The Changing Face of Distribution Channels

KTB UK

Where we are…

Market Background UK

ECONOMIC UPDATE

• GDP grew by 2.7% in 2014 and has continued

to grow at 2.6% in 2015 (exceeding earlier

forecasts)

• Growth for 2016 also recently upgraded to

2.8% (versus 2.5% initially estimated)

• Total consumer spending is expected to

continue growing by around 2% per annum

until 2030 (PWC)

TRAVEL INDUSTRY OUTLOOK

• In terms of spend the United Kingdom is the fifth largest

outbound market (UNWTO Tourism Highlights 2014 Edition)

• Holiday bookings have risen by 10.3% in 2015

• Over half (53%) the UK population took at least one holiday

abroad in 2014

• Growth in the number of holidays driven by more affluent

consumers (ABTA)

Market Background UK

Who Do The British People Holiday With ?

ADULT ONLY GROUP OF FRIENDS

PARTNER ONLY

ALONE

IMMEDIATE FAMILY

EXTENDED FAMILY

GROUP OF FRIENDS INCLUDING KIDS

52%

20%

5%

38%

24%

15%

Top 10 Holiday Types

Package holidays remain important

The Changing Face of Distribution Channels

How are people booking their holidays?

Online Consumer Trends

• 86% of overseas travel transactions in the UK are now ‘digitally influenced’ (Deloitte)

• 80% of travel products in the UK are researched or purchased online, the highest figures for any country in the world (Google)

• 96% of UK consumers book their air travel online (Kantar Media Compete)

• 30% of UK travellers booked their most recent hotel stay directly from a hotel brand website, 32% booked from an online travel agency (ABTA)

What does online mean?

Kenya bucks the trend!

Consumer Trends – Online vs High Street

• Kenya bookings buck the online trend

Multi centre safari and beach itineraries are complex

Consumers need to speak to a specialist

The trade are well aware of this – this is why they love selling Kenya!

Target your consumers online… then take people to the booking source

All Main

77%

49%

48%

43%

32%

45%

15%

13%

9%

6%

The internet

Personal experience

Recommendations

Brochures

Travel agencies

28%

24%

24%

19%

19%

3%

3%

1%

Guidebooks

Tour operator

TV Travel programmes

Newspaper/magazines

Travel magazines

Radio

Main influencers for Kenya

Main channels of research for Kenya

Which channels did you use to research your holiday to Kenya?

• When booking a Kenya holiday respondents were significantly more likely to book direct with a tour operator or a travel agent than online

• When booking their Kenya holiday 82% booked through a tour operator or travel agent vs 30% when booking another long haul destination

(Burns & Co KTB Research)

Booking Kenya

• 192 tour operators sell Kenya

• Volume operators – sell 3 / 4 * hotels

• Luxury operators – 5* holidays

• Specialist tour operators who focus on specific niches

Which tour operators?

In general growth in number of holidays driven by affluent consumers

Which tour operators?

• Previously charters and large tour operators committing seats on charters

• To survive tour operators have focussed their efforts more on tailor-made travel

How can we all use online?

Discovery

Purchase

Experience

Advocacy

The buying process

What should we all be doing?

When are UK consumers online?

Post times of a leading travel supplier in 2015

No one likes cold calls or spam

So avoid promotional posts!

Think Mobile!

UK Outlook

Future

CURRENT TRAVEL TRENDS IN THE UK

© Hills Balfour

THE AGE OF PERSONALISATION

INSTAGRAM: THE INFLUENCER BUMP

THE RISE OF UBIQUITOUS BOOKING

EMERGENCE OF BLEISURE

Current & evolving consumer travel marketing trends will help partners to determine the right marketing channels and messaging

Customisation is key, from cycling, culinary or photography tours. Customers, especially millennials, are seeking deeper connections & personal experiences

The new breed of travel sharer is more viral than bloggers & the twitterati: travel & beyond, to family, food, sports, fashion & design

The ability to book is becoming even more ubiquitous, central, flexible & mobile. Long- haul destinations need to identify with this booking trend which demands more captivating content to help convert last minute bookings

The merging of business & leisure has created a new breed of sky warriors whose expectations & behaviours have shifted towards a culture that combines productivity, opportunity & new experiences.

FUTURE TRAVEL TRENDS IN THE UK

© Hills Balfour

“Across the board, people want to take more international trips and Australia, Italy and the US continue to be the destinations topping travellers’ wish lists.” TripAdvisor chief marketing officer

Barbara Messing

AGEING DEMOGRAPHIC

GROWTH IN TECHNOLOGY

SOCIAL MEDIA REWARDS

LAST-MINUTE LIVING

Increase in 60+ retired travellers with disposable incomes (GENERATION S)

Research by World Travel Market & Euromonitor International identifies more than a third of all travel bookings made online will be done via a mobile device by 2018, revolutionising the travel industry from destination education through to booking

Continuation of last-minute living. AOT partners & industry need to be aware of the late-booking trend & to price fluidly to take advantage of peaks & troughs in occupancy

Companies (such as hotel chains) will start to offer reward schemes for people who share images and reviews of their hotels rooms on social media

Asante sana We are here to help you

Where we were…

Where we were

• In 1990 91% of all holidays booked through a travel agent or tour operator

• In 2004 50% of all holidays booked through a travel agent or tour operator

• Consumers needed human contact

• 1999 Expedia was launched