Week 47 - Travel, bringing people together
Chinese are finally planning to visit EU, Middle East building 82% luxury hotels, Olympics for the rich & more!
TLDR: Too Long Didn’t Read
The Middle East's hotel pipeline reports 82% in the luxury segment, raising concerns about market concentration. The European Travel Commission's report shows growing travel intentions from China and Japan to the EU. In other news, a major Phocuswright travel conference covers diverse topics from Gen Z to innovation, while a "Thanksgiving Grandma" invites strangers via Airbnb to share the holiday, emphasizing the social aspect of travel. AI-generated content contributes to misinformation in the Israel-Gaza war, prompting efforts to combat fake narratives. On the external front, climate reforms are making a tangible impact, with the expected temperature drop by the century's end.
0. News snippets
Not important enough to expand on, but worth hearing about
“LATAM” a Chiliean airline has overtaken United in flights from Brazil, a feat that shows internal offering being compete with major US players | German tax reduction for restaurants due to COVID will not be continued and will end in 2024 | An innovative hotel chain CitizenM hires a new executive to grow their US market, full interview with Rani Gharbie available here. | A new law in the US has made Franchisors (i.e. Marriot) collectively liable for employees of their franchise takers, the AHLA (hotel association) is now suing the government, since it can make franchising obsolete. | Italian cooks are leaving Italy due to low salaries and are not planning to return anytime soon
1. Main Hospitality News
Core news related to the industry
The Olympics might break the Parisian tourism market
Remember when people said that AI-generated content would drive fake news and spread like wildfire? Well, unfortunately, this is already happening in the Israel-Gaza war. How? Simple. Take a conventional AI model like Midjourney (which we use for our weekly picture, by the way) and give it training material (actual war footage from the region). Then start creating prompts that you want the world to see. How much is in circulation? Apparently not much at the moment. What narratives are being pushed? Mostly those that evoke an emotional response in favour of the people of Gaza. How do you fight this? Use x.com for one thing, as the community guidelines have caught and clearly marked several fakes so far. Here are 5 additional steps to help you spot fakes.
Middle East hotel pipeline 82% in the luxury segment
We have seen hotel pipelines around the world, such as those in Latin America, grow year on year. But they are not alone with such great statistics. The Middle East has seen 9% year-on-year growth, with a total of 585 projects and 139,000 rooms in the pipeline. A whopping 82% of these are in the luxury segment, which goes hand in hand with the common image of the region as oil-rich developing countries driving golden Lambos. The total pipeline is expected to grow in the coming years. One wonders how such a high concentration in the luxury market alone could backfire on a market focused on a single group of travellers.
Chinese are coming again!
The European Travel Commission is at it again. Publishing high-quality reports that are accessible to the general public! This time, they report on the study of non-EU countries and their desire to visit the EU. While most have stayed the same, China & Japan have suddenly grown. 74% of Chinese plan to visit the EU by EOY 2024. Japanese intentions increased by 10%. Why don't the others come? Almost every continent cited "high travel costs", with around 40% in each region such as the US & Brazil. Australians plan to stay the longest, up to 3 weeks. And in terms of daily budget, China has the highest. More than 68% said their daily budget was over €200. Read the full report here if you want to better serve the needs of foreign guests.
A major travel sector conference took place
Phocuswright organised another travel industry conference. They have conveniently summarised the events and keynotes given here. There was a wide range of talks from Hopper talking about Gen Z to diversity in travel leadership. We found Skyscanner on how they innovate particularly interesting. The full list of speakers can be found here. As soon as they hopefully release the recorded presentations, we will let you know!
Why do people invite strangers to their homes?
There is a "Thanksgiving Grandma" who accidentally invited a stranger to her home during a Thanksgiving in 2016. This has now morphed into her offering strangers to book dinner with her on Airbnb this holiday. She does this to make friends with people she would otherwise never meet and to spread cheer. Indeed, an important reminder to us all that travel can be about more than just making money. A reason for people to socialise and meet strangers. Demand is now so high that Airbnb runs a random sign-up programme where winners get to take part, while the proceeds from sign-ups are donated to charity.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
Climate Reforms are actually creating an impact
The world has been rather critical of politicians getting together and discussing climate change. However, changes have started to happen. The expected temperature of 3 degrees Celsius by the end of the century has now dropped to between 2.5 and 2.9 degrees. Many conversations have started around the world and green energy is a growing trend (except in the stock market, as the news of the last few weeks has shown). Unfortunately, the global conscience is a bit slow to change its dynamics, but it has started!
AI image fakes are seen in the Israel-Gaza war
Remember when people said that AI-generated content would drive fake news and spread like wildfire? Well, unfortunately, this is already happening in the Israel-Gaza war. How? Simple. Take a conventional AI model like Midjourney (which we use for our weekly picture, by the way) and give it training material (actual war footage from the region). Then start creating prompts that you want the world to see. How much is in circulation? Apparently not much at the moment. What narratives are being pushed? Mostly those that evoke an emotional response in favour of the people of Gaza. How do you fight this? Use x.com for one thing, as the community guidelines have caught and clearly marked several fakes so far. Here are 5 additional steps to help you spot fakes.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Travel Spending by Segment
Which travel segments actually make up the travel market as a whole? It turns out that the luxury hotel segment is about the same size as the budget hotel segment. While the lion's share of spending falls on full-service airlines (aka regular airlines). During a crisis, almost all segments of travel spending fall, but both luxury and budget travel fall more or less equally. A report worth looking at when assessing the health of a market and its diversification.
