across all Airbus A380s and Boeing 777s.
Airlines as tour operators
Airlines are moving into the hotel intermediary space – and in some cases even tour operator space – to increase revenues, according to Peter Mansour, director of product management, Hotelbeds.
“Over the last few years we’ve seen a trend for airlines approaching us to start selling hotel accommodation on their website. In 2018, this has increased, but we predict that in 2019 it really will begin to snowball.”
Mansour said as airlines look to diversify their revenue sources and increase their margins, the opportunity to cross-sell a loyal customer a hotel room offers potentially more profit than operating the flight itself.
“However, what we are seeing is more and more airlines wanting to go a step further and actually become a tour operator, offering a complete package to customers by giving them a combination of a flight and hotel – with all the regulatory and operational implications that means – but also the opportunity to cross-sell the customer more products: car hire, transfers, theatre and sports tickets, etc.
“In 2018 we (at Hotelbeds) have secured many such partnerships with airlines and have many more in the pipeline for 2019,” Mansour added.
Coral Expeditions’ Adventurer will explore the Kimberley region, Cape York and Arnhem Land, Papua New Guinea, the Spice Islands, Indonesia and the South Pacific.
Small ship travel takes off
The year 2019 will be one of extremes as ship sizes at both ends of the spectrum are expected to hit the waters.
In fact, the bulk of the ships scheduled for delivery next year are either under 530 passengers or over 3,000. While river cruisers continue to show an upward trajectory, expedition ships are also all over the orderbook.
“The trend towards larger ships has been underway for some time, however the swarm of small ships is a relatively new development,” remarked Paul Millan, regional director, Traveltek Group Ltd.
“Expedition cruises offer travellers the opportunity to discover new and exciting destinations, otherwise inaccessible to bigger ships. This cruise current is increasingly breaking out of its niche to become one of the hottest trends since river cruising took off a few years ago.”
Australian company Aurora Expeditions will launch its first newbuild, the Greg Mortimer, this October with a revolutionary X-Bow technology that is designed to smooth the passage of the ship through choppy waters.
Gourmands will be enticed by Coral Expeditions’ Adventurer, which will feature a communal wine table hewn from local stone and an open kitchen where passengers can watch chefs prepare dishes as they cruise through North-western Australia and Papua New Guinea.
Other noteworthy additions include French line Ponant’s third of six Explorer class ships, Le Bougainville; Hurtigruten’s Roald Amundsen, the world’s first hybrid-powered expedition vessel; the 100-passenger ship Celebrity Flora designed to sail the strictly-controlled Galapagos archipelago; and the 228-guest Scenic Eclipse with luxury offerings including a submarine and helicopter.
Riding the green wave
More global cruise companies such as Royal Caribbean are taking a stronger stance on social and environmental responsibility in order to make their ships and the overall cruising experience more sustainable.
“The company has a longstanding commitment to protecting the environment — specifically the oceans we sail on — through its onboard sustainability programme, Save The Waves, for over 25 years. We are constantly taking more steps and innovating toward a more sustainable future,” said Angie Stephen, associate vice president and managing director, Asia Pacific, Royal Caribbean Cruises Ltd.
One of its latest efforts, shares Stephen, involves doing away with plastic straws and stirrers onboard all its ships by 2019. At the moment, the company has already implemented a “straws upon request” policy and soon, guests will be handed paper straws instead.
Looking ahead, the company will be working on reducing other single-use plastics such as condiment packets, cups and bags.
The company is also pioneering the use of fuel cells, which produce cleaner power and no carbon emissions, on its new class of ships, ‘Project Icon’, arriving in 2022 and 2024.
This will be the first time fuel cells are used to power cruise ships, according to her.
Millennials drive innovation
Cruise lines everywhere have identified the millennial generation as a lucrative segment, with plenty of first-time cruisers that have the potential to become lifelong loyalists.
In Indonesia, for instance, “the growth in the middle class, be it from primary or secondary cities, will provide a significant number of millennials who will certainly be attracted to cruising as a stylish travel and family holiday option,” said Royanto Handaya, president director, PT Panorama JTB Tours Indonesia.
To ensure its appeal, cruise lines will continue to invest in up-to-date, onboard technology to allow these younger cruisers to stay connected. In fact, ‘Instagrammable cruise travel’ is set to become a popular trend with travellers requiring onboard Wi-Fi to fill their newsfeeds with snaps from their picturesque destinations, according to Traveltek’s Paul Millan.
A number of cruise lines are already looking to adopt advanced technology for cruise travellers, including keychains, necklaces, apps, and more for a more personalised travel experience.
In particular, Royal Caribbean is combining technologies ranging from facial recognition to RFID tagging to GPS mapping to Bluetooth-enabled beacons to streamline boarding, manage check-ins automatically and improve wayfinding, according to Stephen.
“It is crucial to be present where shoppers are, and to make it seamless for them to turn their shopping into a booking. This can be achieved by creating high-quality customer experiences. A brand’s website, social media platforms, and marketing initiatives must complement each other to generate an omni-channel experience. As consumer expectations continue to evolve, airlines will need to make sure that they are present every step of the way, as consumers plan, shop and book,” said Todd Arthur, vice president, Sabre Travel Network, Asia Pacific.
TOURS, ATTRACTIONS & ACTIVITIES
UBE offers experiential tours with a business twist.
More specialisation and segregation
While galleries, museums and theme parks remain evergreen attractions, travellers are increasingly demanding immersive and authentic experiences, whether it is dining in a local family’s home or building a hut for villagers.
“As travellers become increasing savvy, they can easily find online information of ‘touristy’ places or must-visit attractions of their destinations, which they can explore on their own. Therefore, tour operators need to put together more intricate tours with authentic offerings,” said TY Suen, founder of Monster Day Tours.
Realising the rise in b-leisure travellers who travel for work and extend their stay for leisure or vice versa, Suen revealed that he will be launching a new project called UBE, which offers guided tours, interactive workshops and networking sessions at Singapore’s most innovative and creative local businesses.
Channel management wanted
Cloud-based e-ticketing platform Globaltix’s vice president of commercial Chanel Leong believes that more attractions will seek out channel managers to manage their various OTAs and travel agents in 2019 and 2020.
“This is similar to the hotel world 10 years ago, which gave rise to players such as cloud platform SiteMinder. With the cannibalisation of walk-in customers due to the rise of OTAs, which are offering higher yield, attractions need to find balance in this new landscape.
“More and more will introduce minimal selling price (MSP) as well as drive direct online sales. It is with this backdrop that GlobalTix will launch a GlobalTix Solution 3.0 in 1H2019, which will include Point-of-Sales Solution, DDS Driving Direct Sales with build-in features like Google word search and enhanced channel manager capabilities like 1-1 price settings.”
Last-minute bookings are growing continuously – driven by travellers booking via mobile as they look for spontaneity while on vacation.
While it may be tempting to believe that this trend is prevalent only among customers of age 18 to 35 (i.e the millennials), recent data from Booking.com revealed that 80% of its customers in general prefer to self-serve when seeking information.
This means that the mobile browsing and checkout experience matters more than ever for tour operators in driving sales. According to travel activities and services booking platform Klook, 85% of its tours can be confirmed and used instantly.
Travellers are increasingly keen to seek out authentic and unique experiences at their destinations instead of just sitting around in the hotel bar or the pool.
It is with this understanding that Shangri-La Hotels and Resorts embarked on a partnership with Klook last December. Guests can discover and book activities throughout their stay via a tablet at the hotel concierge, even at the last minute, while Shangri-La’s Golden Circle members stand to earn Golden Circle Award Points for each experience booked through the Klook Concierge.
“By delivering additional hotel and in-destination features, we are strengthening the value proposition for guests in line with their widening needs and giving them more inspiring choices during their travels. Collaborating with Klook will allow us to offer guests a deeper discovery of local experience,” said Irene Lin, executive vice president – marketing, Shangri-La Hotels and Resorts.
TRAVEL AGENTSTREND 1
Becoming travel specialists
Travel agencies are developing digital platforms to attract a breed of “travel specialists” that can reach new and untapped customer segments, responding to the continuing trend of travel inventory owners changing agency commissions and pricing strategies.
Digital travel platform +en Travel Envoys has entered the agency scene offering customers a “primarily consultative approach” to travel planning. The platform has attracted more than 300 “travel entrepreneurs” who can learn “how to sell professionally through an online platform”, with the backing and resources of Chan Brothers Group.
“The more discerning travellers are looking for a consultative relationship with their travel provider and this has also reflected a change in the aspirations when it comes to their vacation investment,” said Chloe Chan, COO, +en Travel Envoys.
The level of professionalism and personalised service that consumers expect is “no different from what a corporate traveller may expect of his travel advisor, said Chan.
Push for agencies to become NDC-capable
The development of NDC (New Distribution Capability) in the airlines sector could “change the revenue model for the travel agent”, prompting travel agencies to adapt and expand into new areas of retailing.
+en Travel Envoys COO Chloe Chan explained, “Old revenue channels will be diluted while new opportunities will open up in distributing ancillary services, quite like a low-cost carrier purchase journey – selling advanced seat selection, meals, baggage allowance and entertainment. Consumers will also expect their travel provider to have access to and provide these facilities and services”.
Alibaba has unveiled its first Flyzoo Hotel, an unmanned hotel fitted with smart interactive technologies such as a one-metre-high robot receptionist.
Chain consolidations continue
“Consolidation has been a key part of the accommodation sector over the last 12 months and will continue in 2019. Both investors and owners have recognised that the sector is just way too fragmented,” remarked Sam Turner, global director of sales & sourcing, Hotelbeds. He pointed out, “How many other industries can you name where the top 10 brands generate less than a quarter of revenues?”
“This explains not just the mega deals of recent years, but also the medium-sized chain deals of 2018 such as Minor Group acquiring NH and AccorHotels acquiring Mövenpick, as well as the constant acquisition of smaller brands and startups by AccorHotels and other major chains.”
Once a niche sector, lifestyle hotels have been in the spotlight as hospitality giants look to gain ground in the lifestyle sector. Last December, Hyatt Hotels announced it had fully acquired Two Roads Hospitality, which owns lifestyle brands Alila, Destination, Joie de Vivre, Thompson, and tommie, while AccorHotels has acquired stakes in North American luxury lifestyle group SBE and 21c Museum Hotels, a contemporary art museum and boutique hotel chain.
The rise of ‘smart hotels’
Hoteliers serious about making the pivot to ‘smart hotels’ are deploying technology such as robotics and artificial intelligence (AI) to areas such as self check-in as well as other guest-facing tasks and back-of-house operations.
As part of Singapore Tourism Board’s (STB) Hotel Innovation Pitch Challenge, hotels in Singapore have partnered with technology providers for solutions ranging from autonomous delivery robots to a smart mobile phone application with functions such as snapping a selfie to check-in, digital key, in-room controls and messaging functions.
Others such as Shangri-La Hotels & Resorts have teamed up with Shenzhen-based technology company Tencent to develop “high-end smart hotels”. The new line of hotels is expected to make use of Tencent’s advanced cloud and artificial intelligence technologies, social network and payment tools.
Elsewhere in Asia, smart hotel developments are already taking off. China’s e-commerce giant Alibaba Group unveiled last November its first “future hotel”, or “Flyzoo Hotel,” in Hangzhou, China.
The unmanned hotel relies on smart interactive technologies to operate, such as a one-metre-high robot receptionist, which remembers guests by using facial recognition technology. The hotel also uploads guest details to the country’s national public security system via a machine located in the lobby.
But some caution that technology adoption will require more time.
“For sure both AI and voice search will be relevant in the medium term. But in the short term we need to be more realistic. Perhaps 2019 will be a year in which our expectations will slowly begin to match the more slowly developing reality: small improvements and changes, not a quantum leap,” noted Turner.
Big data makes personalised hotel website browsing possible
Artificial intelligence data solutions are unlocking new possibilities for hoteliers to improve the guest experience even before they make the choice to stay at a hotel.
Amsterdam-founded hotel marketing platform Hotelchamp has unveiled a new artificial intelligence engine that can recognise each visitor and customise a hotel’s static website using a range of marketing techniques and tools. The engine, Autopilot, will be able to guide guests through the entire direct booking process depending on their characteristics and needs. It was built on years of data and hundreds of millions of A/B test impressions on what convinces guests to book direct.
The solution will be able use this knowledge against factors such as real-time data from a hotel’s website and GDPR-compliant visitor insights and behaviour.
“The ugly truth today is that the less sustainable choices often seem easier and cheaper now,” remarked John Kockan, general manager, Grand Park City Hall.
In the area of sustainability, the “next big leap” for the hotel industry is to “drastically reduce waste, water and energy consumption and make the right choice to source sustainably,” said Kockan.
“For instance, this means reducing plastics from our guest journey and making no-plastic a hassle-free option without diminishing guest’s experience. While our industry has made some progress in the right direction, we can certainly move the needle faster when we are more concerted in our efforts to be more sustainable.”