October 25, 2016

Disruption in the Travel Industry: Seven Trends Worth Keeping an Eye On

by Malek Murison

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Plenty is going on in the world of technology at the moment, and it's only logical to assume that much of this will have some, if not a huge impact on the travel industry. Tech trends are already changing customer behaviour and expectations, and over the next decade or so these effects are only going to grow more pronounced. With a little help from a recent London School of Economics report into the future of travel distribution, this week we're going to delve into what's causing disruption in the travel industry...

Disruption in the travel industry

First of all, let's take a look at seven disruptive factors outlined in the report, which are all set to increasingly influence travel sales across the next decade.

Disruptive factors in the travel industry - Now and in the near future

The way that customers make travel bookings is facing a range of disruptions, and it goes without saying that agencies are going to have to re-examine their business models if they want to stay ahead of the game. The LSE report identified five major disruptive factors. These are:

Changing traveller expectations

Consumer expectations have changed dramatically in recent years. 'Change' might even be the wrong word. Expectations have grown. Advances in technology, the proliferation of social media and the increasing ease with which goods and services can be purchased online, have all made the travel industry more dynamic and high pressure. Agencies are fighting to attract customers suddenly exposed to a huge amount of choice, and frictionless purchasing, inspiration, and personalised services are now all becoming the norm. If this isn't going to change the way travel agencies do business, we don't know what will.

An upsurge in mobile

The portability and increasing ease with which users can research and book trips on the go is causing a huge change in the way travellers interact with the industry. On top of that, it's driving demand for 24-7 bookings and customer service. Mobile is also seeing significant growth in emerging markets, where it's fast becoming the way to book over more traditional methods.

Big data and Artificial Intelligence

The huge amount of customer data at the disposal of travel agencies is allowing for more in-depth predictions and behavioural analytics than ever before. Not only that, modern-day computing power is also developing to deal with traveller requests in real time. Intelligent virtual assistants are increasingly being integrated into mobile devices and messaging apps, making truly on-demand service a genuine reality, not to mention a key driver of disruption in the travel industry.


It goes without saying that regulators and governments have the power to influence the way the travel industry works. Whether it's through enforcing laws on competition to restrict the burgeoning power of the sharing economy, or dealing with huge search engines that effectively control the flow of information. Over the course of the next ten years, the extent to which regulators intervene and limit the dominance of huge airline carriers and mega online travel agencies (OTAs) will be hugely important to the chances of success for smaller startups.

Risk and uncertainty

Terrorism and disruption in the travel industry
Security in Paris during Euro 2016

It's no secret that traveller behaviour and ultimately bookings are impacted by wider global events. These include natural disasters, terror threats or attacks, and currency fluctuations. For a look at how politics affects the travel industry you only need to look at the fallout from Brexit or the recent terror attacks in Paris. Although risk and uncertainty are among the most difficult-to-predict trends in travel, what we can say for sure is that certain destinations will continue to be affected. North African hotspots such as Egypt and Tunisia have both been hit hard by terror attacks in recent years, while political crises in Turkey has cast doubt over the safety of another usually popular destination. As a result, we may see demand rise in traditional low-risk destinations, as well as a boom in staycations.

Virtual Reality and Robotics

How will virtual reality cause disruption in the travel industry

It might sound like a case of technology interfering where it has no business, but it turns out that virtual reality and robotics could have a big part to play when it comes to disruption in the travel industry over the coming years. Virtual reality is allowing agencies to effectively transport potential customers to their destination of choice, take guided tours of hotels from thousands of miles away, and immerse themselves in prospective accommodation. Robotics, on the other hand, is heralding in the dawn of a new age of customer service. When robotic tourism assistants can speak multiple languages and have access to all the information a tourist could possibly want, where will that leave traditional staff?

The Sharing Economy

It looks like the sharing economy is here to stay. If anything, traditional travel agencies are going to need to accept further losses in revenue to individuals taking the power of travel into their own hands. Startups that successfully integrate the sharing economy into their products and customer propositions will be able to get on board and ride the same wave in the coming years.

Disruption in the Travel Industry: The Continued Rise of the Gatekeepers

Something we touched on in the previous section was the rise of the Gatekeepers, the tech and industry giants that have and will continue to dominate search traffic and customer targeting online.

This trend, if left unchecked, will continue to play into the hands of the big players and those that work with them in the years to come. There are two ways that tech giants' domination and continued growth will impact the travel industry. First of all, we've got the development of virtual assistants. We all know that virtual assistants have the potential to make the travel booking process easier for customers. Search times will be reduced and bookings will be more personalised. This in turn will be perpetuated by the huge amount of customer data that the tech giants will have. More data means smarter suggestions, more targeted advertising and a better experience for the customer in the long run.

It's also likely that bookings will become more intertwined with social media sites. We already search for second opinions and share holiday snaps like they're going out of fashion, so it's only a matter of time before travel services become increasingly integrated with instant messaging and social platforms.

With tech giants such as Google and Facebook having so much power in terms of directing traffic, targeted advertising and data collection, airlines, hotels and travel agents are going to have to work harder than ever before, possibly seeking collaboration with peers or even with the big players themselves. New business models will need to be explored, and working with, instead of against, the gatekeepers may be the best way forward for ambitious startups.

Build a travel marketplace that can stand the test of time

In case you didn't know already, here at Travelshift we build travel marketplace software that takes ambitious startups to the next level. Our custom-built solution allows you to setup a travel marketplace capable of dominating your chosen niche. All you have to do is aggregate suppliers and bring in potential customers.

That might sound pretty simple. Well, that's because with Travelshift it really is. Our marketplaces are community driven. This means that you can harness the power of a passionate traveller community to produce and publicise truly engaging content that attracts your target customers. On top of that, our host of proprietary SEO features helps you rapidly grow a marketplace that's discoverable, scalable and ready to take on big competitors from day one.

If you're interested in finding out more about our software solution, get in touch today.