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Niche Tourism Has Similarities With The Experience Economy

The concept of niche tourism has gained widespread recognition in the industry, prompting businesses to seek ways to set themselves apart from competitors. Niche tourism closely aligns with the experience economy as niche tourists are always on the lookout for distinctive and immersive experiences that align with their interests.

Previously limited to small independent companies, niche tourism has now captured the attention of mainstream holiday providers, who view it as a potential area for growth. This shift has resulted in large conglomerates such as Expedia, TUI, and Booking Holdings expanding the niche tourism industry through mergers and acquisitions and brand extensions, making it a global phenomenon.

Consumer Trends

Modern consumers no longer exhibit brand loyalty; instead, they prioritize their individual preferences. Leisure tourism is an umbrella term for various traveler motivations, and tourism providers have adapted to cater to each traveler’s wants and needs by becoming more specialized. Tour operators that focus on specific traveler types, such as those specializing in wildlife, adventure, cultural, and sustainable experiences, are now commonplace across the travel and tourism industry. Although major OTAs like Booking Holdings, Expedia, and Group advertise a diverse array of experiences, smaller operators are opting to become more specific, focusing on a single segment.

Niche tourism has attracted a substantial following in various markets, including agri-tourism, eco-tourism, cruises, and ski tourism. Large travel companies have caught on to this trend and recognized niche tourism as a potential growth area, thus breaking away from the notion that it’s limited to smaller companies. Consequently, the niche tourism industry has become globalized, with multinational corporations such as Airbnb, Hilton, Walt Disney, Booking Holdings, and Expedia offering exclusive and personalized experiences.

Business Trends

To diversify their product ranges, major companies such as Booking Holdings, TUI Group, and Expedia are investing in niche tourism experiences and holidays. This move is in response to shifting trends within the travel industry, as many Millennials and Gen Z tourists seek more meaningful and fulfilling tourist experiences. The rise of the experience economy has also played a crucial role in this shift.

The sharing economy has had a positive impact on niche tourism, with some tourists moving away from traditional hotels. Although hotels provide a standardized service, the quality can vary depending on the property’s service rating. This standardized type of service may sometimes lack character, innovation, and authenticity, leading to a generic guest experience. For instance, the guest experience in reputable budget hotel chain Motel One will be the same regardless of whether they stay in Prague, Czech Republic, or Manchester, UK. Both hotels have a similar feel and look, identical breakfast options, and similar facilities such as the ‘Gin Bar’ and contemporary lounge.

Industry Trends

The COVID-19 pandemic has significantly impacted the tourism industry, but adventure tourism may be a long-term beneficiary. With outdoor activities such as rock climbing, skiing, hiking, and mountain biking, adventure tourism offers an opportunity to enjoy nature while maintaining social distancing. These activities are particularly popular with younger generations like Millennials and Gen Z, although less strenuous options like walking are still appealing to older age groups.

In 2022, agricultural and rural tourism will also be a key trend in the niche tourism sector. After months of being stuck indoors due to lockdowns, people have a greater desire to experience the outdoors and natural spaces. The impact on physical and mental wellbeing has been significant, leading many tourists to seek an escape from their daily lives. This pent-up demand for nature-based experiences has created opportunities for tourism providers to offer unique and authentic agricultural and rural experiences.

Niche Tourism In Canada after 2021

In Canada, the fastest growing destinations for leisure travel are British Columbia, Ontario, and Quebec, according to the Canadian Tourism Commission. These regions have seen an increase in both domestic and international tourists due to their diverse offerings, including outdoor activities, cultural experiences, and urban attractions.

The key niche tourism destination regions in Canada include Newfoundland and Labrador for adventure tourism, Manitoba for ecotourism, Quebec for cultural tourism, and the Canadian Rockies for nature and wildlife tourism.

According to Statistics Canada, tourism in Canada saw a rapid rise between 2015 and 2019. In 2019, the tourism industry generated $105 billion in revenue, an increase of 3.3% from the previous year. Contributing factors to this rapid rise in tourism include the low Canadian dollar, increased air connectivity, and Canada’s reputation as a safe and welcoming destination.

The tourism sectors that saw the most growth during this period were the accommodation and food services sector, which saw an increase in revenue of 5.5% from 2018 to 2019, and the recreation and entertainment sector, which saw an increase of 5.7% during the same period.

Niche Tourism in Alberta After 2021

According to the latest available data, the fastest-growing niche tourism sectors and respective destinations for leisure travel in Alberta are:

Adventure tourism: Banff and Jasper National Parks, Kananaskis Country, Canmore, and Waterton Lakes National Park

Agritourism: Calgary and surrounding areas, the Canadian Badlands, and the Edmonton area

Indigenous tourism: Treaty 7 territory (Calgary and southern Alberta), and Wood Buffalo National Park

Culinary tourism: Calgary and Edmonton

Wildlife tourism: Banff and Jasper National Parks, and Waterton Lakes National Park

The top ten key niche tourism sectors and respective destination regions in Alberta could also include cultural tourism, ecotourism, and wellness tourism.

Between 2015 and 2019, tourism in Alberta saw a rapid rise. In 2019, the province welcomed 35.8 million visitors, which is a 4.4% increase from 2018. The tourism industry also contributed $8.9 billion to the province’s GDP in 2019. The most significant growth was seen in the adventure tourism sector, which experienced a 12% increase in visitor spending. Other sectors that saw growth include culinary tourism, ecotourism, and Indigenous tourism.

Several contributing factors caused this rapid rise in tourism in Alberta, including increased marketing efforts by Tourism Alberta, favorable exchange rates for international visitors, and improved air access to the province. Additionally, the growth of niche tourism sectors, such as adventure and Indigenous tourism, has also contributed to the rise in tourism in Alberta.

Top 10 Niche Tourism Sectors & Respective Destination Regions In Alberta

Here are the top ten key niche tourism sectors and respective destination regions in Alberta:

Skiing and Snowboarding – Banff, Lake Louise, Jasper, and Kananaskis

Wildlife Watching – Banff, Jasper, and Waterton Lakes

Ranch and Farm Experiences – Calgary, Edmonton, and Southern Alberta

Indigenous Tourism – Edmonton, Calgary, and Treaty 7 region

Dark Sky Tourism – Jasper National Park and Cypress Hills

Golfing – Banff, Canmore, and Kananaskis

Hiking and Backpacking – Banff, Lake Louise, and Jasper

Cultural and Historical Tourism – Calgary, Edmonton, and Southern Alberta

Winter Activities – Banff, Lake Louise, Jasper, and Kananaskis

Adventure Tourism – Banff, Canmore, and Kananaskis

These niche tourism sectors showcase the diverse offerings in Alberta, ranging from outdoor activities to cultural and historical experiences.

Monitor Trends, Identify Themes, Know The Pitfalls

For businesses involved in niche tourism, it is recommended to stay up-to-date with current trends and anticipate future developments in the market. By identifying important themes early on, companies can make informed decisions about where to invest resources to stay ahead of the competition and secure a competitive advantage. It is also important for businesses to understand the potential pitfalls of utilizing niche tourism and to take steps to minimize any negative social, cultural, or environmental effects on the destination. By taking a responsible and sustainable approach to niche tourism, companies can ensure long-term success and profitability while also contributing positively to the local communities and environments in which they operate.

  • Understand the current niche tourism trends within the travel landscape today and how these will escalate in the near future.
  • Assess how travel and tourism companies such as tour operators, OTAs and DMO’s are utilizing niche tourism to drive revenues.
  • Acknowledge the potential pitfalls of using niche tourism by understanding the social, cultural, and environmental effects on the destination.

How to Maintain Edge on Opportunities to Capitalize on Niche Tourism?

To maintain an edge on opportunities to capitalize on niche tourism, businesses across the travel and tourism supply chain need to constantly monitor and analyze market trends to identify emerging niche tourism themes. This involves conducting extensive research into the preferences and needs of different customer segments, as well as analyzing the performance of competitors in the market.

One way for businesses to stay ahead of the competition is to develop innovative products and services that cater to specific niche tourism themes. This could involve partnering with local businesses to offer unique experiences that cannot be found elsewhere. For example, a hotel chain might partner with a local eco-tourism company to offer guests guided tours of local forests, or a food tourism company might partner with a local farm to offer guests a farm-to-table dining experience.

Another way to maintain an edge on opportunities to capitalize on niche tourism is to invest in marketing and promotion. This involves creating targeted marketing campaigns that appeal to specific customer segments and highlighting the unique features of the product or service being offered. For example, a luxury safari company might create a marketing campaign that targets high-net-worth individuals looking for exclusive, off-the-beaten-path experiences in Africa.

It is also important for businesses to be aware of the potential pitfalls of using niche tourism, such as the social, cultural, and environmental effects on the destination. Companies should work with local communities to ensure that tourism development is sustainable and benefits both the local economy and the environment. This could involve investing in community-based tourism initiatives that provide local residents with employment opportunities and support the preservation of cultural heritage.

Examples of businesses that have successfully capitalized on niche tourism include Airbnb, which has leveraged the sharing economy trend to offer travelers unique accommodation options such as treehouses and houseboats. Another example is G Adventures, a tour operator that specializes in small-group adventure travel experiences to off-the-beaten-path destinations. By identifying and catering to specific niche tourism themes, these companies have been able to differentiate themselves in a crowded market and attract customers looking for unique and authentic travel experiences.

Ten (10) Recommendations For Those Involved in Niche Tourism To Stay Ahead of The Competition, And Secure Competitive Advantage

  1. Stay up-to-date with industry news and trends, attending conferences and seminars and following relevant social media accounts.
  2. Conduct market research to identify emerging niches and target audiences.
  3. Collaborate with local communities to understand their needs and concerns, and ensure that niche tourism development is sustainable and responsible.
  4. Develop a comprehensive marketing strategy that speaks to the unique needs and desires of niche travelers.
  5. Offer personalized experiences that cater to the specific interests of niche travelers, such as culinary tours, eco-adventures, or cultural experiences.
  6. Leverage technology to enhance the guest experience, such as offering mobile apps for tour booking, virtual reality experiences, or personalized recommendations based on traveler preferences.
  7. Develop partnerships with other businesses and organizations in the supply chain to create a seamless and cohesive experience for travelers.
  8. Train staff to provide excellent customer service and cater to the unique needs of niche travelers, such as specialized dietary requirements or accessibility needs.
  9. Foster relationships with local suppliers to ensure authenticity and sustainability of niche experiences.
  10. Stay ahead of the competition by constantly innovating and improving, seeking feedback from customers and adapting to changing trends and preferences.