For those who are aware of Skift, you will know that this cross-platform travel industry publication has become one of the world’s most reliable resources of insights and news relating to all corners of our sector. For us, we look forward to their daily newsletter which helps us stay connected to the ever-evolving world of tourism…
So, with this in mind, of course we were going to attend their Megatrends Forecast and Printed magazine launch event in London last night. The sell-out event attracted travel industry leaders from all over the world who came together to meet and discuss the 19 ‘Megatrends’ (a phrase coined by Skift themselves) that they believe will define the travel industry landscape in 2018… Safe to say, there were some super insightful topics and discussions taking place and if the opinions raised turn out to be accurate, they’ll have a direct impact on our luxury villa business here in Ibiza.
You can find the full report here, but after digesting the opinions discussed, and to save you from an hour or so of reading, we have highlighted the key trends below which we feel will have the biggest impact on Ibiza’s luxury villa rental market over the forthcoming months…
Trend No. 6 out of 19
Personal fulfillment is the new ultimate luxury
Privadia focuses on luxury with our average weekly villa rental coming in at €20,000. That’s our craft and where our experience lies and when you think of luxury, the mind naturally sways towards fully staffed villas, food on demand, a ‘click of the fingers’ flawless service, personalised concierge and the highest quality furnishings and facilities.
However, Skift is saying different. Their research states that “for luxury travellers, an experience in itself is no longer enough. The personal fulfillment and self-improvement one gains from an experience is taking precedence, and luxury brands can help travellers reach this goal.”
Last year they wrote about “the continued importance of memorable, bespoke experiences in luxury travel”’, but now say that “we are witnessing an evolution”.
They are now saying that “Experiential travel is still desired, but it has spread so widely in the travel ecosystem, it is now readily available to travellers outside of the luxury category, thereby losing its exclusive edge. To compensate, luxury travel today has gone deeper than the experience itself. Rather, the ultimate luxury lies in the transformational value of the experience and how it helps travellers become the person they aspire to be. In other words, the new luxury is personal fulfillment.
This evolution is part of the wider shift from the Experience Economy to the Transformation Economy, where the product that is purchased is not an experience, but rather the improved self that results from it. Stemming from consumers’ desire to move up Maslow’s Hierarchy of Needs, luxury has moved beyond the second tier of the hierarchy, “esteem,” to the inward-looking, highest tier of “self-actualization.” This new level of luxury is entirely personal and contextual. What constitutes a transformative travel experience can only be defined by each individual traveller based on their own personal values, passions, and aspirations at a particular moment in time.
All pretty deep and meaningful stuff, but if all the above proves to be correct, out of all locations in the world, the huge rise in health and wellbeing in Ibiza should bear fruits. Also, the fact that more and more people are visiting Ibiza for ‘none-nightlife’ relating holidays is also promising as this will start to force service providers to think outside of club tickets and VIP tables.
To add to all the above, Skift’s research is telling us that guests are starting to see past all the bright, shiny services and experiences and instead are more interested in finding a unique and somewhat ‘unobtainable’ experience. Meaning, if concierge companies can start to supply hyper-personalised services and experiences, then maybe that’s the next big move which will give them their competitive advantage. Time to get creative!
Trend No. 8 out of 19
European travelers return to once-disrupted destinations
Somehow Ibiza continues to attract an ever-evolving audience and in actual fact, rather than concerns around how we’re going to attract more tourists, actually all we hear of is ‘over-tourism’, how the public services are stretched, congested roads, environmental issues and Ibiza preservation tactics. Is Ibiza so magical that is has become immune to the rest of the worlds travel economy? Who knows… so far, so good
However, in Skift’s 2018 Megatrend No.8, their opinion is that Spain’s increase in visitors won’t last and that in recent years we’ve been ‘borrowing’ the tourists as a result of people seeing the likes of Turkey, Egypt and Tunisia for example as high-risk destinations.
According to Skift, in 2016, Turkey saw the number of foreign visitors fall by 30 percent to 25.4 million, while in Egypt tourist arrivals dropped from 8.1 million to 4.8 million. And although Tunisia saw a 6.8 percent uptake in arrivals at its borders that year, it recorded a 3.8 percent decrease in tourist receipts.
They also state that “It is easy to imagine tourists never returning to these once-popular places, but slowly they have come back — in part due to problems elsewhere. Spain was one of the main European countries to see a sharp rise in tourism in 2016, which continued into 2017. But a recent series of events have cast a shadow on inbound travel, prompting some to question whether its growth can be sustained. First, there was the growing anti-tourism movement in places like Barcelona and the Balearic Islands, where locals are concerned about the exponential growth of the visitor economy. Second, there were the terror attacks in Barcelona and Cambrils, which killed 16 people. Finally, there is the ongoing uncertainty and unrest surrounding the potential secession of Catalonia.”
All very real and potent points which we’ll be keeping a close eye on over the forthcoming months. However, to wrap up on this point and sprinkle a little bit more positivity in the air, we have already seen a 36% increase in enquiries and bookings compared to this time last year and our gut is also telling us that there are no signs of things slowing down anytime soon. Yes, the government have tightened up on licensing laws and yes Ibiza’s tourism landscape is changing in many different ways, but reading between the lines, all these elements seem to be enhancing Ibiza’s tourism, not hindering it, and maybe the local government deserve little bit more credit when it comes to long-term thinking and their ideas for sustainability? Please let us know your thoughts…
Trend No. 3 & 10 combined… out of 19Travel mergers and acquisitions combined with leading travel agencies reshaping their strategies
Over recent months we have seen significant moves from some of the travel industry’s ‘mega brands’. AirBnB bought out Luxury Retreats, Accor Hotels moved into villas rentals with the $168m acquisition of Onefinestay and then you have the likes of Booking.com, Trivago and JetBlue setting up dedicated investment arms to proactively seek out new acquisitions and invest in upcoming startups. Forgive us if we’re wrong, but there’s a definite sense of urgency amongst the Goliaths of the industry to win the current travel and tourism race!
The good news is that we’re part of a growing industry navigating itself through a plethora of new and exciting opportunities. Hotel companies are buying villa rental businesses, OTA’s are buying augmented reality platforms and right now there doesn’t seem to be any boundaries as to where these market leaders may take it. Nothing is off-limits.
But we mustn’t forget that these strategies also come with their threats to small businesses like us. There’s a real chance that these larger companies could do to us what the supermarket giants have done to farming and local trade, meaning we have to carve out our niche and have to continually find ways to remain relevant in the overall travel ecosystem, then who’s to say smaller businesses like us are not part of the next sprint of acquisitions…
The long and short of it is that there’s no stopping the juggernaut that is the travel industry and it currently feels like we’re going through one of the most exciting times in its history. Tech has solidified itself as a key pillar of any business, what were once laser focussed brands are now venturing out into completely new territories, larger brands are joining the race to swoop up as much market share as possible and the consumer is becoming more connected, more knowledgeable and their needs are also changing to reflect that.
The industry is most certainly keeping us on our toes, that is for sure. But would we really want it any other way? Probably not!
We would love to hear your thoughts and opinions on all the above so please feel free to get in touch. Who knows, there may be an opportunity for us to collaborate and work together and we’re always open to new working relationships here at Privadia.
Thanks for reading