Máire P. Walsh, SVP Digital Technologies at Enterprise Ireland, describes the big changes disrupting the future of travel tech this year.
As the travel industry moves through massive transformation, 2020 will be a year when the industry takes a giant step forward, as stakeholders get serious about innovation and firmly put the customer first. Here are my top five predications.
Rise of tech giants in travel
As Henry Harteveldt highlighted in Maximizing Revenue Across the Traveler’s Journey, a report commissioned by trade and innovation agency Enterprise Ireland, a large majority of customers are not satisfied with the travel booking process, as they feel they must shop across too many websites to find the travel services they want and need for their trip. Amazon and Google are two tech giants that could offer a customer-centric flow with all the trappings of personalized services and experiences.
Amazon is already testing travel sales in India through a partnership with Redbus, while Google continues to delve deeper into travel with their expanding suite of services to move customers from aspiration to action. It’s not unimaginable for either giant to firmly place a stake in the global travel market as the industry undergoes rapid transformation. The big question is do they do this through build, partner, or buy? One possible hindrance is the greater attention currently being paid to tech regulation.
Airbnb dives deeper into travel services
There is no doubt that 2020 will be a huge year for Airbnb with its projected IPO in Q3. While a successful IPO will dominate the headlines, so will their expansion into broader travel services including owning the sales funnel through offering flights and other services. Not only will this delight customers, it will demonstrate on their S1 filing that they are still innovating and thus drive broader appetite from the markets. Once they dive further into ancillary revenue opportunities, the company will witness explosive revenue growth and profitability. With the first two points, it will be interesting to see how OTAs – in particular Expedia and Booking – will innovate to drive loyalty and differentiation. One likely scenario is that one will get bought by a company eager to dominate in travel.
Deep tech accelerates transformation
While it’s becoming more evident that stakeholders who innovate quickly are gaining more market share (for example, Delta Airlines), deep tech (AI, machine learning and deep learning) that can sit on legacy systems will help the industry further transform. Although it’s surprising to learn that even newer players in the industry have antiquated systems, it’s clear that many fail to innovate due to a fear of integrating these systems with new technology. The advent of companies who can bypass these systems makes it possible for stakeholders to finally take advantage of new core tech that will drive customer engagement, cost savings and profitability.
CarTrawler recently highlighted in their ancillary revenue yearbook that ancillary revenue has remade the business models of the global airline industry, representing 10.7% of all revenue. In 2020, it is time for other travel stakeholders to follow suit and take advantage of all the benefits ancillaries can offer. Not only will offering more products and services drive customer satisfaction, it could prove to be the mechanism for hotels and others to finally have tools in place to ensure they can drive direct bookings.
The customer finally becomes king
With so much competition and the ongoing threat of new entrants to the market, customers will finally reap the benefits of interactions vs. transactions. With heighted competition (expect more than just the above players to enter in a more significant way) and a race to earn customers and their loyalty, companies will need to innovate further around customer experiences. These experiences need to be more meaningful and encapsulate every stage of a trip from complimentary offerings, immediate customer service, fast-track services through loyalty programs, or otherwise. The companies that put the customer first, drive personalization, know what the customer wants before they know it themselves — truly be customer first — will ultimately win.
Enterprise Ireland hosts its annual Travel Tech Summit in Westport on 8th April 2020. To learn more about the event and express your interest in attending, email: Maire.Walsh@enterprise-ireland.com.
A version of this article was originally published in the Sunday Independent.