the ITB Academy Webinar The Sharing Economy - ITB Berlin

the ITB Academy Webinar The Sharing Economy - ITB Berlin

1 Welcome to the ITB Academy Webinar © Euromonitor International The Sharing Economy Changing Travel Demands & How to Capitalise THE SHARING ECON...

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1

Welcome to the ITB Academy Webinar

© Euromonitor International

The Sharing Economy Changing Travel Demands & How to Capitalise

THE SHARING ECONOMY

Euromonitor International: Strategic Global Market Research

© Euromonitor International

2

CURRENT STATE OF THE INDUSTRY DRIVERS OF THE SHARING ECONOMY

HOTELS RESPOND OPPORTUNITIES AND FUTURE DIRECTION KEY TAKEAWAYS

1.1 bn

4%

INBOUND ARRIVALS IN 2014

8.8 bn

7%

DOMESTIC TRIPS IN 2014

3.7 bn ROOM NIGHTS IN 2014

5%

5

CURRENT STATE OF THE INDUSTRY

Lodging sales dominated by hotels Global Lodging Segmentation (Value Sales - 2014) 14% 1%

6%

38%

Chained Hotels Independent Hotels Private Rentals

7%

Hostels Self-Catering Apartments Other Lodging

35%

© Euromonitor International

Total: US$ 662 billion

6

CURRENT STATE OF THE INDUSTRY

Private rentals outperform hotels Hotels and Private Rentals Value Sales Growth 2007-2014 20 CAGR 2007 - 2014

15

8.2%

% y-o-y growth

10

2.9%

5 0 -5 -10 -15 2007

2008

2009 Hotels

© Euromonitor International

2010

2011

2012

Private Rentals

2013

2014

CURRENT STATE OF THE INDUSTRY

Strong rise of peer to peer players

6.000

Airbnb and HomeAway Value Sales 2005-2014

Value sales (US$ million)

5.000 4.000 3.000 2.000 1.000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

© Euromonitor International

7

8

CURRENT STATE OF THE INDUSTRY

Clarifying the terminology

PEER-TOPEER

THE SHARING ECONOMY

BUSINESSTO-PEER

© Euromonitor International

PEER-TOBUSINESSTO-PEER

CIRCULAR ECONOMY

CURRENT STATE OF THE INDUSTRY

Today, you can share almost anything

© Euromonitor International

9

CURRENT STATE OF THE INDUSTRY DRIVERS OF THE SHARING ECONOMY

HOTELS RESPOND OPPORTUNITIES AND FUTURE DIRECTION KEY TAKEAWAYS

11

DRIVERS OF THE SHARING ECONOMY

Drivers for growth of sharing economy MAIN DRIVERS OF THE SHARING ECONOMY

Social

Environmental

Economic

Technological

The need to make real connections

Reducing travelrelated impact on the natural environment

Better value for money

Better match supply and demand through mobile technology

Search for unique and more local experiences

Five R’s: Reduce, reuse, recycle, repair and redistribute

Hosting and sharing provide (extra) income

Online payment systems reduce opportunities for fraud

© Euromonitor International

12

DRIVERS OF THE SHARING ECONOMY

Growth in internet users enables sharing economy

Eastern Europe North America

Western Europe

Asia Pacific MEA

Latin America Australasia

2000 2015 2030 Percentage of population using the internet © Euromonitor International

13

DRIVERS OF THE SHARING ECONOMY

Millennials are first truly global generation

1.400.000

40

1.200.000

35 30

1.000.000

25

800.000

20 600.000

15

400.000

10

200.000

5

0

0 Asia Pacific Australasia

Eastern Europe

Latin Middle East North America and Africa America

2014 Millennial population (15-35 year old) © Euromonitor International

Western Europe

Millennial % share of total population

% share of population

Number of people (‘000s)

Millennial Population by Region 2014

14

DRIVERS OF THE SHARING ECONOMY

European millennial population and income in 2015

Average Annual Gross Income (US$)

100.000 Switzerland

80.000 Norway Denmark

60.000

United Kingdom Germany France

40.000

Italy Spain

20.000 Turkey

Russia

0 0

5.000

10.000

15.000

20.000

25-34 Year Population (‘000s) © Euromonitor International

25.000

30.000

15

DRIVERS OF THE SHARING ECONOMY

Millennials not a homogeneous consumer segment “I want to have and be the best” Average household income: US$ 53,077 Gender balance: 50% male

COMMON TRAITS:

“My life is hectic but exciting” TECH SAVVY Average household income: US$ 39,456 Gender balance: 52% female

OPEN TO COLLABORATIVE CONSUMPTION “I live life on my own terms”

Average household income: US$ 42,716 Gender balance: 55% male

Note: Results are based on responses of 16,300 individuals to Euromonitor’s Global Consumer Trends survey, administered in 2013 to online consumers in Brazil, China, France, Germany, India, Japan, Russia, UK, USA. © Euromonitor International

16

DRIVERS OF THE SHARING ECONOMY

Millennials more comfortable with social media 70%

% respondents

60% 50% 40% 30% 20% 10% 0% 'Follow' or 'like' social media feed/post

Share/retweet social media feed/post

15-29yrs

Leave feedback via a social media post

30-44yrs

45-59yrs

Note: Results are based on the aggregate responses of 8,100 individuals to Euromonitor’s Hyperconnectivity survey, administered in December 2014 to online consumers in Australia, Brazil, China, Colombia, France, Germany, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, Spain, Turkey, UAE, UK, USA. © Euromonitor International

Buy via social Share a product media photo tagged to a company 60+yrs

17

DRIVERS OF THE SHARING ECONOMY

The online travel booker

OTAs

Meta-search

Review websites

Price/discount Location Rating scores/reviews Photos © Euromonitor International

Social media

Brand

CURRENT STATE OF THE INDUSTRY DRIVERS OF THE SHARING ECONOMY

HOTELS RESPOND OPPORTUNITIES AND FUTURE DIRECTION KEY TAKEAWAYS

19

HOTELS RESPOND

30

300%

25

250%

20

200%

15

150%

10

100%

5

50%

0

0%

2014 Size © Euromonitor International

09/14 % CAGR

2009/14 % CAGR

2014 Value Sales (US$ billion)

Hotels unable to compete with p2p growth rates

20

HOTELS RESPOND

Hotel lobbying has mixed results

HOSPITALITY

HOSTILITY

New York

© Euromonitor International

Barcelona

Paris

London

Amsterdam

21

HOTELS RESPOND

Finding alternative ways to benefit from changing demands

Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

22

HOTELS RESPOND

Hotels jump on peer-to-peer bandwagon Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

23

HOTELS RESPOND

Marriott’s Moxy targets Millennials Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

24

HOTELS RESPOND

Marriott’s Moxy targets Millennials Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

25

HOTELS RESPOND

Marriott launches own content studio Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

26

HOTELS RESPOND

Marriott launches own content studio Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

27

HOTELS RESPOND

Starwood frontrunner in technological innovations Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

28

HOTELS RESPOND

Starwood frontrunner in technological innovations Investment in P2P companies

© Euromonitor International

Brand introductions and acquisitions

Media campaigns targeting millennials

Introduction of technology in hotels

CURRENT STATE OF THE INDUSTRY DRIVERS OF THE SHARING ECONOMY

HOTELS RESPOND OPPORTUNITIES AND FUTURE DIRECTION KEY TAKEAWAYS

30

OPPORTUNITIES AND FUTURE DIRECTION

Future focus on high-end as peer-to-peer goes luxury Growth of Average Household Income by Region 2015-2020 15 10

% y-o-y growth

5 0 -5 -10 -15 -20

-25 2015

2016

Asia Pacific Eastern Europe Middle East and Africa Western Europe

© Euromonitor International

2017

2018

2019

Australasia Latin America North America

2020

OPPORTUNITIES AND FUTURE DIRECTION

Asia the next frontier

© Euromonitor International

31

32

OPPORTUNITIES AND FUTURE DIRECTION

Entrants to the sharing economy: Who’s next?

1.4 billion active users per month, P2P payments introduced.

2015 launch of local marketplace for services in US cities.

Already room rentals offered on eBay, but not focus area yet.

Apple Pay mobile payments first step into P2P payments?

© Euromonitor International

33

OPPORTUNITIES AND FUTURE DIRECTION

Compartmentalisation rules travel industry Hotels

2 0 1 5

Selfcatering apts.

Timeshare

Peer-topeer

Traditional

Serviced apts.

Holiday homes

Hostels

Mass Transport Air

Spare rooms

Car Share

Sea/ River

Taxi

© Euromonitor International

Home swap

Bus

Rail

Shared Transport Bike Share

Ride Share

34

OPPORTUNITIES AND FUTURE DIRECTION

Moving towards (and beyond) a multi-modal hub network Rail

Bus

2 0 3 0

Car share

Self-service apts. Boutique hotels Holiday Spare rooms Lodging homes Serviced apts.

Air

Timeshare Corporate hotels Ride share

© Euromonitor International

hub

Bike share

Hostel Home swap

Sea/ river

Taxi

35

OPPORTUNITIES AND FUTURE DIRECTION

The next challenge: Generation Alpha

Social social media is the major part of online interactions

Connected interacted with technology all their lives. Expect personalisation and hyperconnectivity via wearables © Euromonitor International

Generation Alpha born after 2010 Responsible sustainable living and travelling are no longer optional but vital

36

OPPORTUNITIES AND FUTURE DIRECTION

Growing number of urbanites Billions of People

10 Total 8.5

8

6 Urban 5.1 4

Rural 3.4 2

0 1980

1990

© Euromonitor International

2000

2010

2020

2030

1.2 billion

new urban consumers

OPPORTUNITIES AND FUTURE DIRECTION

The rise of mega-cities

© Euromonitor International

37

CURRENT STATE OF THE INDUSTRY DRIVERS OF THE SHARING ECONOMY

HOTELS RESPOND OPPORTUNITIES AND FUTURE DIRECTION KEY TAKEAWAYS

KEY TAKE-AWAYS

Capitalise on changing consumer demands and sharing economy Brand commoditisation is a threat, but the internet gives access to a growing number of consumers if you know how to reach them Millennials offer many opportunities, but are a heterogeneous consumer group Get ready for generation Alpha – Hyper-connectivity and sustainability are becoming a must Sharing economy is becoming more professional and commercial: look out for new entrants Peer-to-peer and traditional accommodation will blend together, serviced by a multi-modal transportation system The future lies in smart cities, as the sharing economy will need to be integrated in existing infrastructure to improve efficiency © Euromonitor International

39

THANK YOU FOR LISTENING Dr Wouter Geerts Travel Analyst - Lodging [email protected] @EMI_WGeerts

Questions about ITB Academy: Tel. +49 30 3038 2528 Mail [email protected] Web www.itb-berlin.com/academy