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Low Cost Evolution in Travel and Tourism - Thematic Research

Low Cost Evolution in Travel and Tourism - Thematic Research

  • March 2022
  • 47 pages
  • ID: 5930855
  • Format: PDF
  • GlobalData

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Low Cost Evolution in Travel and Tourism - Thematic Research

Summary
The pandemic has bolstered the importance of the low-cost evolution, with many travelers becoming increasingly concerned regarding their personal finances due to the economic impact of COVID-19. Low cost options will continue to be in high demand as price-sensitivity grows due to a range of technology, macroeconomic, regulatory, and industry trends that are outlined in this report.

This thematic research report takes an in-depth look at the low cost evolution in travel and tourism.Firstly, the players section identifies some of the leading and challenging companies in this theme and categorizes their position in the value chain.

A trends section is then provided, describing technology, macroeconomic, regulatory, and industry trends connected to the low cost evolution theme.An industry analysis follows, providing insight into the distribution of budget travelers, lodging sector, and air transportation sector.

Use cases, mergers and acquisitions, and a timeline are then provided, which showcases the emergence of the low cost evolution theme in travel and tourism.Penultimately, the low cost evolution value chain is reviewed, with each segment of the chain being given an in-depth description.

Finally, the leading and challenging companies in the theme are outlined, along with their competitive position in the industry.

“Leaders and challengers in this space will often use business models and marketing strategies to shape the purchasing habits of their customers. This could be in the form of a flash sale from easyJet for a limited time only, or a new type of business model from BlaBlaCar that focuses on the low cost transportation option of carpooling”.

Key Highlights
- The increase in the global proportion of internet users from 2011 to 2021 has been substantial, spurring the growth of the low-cost evolution. According to Macroeconomic Database, the global proportion of internet users in 2011 stood at (xx), by 2021 this figure increased to (xx). With the internet constantly becoming more accessible across the globe, more travelers can utilize cheap and direct booking channels when self-packaging a low-cost trip, as well as price comparison sites to ensure the all-inclusive package they are purchasing from a tour operator is the lowest it possibly can be.
- When looking at the LCC market, through dynamic pricing, rates change in real time based on a constant stream of data. Pricing can be informed by customer booking patterns, competitor prices, and even macroeconomic and geopolitical factors. To maximize revenue, airlines need to sell as many seats as possible for the highest price. To ensure that that prices are not so high that it deters budget travelers, LCCs need to understand current market demand and the spending behaviors of their customers. Dynamic pricing helps to achieve this. In the LCC market, this pricing model allows for increased competition, which can result in low prices if demand for a particular route is low, and airlines react by dropping their prices to stimulate demand.
- With it seeming that Millennials and Gen Z have taken the brunt of the pandemic across the globe, travelers in these cohorts that are still able to go on domestic and international trips will be looking for low cost options. It is imperative for low cost brands to be active on social media to drive engagement with younger audiences, and to convince them to part with their savings that could be in short supply. According to Q1 2021 Consumer Survey, (xx) of global respondents consider the ability to engage directly with a brand as an ‘essential’ or ‘key driver’ of purchase. Direct engagement with a brand acting as a key driver rises to (xx) for Gen Z and (xx) for Millennials. Ryanair is a leader in this space. The airline currently has 1.6 million followers on TikTok, which allows the company to already be in the minds of its next generation of customers. It has gained a mass following on various platforms because it capitalizes on viral content, such as memes that are entertaining and relatable.

Scope
- This report provides an overview of the low cost evolution in travel and tourism.
- This report explains why the low cost evolution will continue to grow in importance.
- This report outlines how the need for low cost options from travelers is met by a range of companies.
- This report provides examples of what companies and organizations in the travel and tourism industry are doing in reaction to this theme, and how they create differentiation.
- We highlight travel and tourism companies that are leading in this theme, such as Wyndham Hotels & Resorts, Accor, The Motel One Group, Southwest Airlines, BlaBlaCar, Ryanair, Airbnb, Expedia Group, and Carnival Corporation.

Reasons to Buy
- To understand the low cost evolution and its current and future impact on the industry.
- To assess the strategies that leading companies are adopting to attract budget travelers.
- To identify the leading and challenging companies in this theme.
- To understand how this theme is being shaped by a range of different technology, macroeconomic, regulatory, and industry trends.
- thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.

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