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Travel in the Metaverse to Reach New Audiences and Revenue Streams

11/11/2022
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Despite much controversy and scepticism, the metaverse is the next generation of the internet, promising to be as disruptive to travel brands and destinations as online booking and mobile web services were and continue to be. It is where consumers will increasingly socialise, shop, work, play and explore.

Disruption opens up vast opportunities to reshape engagement

Travel companies and destinations are already testing the waters, offering fun and immersive travel experiences in the metaverse, launching brand campaigns to unlock value by reaching new audiences, and creating new revenue streams. Personalisation, loyalty, payments and destination marketing are all set for disruption as the metaverse evolves from its nascent state.

Powerful drivers behind adoption

According to Euromonitor International’s Voice of the Consumer: Digital Consumer, the most popular virtual activity with 43.6% share in 2022 is wearing a VR headset to explore a travel destination pre-trip.

50.2% of millennials enter a holistic and immersive world

           Source: Euromonitor International - Voice of the Consumer: Digital Consumer
Furthermore, an astounding 50.2% of Millennials are extremely or moderately interested in entering a holistic and immersive world such as virtual concerts or unique virtual events, highlighting that the metaverse is already here and young people are keen to engage with it.Interest in VA by Generation.pngSource: Euromonitor International - Voice of the Consumer: Digital Consumer

First-mover advantage for new engagement

The metaverse is the latest development in the marketing, communications and loyalty toolkit for hotel brands to experiment with. Millennium Hotels claims to be the first hotel brand in the metaverse, launching M Social in the Decentraland metaverse platform in May 2022. M Social offers immersive travel experiences for consumers’ avatars, where they can socialise in the hotel lobby, get to know the brand and explore Decentraland.

Importantly, consumers can win rewards that can be redeemed in the real world, requiring a connected omnichannel approach by seamlessly weaving the physical and digital together.

Reinventing real life experiences with a virtual twist

There is more to the metaverse than online where Disney has patented a new virtual world simulator that will project 3D images and virtual effects to blend the physical and virtual worlds for its visitors. The simulator technology will not be dependent on mobile phones or AR/VR headsets, further blurring the boundaries between the different realms of experience. There is clearly huge potential for the dizzying array of in-destination experiences to receive a metaverse makeover.

Business travel at a loss

Business travel spending is still in recovery mode and is facing a new challenge from the metaverse, due to hybrid work and virtual teams, and the emergence of virtual MICE events, that is expected to cannibalise some spending.

274 million business trips lost by 2027 and potentially USD36 billion of in-person business travel spending transitioned

Source: Euromonitor International

Trips lost and value transitioned to the metaverse could reach 12% by 2030 in line with previous technological acceleration witnessed in the sector. This would amount to 274 million business trips lost by 2027 and potentially USD36 billion of in-person business travel spending transitioned to virtual business travel activities in the metaverse.

Impact of the metaverse on business travel.pngSource: Euromonitor International

Hotels tap into new revenue streams

Global hotel chains including Atlantis, Marriott, Accor, IHG and Four Seasons are working with start-up Rendezverse, which aims to build a metaverse community for MICE (meetings, incentives, conventions and exhibitions). Leveraging the very latest in VR and Web 3.0 technology, the platform will bring together hotels, event specialists and buyers.

Creating digital twins of hotels also allows buyers to preview facilities and services, enabling businesses to reduce their global carbon footprint. Rendezverse predicts that soon all hotels will sell virtual meeting rooms along with standard services, generating a new revenue stream. Furthermore, Mytavese is working with Unreal Engine to create more realistic virtual worlds for business travel.

Breaking new ground for smart cities

Seoul aims to be the first city in the metaverse, with the Seoul Metropolitan Government announcing its plans to become a virtual public service centre for residents and visitors in 2023.

Famous and lost landmarks will be featured on the Seoul Metaverse platform, in the Virtual Tourist Zone. However, the main functions will be for residents to engage with officials through VR headsets and for general smart city initiatives.

Staking a sovereign claim in virtual land

In November 2021, Barbados became the first country in the world to open an embassy in the metaverse, on the Decentraland platform. The role of the virtual embassy is for global diplomacy, such as issuing e-visas as well as teleporting users’ avatars to different virtual worlds. The question of sovereignty and nationality in the metaverse is only just emerging.

Digital twins key to enabling carbon neutrality

Digital twins are transforming smart cities where Helsinki is a pioneer, recently culminating in the launch of its digital twin. Due to 3D mapping combined with computer gaming capabilities, the city has created a reality mesh model. This will prove to be fundamental in achieving ambitious national level targets, such as aiming to be net zero by 2035.

Learn more about this topic in Euromonitor International’s new report, Travel in the Metaverse.

 

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