Travel Agent's Travel Industry Forecast for 2016

This past year was bookended by the first steps toward normalizing relations between the U.S. and Cuba and two events that shook the industry in decidedly different ways.

The November 13 terrorist attacks in Paris were a grim reminder of a new challenge that travelers and their agents must face when planning future trips.

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The following week came Marriott International’s announcement that it was acquiring Starwood Hotels & Resorts. The $12.2 billion proposed buy was seen by many as a portent of more such mergers — and indeed, within a month of that development came word that AccorHotels had signed an agreement to acquire FRHI Holdings, parent company of Fairmont, Raffles and Swissôtel. The Marriott-Starwood deal would not only create the largest lodging company, but many in the business see it as a sign that consolidation within the hotel industry may be its best bet to defend against disruptive forces that include Airbnb and online travel agencies.

It was a year that also saw severe weather conditions (including crippling record snowfalls in the northeast, hurricanes in the Caribbean and Mexico and severe drought in California), the growth of homeshare accommodations, the continuing evolution of the LGBT travel market, the proliferation of travel apps, airline strikes and a terrorist attack in Tunis, among other developments affecting how agents do business.

Throughout it all, travel advisors, as always, have adapted and flourished, and all signs point to that trend continuing. According to American Express Travel’s recent Future of Travel Report, released in October, better than nine out of 10 respondents in the U.S. indicated that using a travel professional completely or somewhat enhanced their travel experience and almost half said they would travel more if they received more personalized service.

That latter number was higher among Millennials, and some reasons for this can be found in Ensemble Travel Group’s Ensemble Insights Survey. Whether it’s the type of vacation they’re looking for or the reason they value travel agents, Millennials are looking for experience, according to the survey, and toward that end this generation books their vacations through a travel professional because of his or her knowledge and experience (47 percent) and time savings (26 percent), far outweighing cost savings (14 percent) and help in emergency situations (13 percent).

The United States Tour Operators Association’s (USTOA) annual travel trend and forecast survey also noted the importance of agents to USTOA members. A whopping 87 percent of respondents reported using agents to sell product in 2015, and 55 percent of the year’s USTOA member bookings were made through a travel agency.

Heading the list of reasons to work with a traditional travel agent, according to MMGY Global’s 2015 Portrait of American Travelers, are “knowledge of destinations/travel service providers” and “the ability to take the hassle out of booking travel,” cited by 81 percent of respondents, followed very closely by “the ability to provide an extra level of service when things go wrong” and “the experience to help me book a better trip than I could on my own” (80 percent) and “greater confidence in the recommendations of traditional agents” (75 percent). These numbers were gleaned from travelers who used a traditional agent for a vacation during the past 12 months or intend to use one during the next two years.

Meanwhile, on the sales front, optimism reigns for 2016. The aforementioned USTOA survey shows that better than nine out of 10 USTOA members expected travel agent business to stay the same or increase. More good news for the year ahead comes from the Cruise Lines Industry Association (CLIA), which reports that eight out of 10 CLIA member travel agents say they anticipate increased sales in 2016 over 2015. This dovetails nicely with the association’s forecast that 24 million passengers are expected to sail in 2016.

Travel moment of the year? If we had to pick one it might be the official flag-raising ceremony at the U.S. embassy in Havana on August 14. In case anyone doubted the significance of this, the American Society of Travel Agents (ASTA), which has long supported a repeal of the travel ban to Cuba, was there. In addition to attending the ceremony, ASTA President and CEO Zane Kerby and SVP Government and Industry Affairs Eben Peck had talks with representatives of AccorHotels on potential business opportunities in the Cuba market.

Shangri-La Hotels & Resorts plans to showcase its virtual reality (VR) tours at industry events and in meetings with clients.
Shangri-La Hotels & Resorts plans to showcase its virtual reality (VR) tours at industry events and in meetings with clients.

Trend: Virtual Reality Sales

Looking for a Way to really drive home the “wow factor” for your clients in 2016? A major luxury hotel company and cruise lines are turning to virtual reality as a way to let travel agents and their customers try their travel product before setting foot in a guest room or on a ship.

Shangri-La Hotels and Resorts has developed a series of virtual reality videos that play on Samsung Gear VR headsets. Designed to be used as promotional and educational tools at tradeshows and industry events, the 360-degree videos aim to offer a you-are-there level of sales knowledge on the company’s hotel experiences. Shangri-La also plans to show off the VR tours during in-person meetings with travel advisors.

Shangri-La plans to have VR videos available for nearly half of its hotel portfolio by January, with the full rollout scheduled for completion in early 2016. The videos can also be watched online on a 360-degree video player, or downloaded and viewed on a VR headset that uses the Oculus platform (the same virtual reality platform that powers the Samsung Gear and the Oculus Rift headsets). Agents can share the videos with their clients at www.shangri-la.com/VR.

Cruise lines have also rolled out virtual reality experiences to showcase their product onboard and ashore. Azamara Club Cruises, for example, has developed a series of 360-degree Azamara 3DI videos that showcase onboard amenities as well as its onshore experiences, such as zip-lining through a Costa Rican rainforest or taking a moonlit carriage ride in Cartagena, Colombia.

Azamara 3DI works with the Oculus Rift virtual reality headset and desktop computers, as well as on Android and iOS mobile devices. On mobile, travelers and agents can either touch the screen to navigate or point the device in the direction they want to explore. The videos are also shareable on major social media platforms, such as Facebook, Twitter, Pinterest and Google+.

Azamara says it has showcased the technology at major trade conferences and travel agent industry events. The line has also partnered with certain travel agencies to do live consumer events around North America, and it has also used it to train agents at Vacations to Go and other travel agency offices.

MSC Cruises debuted its own virtual cruise ship experience at this year’s Expo Milan. Like Shangri-La, MSC’s virtual reality offering runs on a Samsung Gear VR headset and offers a video walkthrough of several of MSC’s vessels. Travelers can even watch a show in the ship’s theater, or smell scents like fresh fruit, rosemary or freshly baked bread.

MSC says it will be showcasing the headset at future tradeshows. The line’s business development managers will also periodically be taking them to travel agencies that they visit.

Finally, as of press time, Uniworld Boutique River Cruise Collection has announced its own virtual reality app that showcases the line’s new flagship, the Maria Theresa. Designed to function with the Oculus Rift headset, this app can also be downloaded from Google Play and the Apple Store.

Our Travel Industry Forecast for 2016

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