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VR in travel: show us the money

We’ve seen a large rise in interest in deploying virtual reality from the travel sector with companies as diverse at Expedia, Marriott and Quantas pitching in with early innovations in the travel booking, hospitality and airline sectors respectively. VR’s appeal from a travel perspective is not that difficult to see.

As a service, travel is what academics like to call an ‘experience good’, in that its value can only be truly determined by consuming or experiencing it. A bottle of wine is the classic example of an experience physical good, and travel is equally so in services. In the case of wine though, it’s possible to allow people to sample the product before purchase, and in-store wine demos are highly effective in this regard. However for travel this is not practicable, from a logistics or price perspective. Hence the high reliance on recommendation sites among customers to use reputation as a gauge to likely quality.

However VR is set to disrupt this process. The ability to experience vicariously a destination offers nimble marketers the opportunity to steal a march on competitors. While a recent study in Italy found that VR was not a substitute for travel, its advantage lies as a sampler at the choice stage with examples including Norweigan Airlines promoting their routes to the US, or in the case of Australian tourism where a commissioned a series of online VR experiences was found to consider places they would not otherwise have done, and led to a 64% rise in online engagement.

Moving from the web to an live retail context – the travel agency space – Thomas Cook report that one in ten users of the technology at its Bluewater [Kent] store is booking a holiday there and then. A VR helicopter tour of Manhattan boosted revenues for the real thing by 190pc. While these metrics are undoubtedly impressive, irrespective of how the technology is refined, we need to see more evidence-based studies confirming VR effectiveness before we see a more rapid adoption.