WHAT IS THE NEXT BIG ITB... · Zealand, 2010; Backpacking and Youth Travel in South Africa, 2007;...

WHAT IS THE NEXT

BIGTHING IN YOUTH TRAVEL?

Samuel VetrakStudentMarketing, Ltd.

March 8, 2012

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PRESENTATIONOUTLINE

• Market features

• Market overview

• Drivers & trends

• NEXT BIG THING

ITB BerlinMarch 8, 2012

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MARKETRESEARCHMarket research can reveal answers

crucial for the future growth of any enterprise.

Good marketing decision guided by market research

leads to 25% - 50% increase in revenues within 3 years.*

*Source: D. V. L. Smith, J. H. Fletcher: The Art & Science of Interpreting Market Research Evidence

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Source: UNWTO, 2012; Youth Travel Matters, 2008; UN Population Division, 2011; StudentMarketing, 2011

YOUTHTRAVELMARKETFast facts

Market size: 196 million trips

Market value: US$173 billion

Target group worldwide: 1.8 billion

Average spending per trip: US$1,000 - US$6,000

Average lenght of trip: 10 to 53 days

Number of associations: 300

Number of businesses involved: 40,000

Number of industry events: 150 pa


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Source: UNWTO, 2001 – 2011; Youth Travel Matters, 2008;

YOUTHTRAVELMARKETIndustry value


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Global tourism is a framework

in which youth travel existsYouth traveller of today is

the global tourist of the future

YOUTHTRAVELMARKET Global tourism vs youth travel

Source: Youth Travel Matters, 2008, StudentMarketing, 2012


Two-way relationship

US$40,000 – US$120,000

Estimated long-life budget

Youth travel currently accounts for 20%

of the global market and is expected to be 25%.

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Source: StudentMarketing, 2012

YOUTHTRAVELMARKET Industry scheme


Service providers

YAST organisations

Mainstream brands

Governments

Youth travel

Global travelYoung travellers

Programme providers

YAST agencies

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Source: UNWTO, 2005 – 2012; Youth Travel Matters, 2008

YOUTHTRAVELMARKET Industry performance


Youth Travel – 196million arrivals

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 2010 2011

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YOUTHTRAVELMARKET Purpose of travel


Purpose of the last main trip

Explore34%

Relax and fun28%

VFR17%

Study abroad

9%

Work abroad

7%

Volunteer3%

Language course

2%

Source: WYSE Travel Confederation Independent Traveller Survey, 2007

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YOUTHTRAVELMARKETPopulation prospects (15-30 years)

0

0,2

0,4

0,6

0,8

1

1,2

1990 2000 2010 2020 2030

Africa Asia

Europa Latin America and the Caribbean

Northern America Oceania

billion

Source: UN Population Division Prospects, 2011


PROGRESSIVE

GROWTH

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THENEXTBIGTHINGNext big thing in youth travel?


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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THENEXTBIGTHINGNext big thing in youth travel?


Source: UNWTO, 2011; Youth Travel Matters, 2008, StudentMarketing, 2012

196 millionarrivals

300 millionarrivals

US$173bn

US$320bn

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MARKETOVERVIEW Educational travel

Competition increases

Source: Institute of International Education, 2011; Global Education Digest, 2011, Language Travel Magazine, 2004 - 2010


USA – market shared declined

28.6% from 2001 to 2009 (IHE)

UK – market share declined 34.1%

from 2005 to 2009 (LT, student

weeks)

0

1

2

3

4

5

6

2002 2003 2004 2005 2006 2007 2008 2009

Higher Education

English Language Travel

million

Performance

Traditional destinations are losing, new destinations are increasing.

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MARKETOVERVIEWBackpacking/Flashpacking

Top 10 preferred destinations

Source: 2009 Snapshots: Backpacker accomodation in Australia, 2009; Ministry of Economic Development NewZealand, 2010; Backpacking and Youth Travel in South Africa, 2007; Youth Travel Matters (ATEC Symposium), 2009

Share of youth on backpacking


Australia

USA

France

Spain

Italy

Germany

UK

Thailand

New Zealand

China 79%

76%

70%

New Zealand Australia South Africa

Backpacking and budget travel on rapid increase

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MARKETOVERVIEW Volunteer travel

Evolution of volunteer organisations

Source: Volunteer Tourism: A global analysis, 2008

GoAbroad.com – number of

volunteer programmes offered:

• 2005 – 698 programmes

• 2007 – 3,036 programmes



845% increase over the last 7 years

Case study

Source: Novelli, M., 2005; Coppage, J., 2007;GoAbroad.com, 2011, 2012


0

50

100

150

200

250

1915 1925 1935 1945 1955 1965 1975 1985 1995 2005

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MARKETOVERVIEWYouth travel accommodation

Hotels vs hostels

Source: Youth Travel Matters, 2008; The STAY WYSE Youth Travel Accommodation Industry, 2008, 2009; The STAYWYSE Youth Travel Accommodation Industry Survey, 2010

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30 29

36

2005 2007 2008 2009

US$


Average price of a hostel overnight

50% 48%

56% 57%

63%60%

55%58%

2007 2008 2009 2010

Hostels Hotels

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DRIVERSANDTRENDSGrowth contributors

• Emerging markets

• Youth travel agencies

• Mergers & acquisitions

• Governmental engagement

• Diversification

• Less barriers


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Economic impact = shift in the industry?

DRIVERSANDTRENDSEmerging markets


2002 2012

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Source: Standard Chartered Bank Research, 2010; IATA Industry Outlook, 2010; OECD, 2010

DRIVERSANDTRENDS Emerging markets

Middle class booming in emerging markets


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ITB BerlinMarch XX, 2012

Emerging countries catching up – international arrivals in global tourism

Advanced; 523

Emerging; 457

150

200

250

300

350

400

450

500

550

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

million

Source: UNWTO World Tourism Barometer, January 2012

DRIVERSANDTRENDS Emerging markets


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DRIVERSANDTRENDS Youth travel agencies


Source: StudentMarketing, 201226,000 retailers, over 50% bookings, increasing share

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• Young travellers tend to travel for a reason, are not “escapists” and many

programmes include assistance to local communities what underpines

importance of the industry

DRIVERSANDTRENDS Mergers and acquisitions


• Due to increase in share on global travel, governments and

international organizations have started to recognize the

size and significance of this industry (UNWTO initiatives, EU

- European Year of Volunteering)

• Organisations active on the market are successfully

bringing in partners from different spheres

(Microsoft, ManUtd, TUI)

• Industry is becoming more and more documented

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Youth and student travel brands in TUI portfolio

Source: www.tuitravelplc.com



TUI Portfolio

297 brands

c. 20 % offering youth & student travel

Youth and studenttravel

Educational travel

StudentCity

Manchester Academy of English

Educators

English Language Centre York

Adventure travel

MasterClass Sports Tours

Interpid Travel

Gecko's Adventures English

Jumpstreet Tours

Volunteer travel

i-to-i volunteering

Real Gap

Inspired Breaks

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Source: www.thepienews.com, 2012; www.timesofmalta.com, 2011; www.travelpress.com, 2009



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Traditional destinations currently dwell in a re-evaluation

phase, reappraising regulations, policies and standards.

Emerging destinations, intensive marketing investments and easing

regulations to gain more market share and international students.

DRIVERSANDTRENDS Governmental engagement


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DRIVERSANDTRENDS Diversification


Portfolio Destinations

Booking channels Source markets

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Four aspects of the future growth

More youth travellers More stakeholders

More arrivals More revenues


DRIVERSANDTRENDS Diversification


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226

451

639

2004 2007 2010

million

Low-cost carriers fuel grow in YT

Source: iata.org, airneth.nl

DRIVERSANDTRENDSLess barriers


155

322

802

320

717

937

Europe Asia Transatlantic

Low-cost carriers

Full-service carriers

US$

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Critical mass already speaking lingua franca

Source: British Council, 2006

DRIVERSANDTRENDSLess barriers

9001000 1050

1250

1800 1850

17001600

1400

1250

1990 1995 2000 2005 2010 2011 2015 2020 2025 2030

million Language abilities give current

youth travellers rather different

options and opportunties than

to their parents.


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• 80% online

• 50% word of mouth

• Young first purchasers of overseas services

• Information sharing & vizualisation

• Customer reviews

• Product knowledge

DRIVERSANDTRENDS Less barriers


Technological leap

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THENEXTBIGTHING Youth Travel

• US$ 100 bn market potential by 2020

• Meaningful sectors (2/3 receipts)

• Education and experience programs

• Both traditional and alternative destinations

• Emerging source markets

• Youth travel agencies

• Online presence


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

196 millionarrivals

300 millionarrivals

US$173bn

US$320bn

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THANKYOU

www.student-market.com

• Market intelligence• Market studies

• Trade missions• Business solutions

Assistance for organisations to succeed at international youth travel market.

WHAT IS THE NEXT BIG ITB... · Zealand, 2010; Backpacking and Youth Travel in South Africa, 2007;...

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