Seven Travel Trends for 2010

In the spirit of last year’s predictions about the direction of the travel industry, I’m once again tossing my hat in the prognosticator ring, certain only that I will be wrong in some ways and (hopefully) right in others. Here are some key trends I see in the world of travel as we approach 2010:

1. King Mobile. I’d very much like to avoid hopping on Mary Meeker’s bandwagon…but I can’t. She is in fact absolutely correct that mobile is a game-changer, especially for travel. What’s especially exciting is that it’s really most powerful in emerging segments of the travel ecosystem, like trip planning content, in-destination activities, and the like, rather than in the traditional air/car/hotel transactional space. Location adds a critical layer of relevance on top of any content, and, when combined with other relevancy tools (like NileGuide’s preference filters, for one), can dramatically improve the potential for user engagement, and ultimately, monetization. The flowering of the Apple App Store environment and the coming onslaught of Android apps only buttresses this trend. The key constituent elements of a real business segment are finally here: a small number of common technology platforms, huge numbers of customers, low barriers to entry for emerging businesses, and monetizable products and services. Google’s AdMob deal clearly shows they’re eagerly on board this train.
2. For locals or for travelers? 2010 will see a real blurring of the lines between what has traditionally been considered local city guide content (Citysearch, Yelp, etc.) and what’s been thought of as guide content for travelers. Sites like Centerd, NileGuide, and Goby are positioning themselves to serve everyone from the local looking for a day trip escape from the city, to a business traveler staying over the weekend, to a long-haul vacationer. As city guides and travel guides cross-pollinate, and as mobile travel content becomes location-smart (see above), the distinctions between the two formerly separate worlds will largely become moot for the consumer. Where won’t the distinction become moot? The city guides are the ones with local advertising revenue model (giving you “sponsored listings” and the like), while the travel guides are the only ones truly covering the world’s more off-the-beaten track locations, especially internationally.
3. SWF, Part 2. Last year I posited that Surfing While Flying (in-flight Wi-Fi) would become ubiquitous. Well, I may have been slightly ahead of my time (at least for U.S. travelers), but the trend is clearly growing stronger, with Virgin America, American, and many other airlines rolling out service in 2009, and many more on tap for 2010. Kinks are still being worked out, based on the chatter about porn-surfing and VoiP use, among other controversial pastimes. Still, it’s clear that the value to many travelers is so great that it’s likely to become an important new revenue stream for airlines this year.
4. Orient Express. China’s growth in the travel sector in 2009 was even higher than predicted, and that growth should continue in 2010, with millions of the emerging middle class venturing outside the country for the first time. Domestic tourism, already large, will be supplemented by a flood of outbound tourists, first to regional countries, and then around the world. Similarly, the demand by Chinese travelers for more than plain-Jane transactional functionality will spur leaders in the space to invest in travel content (witness TripAdvisor’s acquisitions in China).
5. Curation is key. The sheer volume and noise from all the user-generated content out there, super-charged by social media like Twitter and Facebook, has put the onus on quality travel content sites to use some intelligence (whether algorithmic, human, or both) to filter that undifferentiated stream into a form more digestable and usable by consumers. Whether it’s Facebook filtering what appears in your news feed, or Amazon showcasing top reviewers based on authority, travel content providers will have to take their cues from best practices outside our industry to ensure we’re helping people cut through the ever-growing clutter. That means actively working on behalf of the user to deliver relevancy, whether it’s by sniffing out travel intent or preference, or by making it super-easy to filter out the irrelevant.
6. OTA’s Growing Up. The major online travel agencies will realize in 2010 that they cannot keep going down the path of cutting fees to grab share back from suppliers indefinitely. Instead, they’ll start to invest in providing additional value beyond the cheapest transaction and the “best” selection — what a great personal travel agent should do. Some of this is starting to happen with things like price assurance and price tracking, mobile alerts, and the like. Next year this will expand to include more content (reaching consumers higher up in the “funnel”) as well as more itinerary management tools (holding customers’ hands post-transaction instead of just spitting them out of the funnel). Providing this kind of real value is the only way that they can escape competing solely on price and selection.
7. Currency conversions. When it comes to international travel, short-term changes in exchange rates usually have little impact. However, longer-term trends most certainly do. As a result, with continued economic weakness and low interest rates in the U.S. persisting into next year, the dollar’s slide is likely to continue, significantly raising the cost for American travelers in places like Europe, Japan, Australia and even emerging economies like South Africa. Thus, more affordable destinations like Central and South America, parts of Eastern Europe, and southeast Asia are likely to gain market share in the international travel wallet of Americans, alongside a trend of increased domestic travel. Similarly, inbound tourism to America is effectively the same as the “export of tourism services,” and as we all know, a cheaper currency means cheaper exports. Assuming the federal authorities can address the most egregious bumps in the road for international visitors, the downturn in inbound travel to the U.S. should start to reverse itself based on the simple principles of supply and demand.