2023 Destination Marketing Predictions
January 4, 2023
The year ahead will be a pivotal year for the tourism industry. With substantial challenges in the rear-view mirror, there are external factors out of DMOs control. But there is hope! As we gaze into our crystal ball, we see emerging trends and technology that will help destinations respond. Read on to discover how DMOs should prepare.
The tourism industry has weathered numerous tragedies over the past two decades: 9/11, the Great Recession, and the COVID-19 pandemic. Each has brought unique circumstances, and required tailored strategies to recover.
Unlike those previous events, we can see the next one coming. Inflation, interest rate increases, and a divided government have analysts predicting an economic recession. DMOs should look to leverage visitation data to identify their top origin markets and which target markets deliver the longest average length of stay. Recessions are when destinations should double down on their strengths and lean on reliable origin markets.
International Travel Continues to Lag
More than any other vertical, international travel was hit hardest by the pandemic and has been the slowest to recover. Is 2023 the year for DMOs to restart their international targeting, Probably not. What should destinations know as they look to rebuild their visitation from other countries?
Even with a recession on the horizon for the U.S., economic challenges are not an isolated domestic issue — the global economy is reeling. A strong U.S. dollar also means U.S. destinations are more expensive for international travelers. Pile on continuing international COVID restrictions and tensions caused by the Russia-Ukraine war, it is extremely unlikely destinations will be able to restore their international visitation to pre-pandemic levels.
Time for a (Virtual) Reality Check
The Metaverse is slated to be at the center of conversation in 2023. However, like previous “hype vs. reality” news cycles, the conversation is bound to be all style and no substance. While its technology can seem like magic, it doesn’t solve consumer problems. Escaping from their everyday surroundings takes more than slipping on some goggles and headphones. The only virtual reality DMOs should embrace is Vacation Reality — travel is so much more than the sights and sounds. It’s about the feelings of your stomach lurching on a thrill ride, rushing endorphins as you experience something new, the taste of local authentic cuisine, and most importantly, sharing those moments with the people who matter most.
DMOs would be best served by not rushing to dip their toes in the Metaverse without a strategic plan. There are some examples of tourism brands experimenting with the Web3 technologies, such as CitizenM building a hotel in the metaverse and Singapore’s Sentosa Island recreating itself virtually in Animal Crossing. DMOs should continue to monitor the metaverse in 2023, and plot ways to achieve specific objectives, like generating an earned media boost through VR initiatives.
Artificial Intelligence (AI) Continues to Evolve Travel Planning
AI’s growth continues to make consumers’ lives easier. Smart-planning apps for travelers are becoming more popular, and giving consumers an easy way to create customized itineraries with the help of AI to give users a better idea of destinations and experiences.
According to a recent report from Trendhunter, the use of smart technology to streamline aspects of consumers’ lives has resulted in people being able to organize their time more effectively, and in a way that’s personalized to their exact interests — this convenience extends to infrequent events like travel. For example, iplan.ai is a smart travel planning platform and Karambol is an AI-powered travel guide — both utilize AI to help consumers efficiently and effectively assemble travel itineraries.
Audio Marketing is Music to Consumers Ears
Audio marketing boomed during the pandemic, and while that growth has leveled off in recent years, one of the medium’s most popular elements is retrospective analyses of users’ year-long listening habits. Spotify’s “Wrapped” feature is popular not only for keeping track of how many times someone listens to Taylor Swift, but also for analyzing what type of people users are based on their listening habits — Wrapped results also lead to organic social media posts from users sharing their results.
Tourism is dipping its toe in the audio analysis game. Spotify and easyJet teamed up to create Listen & Book to analyze listening habits and make personalized travel recommendations based on them. This collaboration with Spotify gives the airline a new way to tap into wanderlust — recommending botanical gardens in Lisbon or a relaxing sauna in Helsinki to someone who prefers calm and dreamy music, for example.
Death of the Duopoly?
For years Google and Meta have been the monarchs of the digital advertising kingdom. Could breaks start to show in 2023? With the rise of TikTok and Gen Z, consumers are shifting their consumption habits away from the digital stalwarts. DMOs should monitor their performance on the two leading platforms and look to grow their presence in other channels to meet younger travelers where they are.
Platforms like Pintrest are popular among travel planners, with 72% of pinners planning their travel on the platform. The influencer market grew to $16.4B in 2022, due largely to the growth of TikTok. Don’t get us wrong, Google and Meta are still going to be the major players next year, but DMOs should not put all their eggs in those two baskets.
Experiences will Connect with Travelers
Let’s face it, consumers are bombarded with thousands of marketing messages a day, and frankly, they all start to blend together. Studies dispute the specific percentage, but all show the vast majority of ads go unnoticed. So, how can your brand stand out?
After years of restrictions or COVID-caused travel challenges, Gen Z is looking for escapism. According to a recent report by Trendhunter, they are singly turning to brands that can offer them genuine moments or experiences that create a sense of freedom from personal responsibilities and stress.
Giving consumers an escapist experience, whether in real-life or digitally, is the best way to make a lasting impression that resonates with travelers. These experiences can be big, like in-person activations in your target markets, or small, like unique user experience (UX) elements on your websites. Above all, they should embody your brand and create positive feelings among your target audience. One example of this is Kiss & Fly, an augmented reality (AR) book that features nine different locations. Travel enthusiasts can visit France, Brazil, Iceland, Mexico, Italy, Greece, India, Jordan, and other countries along the Mediterranean sea.
Win with Smarter Content
Search engines are changing. While this statement could be relevant multiple times a year, it feels particularly true as the travel and tourism industry hits 2023. Since August 2022 alone, Google has rolled out not one but at least five updates as part of its ongoing efforts to improve search results, meet user intent, and reduce spam.
As organic search changes, destination marketing organizations need to create content to match user intent to leverage zero visit searches, equip websites with personalization technology to keep users engaged, and exceed user expectations by providing rich UX experiences, like using scrollytelling technology, to set your destination apart from the rest.
Advertising on Popular Streaming Services
Last year was the peak of the streamings war, as many subscription streaming services came to market in earnest and long-standing streaming superstars began to lose subscribers. It’s hard enough keeping track of all these streaming services as consumers — the monthly statement surprise — but in 2023, DMOs will be challenged to keep track of streaming services as many launch ad-supported models.
This year will be the first year that Netflix, Hulu, Disney+, Prime Video, Apple TV, HBO Max, Peacock, and Paramount+ all have pricing model options that include advertising. The best thing DMOs can do is richly understand and define their target audience, and leverage the platforms that best reach those types of travelers. DMOs should also understand the minimum spend requirements for each platform, as you will need a substantial budget to leverage these top players.
The Year Ahead
Did you have any of these predictions on your to-do list this year? Did anything in our crystal ball surprise you? Reach out to our team if you’re looking for destination marketing help in 2023 or want to learn more about any of these predictions.