Virtual Reality – the future of travel marketing? | Nelli Jokelainen and Leena Mäkelä

Virtual Reality is expected to have a great impact on travel marketing in the upcoming few years. At the moment, the utilization of this emerging technology is still in the early adopter phase, and the research related to the field, also in the travel industry, is scarce. This article introduces the results of a marketing study that inquired potential of VR in travel marketing in Singapore. Nelli Jokelainen, a TAMK student of Master’s degree programme of International Business Management, took a demonstration of virtual Northern Lights to Singapore and asked how travel businesses and customers found it. The results were encouraging.


The objective of the study was to develop the usage of Virtual Reality (VR) in travel marketing. The thesis commissioner, game development company Iceflake Studios Oy, has created a VR demonstration of Lapland and Northern Lights, called Aurora. They wanted to get user feedback of how Aurora could be developed and examine the opportunities VR in travel marketing could offer. (Liljedahl 2017).

Picture 1 Screenshot of Northern Lights in Aurora VR experience.
Photo: Iceflake Studios Oy

In Aurora, the user can observe the peaceful Lappish nature, see bonfire, frozen lake and vivid Northern Lights in their full colors. It was presented to the target group in Singapore. The target group consisted of Singaporean individual consumers and travel businesses that are selling and marketing travel to Finland. The purpose of the research was to study how the Aurora product can be used when marketing Finland to Singaporeans.

Foreign tourists are a significant source of income for Finnish travel industry: in 2017 they brought over 2,6 billion Euros to Finland (Visit Finland 2018). Especially Asian tourists – who cannot experience anything similar back home – come to Finland to experience the pure nature, winter and Northern Lights. By utilizing Virtual Reality in marketing, these essential points of interest can be showcased to potential customers in an unequaled way.

Virtual Reality is a computer-created three-dimensional environment. It is shown to the user by special virtual glasses or headsets and headphones, connected to a smartphone or table PC. These VR equipment reshape and reflect different image for each eye to mimic how our eyes see the world. The VR contents include 360-degree videos of existing locations, entirely computer-programmed artificial environments and Augmented Reality (AR), the combination of those (Arvanaghi & Skytt 2016). The key factor is that the user is “inside” the virtual world: at least capable of observing it or, by attaching hand controllers, actively participating and influencing the incidents (Pänkäläinen 2017).

Travel industry sells visions. Visual experience is a powerful selling tool. This is where VR comes along: it can be used for inspiration and demonstration (Krau 2016). The potential customers do not have to imagine what the destination might be like: they can see it. With VR they can familiarize themselves with the landscapes, activities and accommodation options of the potential destination. As previous studies have proved, even the best-quality VR experience does not replace the need for true traveling but actually increases people’s desire for the real experience (Ragavan 2017).

For Singaporeans, who have never experienced anything similar, Virtual Reality can be used to demonstrate things that are hard to explain.

In Singapore the traditional brick-and-mortal agencies are still popular – this “try before you buy” VR experience can be used as bait for potential customers to step into a physical store and furthermore increase the number of travel bookings.

This marketing study was conducted in Singapore on 25.2.-17.3.2018. Data were collected by a qualitative research method: customer surveys and semi-structured interviews. Local travel-agency representatives were interviewed and answers from individual Singaporean consumers were collected during a travel fair by using customer surveys.

Picture 2 Singaporeans exploring new travel destinations in bustling travel fair stand.
Photo: Nelli Jokelainen.

Results

In the study all respondents first tried Aurora demonstration by using Samsung Gear VR headset. Thereafter, they answered questions concerning the Virtual Reality, the product and its usage opportunities in travel marketing. Also more general questions concerning Singaporeans as travelers and why they travel to Finland were asked. The data consisted of the total of four interviews and 37 customer surveys.

Singaporeans are wealthy, highly-educated and speak English comprehensively. They are experienced travelers who constantly seek for new travel destinations. During their travels, they like to invest on experiences and relaxation as well as spending time with family. For Singaporeans – who come from a tropical, bustling city-state – peaceful, Northern Finland can provide them something different and exotic. According to the research results, the main reason why Singaporeans travel to Finland was Northern Lights. Other reasons mentioned were Santa Claus, glass igloos and the opportunity to experience winter/cold weather and snow. Finland’s travel marketing in Singapore – the concept of Santa Claus and the Northern Lights – is successful: Singaporeans come to Finland especially for Lappish experiences.

Does VR experience increase the desire to book a trip?

According to both interview and customer survey results, VR provides a comprehensive and realistic image of the travel destination – it can generate or increase customers’ interest to travel. Over 70 % of the respondents stated that experiencing the destination in VR would increase their desire to book a trip. The VR experience needs to be high-quality, have interesting elements and reflect the company’s travel products. Based on the results, the middle-aged or older respondents (age 45+) were not very familiar with the VR technology and may prefer the more traditional marketing methods, such as brochures and videos.

70 % of all respondents stated that the Aurora experience increased their desire to book a trip to Finland. They want to see Northern Lights with their own eyes: “It feels unreal and is a step towards seeing the real thing”. It seems that VR indeed increases the desire for booking, especially among millennial consumers (age 18-34).

How can this VR product be developed in order to use it in travel marketing?

The colors and active movements of the Northern Lights in Aurora were complemented. Respondents would develop it with more contents, such as interactive elements and more coverage of Finland as a travel destination. Interactive elements could include animals, the ability to do something by hands and human interaction – there could be reflections and recommendations from other customers or a company guide explaining the key viewpoints. The experience could provide a virtual tour of the company’s travel package: including the change from day to night, participating activities and show the accommodation: “You could see Northern Lights from the inside of an igloo. When you go out, how it is like to step on the snow. And the reindeer, the whole experience in Lapland.” Some also wanted to see other destinations such as Antarctic, Iceland or Africa in VR as well.

The development suggestions were clearly related to the travel destinations. It seems that there is a demand for trying the travel destination in VR before booking: “will be helpful to have teasers of places of interest that may be visited in a travel itinerary”. In its current state, Aurora can be considered as a platform on which companies can build their full marketing experience.

Are travel industry businesses interested in using VR in their marketing?

For a travel company to be interested in using VR in travel marketing, it needs to bring them advantage. 67 % of the respondents stated they would visit a travel agency if they could experience travel destinations in VR there. Those respondents who would not visit travel agency specifically to try VR still expressed their interest to travel – so if they visit travel agencies for other reasons, they may still try it and therefore it may influence positively to their booking desire.

VR can bring competitive advantage since it influences customers’ decisions to visit certain travel agency and make bookings. Travel businesses were clearly interested in using VR in their travel marketing: two interviewed companies had already invested in VR marketing campaigns. Two other companies expressed their interest as well, but the costs and competition need to be considered: the product cannot be similar to what competitors have. The customized VR software product with compatible devices are an expensive investment but non-recurring, and Return on Investment can be foreseen. The research findings show that the marketing advantages of VR are acknowledged.

Summary

According to research results, it is clear that there is a demand for VR in travel marketing. VR products are useful when marketing Finland to Singaporeans. Virtual experience can act as an incentive in travel fairs and other related events. VR shows the Finnish environment, nature and Northern Lights in a more immersive, comprehensive and realistic way compared to other marketing methods. For Singaporeans, who have never experienced anything similar, VR can be used to explain the phenomenon: “It is very hard to explain people how Northern Lights is: how it moves, what shapes it is, how it comes and goes in two seconds, how it suddenly comes very bright. Things like this, it is very hard. So the best way to do is Virtual Reality.” With updates and improvements, VR software is a long-lasting investment that suits to different travel products and never expires. With Virtual Reality the travel industry looks to the future.


The Master’s thesis of Nelli Jokelainen can be read in Theseus:
Jokelainen, N. 2018. Bringing Singaporeans to see Northern Lights: how can Virtual Reality be utilized in travel marketing? Tampere University of Applied Sciences. Master’s thesis. https://www.theseus.fi/handle/10024/146015.


References

Arvanaghi, B. & Skytt, L. 2016. Virtuaalitodellisuus – tulevaisuus on täällä tänään. Released on 17.5.2016. Tieteen Kuvalehti. Read on 24.4.2018. http://tieku.fi/teknologia/vempaimet/virtuaalitodellisuus

Krau, A. 2016. Virtual Reality: What potential for travel industry? Released on 7.6.2016. TravelThink. Read on 11.11.2017. http://www.travel-think.com/virtual-reality-what-potential-for-the-travel-industry/

Liljedahl, L. CEO & Co-founder. 2017. Interview on 2.11.2017. Interviewer Jokelainen, N. Tampere

Pänkäläinen, T. 2017. Virtuaalitodellisuus – 108 miljardin markkina vuonna 2021? Released on 15.1.2017. Virtuaalimaailma. Read on 24.4.2018. https://www.virtuaalimaailma.fi/virtuaalitodellisuus/

Ragavan, S. 2017. Virtual reality in travel marketing: Passing fad or here to stay? Released on 21.4.2017. Travel Wire Asia. Read on 12.1.2018. http://travelwire-asia.com/2017/04/virtual-reality-travel-marketing-passing-fad-stay/

Visit Finland. 2018. Spending by international visitors increased by 20% in 2017. Released on 16.3.2018. Read on 24.4.2018. http://www.visitfinland.com/travel-trade/newsletter/spending-international-visitors-increased-20-2017/


Authors

Nelli Jokelainen, Bachelor of hospitality management, Master of business administration (MBA)

Leena Mäkelä, Ph.D, Principal Lecturer, School of Art, Music and Media, Tampere University of Applied Sciences

Photo: Iceflake Studios Oy (Screenshot of Northern Lights in Aurora VR experience.)