4 key insights from Phocuswright Europe 2023


Simply how does Airbnb get away with spending so little on advertising and marketing – and what does a TikTok influencer must do with it? What’s going to it take to maintain journey revenues rising, whereas the business additionally does its half to save lots of the world? Why does one journey sector see a silver lining in rising rates of interest and inflation?

With three days chock-full of panel discussions, keynote speeches and govt interviews, you’d be excused for not catching all of the insights from final week’s Phocuswright Europe 2023 convention — even when you might make it to Barcelona for the corporate’s largest occasion in Europe up to now.

To catch you up, right here’s a recap of a number of the belongings you might need missed.

Extra free publicity for Airbnb

A latest PhocusWire evaluation of expenditures within the first quarter of 2023 revealed vast disparities in how some of biggest travel companies approach marketing. Whereas Expedia Group and Reserving Holdings spent a mixed $3.2 billion on advertising and marketing over the primary three months of the 12 months, Airbnb spent $450 million.

Amir Segall, the business director at Airbnb, offered some insights into how his firm can handle that in a middle stage interview with Linda Fox, PhocusWire’s senior Europe reporter.

As Segall defined, Airbnb can afford to rely extra on the free publicity it will get from information and social media alike as a result of most of its site visitors is natural.

“Airbnb is a noun. It’s a verb. It’s a really well-known world model,” he mentioned.

For example of how that performs out, he shared the story of Alix Earle, a TikTok star with thousands and thousands of followers greatest recognized for her skincare and make-up suggestions. The 22-year-old American was on a visit to Europe with mates in Might when she posted on TikTok that the home the place they had been supposed to remain in Italy didn’t exist.

“The ladies’ journey took a flip,” she mentioned.

The folks on Airbnb’s TikTok account had been among the many greater than 5 million who considered the publish — and a follow-up video from Earle confirmed her group having fun with themselves in a palatial villa and thanking Airbnb for arranging it.

“She and her mates had fallen sufferer to a pretend itemizing [on a different website],” Segall informed Fox. “We had been capable of finding another lodging for them. Then she posted a narrative about that, which had one thing like 635,000 likes. We expect that’s a very great way for us to discuss our model.”

Fox requested if the occasion had been choreographed for advertising and marketing functions — as some on-line reviews had speculated. Segall earnestly denied that.

“It was fully non-choreographed,” he mentioned, calling it an instance of “alternatives the place we are able to step in and assist.”

A name to motion on local weather change

Throughout a keynote speech on the journey sector’s challenges in working towards United Nations’ objectives of halving world emissions by 2030 and reaching internet zero by 2050, Bernadett Papp, a senior researcher with the European Tourism Futures Institute, spoke of the frequent pursuits served via collective, short-term sacrifice.

“When you consider our sector, journey and tourism, and its connections to local weather change, then you definately see a really attention-grabbing paradox,” she mentioned. “On the one hand, tourism as we all know is a key driver of socio-economic growth. It contributes to employment, generates income, contributes to the livelihood of many individuals in locations.”

However alternatively, she continued, journey can be a major contributor to local weather change, and local weather change holds the potential for “devastating impacts on journey locations.”

“If there’s no vacation spot or it’s not protected to journey to the vacation spot, then there isn’t any tourism. And if there’s no tourism, many locations can have a really troublesome time to drive their economies ahead. So I strongly consider it’s in our frequent curiosity to guard locations towards the impression of local weather change in order that communities can thrive.”

Referring to her group’s work on a report published this year by the Travel Foundation, she spoke of the handfuls of various interventions and lots of of eventualities the report’s researchers thought-about earlier than arriving at a sobering conclusion: Not one of the mixtures allowed journey to succeed in the UN objective.

“So we had to consider one thing a bit of extra radical,” she mentioned.

The one option to permit journey to proceed rising whereas assembly the local weather targets from the 2015 Paris Local weather Accords, she mentioned, was capping airport capacities at 2019 ranges till aviation can totally decarbonize. Solely with that strategy might the journey business proceed rising whereas nonetheless doing its half to succeed in local weather change objectives.

“We have to be a part of forces. We have to collaborate,” she urged the viewers of journey professionals. “Hopefully then, the objective of internet zero by 2050 might be in attain and we as a sector can do our half.”

The lengthy recreation for short-term leases

At a panel dialogue on what comes subsequent for short-term leases, the specialists had been unanimous of their optimistic outlook.

“I’m an optimist,” mentioned Leda Zanlungo, the overall supervisor for Iberia at Sonder. “Vacationers are there, [and] we have now a brand new technology of vacationers, they usually’re going to maintain on touring.”

“The basics are very sturdy,” chimed in Henrik Kjellberg, a bunch CEO for Awaze. “This sector of the business goes to proceed to outperform the remaining. We’re very, very optimistic.”

“There’s a sturdy basis and powerful progress,” added Sylvia Epaillard, a co-CEO at Interhome. “We see the expansion [and] we see additionally the change in shopper conduct. They’re not speaking anymore a couple of home with three bedrooms and a pool. We’re speaking about, ‘Can I’ve conferences there?’ or ‘Can I’ve a household reunion there?’ … That is the stuff that we have now to sort out now.”

Overly restrictive rules imposed by native governments stay a mutual concern, because the panelists spoke of a necessity for extra concerted lobbying efforts to coach communities about the advantages short-term leases can present.

“In the event you do it properly, you do deliver worth to the neighborhood, the group,” Zanlungo mentioned.

“We’re rising up as an business, and we have now to take part extra, to tell the legislators of the great issues that we do,” Kjellberg mentioned.

The business could discover extra allies in householders who’re pushed to hunt extra earnings for his or her largest investments following traits of house expansions or renovations throughout the pandemic and rising rates of interest now.

“We see a variety of house owners on the lookout for our companies,” Epaillard mentioned. “Many have been going into the thought of renting out their houses, many have been going into the thought of investing into secondary houses. I feel what they realized … is that, as a enterprise, it’s a full-time job to do, so they’re increasingly searching for professionals to assist them really do the job. And there are two sides to that job. One is administrating a secondary house, a rental, with cleansing, with handyman work, etcetera. The opposite is distributing: discovering visitors, filling the rooms as a lot as attainable for the appropriate worth, on the proper time.”

And whereas that would improve the provision, demand may even see a lift as costs elsewhere proceed to rise.

“Air costs are via the roof. Individuals are nonetheless doing this revenge journey, [but] the air costs are going to stay excessive,” Kjellberg mentioned. “We nonetheless supply the greatest, as a class, the most effective worth for a trip. … I feel we’re very properly positioned as an business.”

Balancing act for tour and expertise operators

Whereas the information has usually been upbeat for the journey experiences market, with a majority of global operators reporting that bookings in 2022 were at or above 2019 levels, an knowledgeable panel on the sector mentioned a number of the challenges that stay.

Fabián González, Phocuswright’s market analyst for Spain, moderated a dialogue amongst Ben Drew, the president of Viator, Alberto Gutiérrez Pascual, CEO and founding father of Civitatis, and Peter Ulwahn, CEO of TUI Musement.

The panelists noticed nice potential within the sector’s restoration from COVID-19.

“I’m optimistic for the longer term,” Ulwahn mentioned. “The U.S. is robust. Europe is again. Asia is now coming again.”

Drew agreed. “Our operators are seeing bookings properly above 2019 ranges,” he mentioned. “A part of that’s due to the U.S. and numerous different traits associated to it, however it’s a really totally different demand than what we had earlier than the pandemic and throughout the pandemic.”

The distinction, he defined, was a shift from vacationers reserving experiences nearer to house to a “re-emergence of long-haul journey.”

But the intense outlook didn’t blind panelists to considerations with fragmentation and assembly clients’ calls for for shorter reserving home windows, which Drew referred to as “one of many largest challenges on this business.”

“You may have 1 in 3 individuals who need to e book on the identical day because the tour is definitely going down,” he mentioned. “The challenges which might be concerned in that for small companies are fairly nice.”

Whereas encouraging vacationers to e book extra upfront is one answer, it goes towards prevailing traveler traits. That leaves it for operators who’re “actually obsessing” about vacationers’ desires to information the sector in the direction of one thing extra intimate that enables for even shorter reserving home windows, he added.

“There’s this stress between what is straightforward for operators and what vacationers need,” he mentioned, “and we’re kind of enjoying within the center and attempting to steadiness these two sides.”

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