The route to travel growth: 3 takeaways from WTM London 2023

1. Sustainability & responsible tourism in demand, long term ESG strategies needed to drive revenue

Sustainability, and its stablemate responsible tourism, have long been on the ESG agenda for travel providers. But, at this conference, the overriding sentiment was that now is the time to get serious about them. As one speaker put it, “the pandemic put a pause on travel, now is the ideal time to take the opportunity to rebuild a new, better travel sector.”

Travelers are more aware of their impact and are voting with their money, spending it with companies that they feel are genuine in their actions, making ESG a commercial imperative.

Every speaker felt profit should not be the reason to engage in ESG. Instead ESG as the right thing to do - of “righting a wrong” was the focus, giving back to communities to ensure their survival; creating jobs, improving prospects and preserving authenticity.

However, both sustainability and responsible tourism can be profitable, particularly in the long term but only if strategies are implemented in meaningful, authentic ways and benefit the communities in which the company operates. Examples of ESG efforts discussed at the show were wide-ranging and included:

• hotels training and employing mainly local people
• on-site restaurant menus based on locally-grown ingredients
• landscaping hotel grounds using only native plants
• building a community school as part of a development agreement

For businesses, the benefits of committing to genuine sustainable and responsible tourism include risk mitigation, business resilience and increased consumer loyalty. But the benefits for local communities are far greater. For some, tourism is critical to their economy, but if local people and the ecosystem are exploited, and profits siphoned away from the community, the likelihood is that those communities will not survive for future generations.

After all, the more the culture is retained, the greater success it will have as a tourist destination.

2. Demand for authenticity & experiences continues, Gen Z leading the charge

Authenticity was the buzzword of the conference, uttered both in the context of the ESG strategies needed to preserve the cultural authenticity of destinations and, more commonly, consumer demands.

It was clear from several conference sessions that many travelers are no longer satisfied with simply visiting a place, instead they yearn for authentic experiences. What’s more, the WTM Global Survey report shows that even with increasing operating costs driving up prices, they are willing to pay for them.

Tracy Lanza, Group Head of Brand Development, Red Sea Global said “stories, in travel, are more exciting the smaller you get” and I couldn’t agree more. It is these stories-that contribute to the true culture of a destination-that 73% of travelers want to experience (booking.com research referenced by Tom Hall, VP of Lonely Planet).

Authenticity is in demand with many traveler segments, but 18-24 year olds-collectively known as Gen Z-are at the forefront and are vocal in their demands. YouGov research from 2022 shows Gen Z travelers have a strong interest in localism and the authentic cultural experience that individual countries can offer. The research found that the number one demand of Gen Z travelers is an authentic experience that is representative of their destination. Here at Flywire, many of our clients are already in the business of delivering authentic experiences and we consider ourselves very lucky to work with them.

But it’s important that providers do not assume travelers with the same budget, or buying patterns always want the same things. Travelers also want their experiences to resonate with their life view, and hyper-personalization is set to become the next big trend.

It is taking hold already. Hyper-personalization is the lens through which Gen Z interacts with the world, in particular through their social media consumption. Social media is the number one tool that Gen Z use to plan travel (YouGov), sourcing information and recommendations on the experiences available in their destination. They use it to plan highly personalized trips, and it’s only going to expand from there.

3. AI & other technologies key to improving efficiencies and customer journey

The prominence of technology on the agenda at WTM London signifies just how important tech and data are to driving growth in the travel sector. And the most-talked about tech, of course, was Artificial Intelligence.

One speaker went so far as to say that adopting AI is not a choice, that it is here and the companies that fail to embrace it will fall behind those that do. However, there was no suggestion, from any speaker, that AI would replace humans in the travel sector. Instead, they all emphasized the need to understand what AI is good at and how it can augment human capabilities. Said strengths lie in accelerating data analysis-structuring vast amounts of data, manipulating it and making sense of it-and also in creating process efficiencies to free humans up for more valuable activities.

In short, anything involving data can be accelerated with AI-whether that is room mapping, itinerary creation or offering simple responses to customer enquiries. Boon Sian Chai, MD & VP of International Markets at Trip.com Group said that AI solves 75% of the 15m+ customer service requests they receive.

The unequivocal perspective on the value of AI was that humans with AI will outperform humans without it, and that harnessing the power of AI will bring huge growth potential.

Interestingly, personalization is a huge driver for the use of AI. Not only is AI the most efficient way to organize and make sense of the granular data that personalization both requires and creates, but generative AI can also be used to help customers curate personalized holidays based on complicated queries.

Spoiler alert: in new Flywire research, nearly a third of travel providers said that the use of AI in the travel sector would lead to an increase in personalization. Keep your eyes peeled for the full report soon.

Of course, all of this rests on providing the technology that eases the booking process – so that travelers can have these experiences. AI is not the only tech available to help streamline processes and improve the customer journey. Leading providers look to payments process improvements that give travelers familiar, local payment methods in their currency of choice and providers a way to easily receive and manage payments, deliver invoices and statements, and handle agent commission payments.

As one of our clients put it “anything that can be done by a machine should be done by a machine, leaving the humans free to do the creative thinking.”