Executive summary opportunities for growth
2019 has been an eventful and some might say transformational year for the UK travel sector. While consumer confidence wavered in a climate of continued political and economic uncertainty, spending remained resilient. Most important, consumers still
favour experiences and our research on leisure spending has shown net spending on holidays remains robust and above other leisure categories. However, should the consumer fundamentals change there is concern consumers’ ability to pursue their holiday dreams as often or as elaborately may be constrained. There have been fewer travel company acquisitions over the last year. While this could be linked to the general uncertainties, it is also potentially an indication that longer-term prospects for growth in the sector are being questioned. The sector is becoming increasingly
competitive and a range of operational challenges have put pressure on individual operators as well as the sector as a whole. Cyberattacks, drones and fleet issues have caused service disruptions, and workforce-related challenges – rising labour costs and limited labour supply – have combined with overcapacity to put margins under pressure.
SETTING A VISION FOR 2025 As 2020 dawns and focus shifts to refining business plans for the next five years, what should travel businesses do to continue to grow? The answer is simple: focus on people – both consumers and employees. While the outlook for economic
growth might be muted, there are still opportunities for growth. Holidays remain special to consumers and a travel business can set itself up for success by understanding what, when and how consumers want their holidays. This is only possible if staff are motivated and feel their contribution is valued. Technology is a key enabler for
improving understanding of the consumer 4 Travel Weekly Insight Report 2019-20
Travel companies need to focus on consumers and employees, and work out how to lead with purpose, says Alistair Pritchard of Deloitte
and there is more the sector could do in using analytics to predict what consumers want next. The sector can also make better use of technologies to operate efficiently and empower staff – for example, by automating more menial tasks and enabling staff to be more insight-led. This can be achieved by extracting more value from the data collectively held on consumers, by collaborating and sharing across companies. There are indeed signs that consumer
preferences are evolving. Holidays are increasingly an opportunity for consumers to enrich their lives and they want authentic experiences. They also want to understand the impact their holidays have on the environment, the local communities and places they visit. Having a strong brand, interesting offerings and competitive prices might not be enough to succeed in the next phase of growth. In future, a successful company needs to be responsible and purpose-led to inspire and resonate with consumers and employees. This is not about quick wins. Companies need to invest time and effort in working out how they truly lead with purpose. The pressure to do so is only likely to increase.
Alistair Pritchard, lead partner, Travel and Aviation, Deloitte LLP
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