Report on World Tourism Economy Trends (2018) Excerpt -8 Tourism industry becomes one of the major industries that apply VR technology

1. Characteristics

(1) VR will change the way humans feel the world

Virtual reality (VR) means an all-new human-machine interaction way based on computer and the state-of-the-art sensor technology. The VR technology mainly involves three key technologies: the dynamic environmental modeling technology, the real-time tridimensional image generation technology, and the cubic display and sensor technology. The VR technology will allow people’s vision to break away from the reality, and see more intuitive virtual views. It will change the way people see the world and will greatly change people’s social activities and lifestyles.

(2) The VR market has experienced continuous segmentation and rapid change

Google, Facebook, Samsung and other technology enterprises have continuously spent piles of money on the VR technology, which has helped gradual penetration of VR applications. Judging from the industrial perspective, the VR technology can be divided into the consumer grade and the enterprise grade. The “consumer-grade” VR stresses contents and mainly includes gaming, video, live and other areas. The “enterprise-grade” VR technology platform still needs further development, and the human education and training demand is the major factor powering thrift growth of the enterprise-grade content market. In 2016, the VR market had an overall size of RMB3,463 million, and the VR headset was the biggest industry with a share of up to 59.2%. We expect this ratio will fall down to 37.6% in the following five years. At the same time, the consumer-grade contents took a share of 7.7% in 2016 and this figure is predicted to grow to 35.3% in 2021.

Figure 3.2 5-year Trend of Industry Shares in VR Market

Data Source: iResearch, Greenlight Insights, 2017

(3) VR will create new forms of experience marketing

VR marketing, such as panoramic advertisements, APP embedded advertisement, VR live advertisement and brand experience event, will become an important marketing option of enterprises. The VR marketing market is expected to maintain a compound annual growth rate of more than 120% and hit RMB1.98 billion by 2021. The VR offline experience hall is also one of the important applications. Moreover, the VR panoramic video camera and other VR video cameras are gradually penetrating into the consumer market and the professional market.

2. Application to tourism industry

(1) VR technology can simulate and improve tourist experience

The VR technology can simulate and improve tourist experience. With the VR technology, tourists can see every detail of a scenic spot and also see tourism resources that are not open or are open at irregular intervals, and access the interpretation of the scenic spot in greater detail and presentation in multiple dimensions. People can travel the tourism destination in the virtual environment, better understand the destination with some special effect technologies and enjoy strong feelings and rich experience that can’t be realized in the real environment. The VR simulated travel has the comparative advantages in cost, time and safety and allows people to stay at home. The travel ranges from an adventure to daily walk in the city, from the remote polar region to remains and cultural relics that have already disappeared. Based on different experiences of consumers enabled by the VR technology, tourism companies can customize unique tourism paths and event schedules.

(2) VR technology helps tourism decision-making and stimulates the desire to buy

“VR + tourism” products can effectively help users decide their travels, realize the function of “first experience then buy”, and render the feeling of personal arrival at the scene. For example, Alitrip and Tuniu.com have introduced the VR technology to online room selection, and users can collect intuitive and comprehensive information of the hotel to help decision-making. Some travel agents have also provided the VR tourism experience, including virtual experience of the destination before departure, VR amusement item, VR-assisted landscape presentation of the destination and VR-presented special path and view, so that tourists can select routes more intuitively before setting out. The immersed prior experience enabled by the VR technology can better strike tourists, turn their desire into tourism behavior and stimulate potential tourists to buy the tourist services.

Figure 3.3 Investment in VR Application Industry in China

Data Source: Analysys, 2016

(3) VR technology can improve the level of tourism experience sharing

The VR technology can improve the level of sharing the tourism experience. Combined with social media platforms, the VR technology makes it possible to share the tourism experience in a new way, thereby better enhancing the tourism experience of tourists, allowing people to feel like personal arrival at the scene and strengthen the interactive entertainment experience. For example, Marriott has attempted to make tourists share their tourism experiences with the VR technology at several hotels. After putting on the VR headset, a user can share travel notes and comments from other tourists in the 3D form as if he was on the scene himself in all dimensions.

3. Influence on global tourism industry

Tourism is one of the major areas that will apply the VR technology in future. Three factors will propel the application of the VR technology in the global tourism industry: Furious market competition, increase in customer expectation and optimization of marketing strategy. As a frontier technology, “VR + tourism" has changed the traditional way people go out of home to see the world, but allows people to appreciate the world with the VR device and help make tourism decisions. The application of the VR technology has become a new battlefield of hotels to wrestle with one another.

(1) VR technology can create tourism experience sharing products

VR technology can create tourism experience sharing products. Combined with social platforms, VR tourism products have created new product types in the global tourism industry. With such product, a user can put on the VR device to feel the 3D tourism and comments of other tourists. The all-new tourism experience of these products will become a new growth area of the tourism industry in future.

(2) VR technology and device upgrade facilities of tourism destinations

Second, VR technology and device can upgrade facilities of tourism destinations. In future, the VR technology will penetrate into the infrastructure design of tourism destinations, overlap real scenes and simulated sense, provide the recovery of historical sites and conservation of digital cultural heritages, and thus substantially change modes and methods of destination building. Many scenes can be presented with the VR technology to enhance the site effect. On the real scenic spot, a tourist can put on the VR device to realize vocal exchange and interaction with users from the virtual world, thereby finally realizing the universal connection from “reality to virtual reality and from virtual reality to reality” and strengthening truer experience of tourists.

(3) VR technology will change the tourism reservation method

The VR technology will change the tourism reservation method. After wearing the VR device, a user can realize real-time navigation and feel the target destination, thereby promoting tourism decision and reservation. Moreover, the user can search and compare flights, preview the cabin, complete the reservation, look at rooms at the hotel and realize virtual tourism reservation. Therefore, the global tourism industry will face a significant change in reservation mode and technical platform.