TORONTO — More than 300 members of the tourism-and-hospitality community came together recently at Destination Toronto’s Spring Briefing at the Arcadian Court. The gathering was held to bring the industry up to date on the organization’s sales-and-marketing initiatives and to educate attendees about a few of the key trends impacting the travel-and-tourism industry in Toronto and beyond.
With the world in flux, Greg Klassen, senior director at Skift Advisory and former CEO of Destination Canada, shared some international perspectives and statistics and trends influencing today’s travellers. Klassen told a room full of hotel and tourism executives to expect a major shift when to comes to competing with other urban destinations.
As part of his keynote address, entitled, “Influencing Tomorrow’s Traveller,” Klassen, most recently principal of Twenty31 and a travel-and-tourism strategist, told the audience it’s time to stop looking at the rearview mirror on the pandemic because those days are over and to instead start looking at the windshield to see “what’s going on in the world and how can we use that to our advantage.”
Starting with a mix of global news fuelling consumer malaise, Klassen said we’re living in a state of great flux and confusion with mixed economic signals. He cited disruptive technology, virtual conferences and a post-COVID world − not to mention competitive threats from around the world.
But Klassen reminded attendees there are also good nuggets of info that’ll help us better understand what’s going on, referring to them as three phenomena to help attendees understand travel patterns.
The first phenomenon he referred to is the economy, adding that murky economic news is fuelling a host of changes. “The U.S. national debt is at $32 trillion and global trends growth is expected to slow down in 2024. Travel is off the chart expensive, with higher rates for car rentals, restaurants, hotel rooms and flights. The price of travel and tourism has gone up significantly,” said Klassen, adding that consumer confidence has fallen to its second-lowest recorded score in Canada.
But, despite this, consumers are travelling more than ever. “Consumers plan to spend more on travel despite those rising costs,” said Klassen. “We might not buy some other things but we’re going to continue to travel. That may be a response to COVID. Travel is at a statistically high point. There’s an anomaly – a phenomenon, I would call it.”
Klassen referred to the second phenomena as the “Tourism of Taylor Swift (and Big Events). “I’d be remiss in not talking about this impact. We all know people who are travelling to destinations they’ve never been to see Taylor Swift. It’s Dublin, Ireland, it’s Rio de Janeiro, it’s Vancouver, it’s Toronto. We’ve never seen this phenomenon happen before where it’s such a mass appeal of a single individual or a single event that has created a tourism phenomenon with spending. There’s going to be benefit to the city of Toronto. It’s not just Taylor Swift that can pull this,” he said, pointing to other sporting events such as FIFA, adding the importance of imagining those future events and leveraging them to introduce new travellers to what our cities can offer.
The third phenomenon, said Klassen, “is the tourism of Me,” explaining that in the post-COVID world, we’ve become hyper focused on ourselves. This is being fuelled, he said, by algorithms, and social feeds, which know more about us than we do. “We’re all getting personalized data and information making us believe it’s all about us.”
These three phenomena are creating a set of new trends. As an example, consumers are becoming more hyper focused on their health and on pampering themselves to make sure they’re fit. Health and wellness are becoming more important as are our mental state and spiritual self. It’s also fuelling the low-to-no alcohol trend, all which leads consumers to present the best versions of ourselves and to be Instagram worthy.
On the travel side, it means “that luxury is back with a vengeance,” said Klassen, adding that growth in the luxury sector has grown post-COVID and is solid. He said luxury is expected to grow from a $628-billion market to $1.2 trillion by 2031.
The next significant trends are health and wellness, the loneliness epidemic and solo travel, as well as tourism’s murky relationship with work.
When it comes to improved health and wellness, Klassen said it’s taken on a broader connotation, moving well beyond the spa component to incorporate sleep, performance, nutrition….“all those pieces together to help you become a better you.”
Klassen believes AI and digital innovations will continue to fuel changes to provide a more personalized view of luxury, including taking over the concierge function. “I agree that AI is creepy but we need to figure it out, embrace it and capture it,” said Klassen.
He also touched on the loneliness epidemic. Today’s youth are feeling lonelier than they ever have and social media isn’t helping,” warned Klassen.
This loneliness epidemic is spurring growth in the solo traveller market, with 62 per cent of consumers now travelling alone, with the majority of this group being female travellers. “We need to cater to solo travellers, find them communities, also creating a sense of community through travel,” explained Klassen, adding that solo travellers are sharing experiences with people they don’t yet know.
And, he advised attendees not to forget about sustainability. Eighty per cent of luxury travellers say they’re willing to pay more for sustainable experiences.”
Klassen concluded his presentation by informing attendees to watch for a big threat on the horizon. It won’t happen for another five years, said Klassen, but he shared that Saudi Arabia poses a threat as a new, viable travel destination. “They’re spending between $2 trillion and $2.75 trillion in building their destination, which will be ready by 2030. These are former places that didn’t exist and a lot of them sit across the Red Sea.”
Klassen told the audience a lot of the hotels being developed in this part of the world will be seven- and eight- star properties and will re-define what wellness means for travel. “They’ve got novelty on their side,” said Klassen, adding they will compete with other global destinations and will even recruit talent from North America with the lure of triple the compensation packages currently offered in North America. “Initially the impact will be on other Middle East travel destinations, but then Western Europe and the rest of the world.”
As for what North American operators can do about this threat, Klassen said it’s important to “understand these trends; understand what luxury means, what wellness means and then follow the lead of Destination Toronto to try to re-commit, re-position our destination in the service of customers so that we can grow in the same direction.”
