Have you ever wondered the ease with which you can plan a vacation today? Gone are the days when you had to decide on a vacation, months in advance and initiate bookings for flights, hotels and travel packages. Today, aggregators such as Expedia, Airbnb, booking.com and Uber have disrupted air-travel, inter-city commute and hotel bookings. While the average cost of travel has fallen (in real terms), the options available to the global traveler has increased. The travel and tourism industry is one of the fastest growing industries in the world, contributing 2.3 trillion USD directly to the global economy. The industry accounts for roughly 10.6% of the global GDP through direct contributions as well as through ancillary support industries.1 So, what are the key trends that have been powering this shift?
The rise of the middle class in emerging markets has driven tourist exports from countries such as Africa, Asia and the Middle East. These economies will continue to grow at a faster pace vis-à-vis developed markets and will be comparable to European tourist industry in the next 10-15 years.2
Smart Connectivity & Mobility: As the number of unique mobile users continues to increase, mobile bookings would also keep pace. More than one-third of the bookings from major economies of the world comes from a mobile device and expect a seamless experience across various channels and multiple touchpoints3
Personalization and experience-driven economy: 77% of global spend on travel is leisure based.4The millennial traveler/holiday goer today seeks different experiences from leisure travel - basic trips for unwinding from the daily grind to realizing life goals. Personalization has thus become a key differentiator for the leisure traveler and consumer data (location, airport, airline, restaurant and hotel reviews) across all journey stages is used to curate this at a 1-1 level.
Geopolitical developments (events such as Brexit, implementation of GDPR regulations) continue to shape travel regulations and restrictions. According to a recent IATA survey, border control and immigration have the lowest CSAT levels across different phases of travel. Digital solutions of the future will have to address these challenges and come up with new solutions to make this transition painless. 2
So, how are businesses adapting to the changing tides in the travel industry?
The middle-class millennial in emerging markets is very open about defining personalized travel plans and sharing their expectations and experiences in social media. Most players in the industry are finding innovative ways to engage with consumers from pre-trip planning to post-trip feedback. End-to-end customer experience would also be impacted by aspects like border transit, baggage tracking and travel insurance which is why global players are experimenting with blockchain use-cases in some of these areas.
With customer experiences being increasingly driven by cognitive tech, the role of intermediaries (travel agencies) may seem redundant. However, such automation can in turn free a lot of agent/employee time wasted in trivial tasks and enable them to have insightful conversations with customers.
Millennial travelers are keen on broadening their horizons through vivid cultural experiences. The industry leaders of the future will be organizations striking the right balance of providing the best D-I- Y experience, hassle-free travel and value for money. Whether you are an airline, a hotel chain, a travel agency or an online aggregator, the way forward would be step onto a continuous digital mode around building and iterating customer-centric, personalized experiences at global scale.
References
[1] https://www2.deloitte.com/us/en/pages/consumer-business/articles/travel-hospitality-industry-outlook.html
[2] http://reports.weforum.org/travel-and-tourism-competitiveness-report-2017/industry-trends/?doing_wp_cron=1528961423.1951019763946533203125
[3] https://www.travelport.com/how-todays-traveler-has-shaped-evolution-travel
