Never before has the travel industry witnessed such high growth. Furthermore, analysts expect this velocity is will continue for at least another 10 years.
To predict the future of the travel industry, there are 5 key factors that require attention. Despite the new capabilities these developments will bring, they will arise at such speed that they are likely to manifest as disruptors as much as improvements. Therefore, in order to sustain high growth, it is paramount that businesses are aware of the variables that are likely to shape the future of travel distribution.
1. Increased consumer expectations
A principal disruptor in the growth of the travel industry is consumer expectations. As capabilities evolve in the wider retail sector, consumer expectations will become higher. When other retailers provide greater choice, inspirational marketing, frictionless purchasing, and personalized service, these expectations will translate into the travel industry. As such, the travel sector must keep in step with these customer service developments.
2. Mobile devices and micro-moments
Cell phones and tablets are already shaping today’s consumer market. Mobile is displaying particularly rapid growth in emerging markets, where it is becoming the booking device of choice. Consequently, their role as a major disruptor in the travel industry will continue to grow. Their portability is modifying the way customers interact with the industry, driving demand for 24-hour services both prior to and during the trip. Micro-moment searching and booking is projected to grow, with high-speed content consumption and snap decision-making becoming an integral feature of a customer journey.
3. Big data and AI
Today’s computer processing power allows for real-time analysis of consumer preferences and search behavior. Virtual assistants are already a ubiquitous feature of mobile devices. Increasingly, tech companies are integrating artificial intelligence into messaging apps to interact directly with customers. As such, the growing sophistication of virtual assistants is shifting greater power towards AI developers and big data analysis interpretation.
4. Industry regulation
National and international legislation determines the regulations governing competition across the industry. For example, display neutrality and content parity are aspects of the online landscape that are currently legislated. A significant disruptor in the coming years will be the extent to which states and transnational organizations intervene in the market. This could limit the influence of large airline corporations, aggregators, OTAs and travel management companies. In addition, the role of ‘gatekeeper’ websites like Facebook, Google, and Twitter that profit from biased advertising will be determined largely by state legislation – especially in light of recent ‘fake news’ scandals.
5. Travel risk
As implied above, news media is influencing customer behavior in a manner never seen before. For instance, consumers are becoming increasingly aware of travel risks, such as natural disasters or terrorist attacks. This presents a significant disruption for travel distribution, as demand increases for notionally ‘low-risk’ destinations, safer travel dates or accommodation with good safety reports. Concurrently, tighter security at travel hubs can cause delays which increases demand for restaurants, shopping offers, and lounge facilities.
Staying in step with high growth
Alongside these 5 disruptors, other drivers within the travel industry will promote high growth. These include shared economy models; developing advertising strategy; product differentiation; and industry consolidation. As a result, it is crucial that organizations develop sustainable operations and marketing strategies to keep up with competitors in a rapidly evolving market. If one thing is certain, the future holds many exciting and unexpected developments in travel. However, one thing businesses can expect is that the trend of high growth will continue.