As the travel industry moves through massive transformation, 2020 will be a year when the sector takes a giant step forward, as stakeholders get serious about innovation and firmly put the customer first. Here are my top five predictions.
1. Rise of tech giants in travel
As Henry Harteveldt highlighted in 'Maximising Revenue Across the Traveller's Journey', a report commissioned by Enterprise Ireland, a large majority of customers are not satisfied with the travel booking process, as they feel they need to shop across too many websites to find the services they require for their trip.
Amazon and Google are two tech giants that could offer a customer-centric flow with all the trappings of personalised 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 its 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.
2. Airbnb dives deeper into travel services
There is no doubt that 2020 will be a huge year for Airbnb, with its projected initial public offering (IPO) in Q3.
While a successful IPO will dominate the headlines, so will its 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 its S1 filing that it is still innovating, and thus drive broader appetite from the markets. Once it dives 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.
3. 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.
4. Ancillary everywhere
CarTrawler recently highlighted in its ancillary revenue yearbook that such revenue had remade the business models of the global airline industry, representing 10.7pc 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.
5. 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 versus transactions. Amid heightened 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 must be more meaningful and encapsulate every stage of a trip, from complementary offerings to immediate customer service, fast-track services through loyalty programmes, or otherwise. Firms that put the customer first, drive personalisation and know what the customer wants before they know it themselves will ultimately win.
For more insights into the industry's biggest trends, download the thought leadership paper: irishadvantage.com/travel-tech-whitepaper