the future of travel - 10 trends

PowerPoint Presentation

Navigating Travel in a Connected WorldLee McCabeGlobal Head of Travel & Education Strategy

Welcome, etc. Great to be here.I see some familiar faces here, and some new ones.I have a lot to share about education and Facebook today, and in the spirit of attending one of the most important conferences in education, I want to keep this fairly high level.

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Booking travel like this was not too long ago.Booking travel was a very personalised experience.In the past, travel was considered luxurious.However, peoples options were limited. Fast forward to today and the dynamic has completely changed.On the business side, we have more technological capabilities than weve ever had. On the consumer side, people have more options than ever. Combine that with the power of digital and this is an exciting time for this travelfor this industry and for people.2

The evolvingcustomer journey10 key trendsreshaping travel

-To put this change into content, I want to talk with you about three key trends were seeing and then what this means for you.-And as you think about how to approach your business, your marketing, your overall strategy, I urge you to think like a consumer every step of the way. -The consumer journey has evolved quickly and in a very short period of time.

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1Mobile is not just a technologyMobile is a consumer behavior

-Mobile is not just a technology.[CLICK]-Mobile is a consumer behavior.-People are mobile. Fitting your business into their lives is how to build relationships with customers and make them more valuable over time.-People continue to add to the total time they spend with media as they leverage the power of mobile to remain connected to the people and things they care about throughout the day.-Our phones and tables are the remote control for our lives.-They provide you with the most incredible opportunity to connect with the people who matter to you at a scale that has never been seen.[CLICK]

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Source :Gartner sales of smart phones in 2008 were 140M; Morgan Stanley sales Q1 09-Q2 10, now there are 1.75B smart phones, eMarketer

140M 1.75B

active smartphones on the planet

But now almost everyone has an intensely personal communication device in their hand.

In 2008, there were about 140M smart phones sold, [according to Gartner.] Today there are over 1.75B smart phones in the world, [according to eMarketer.]

That growth is mind-blowing. Why did mobile phones scale so quickly?

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Mobile travel gross bookings (US$M)Share of total and online travel market and annual change, 20122016Includes both smartphones and tablets. Note: 20142016 projected.Source: U.S. Consumer Travel Report Sixth Edition 2014 Phocuswright Inc. All Rights Reserved

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People are living their lives on mobile devices. At Facebook, we have been fortunate to play a role in shaping changes in peoples relationship to technology and to each other. But I'll admit that at times even we've struggled to keep up. In many ways, this struggle has defined our business.

Just a few years ago, we were a company based primarily on desktop computers. We knew mobile was coming, but not how fast. Frankly, we almost missed it. We had to make a massive shift, very quickly, and rebuild ourselves as a mobile-first company.

Today mobile is at the core of everything we do. It informs every product decision we make, for both businesses and consumers.

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Our facebook community

1.49 BILLIONpeople on Facebook each month900 MILLIONpeople on WhatsAppeach month700 MILLIONpeople on Groupseach month700 MILLIONpeople on Messengereach month300 MILLIONpeople on Instagrameach month45 BILLIONmessages sent daily4 BILLIONvideo views daily800 MILLIONpeople offered access through internet.org650 MILLIONpeople connected toa sports page2 MILLIONadvertisers

Q1 15 community highlights

2Devices, Devices, Devices


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-And think of how this plays out in the real world. -We dont only use our phones, people use a couple of devices simultaneously and throughout their day. -Cross-device. -Omni-channel world. In a sense, mobile has stacked time in peoples lives. Meaning that, with mobile, people are consuming new forms of media (think: multiscreening) in addition to consuming traditional media rather than wholesale shifting away from formats like TV.-More opportunities to connect

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60% of people use two or more devices.

Nearly 40% use three devices.Source: Google and TNS Consumer Barometer, Oct 2014

39%

The third theme is that multiscreening is the new normal.People continue to use many devices all day longIn fact, 60% use more than 1 device per day, 25% use 3 devices every day(SOURCE: GfK, 2014; US & UK; n=~2000).In Luxury, this means people sometimes want to see a handbag online, but buy it in-store.With Fast-moving consumer goods, this looks a little different.Same for Auto. While the path to purchase is complex and different from industry to industry, the landscape is consistent and the opportunity is growing.So when you think about building your brand and increasing that equity over time, its going to increasingly happen on peoples many mobile devices because it is where people are spending their time.11

Its about people, not cookies

-The measurement piece is important to this equation. -How you measure matters. And what you measure matters.-As the consumer journey has evolved, so too have new measurement capabilities.-You can now identify who people are across their devices. -You no longer have to rely solely on the cookiewhich was great when people used a single desktop computer to connect to the internet.-Measuring activity across devices helps solve part of the challenge.-In a time where people are connected all the timeevery dayand using multiple devices, the ability to know who youre reaching and when youre reaching them helps advance this ongoing conversation.-Importantly, reaching people within context is pivotal

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More and more people are using more and more devices

As weve already seen, the average consumer in 2015 uses 3 devices each day. In the scenario I just described, there were ten each working seamlessly in sync with the other.

In the 2020 transition from home to work, device-to-device, there will be no such thing as offline mode. Connected devices will be fully integrated into every task on a daily basis.

And recall the number of media messages todays most connected consumers absorb 1,000 each day?

ORIGINAL COPY:

The smartphone is the key to unlocking the internet of things

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Internet-connectable devices worldwide including smartphones will exceed 83 billion units in 2025Source: IHS

3Consumption is stacking, not shifting


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Mobile has created timeDaily share of U.S. media consumption 2011 2014

Source: eMarketer, April 201510 hours12 hours5:15TVRadio / Print / OtherDigital4:222:203:404:342:57

Audiences are spending more time than ever before consuming media.In a sense, its as though mobile has created time in our lives.People are stacking new forms of consumption onto existing, rather than shifting traditional time to new.This means you have more opportunity to reach more people on the devices where they are spending their time. From a reach and scale perspective, this opens up a world of new possibilities.As youll see, the majority of time audiences spend consuming media is now via digital.And the majority of that time is spent on mobile, so you can see where Im going with this.Importantly, the use of mobile skyrocketing in the last couple of years has completely redefined peoples expectations.

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TV Time is DecreasingChange in hours spent watching traditional TV per week since 2010Age Group50 64-1%35 49-10%25 34-23%18 24-32%Source :Nielsen June 2015

4Everything competes with everything

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In a mobile first world, everything competes with everything.

With our smartphones we all now have super computers 100x more powerful than those that sent the first spacecraft to the moon. Increasingly that means we can access anything we want [CLICK] anytime, anywhere. [CLICK]

And so our options begin to look like thisand your brands are part of it. Having endless options for content and services at our finger tips also means we increasingly have the ability to filter out advertising as well.

So in order to cut through that clutter you need to ensure your messages are meaningful & relevant. You also got be where the consumers are mobile!

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of smartphone users keep their phones with them for all but two hours of their waking day79%media time on mobile25%of budget on mobile11%

-We are living in a revolutionary time.-We know people spend increasing amounts of time on digital properties. In fact, people spend more time online than they do watching TV.This is akin to the 1950s when TV surpassed radio. When families sat together by the TV, which had a handful of channels.Take that a step further. The IDC reports that 79% of people have their smartphone phone with them for all but two hours of their waking day. Two waking hours. As an example of what this means on a macro level, people in the US spend 25% of their media time on mobile, yet [CLICK] advertisers only spend 11% of their budgets there. Disproportionate, at best.

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5Communication Becomes Immersive


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VR / AR

aa

Videos

PHOTOS

Text

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Mark Zuckerberg

Andrea Besmehn

Mark Zuckerberg

First time in Italy and I am absolutely mesmerized. What a beautiful day tolook around and share the amazing scenery with everyone!

Pallack ChandhokCheck out my new virtual pet Zeus. Were gonna go for a walk.

Michael Flanders

HARDER,BETTER,FASTER,STRONGER.

These are spherical videos. You can move around by changing your viewing angle, because these are filmed with up to 24 cameras.

This is a new and much more immersive type of video content. Its not something you consume passively, you can interact with it.

6Signals Create Business and Opportunity


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Sensor growth in smartphonesDepth sensing camerasInfraredRetina eye scannerBody tempBody-fat sensorsBarometerBarometerHeart rateFingerprintHeart rateFingerprintHeart rateFingerprintTemperatureHumidity Hall effectTemperatureHumidity Hall effectTemperatureHumidity Hall effectTemperatureHumidity Hall effectPressure RGBPressure RGBPressure RGBPressure RGBPressure RGBGyroscopeProximityGyroscopeProximityGyroscopeProximityGyroscopeProximityGyroscopeProximityGyroscopeProximityAmbient lightAccelerometerMagnetometerAmbient lightAccelerometerMagnetometerAmbient lightAccelerometerMagnetometerAmbient lightAccelerometerMagnetometerAmbient lightAccelerometerMagnetometerAmbient lightAccelerometerMagnetometerAmbient lightAccelerometerMagnetometerCamera/GPSCamera/GPSCamera/GPSCamera/GPSCamera/GPSCamera/GPSCamera/GPSCamera/GPSPre-2010201020112012201320142015Post-2015

Source: Qualcomm Behind the sixth sense of smartphones April 2014

Integrated sensors, user experiences

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Ted,enjoys exotic vacations

Julie,just got scuba-certified

Jesse,loves yachting

Neil, loves Seaworld

Troy,likes adventure travel

William, avid golfer

Jane, thinking of taking a cruise

-On large, people-based platforms, youre not reaching an email address or an account number. -You can reach real people and gain a deep understanding of their intentions. -Lots of signals that indicate intent-No better signals than people who have visited your website.Once you have that signal, its massive missed opportunity.FB recency: 8% of retargeted ads were shown within the first 24 hours of leaving a website (Source 2013).60% of our users see an add within an hour of visiting our website (2013).-This takes the meaning of big dataor targeting, which is how I think about itto an entirely new realm of possibility.-It has also changed the face of travel because you can use information to personalize experiences for people.-You can pinpoint, to a science, who you want to reach and when you want to reach them. -Real identity-based networking (like Facebook) plus your data allows for long-term relationships with customers that increase the ROI of each customer over time. -With privacy-safe structures in place, combine that data.-Leverage your own dataand match it with that on digital for maximum reach.-That is how so many businesses are seeing tremendous result.

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Massive reach once meant onemass-message

Females 18-34

MessageAchieve massive reach AND deliver relevant messages

3G Customers who have Android Watched electric car videosPhoto EnthusiastLoves to travelBeforeNow

Ability to pinpoint at scale. Earlier I mentioned that advertisers used to have to cast a wide net to reach a broad audience. That left for wasted impressions, therefore, wasted opportunities.But the ability to now precisely reach thousands of perfect customers, your brand suddenly becomes highly more relevant and valuable.And with the proliferation of devices and more time mobile, think about how that equity, that value can grows over time28

The thumb is in charge

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Forecast: US Beacon install base

Source: BI Intelligence Estimates

Cagr = 287%We arehere

Current vs. Planned implementation of beacon-enabled appsSource: SITA (Socit Internationale Tlcommunications Aronautiques), Air Transport Industry Insights: The Airline IT Trends Survey conducted by Airline Business, June 18, 2015

7Apps Eat Mobile


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Fastest to 50M users

Radio38 years

Television3x faster13 years

10x fasterInternet4 years

Facebook

11x faster3.5 yrs

iPod

13x faster3 yrs

Surpassed Angry Birds to become the fastest growing mobile game with over 50M downloadsTemple Run 2

1066x faster13 days

Draw Something

277x faster50 daysSource: Localytics The evolution of the almighty app

Re-order chronologically Radio, TV, Internet etc (remove LInkedIn and Twitter)33

Apps are everywhere

As weve already seen, the average consumer in 2015 uses 3 devices each day. In the scenario I just described, there were ten each working seamlessly in sync with the other.

In the 2020 transition from home to work, device-to-device, there will be no such thing as offline mode. Connected devices will be fully integrated into every task on a daily basis.

And recall the number of media messages todays most connected consumers absorb 1,000 each day?

ORIGINAL COPY:

The smartphone is the key to unlocking the internet of things

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In CarIn FlightIn HotelIn VR

64 M37 M25 M16 M14 M14 M12 M10 M10 M9 MLeading travel companies by unique visitors in USA (M) Source: Comscore, USA, May 2015Time Spent on Mobile Select leading travel companies based on unique visitors by platform & time spent on mobile

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Average number of apps used and time per person per monthRead as: In Q4 2014, smartphone users accessed 26.7 apps per month on average, and spent 37 hours and 28 minutes per month on apps.Source: Nielsen23:0230:1537:28

Top Apps of 2014: Worldwide iOS and Google Play downloadsRankAppPublisher1Facebook MessengerFacebook2FacebookFacebook3WhatsApp MessengerFacebook4InstagramFacebook5SkypeMicrosoft6Clean MasterCheetah Mobile7ViberRakuten8LINELINE9TwitterTwitter10SnapchatSnapchat

Source: App Annie

8Everything On Demand


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Anything we need is always available

TransportationFood/grocery deliveryParkingHealth and beautyLaundryTravel and loungingShippingHome servicesSource: Wong, Matt. Rise of the On-Demand Economy, CB Insights (June 30, 2015)

These are all the brands that are emerging and succeeding at on-demand services.

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On-Demand mobile services financing trendSource: Wong, Matt. Rise of the On-Demand Economy, CB Insights (June 30, 2015) 156%

U.S. Hotels Ancillary RevenuesSource: PKF Hospitality Research, a CBRE Company, Trends in the Hotel Industry Report

Total F&B department revenuesCompound average annual change 20072014Same-Store Sample: 1,613 Full-Service Hotels Average: 302 RoomsSource: PKF Hospitality Research, a CBRE Company, Annual Trends in the Hotel Industry Report

Limited serviceLimitless service

In-room entertainment

Laundry

Gym

Mini-Bar

Spa

Bedroom

Bathroom

Wi-fi

Restaurant

In-room dining

Parking

Reservation

Netflix

Saucey

OpenTable

Hotel Tonight

Uber

grubHub

StyleSeat

ClassPass

Washio

In-room ent NetflixLaundry WashioGym ClassPassMini-Bar SauceyIn-room dining GrubHubRestaurant Open TableParking Uber

1. Restaurant = OpenTable2. Spa = StyleSeat3.Reservations = HotelTonight5. Laundry = Washio6. Gym = ClassPass7. Mini-Bar = Saucey8. In-room Dining = GrubHub9.Parking = Uber

Hotel only left with bed, bathroom, Wifi

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5-star service anywhere

In-room ent NetflixLaundry WashioGym ClassPassMini-Bar SauceyIn-room dining GrubHubRestaurant Open TableParking Uber

Hotel only left with bed, bathroom, Wifi

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Platforms

9Creativity is Just About Connecting


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Mission:Give People the power to share and make the world more open and connected

Eventually everything connectsCharles Eames

The Connective Journey

Internet Connects information to information

BrowsersConnects people to the Internet

PortalsConnects people to information

SearchConnects information to people and commerce to people

SocialConnects people to people (scale)

IOTConnects device to device

MessengerConnects people to people (121)

The knowledge economy people, info, commerce, device

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The Connective Journey

Commerce

Device

Information

People

-THE GRAPH MODEL-The whole difference boils down to 'what is the best' vs. 'what is the best for me now' -Some people believe that there are absolute answers, truths if you will. We just don't model the world that way. We believe that every single person has a unique perspective, and that perspective evolves over time. That is the fundamental conceit of the graph as our model, and our challenge as a company. -We spent the last eight years as a company in the cartography business building out a relatively static map. Just connecting the world.

-Now we need to understand that map as a living breathing organism as new connections form and others decay.-We need to understand that in reality there are as many perspectives on the graph as there are people in the graph-And we need to be able to deliver to each their best answer in context, rather than an average.

Nearby places Airport

Nearby places City

MISSION OF SOCIAL-When you hear people asking where should I stay in New York? where's the most relaxing vacation spot?, who should I spend time with?, Who is the best employer?, Who's the best pediatrician?, what is the best car?, remember that they are always asking all of these questions prefaced with "for me", "right now" in an attempt to live better, to make a better decision.-In many ways life is just a string of these decisions and we can do so much good, and create so much value, by creating a medium through which we can work to do this.

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You will understand the landscape.The landscape will understand you.

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10Access over Ownership


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Millennials access over ownershipSource: Pew Research Center, Current Population Survey. US Census Bureau.Different priorities

75% have travel apps

First digital natives

75% value experiences over things

They have less moneyLower employment levels and smaller incomes have left younger Millennials with less money than previous generations.The largest generation

The Millennial generation is the biggest in US history even bigger than the Baby Boom.

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Things to experiencesPCE expenditures by category (according to the U.S. PCE data):Experience: travel, restaurants, entertainment, recreation, home improvement, gaming and lodgingThings: apparel and accessories, personal consumer goods, consumer electronics, furnitures, appliances, durable goods, autosU.S. PCE Growth

ThingsExperiences

The peoplethat buyare the ones thatwho rentcant afford tothat buybuyrent

ConnectionContext Convenience

-That in mind, we think travel marketers have no greater opportunity to put systems in place that allow for meaningful connections with customers and prospective customers. -Couple the power of digital with big data and you can reach people when and where it matters most. Apps that provide context to peoplethose that offer a level of personalization and ease that others dont will continue to gain momentum in a world where the appetite for this is large and growing.-Convenience.

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-With digital,-You have the power to drive growth and optimize your market potential. -You have the power to scale farther and faster than ever. -You have the power to harness the power of all of the right people who matter to you.Thank you.

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