RSM's head of travel and tourism Ian Bell says whether it's the influence of the royal wedding, a focus on staff retention or the waning influence of millennials, predictions for 2018 suggests big changes for the travel and tourism sector.
In recent years there has been much made of the millennials, but Generation Z has come of age. These so-called ‘digital natives’ born between the mid-1990s and mid-2000s, know nothing of a world without the internet and social media.
Expect to see innovative operators create personalised, interactive experiences incorporating the latest digital advances and more sustainable and ethical experiences.
Businesses that fail to adapt will miss out on relationships with a demographic that holds more buying power than millennials.
Reacting to an unprecedented change in regulations
The second EU Payment Services Directive on 13 January means surcharging on credit and debit card payments will be a thing of the past.
Businesses will need to monitor responses from consumers and competitors with a view to mitigating charges and fees from card acquirers.
The UK will apply the new Package Travel Directive from 1 July and businesses will have little time for commercial changes to comply with the regulations effectively.
Focus on data and GDPR
Businesses will feel the full force of General Data Protection Regulation as it comes into law in May. It means much smaller mailing lists, making it more difficult to target customers through traditional means.
It also means operators and agents will take on smaller, more frequent, marketing initiatives and make more effective use of influencers and social media. Businesses will have to get creative to connect with their customers.
Aspects of GDPR like contracts with suppliers, consent, the right to be forgotten, and subject access requests, will be critical.
Expect to see a renewed focus on staff retention as a key theme among operators in 2018. This could come through creating career ladders, training programs and educational opportunities.
In addition, The Apprenticeship Levy was viewed by many as an opportunity rather than another overhead after it was introduced in April 2017.
From buying to doing
While consumers are holding back on buying beauty products, they are increasingly splashing out on wellness retreats, with the experience economy now in full swing.
It means that operators will continue to innovate with health and wellness, retro experiences, bucket list and environmental destinations.
ABTA reported in their Holiday Habits Report 2017 that more than 30% of people are planning to spend more on holidays in 2018, with millennials being the most likely.
The royal wedding
Notwithstanding the weak pound, the announcement from Kensington Palace about the date of the royal wedding in May will mean a further boost for UK tourism.
Europe, the EU and the single market
Brexit will mean a spotlight on the UK’s relationship with the EU single market and customs union.
The UK government will push through changes in regulations to develop its customs and trade position.
It is expected to build on the principles outlined in the recently published Taxation (Cross Border Trade) Bill which outlines the UK’s post-Brexit vision of its standalone customs, excise and VAT position.
RSM says if the UK remains part of the Single market, the VAT system should remain.
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