Changing the Mindset: Travel and Sustainability · 2019. 7. 12. · Game-changing technology Travel brands and start-ups are taking things into their own hands, deploying technology

CHANGING THE MINDSET: TRAVEL AND SUSTAINABILITY

October 2018

INTRODUCTION

BIG CHANGES ARE COMING

APPETITE FOR CHANGE

TECHNOLOGY AS A GAME-CHANGER

© Euromonitor International PASSPORT 3TRAVEL: CHANGING THE MINDSET: TRAVEL AND SUSTAINABILITY

Disclaimer

Much of the information in this

briefing is of a statistical nature and,

while every attempt has been made

to ensure accuracy and reliability,

Euromonitor International cannot be

held responsible for omissions or

errors.

Figures in tables and analyses are

calculated from unrounded data and

may not sum. Analyses found in the

briefings may not totally reflect the

companies’ opinions, reader

discretion is advised.

With near unanimity, the time

for taking action to mitigate

climate challenges is now, with

an official roadmap of

Sustainable Development Goals

to 2030 and the importance of

collective environmental

stewardship. Consumer

attitudes are also shifting in the

right direction, with the majority

of consumers seeking to have a

positive impact on the

environment. Travel brands are

not resting on their laurels,

deploying technology to

instigate behavioural change

and rewarding sustainable

actions.

Scope

INTRODUCTION

▪ This spotlight report on “Changing the Mindset” is part of Euromonitor

International’s global content for its Passport Travel research. Data are given in

US dollars in constant terms at fixed 2018 exchange rates and given in constant

terms at fixed exchange rates for the forecast period.

Travel

Tourism flows

Lodging

Travel modes

Online travel and intermediaries

http://www.euromonitor.com/



Key findings

INTRODUCTION

Perfect storm A perfect storm has been unleashed. The impacts of tourism (good and bad) are ever

more under scrutiny at every level, as the challenge of achieving sustainable, low-

impact growth at a local and global level comes into sharp relief.

Enough is enough The challenges for destinations is knowing when they have reached the optimum

level of carrying capacity, especially where it concerns capacity management and the

need to ensure the right balance of visitors and residents.

Plugging the gaps The 2030 Sustainable Development Goals provide the necessary roadmap for

businesses, governments and consumers. A major push will also be required to

ensure the right type of data is collated and used to measure tourism impacts.

Why wait? Air travel is one of the biggest contributors to the travel industry’s carbon emissions,

particularly long haul flights. However, electric aircraft are only expected by 2025, and

the use of alternative fuels will take longer to integrate.

Game-changing

technology

Travel brands and start-ups are taking things into their own hands, deploying

technology to address problems such as over-tourism by providing alternative

choices and encouraging visitors to explore further and deeper, beyond the tourist

routes.

A force for good With apps starting from as little as USD5,000, brands are rewarding good behaviour

(whether for healthy, ethical or sustainable actions), optimising machine learning and

algorithms to spur real change in consumer behaviour.

Not a silver bullet… There is no silver bullet that will fix the world’s climate challenges, and it will require

fundamental changes in consumer behaviour, government policy and company

actions to deliver on the ambitious goals set out and avert climate chaos.



INTRODUCTION


APPETITE FOR CHANGE



▪ With the 2030 Sustainable Development Goals in place, and the majority of the world signed up to the Paris Climate Agreement, with the exception of the US, the roadmap has been laid out how to reduce carbon emissions.

▪ A new report published in Nature Climate Change indicates that tourism is highly resource-intensive, accounting for 8% of the world’s carbon emissions, when taking into account transport, lodging, food and shopping. Air transport currently sits outside the Paris accord, but is a major emitter.

▪ One worst-case scenario that the travel industry faces is that governments and regulators clamp down on high energy consumption activities, such as travel.

▪ It is difficult to predict what the impact on demand would be under these circumstances; however, there are precedents that we can refer to where consumer products/services have witnessed heavy regulation and taxation, and finally bans imposed. The tobacco industry is an example of heavy regulation and the shift in consumer attitudes to smoking.

▪ Another current area where the tide is changing quickly is regarding consumers’ attitudes to plastics and food waste.

Travel in 2030: no longer a case of growth at any cost





▪ Sustainable tourism experts such

as Susanne Becken believe that

the travel industry is witnessing a

perfect storm, and that we are at a

crossroads in terms of future

direction – and most importantly,

how to ensure that tourism has a

minimal impact. There are also now

calls by the Intergovernmental

Panel for Climate Change for global

warming to be limited to 1.5%

rather than 2.0% of pre-industrial

levels.

▪ As the world inches ever closer to

irreparable climate disaster, the

travel industry will need to take a

sharper look at the multiple players

and business models within its

ecosystem, and decide where to

rein back or push forward on

development and find adaptive

measures to ensure traveller

behaviour changes.

Facing up to unwelcome truths





▪ There is growing awareness across the spectrum –entrepreneurs, brands, DMOs, governments and consumers – that a climate change catastrophe is a real and credible threat (despite some high-profile climate change deniers such as President Trump).

▪ The challenge is that there is no one-size-fits-all solution. Changes are required across multiple facets of society – energy and resource usage, retrofitting existing buildings and infrastructure and investing in green/clean technology such as biofuels and electric vehicles.

▪ The issue is further complicated by the need for consumer lifestyles to adapt to this stark future reality, where all coral reefs could die and the polar caps could see substantial melting as a result of global warming by 2100, compounded by extreme weather events.

▪ The 17 Sustainable Development Goals that 195 countries signed up to following the Paris Climate Agreement outline the best way forward to ensure a world fit for future generations, that is equal, inclusive and fair. Despite the US pulling out of the Paris agreement, heavyweights such as China, Japan and Germany are supporting the process.

Global Goals roadmap for future-proofing our world


2030 Agenda for Sustainable Development




▪ Recent research by PATA and Tourism Economics reveals that thanks to developing a digital ecosystem

for travel and tourism, there was a subsequent uplift in arrivals of 5% over 2013-2018.

▪ Digitalisation drives efficiencies, whether through automation, e-visas, biometrics or digital interactions with

travel brands, before, during and after the trip. Many travel brands and destinations have focused on

providing a seamless, streamlined travel experience, pushing the experiential element of the trip to the fore

by pushing operations to the back-end and out of sight.

Digital as an accelerator of travel growth


Correlation of Airline Sales and Internet Access Per Household

9.7%Internet users

CAGR 2008-2018

6.7%Resident trips

CAGR 2008-2018




▪ Behavioural economics is being used to help nudge consumers into more sustainable behaviour. An interesting report by the Nordic Council of Ministers on “Nudging and Pro-Environmental Behaviour” provides insight into what nudge actions can be used when legal or economic means cannot be applied.

▪ According to the report, providing real-time information about energy usage, changing the physical environment so that it is conducive to green behaviour, providing the green option as the default option, and the most important factor, allowing peer comparison, help change social norms.

▪ Consumers respond well to convenient, easy solutions where there is not too much choice.

▪ Some key technology that can be implemented to reduce energy and waste are devices such as smart meters, electric vehicles, electric aeroplanes (as being tested by easyJet in Europe), carbon calculators, carbon offsetting for flights, the introduction of low-energy transport and mobility solutions such as bike-sharing.

▪ As with any new strategies to influence consumer behaviour, it is a case of test and learn before scaling up.

Define • What is the problem?

Diagnose • How are we going to fix it?

Design • Design the solution

Test• Test and learn, until it is ready

to scale

Nudging travellers in the right direction


Approach to Nudge Theory for Sustainable

Behaviour

Source: Euromonitor from United Nations Environment Programme




▪ As the bedrock of tourism data, the UNWTO

launched a Statistical Framework for Measuring

Sustainable Tourism (MST) in the Philippines, with

80 countries signing up. It builds on the strengths

of the existing framework, the Tourism Satellite

Accounting System (TSA), that is heavily skewed

towards reporting supply and demand metrics.

▪ Building on the TSA, sustainable tourism metrics

will incorporate environmental/social and economic

measurements. Most importantly, the TSA will be

linked to the System of Environmental-Economic

Accounting to help bridge these two existing global

standards.

▪ The Manila Call for Action is a great starting point,

and it is imperative that other countries sign up and

commit to monitoring the impact of tourism and

ensure consistency of data collation.

▪ Four key areas will be considered – water, energy,

greenhouse gas emissions and solid waste.

▪ The final framework is due to be launched in 2020,

and will be instrumental in the travel and tourism

industry’s ability to deliver tangible positive change.

▪ Former UNWTO Secretary General Taleb Rifai

called for “an integrated base for the three

dimensions of sustainable tourism – economic,

social and environmental – and a common

language for measurement that is standardised

across destinations, countries and regions”.

▪ It will also be important to capture tourism’s

linkages to the environment and biodiversity.

Measuring Sustainable Tourism: a global standard to be met




INTRODUCTION


APPETITE FOR CHANGE



▪ The ethical living movement is more progressive

in emerging markets, where a higher than global

average ratio of consumers seek out ways to

make positive decisions about what they buy

and look for a solution to the negative impact

consumerism is having on the world.

▪ Awareness, availability and affordability drive

consumers’ interest in ethical living. However,

consumers still rank features such as efficacy

and value as the main driving force behind their

purchases.

▪ At national and international level, the regulatory

environment is tightening up. Companies are

also taking environmental concerns more

seriously. Green strategies are no longer just

the preserve of niche companies with a

specialist environmentalist positioning.

Mainstream players are also greening up their

act.

▪ Among consumers, green issues are no longer

a niche, only of interest to a specific

demographic, and are becoming the norm.

Ethical Living

Regulat-ion

NGO pressure

Corporate change

People power

Ethical living is identified as a key megatrend shaping behaviour

APPETITE FOR CHANGE




▪ Globally, 60% of consumers stated that they were

worried about climate change in 2017; however,

64% try to have a positive impact on their

environment through their everyday behaviour.

Clearly, we are living through a period where

actions now matter more than words.

A growing appetite for mindful consumerism

APPETITE FOR CHANGE



INTRODUCTION


APPETITE FOR CHANGE



▪ Geotourist is an award-winning GPS-based travel app for audio

tours curated by experts, providing a personal tour guide in-

destination on demand.

▪ On the supply side, it offers a universal portal for tours and

provides destinations and venues with insights from the app to

help understand where visitors go and understand footfall around

a city.

▪ This level of insight on visitor behaviour in destinations is vital for

destination management and to avoid the scourge of “over-

tourism”, where the visitor/resident balance tips off-balance.

▪ Geotourist has created over 2,000 tours worldwide. It was

instrumental in helping the four councils which are part of the

1066 destination management company in England to disperse

visitors to less-well known areas and share the economic

benefits.

▪ The app has developed into a management tool, where curated

content is created and influences visitors, creating a radius effect

to help push out visitors beyond the core hubs, helping in the act

of visitor dispersal – critical for sustainable development.

Geotourist: the act of visitor dispersal





▪ The business model is working well for city tourism, and Shaon Talukder’s team is now working at a

country level. Partner organisations looking to offer country-wide audio tours on the app include those in the

US, Australia, Scotland, Indonesia (Bali) and Singapore. They are also working with Saudi Arabia to offer

pilgrims to Mecca an audio guide in their own language.

▪ Given that Geotourist unifies information and multiple destinations are available, this ensures the DMOs

are not impacted by consumer app fatigue. The key content pillars are architecture, art, history and

culinary, whereas shopping is seen as being too commercial; keeping the focus on enriching the traveller’s

experience.

▪ Working with events and festivals also ensures that the audio tour can live-on after the event is over, as

exemplified with the Sydney Architecture Festival.

▪ Long-term, the company is keen to operate on WeChat, and it already provides tours in Mandarin. It is also

developing a revenue-generating model with partners, as well as content providers.

Geotourist: scaling up for destination gains





▪ My Green Butler empowers consumers to use

fewer resources in lodging outlets in Australia by

being upfront about the need to reduce resources.

▪ Its track record speaks for itself, as it has managed

to save 35% electricity, 21% water and 20% gas.

Using smart technology such as smart meters it

monitored 15,000 guests’ energy consumption

during their stay.

▪ What is more Christopher Warren of ICRT

Australia said that, “80% of guests were happy to

be more engaged and involved”.

▪ Users are rewarded for using less electricity, gas

and water with personalised activities and services.

For example, Sheraton Dubai rewards users for

taking shorter or fewer showers by offering them

lotions. It is important to note that the outlets tend

to be at the high-end, where consumers are more

willing to pay more.

▪ Urbanwaste is a mobile app created for tourists as

well as residents, designed to promote users’ good

behaviour regarding waste, to have a positive

impact on waste management and follow cities’

litter policies.

▪ Strut is an app that encourages users to uncover

the world one map tile at a time, and seek

alternative routes in their daily lives as well as

when on the road. The experience is gamified

through the use of leader boards and being able to

share with family.

Greening consumer behaviour for positive impacts





▪ Ant Financial, a subsidiary of Alibaba, launched

the Ant Forest project in August 2016 as a special

feature on Alipay, its payments ecosystem.

▪ It encourages green consumer behaviour by

providing a personalised carbon footprint to users,

offering alternatives to reduce their footprint, and

providing rewards for carbon savings. The reward

comes in the form of a virtual tree, which once fully

grown, is planted as a real tree by Ant Financial in

a desert in Inner Mongolia.

▪ By March 2018, the app had 300 million users,

which is over a fifth of the Chinese population;

reducing their collective carbon footprint by over

8,000 tonnes per day. Over 13 million real trees

have been planted, which is a major achievement.

▪ The scheme educates users about their carbon

output and effect on the natural environment, as

well as encouraging changes in consumer

behaviour. With China set to experience 200

million outbound trips, as well as 8 billion domestic

trips a year, minimising their impact on the

environment will be critical.

Ant Financial: rewarding good behaviour





▪ Yoshinoya, a fast food chain, launched a mobile

app with a feature that syncs with a smartphone’s

step-counting technology.

▪ Users are rewarded with daily discounts if their

step-count goals are met, in addition to engaging

with consumers beyond the store, during the after-

stage of their customer journey.

▪ Technology is at the forefront of this behavioural

shift towards healthy living, with devices, digital

platforms and science evolution facilitating health

tracking, diagnosis, general health awareness and

personalised prevention concepts, which support

the newly-forming self-care model and approach by

consumers.

▪ There are numerous healthy lifestyle apps

available for download, in addition to the quantified

self-care devices such as Garmin and Fitbit.

However, the Yoshinoya example illustrates that

even a brand which operates in the fast food

category, albeit with quality food with a conscience,

can encourage healthy behaviour and active

lifestyles, going beyond offering healthy food on its

menu.

Yoshinoya: incentivising healthy living





Fitbit’s consumer base is traditionally fitness

enthusiasts or health-conscious consumers. To

expand its potential customer base, Fitbit has

embarked on a partnership with the NBA to attract

gamers.

Gamers of NBA 2K17 who have clocked at least

10,000 steps in a day with their Fitbit device are

rewarded with in-game rewards that will boost their

performance on the court.

Fitbit: rewarding gamers for getting off the sofa


Fitbit accounted for almost a third of the global activity wearables market in retail volume terms in

2016

Image source: Fitbit and 2K Sports



FOR FURTHER INSIGHT PLEASE CONTACT

RELATED ANALYSIS

Caroline Bremner

Head of Travel

[email protected]

@carolinebremner

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Travel Quarterly Statement – Q2 2018 – June 2018

Mega Trends – Experience More Digital Toolkit – March 2018

Travel Quarterly Statement – Q1 2018 – March 2018

Google – The Ultimate Disruptor in Travel? – February 2018

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Work Reinvented: Future Business Travellers – January 2018

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Changing the Mindset: Travel and Sustainability · 2019. 7. 12. · Game-changing technology Travel brands and start-ups are taking things into their own hands, deploying technology