Complex Made Simple

Here’s what travel tech businesses need to focus on!

The growing population of tech-friendly millennials and massive mobile penetration has boosted the GCC travel tech industry, but what are you doing about it?

In 2018, social media accounted for 22 percent of the digital spend for travel marketers Mobile travel bookings soared 110 percent in the GCC region in 2018, compared to the previous year The 2019 State of the Industry report makes it clear that digital ad spending will define the future of businesses

The travel and tourism industry is witnessing a boom with increased business, leisure, academic and medical travelers visiting the Middle East and GCC regions. With the GCC region diversifying away from oil, the travel and tourism sector has gained momentum. Governments such as Saudi Arabia have announced big budgets in a bid to attract more visitors and greater investment. The travel and tourism sector has already contributed $146.8 billion to the GDP of GCC states in 2018 – and is expected to climb to $318.6 billion by 2027, according to Statista.

The growing population of experience-driven, tech-friendly millennials coupled with increasing mobile penetration in the GCC has also boosted the travel tech and travel trade industry. Mobile travel bookings soared 110 percent in the GCC region in 2018, compared to the previous year, a study by Cleartrip and Flynn indicates. A report by MENA Research Partners projects that the online travel market will rise to $15 billion within the next five years. The growth of digital infrastructure in the region has also fueled investments into travel tech and travel trade.

With bigger investment coming in, travel and tech companies have begun taking a closer at the data surrounding this growth story. AMEinfo spoke exclusively to Volkan Cagsal, CEO of Adphorus, and Stewart Smith, Commercial Director MEA at Sojern, who are both experts at supporting travel brands that are tracing the path to purchase – from when a person first engages in looking for a holiday, all the way up to when they book their holiday, and what happens post-booking.

Total economic contribution of Tourism and Travel to the GDP of GCC nations (2012-2018)

Travel tech trends

The steady upsurge in the e-travel business space has also led to increased traveler expectations. Not only are people spending an increasing amount of time researching the best travel deals, but they are also looking for experiences that are unique and customized.

“A big topic at the moment is personalization. People’s attention spans are much less than they used to be. So, it’s important to figure out how you can engage with people when they are going through their customer journey in order to make your products stand out, differentiate your destination, or get people to actually come and book a ticket with you,” said Stewart Smith, Commercial Director MEA at Sojern.

Businesses are also latching onto the social media trend, spotting that a majority of their customer base is heavily influenced by social media such as Facebook and Instagram. The recent State of the Industry report demonstrates how overall investment into social media ads is growing. In 2018, social media accounted for 22 percent of the digital spend for travel marketers, while 58 percent of all travel marketers stated that they are planning to increase their Facebook and Instagram advertising expenditure, according to the report.

“More than two-thirds of travel marketers in the region plan on using Facebook and Instagram Stories in 2019. This is pretty important because it is a very new format. It is driven by user behavior. A few years ago, the concept of vertical videos didn’t exist. Now people can take videos on their camera without tilting their phones. They can share their videos the same way they hold their phone. A lot of the innovation came from the users. Whether it is tagging a location on a Facebook or Instagram Story, or sharing a Spotify song you are listening to – users have led the way. Brands are now trying to keep up with the users. If you're not using enough Stories in the next two years, you will be in big trouble. It is also aligned with other trends of video usage, social media, and the use of smartphones. This is definitely one of the most important trends that we see,” said Volkan Cagsal, CEO of Adphorus.

Omnichannel strategies

While people are increasingly moving to mobile phones to browse through travel options on-the-go, they still choose desktops to confirm actual bookings and make purchases.

“On average, we see 57 percent of people and searches are done on mobile phones, but when it comes to bookings 78 percent of people book on desktops. If you look at the path of purchase, how people are engaging, there are anything between 35 and 640 touch-points across all the devices, platforms and channels” confirmed Stewart Smith.

This is vastly different to what the perception was in the past. There used to be an understanding that travelers look at about 30 websites before making a purchase. However, this is not the case anymore. With the number of touchpoints varying between 35 and 640, Sojern’s data analytics prove that the “30 websites” perception just isn’t relevant anymore.

Apart from attempting to keep up with the fast-paced tech landscape, travel marketers are also facing the challenges of achieving ROIs, interpreting customer data, as well as managing integrated campaigns, pricing and profitability.

“The travel and tech industry is trying to keep up with the trends and the fast-moving technology within the region. I think that's a big challenge for a lot of GCC companies who are looking to advertise both locally but also to a bigger audience. It's a very fast changing, populous region. They’re very demanding about the content that they want to see, and the content they want to engage with. So that's very important. You've also got the affinity to traditional travel agents and cash to deal with,” Stewart Smith said.

The State of the Industry 2019 report makes it clear that digital ad spending will define the future of businesses looking to grow within the travel and tourism space. Social media will stay strong, and is here to stay. Big tech players such as Amazon, Facebook, and Instagram will be the biggest disruptions in the travel marketing sphere.