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
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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
BIG CHANGES ARE COMING
APPETITE FOR CHANGE
TECHNOLOGY AS A GAME-CHANGER
© Euromonitor International PASSPORT 6TRAVEL: CHANGING THE MINDSET: TRAVEL AND SUSTAINABILITY
▪ 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
BIG CHANGES ARE COMING
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▪ 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
BIG CHANGES ARE COMING
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▪ 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
BIG CHANGES ARE COMING
2030 Agenda for Sustainable Development
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▪ 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
BIG CHANGES ARE COMING
Correlation of Airline Sales and Internet Access Per Household
9.7%Internet users
CAGR 2008-2018
6.7%Resident trips
CAGR 2008-2018
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▪ 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
BIG CHANGES ARE COMING
Approach to Nudge Theory for Sustainable
Behaviour
Source: Euromonitor from United Nations Environment Programme
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▪ 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
BIG CHANGES ARE COMING
INTRODUCTION
BIG CHANGES ARE COMING
APPETITE FOR CHANGE
TECHNOLOGY AS A GAME-CHANGER
© Euromonitor International PASSPORT 13TRAVEL: CHANGING THE MINDSET: TRAVEL AND SUSTAINABILITY
▪ 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
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▪ 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
BIG CHANGES ARE COMING
APPETITE FOR CHANGE
TECHNOLOGY AS A GAME-CHANGER
© Euromonitor International PASSPORT 16TRAVEL: CHANGING THE MINDSET: TRAVEL AND SUSTAINABILITY
▪ 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
TECHNOLOGY AS A GAME-CHANGER
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▪ 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
TECHNOLOGY AS A GAME-CHANGER
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▪ 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
TECHNOLOGY AS A GAME-CHANGER
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▪ 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
TECHNOLOGY AS A GAME-CHANGER
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▪ 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
TECHNOLOGY AS A GAME-CHANGER
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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
TECHNOLOGY AS A GAME-CHANGER
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
@carolinebremner
Market Overview for Intermediaries – October 2018
Ctrip Standing on the Shoulder of Giants – August 2018
Mega Trends – Experience More in the Moment – June 2018
Mega Trends – Experience More in Asia Pacific – June 2018
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
Smart Destinations to Tackle Over-Tourism – January 2018
Work Reinvented: Future Business Travellers – January 2018
Mega Trends – Experience More Across the Customer Journey – November 2017
© Euromonitor International PASSPORT 23TRAVEL: CHANGING THE MINDSET: TRAVEL AND SUSTAINABILITY
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