How Virtual Reality Is Impacting the Travel Industry

How Virtual Reality Is Impacting the Travel Industry

Virtual reality can lend credibility to travel agents and help drive sales By: Skye Mayring
<p>Shangri-La was one of the first hotel groups to incorporate VR into worldwide hotel sales efforts. // © 2016 Shangri-La Hotels and...

Shangri-La was one of the first hotel groups to incorporate VR into worldwide hotel sales efforts. // © 2016 Shangri-La Hotels and Resorts

Feature image (above): 360-degree video allows users to virtually experience a space. // © 2016 Wasim Muklashy

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Virtual reality systems can transport users to far-flung destinations like Bora Bora, but there’s nothing quite like real-life adventures such as spotting sea life by Jet Ski with Hilton Moorea.

Facebook CEO Mark Zuckerberg has predicted that virtual reality (VR) will become the “most social platform” out there, but it sure didn’t look that way to customers of the Coffee Bean & Tea Leaf where I met with the public relations manager for Contiki. With Samsung Gear VR headsets strapped to our faces, we sat across from each other but felt like we were worlds apart — one of us virtually experiencing cliff diving along Italy’s Amalfi Coast and the other touring an overwater bungalow in Bora Bora.

VR isn’t the next big thing in travel. It’s already here. And suppliers, travel agencies, sales teams and consortia are refocusing their 2016-2017 business plans in order to ride the wave. If you find them mad for doing so, run the numbers. Investment in VR and augmented reality (AR) reached $1.1 billion in the first two months of this year, while trusted brands such as Google, Apple, Microsoft, Netflix, Samsung, YouTube and Facebook positioned themselves to bring VR to the masses. Looking ahead, Goldman Sachs Group expects the VR and AR markets to generate about $80 billion in revenue by 2020.

“The travel industry is all about finding the perfect destination or getaway, and VR allows you to explore multiple environments from the comfort of your own home or office,” said Tom Harding, director of VR and immersive products for Samsung Electronics America. “VR is incredibly powerful because it allows travel businesses to intimately showcase their expertise as curators of experience — be it destination options, restaurant suggestions or hidden gems that only the locals know.”

If you have gotten this far and you are still wondering what the heck VR, AR and 360-degree video are in the first place, you’re not alone. Most marketers don’t know, either.

Here’s a primer: VR, in its purest form, is an immersive multimedia or computer-simulated reality that allows the user to interact with (and often control) the experience. Users wear headsets and headphones that are tethered to a powerful PC that, along with controllers, tracks their exact location in space and allows them to explore the virtual world. AR, seen in applications such as Pokemon Go and Snapchat, happens when the real world is enhanced with elements such as computer-generated graphics, sound or GPS data. In other words, new information is added to the existing environment. And lastly, 360-degree video viewed in a headset is immersive content that wraps around the viewer. She can look up, down and all around her to get the sense that she is standing in the middle of the action, although unable to control the environment herself. Viewers without headsets can play around with less-immersive 360-degree videos on Facebook and YouTube via a mobile or desktop device.

While technically incorrect, “VR” has become the catch-all term for all spherical content viewed in a headset. Following in the footsteps of the media and the aforementioned brands at the forefront of the industry, I will use “VR” and “360-degree video” interchangeably in this article.

So, what do all of these developments mean for you and your business? The short answer: many things. Much like a consistent social media presence and a professional-looking website, VR can lend credibility to your company and help drive sales.

Greenlight Insights, a market research company that specializes in VR and AR industries, recently released results from its consumer survey of 1,300 adults. A majority of respondents said they would be more inclined to purchase from a brand that uses VR than from one that doesn’t, while 71 percent of consumers felt that VR makes brands appear “forward-thinking and modern.” The survey also found that consumers are interested in many applications of VR and AR, with travel as the most popular surveyed category (74 percent).

Travel professionals can also benefit from VR as an educational tool. Expect your business development managers, favorite hotel representatives and other travel partners to begin exposing you to 360-degree videos to educate you about their latest products. They might break out a Google Cardboard viewer, complete with the company’s logo, during a deskside visit or showcase their products with a higher-end solution, such as the Oculus Rift, at road shows and other industry events.

During last month’s Travel Week, for example, travel advisors got an early look at how Virtuoso is approaching VR. Currently in the incubator program, Virtuoso Virtual Reality utilizes custom-built PCs and Oculus Rift headsets to showcase its member’s 360-degree content.

“The reaction was, not surprisingly, extremely enthusiastic — it’s hard to find anyone who isn’t completely blown away after trying VR,” said Tony Corneto, director of user experience for Virtuoso. “We literally had a couple of people cry afterward because they were so overwhelmed by the footage. And I already had one agency, Unique Travel in Delray Beach, Fla., go out and buy an Oculus Rift for their office after seeing the demo.”

As part of a pilot program, Virtuoso plans to either provide, lease or purchase the equipment needed to drive these immersive experiences for its biggest agencies.

“We would actually install a PC and an Oculus Rift in each of these agencies, and then distribute travel content that we either produce ourselves or acquire from suppliers,” Corneto said.

Ultimate Jet Vacations, a Miami-based wholesaler that connects travel advisors with hoteliers, is in the process of creating a booth in its office that’s dedicated to 360-degree photography and video.

“Travel is sold through emotions,” said Steven Kadoch, managing partner for Ultimate Jet Vacations. “Our suppliers visit our office all the time. We find that to get them to buy into how special this tool can be for them and for us, having a dedicated area to experience VR is important.”

Ultimate Jet Vacations is also distributing its hotel tours on its websites, through VR apps, during office visits and at trade shows.

“When we visit a travel advisor, we can have them put on our VR goggles and ‘walk into’ one of these hotels, sometimes even with video, and experience it as if they were truly there,” Kadoch said. “We can then leave them with Google Cardboard goggles that they can use to show their client, the end consumer.”

Earlier this year, travel agency Thomas Cook reported great success reaching its end consumer with 360-degree content. The 175-year-old company produced VR videos of specific tours it wanted to promote, including a New York package, then supplied 10 of its brick-and-mortar offices with Samsung Gear VR headsets to showcase the footage. Potential clients were able to virtually fly in a helicopter over the Manhattan skyline, among other experiences. Remarkably, in the first three months alone, Thomas Cook reported a 190 percent uplift in the New York excursions it was promoting and a 40 percent return on investment.

Luxury hotel group Shangri-La Hotels and Resorts also sees VR as an effective sales tool. The company was among the first to incorporate VR into worldwide hotel sales efforts, producing original 360-degree videos of its properties and outfitting all of its global sales offices with headsets.

“This is the beginning of VR becoming mainstream, and we want to be on the forefront of it,” said Brian Windle, vice president of sales and marketing for the Americas for Shangri-La Hotels and Resorts. “It’s easy to talk about square footage and hardware, but VR lets clients virtually step into event spaces to envision not only the space, but also an experience for their customers. They now look for immersive experiences to better understand a destination and a property, and we find that VR best helps those customers without leaving the trade show floor.”

Contiki, which specializes in tours for 18- to 35-year-old travelers, sees an opportunity to educate advisors who cannot attend its fams due to their age range or other factors. Its newest 360-degree videos focus on the brand’s different travel styles, from Easy Pace and In-Depth Explorer to Sailing and Cruise. Currently, Contiki’s sales team is showcasing the media at trade shows and other events via a custom-built app that curates the user experience.

Similarly, Quark Expeditions unveiled a 15-part Antarctica VR series, which can be viewed through the brand’s custom app.

“A branded app keeps everything in one place, is easy for a user to return to and gives Quark the control on what content is portrayed and how it’s delivered,” said Rachel Hilton, vice president of customer experience for Quark Expeditions. “Plus, it provides the most reliable user experience currently possible.”

Some travel advisors have voiced concerns that a compelling VR experience could replace the need to travel, causing them to actually lose sales, rather than generate new business. Kadoch of Ultimate Jet Vacations disagrees with that thought process.

“These won’t ever replace real vacations,” he said. “They enhance the selection experience and are tools for travel advisors to use. It’s like viewing a magazine many years ago and then being introduced to a video of the resort. It’s quite different.”

For Virtuoso, the greatest challenge of VR is content — specifically, having enough content to distribute to its partners and ensuring that the footage is of the highest quality.

“Content creation and acquisition, especially with the quality that we want, is really the most important thing,” Corneto said. “We as a company need to figure out how to mitigate that risk and help suppliers — as many as we can, all over the world — to have really high-quality, great-production VR content so everyone can have access to our clients.”

For travel advisors who are interested in VR but are unsure where to start, Corneto suggests finding someone with a headset and trying it out for the first time.

“I think a lot of people think it’s just another shiny object, that it’s a gimmick,” he said. “There’s no way for anyone to describe what it’s like unless you’ve personally experienced it for yourself. VR will sell itself, and people will get excited about it once they try it.”

Kadoch says that while some of his travel planners use the technology more than others, they all see the value of 360-degree video as a unique and innovative way to sell travel.

“It’s an effective tool that will help you sell more and allow you to engage your clients in a new, refreshing way, enhancing your relationships with them,” he said. “It will also lead to referrals. This is coming, and it’s coming fast.”