Key trends to monitor in tourism recovery

Consumers’ actions and attitudes

Generation Z is an important demographic to keep an eye on since it will account for the biggest percentage of the world population by 2040, with a total population of 2.6 billion people. Compared to older generations, who are often in worse health, these digital natives will be more eager to explore with less trepidation than they are. As a result, their new behaviors may spur the development of digital and innovative services, particularly in the mobile space.

At the same time, they will seek experiences that are unique to them. According to the research, the Generation Z age group, as well as millennials, place a high value on having memorable travel experiences. Their travels are distinguished by their short length, a strong emphasis on authenticity, and a commitment to environmental sustainability.

Technology and innovation are important

These digital natives are seeking innovative solutions that are based on cutting-edge technology such as 5G, cloud-based services, artificial intelligence, and blockchain, among others. All of these solutions improve the speed with which information can be retrieved and the intuitiveness with which interactions and experiences can be had both before and after a trip. Example: A growing number of travel technology start-ups are incorporating blockchain tokens into their booking experiences as well as creating incentives that are based on decentralized networks. All of this contributes to the acceleration of the digitization of the tourist value chain and its constituents.

Start-ups in the travel technology sector

This sector has seen a steady increase in venture capital investment over the last decade as the travel technology industry has grown. Unexpectedly, despite the decline in worldwide investment anticipated in 2021, the amount of money allocated to the travel technology industry not only remained consistent, but increased somewhat during the first quarter of 2022 when compared to the same period in 2020. Contrary to traditional assets, this has proven to be an interesting driver when it comes to capital formation and international investments in intangible asset classes.

Investing in the environment

The shift to green investments in the tourist industry has been hastened as a result of Covid-19. Because it promotes incentives, regulations, and consensus in order to achieve sustainability compliance with regard to the sector’s growth, it is a powerful driver for the creation of FDI opportunities. It can accomplish this through cost-efficiency, city policies, corporate/brand image, and improved guest satisfaction. Moreover, as a result of the pandemic, opportunities for green construction and retrofitting have arisen, and the need to reduce emissions has created a $24.7 trillion investment opportunity in the green construction sector of emerging market cities between now and 2030.

Cross-border mergers and acquisitions

The decline in tourism investments that occurred in the first half of 2021, as well as the potential drops expected in 2022, suggests that any new global FDI opportunities will be related to an increase in cross-border mergers and acquisitions rather than traditional greenfield investments in the sector. Among the characteristics of these new investments will be the purchase of distressed hospitality assets with the goal of restoring and retrofitting them as well as repurposing and rebranding them.

These solutions will allow for the reallocation of capital while at the same time ensuring the preservation of employment opportunities. They will also result in new business models for hotel offices and workstations, as well as a repositioning towards green buildings that are in accordance with strict health regulations and increasing demand.