The world is a complex place and we are living in particularly complex and tumultuous times. We’ve looked on plenty of occasions at different trends from the spheres of technology, sociology and politics. We do this in an effort to predict and outline how these trends are going to impact the travel industry. Then we think of ways startups can adapt to meet those challenges.
However, we’ve never looked at the big picture and tried to pull all of the different strands together. Fortunately, that’s been attempted for us by an Amadeus & A.T. Kearney report, titled ‘What if? Imagining the future of the travel industry’.
The report identifies several risks and trends that the travel industry should heed over the next decade.
It even goes as far as to offer four possible world scenarios that could come to pass, outlining how the travel industry would have to adapt to each. Sounds interesting, right?
So let’s get into it.
What are four possible futures for the travel industry?
Four possible futures laid out by the Amadeus report
The vast chasm between these possible travel industries of the future reflects how pivotal the current moment in time is. It feels as though we are at a crossroads; faced with huge challenges: climate change, mass migration, rapidly advancing technology, economic inequality, terrorism, populism, isolationism, scepticism over open borders. All of these issues will shape our relationship with travel in the years to come.
And there’s no telling how things are going to end up. Although we can rely on the continued advancement of technology, we have no way of knowing in which ways it will be applied. Will it lead to seamless travel, a more personal approach and reduced security fears? Or will it be deployed to restrict travel and shepherd the mass market toward a common theme?
Here are the four futures, based on the conflict between seamless travel, fragmentation, personalised opportunities and mass market groupthink.
The Picasso scenario
The Dali scenario
The Bosch scenario
The Warhol scenario
Will Tech Giants Have a Big Role to Play in the Travel Industry of the Future?
One interesting result of the Dali scenario is the assumed influence of technology giants like Apple and Google and Facebook. In a seamless world dominated by innovation and integration, they seem like likely candidates to monopolise the travel industry.
Google, in particular, has already stepped into the travel space to an extent with a series of investments in flights, hotels and destination services. So how worried should traditional travel agencies be? Will the current ‘gatekeepers’ take an even bigger chunk of the pie as their role in travel sales increases? Will they take over transactions and become super travel agencies?
According to the founder of Innovation Strategies Miguel Fernandez Diaz, the answer is no, probably not.
There are two reasons for this. The first is that stepping into selling travel packages will lead to technology giants directly competing with their own customers. After all, travel providers struggle without ranking highly on search engines and popping up on social media networks.
The gatekeepers already make a fortune by charging travel operators for various types of marketing and general exposure. The financial gains to be made by stepping directly into the market may be undercut by the lost advertising revenue from companies put out of business.
Second, moving from being the gatekeeper to actively putting together and selling travel packages adds a layer of complexity and responsibility that can be off-putting. Selling travel packages brings with it liabilities and a duty of care to customers – new burdens that might not be appealing.
In sum, it’s unlikely that the incentives outway the drawbacks for the world’s technology giants.
But that doesn’t mean that they won’t grow more influential in the travel industry, even if they aren’t moving into direct sales. That’s because the way things stand, giants such as Google hold the fate of many travel operators in their hands. If you’re not ranking highly in search engines for your chosen market, it’s going to be difficult to get off the ground.
In the future, the increased role of artificial intelligence and personal assistants, such as Google Home, Siri and Alexa, will present the real challenge to travel agents. These personal assistants will know ever more about our lives, our taste, our habits, our finances and our calendars. It’s easy to imagine a world in which our free time and holidays are planned out by these increasingly influential assistants.
The challenge for travel operators then will be to connect to these platforms as efficiently as possible; to, as Skift says, “look for ways to complement the tools that technology platform giants provide consumers, whether that’s providing richer travel content or marrying data sets to provide more personalised service during the booking process.”
One interesting consequence of tech giants venturing into the travel industry could be the loss of neutrality from search engines. If Google Home is planning your trip for you and offering suggestions based on your history, the function of the search engine has evolved and will be significantly more intimate and personalised. Sure, that’s a good thing, but is it fulfilling the promised function of these engines? Would it be giving you access to all the possible options, or just assuming the right ones?
As we become more open to technology and the integration of information, the power of tech giants and their assistant features will become increasingly dominant. So it’s perhaps not the case that travel operators should be fearful of a direct rivalry. The fear should more be about 1.) getting left behind as travellers save time by going through virtual assistants and 2.) not being able to connect efficiently and appeal to these new mediums.
Nobody can predict the future of the travel industry
As we’ve explored in many of our past articles, the travel industry is very much at the whim of emerging trends in technology, economics, geopolitics and society in general. For that reason, it’s impossible to say which of Armadeus’ future worlds will come to pass.
However, some things are clear and some challenges are inevitable. The growing influence of technology giants in the travel process is one of the obvious ones. While it may not come to pass that these ‘gatekeepers’ actually sell their own travel packages, there’s little doubt that they stand to become more influential regarding travellers’ purchasing decisions.
While no travel operator can predict what the future holds, one thing they can do is prepare for a more technologically advanced world in which customers are better informed and better connected. There may not be an appetite for a complete one stop travel shop that tech giants could create, but providers should seek ways to best complement smart assistants, search engines and other tools to stand the best chance of succeeding in tomorrow’s world.