Will Holidays Survive Virtual Reality?
The traditional business of travel and tourism continues to be disrupted by the relentless rise of the sharing economy. Despite business practices which sometimes attract critical scrutiny, and fierce political opposition in key markets, the momentum behind this business model seems unstoppable. Airbnb's recent $10 billion valuation and reported annual revenues of $250 million has prompted some to in the sector to ask what can be done about this real business threat.
However, even collaborative models may fall prey to the emergence of virtual reality (VR), which may alter our definition of what it means to travel and enjoy new experiences.
Until now, interest in VR has been mainly constrained within the gaming industry where the amazing realism it delivers is clearly light years ahead of the joy sticks and consoles of yesterday. Now the technology’s coming out of the games room and entering new market sectors where the transformation of our experience is likely to be as equally profound.
Reports that Marriott is giving guests a sampler of the destination experience before they even buy a ticket reflects an obvious application, and it’s seen as a precursor to the physical experience. The complementary approach is understandable, given the interests of incumbents, but could VR replace at least some physical transport demand?
For example, given time and cost constraints, could the idea of completing one of the great walks over series of hourly sessions at the local gym have some appeal? Does it redefine the family holiday if this experience is enhanced through sharing in real time with distant family and friends? Perhaps recent evidence suggesting there's psychological benefit from taking many short breaks rather than the big trip could also lift demand for VR mini-breaks.
In the real world, the latest evidence shows that travel and tourism continues to prosper globally, with arrivals reaching a record 1.1 billion in 2013 and further increases expected in 2014. Clearly, there will always be those who want to travel and the sheer experience is going to be hard to beat for a while yet.
However, as the economic situation remains precarious and in a century of finite resources and increasing environmental concern, the virtual alternative may become not just an economic choice, but a moral one too.
Lewis Black's on-stage comments suggest that there’s at least one customer who would swap the physical experience of a trip to New Zealand with a virtual one (warning strong language). If a relatively cheap, time efficient alternate is presented that can be accessed year round from home, how many others might jump at the chance?