Low Cost Evolution in Travel and Tourism – Strategic Intelligence
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Low cost evolution has changed the way travelers book trips and the business model poses a threat to many different operators. GlobalData forecasts that online travel sales will reach $4.34 trillion by 2028.
Scope
This report analyzes the key theme of low cost evolution in the travel and tourism sector.
This report provides an insight into key trends, challenges, and recommendations, as well as providing concrete case studies to help the reader see examples of low cost evolution in action.
Key Highlights
Travel, especially international travel, was once confined to the wealthy. But as airfares have decreased and hotels have become more affordable, travel companies have been able to target a wider range of customers. The industry now encompasses every type of traveler, and the rise in the popularity of low-cost operators is likely to continue. As financial constraints continue to be present, consumers will increasingly look for ways to reduce their spend and low-cost evolution has opened up travel to the masses. When comparing GlobalData’s Q3 2022 Consumer Survey to its Q3 2023 Consumer Survey, the level of ‘extreme concern’ from global respondents over their personal finances only changed by one percentage point, from 30% to 31%. This minor change shows that a substantial segment of the global traveler market will continue to look for low-cost options as international travel continues to become more accessible in 2023.
Travel apps have been heavily adopted by tourism-related companies operating in the low-cost market. Low-cost companies that are not developing and investing in app technology stand to become laggards within their respective sectors. Apps shape travelers’ spending habits by sending push notifications regarding last-minute deals while allowing for personalization. Advancements in technology have seen a rise in the popularity of the sharing economy. The sector has changed the way travelers book trips and the business model poses a threat to many different operators. Airbnb and Uber have revolutionized the interaction between buyers and sellers and the asset-light business models these firms have adopted have resulted in low prices being offered to the market. Internally, apps reduce overheads by instantly solving customer queries with ‘frequently asked questions’ sections and allowing companies to create competitive advantages by displaying innovation through their app development, such as by incorporating advanced technologies like AI.
Low-cost evolution first happened within the aviation sector and has now occurred across the majority of the travel and tourism sector. There is a magnitude of different ways firms can make cuts to become low-cost. Car hire firms have removed navigation devices from vehicles and offer economy option cars. Hotels have diversified to offer basic hotel rooms offering the bare necessities in a smaller room with fewer amenities.
Reasons to Buy
Understand the impact of low cost evolution on the tourism industry, using case studies to help you understand how you can adapt and understand this theme.
Assess the strategies that companies are adopting to succeed in the low cost evolution space.
Discover companies that are leading in the space.
Analyze real-world trends created by integrating low cost evolution across the travel & tourism sector.
GlobalData’s thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.
Airbnb
Best Western
BlaBlaCar
Booking.com
Carnival Corporation
CitizenM
CityMax Hotels
Couchsurfing
EasyHotel
easyJet
Expedia
Fareportal
Flixbus
IHG Hotels & Resorts
Jetcost
Kiwi.com
Lyft
Motel 6
OYO Rooms
Redbus
Ryanair
Safair
Southwest Airlines
Spirit Airlines
The Motel One Group
Trip.com
TUI Group
Uber
Volotea
Wizz Air
Wyndham Hotel & Resorts
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