The future of travel industry: trends and predictions. Part 1

The digital travel industry is making a dramatic shift over the next 3–5 years. For almost 2 decades meta searches and OTAs dominated the market with desktop based search. Now the travel business must play by mobile tech rules.

In 2–3 years, online travel bookings will be dominated by the companies that create the best Mobile experience. For companies that are web and desktop based, that is a massive change. Searching millions of flights and hotels across 7 tabs on your desktop browser has worked for years. That experience changes on a 4 in. mobile screen.

That means that the mobile experience won’t be driven by search aggregators like in the years past. Instead it will be driven by companies that best leverage multiple innovations:

• data science,
• artificial intelligence (AI),
• predictive analytics,
• chatbots,
• voice commands,
• automation and personalization,
• augmented reality (AR),
• virtual reality (VR), etc.

If you are a company that exists primarily on the web with mobile as a supplementarity platform, then you need to rethink your priorities. In 2017 mobile traffic exceeded the desktop one for the first time ever, and this is not likely going to change, so customers will engage with your product primarily on mobile over the next 3–5 years. If you are a travel startup, then mobile-first and data science-based is going to be the focus for beating the legacy meta searches. Other innovations like blockchain and chatbots will definitely find their way to the travel business too.

For example, there is a startup titled Roadie that uses the mobile application to track the parcel delivery process. Are you going to Idaho from Iowa and can deliver a package on the way? You can register in the app and earn some cash by lending a helping hand. There will definitely be more such projects in the next 3–5 years and they can transform the way people travel, send their luggage and book their rooms.

AI is actively used in travel business to predict the best routes for business trips and buy the cheapest airline tickets, complete with booking the rooms via AirBNB and renting the cars online. These algorithms are used by tech startups like Booking, Kayak and others.

Globalluxsoft decided to collect the firsthand comments from the travel industry players and experts, to find out their opinions on the digital trends and predictions for the travel business evolution over the next 3–5 years. We are grateful for their feedback and list the answers below.

Gillian Morris, Founder at HitList:

“AI will be used to provide more personalized user experience and offers. Unlike human agents, it will never become frustrated and will only improve over time.

The majority of tourists prefer AirBNB to renting hotel rooms already. Such digital trends are surely here to stay, so we will see if the hotels can adapt.

By 2020 almost all travel business bookings are expected to be done from mobile, so paying attention to your website’s mobile version should be your topmost priority.

Millennials continue to search the ways “off the beaten path”, so new digital tech applications are sure to emerge and affect the travel industry as a whole.”

Joen Schauman, Founder at TripRepublic:

“The travel industry is currently in the process of building new ecosystems based on the latest digital tech advancements. All of the key market players are keen on getting more of the travel lifecycle, namely to increase the customer engagement level and keep the customer for longer. They want to get more of the pie and they know they need to build new things to do so. This is what drives constant effort for innovations in the travel industry.”

Anthony Collias, Co-founder and CCO at CityStasher:

“A lot of travel problems are around efficiently predicting future outcomes and matching two sides of a marketplace — this is very obvious in pricing issues, an efficiency of aircraft, etc. AI has the potential to massively improve these functions and effectively reduce costs to travelers!

Blockchain is still a very immature tech, I don’t see it gaining a foothold at any point in the next 5 years. In the next 25 years…maybe passports will be obsolete!

Chatbots (written and voice) are a trend I think is a bit overhyped. They have their place — answering simple, direct questions, providing FAQ type questions, etc. However, for tasks such as selecting flights, accommodation, routes, etc, I actually think this won't catch on very well. We speak and listen much slower than we can read and type and a lot of info is better represented visually. My bet is that there’ll be a blend, not a substitution.”

Brandon Macon, Founder at Macon Travel Easy:

“ My company earns the 5 star reviews that has been one of the leaders to why Airbnb is preferred over hotels. This year with the help of Artificial intelligence, we want to scale our abilities to do that. We are consistently referred to as the best Airbnb experience ever, please see for some of our reviews. We will eventually create a platform that allows other to use Airbnb and other platforms without the fear and headaches. We will create tools to allow others to use the sharing economy like we have.

Now the digital tech has moved on, and the people use smart air conditioners, smart lights controlled through Amazon smart speakers, etc. We are now looking for the patterns of usage, which will help us create new workflows and earn more money. You can build apps for Alexa or Google Home and automate lots of tasks related to real estate and travelling. Thus said, I think the travel industry will definitely transform in the next 3–5 years to provide smarter user experiences.”

Mike Cartwright, CTO at DigitalTown:

“Today the travel industry is dominated by a small group of very large companies that control the majority of hotel search traffic. This means that if you are an independent property, it’s really hard for you to attract customers directly. The dependency on traffic from third parties means that you pay a premium for each reservation. We have seen examples of marketing fees reaching as high as 40%.

Emerging technology is going to change that. The DigitalTown (www.DigitalTown.com) project is aimed at turning every city into its own Expedia, AirBnB, OpenTable, Amazon, and Paypay — branded in the identity of the city and powered by a local search engine. Searches prioritize local independent businesses over global chains.

Visitors to any city will be able to use the DigitalTown App as a simple way of connecting with locally owned hotels and businesses. Using technology for good, we will transform the user experience in the travel business in the next 3–5 years while better supporting local economies.”

A.J. Dunn, Co-founder at Abroaders:

“We will see travel business model innovations that put a hell of a lot of pressure on “the old guard”. Bigger/older companies will be exposed for not being as capital efficient as they should be. We will see AI used to provide much better personalized user experiences. Let’s say there is a traveler with $1,500 for 6-day itinerary including airfare. Today, the travel business consultant will try to squeeze such a person into some offer. In 3–5 years, AI will rapidly compose the routes based on the customer’s preferences and previous travels.

The next big thing is as follows: there is a cohort of startups that are aimed to disrupt the market of airline loyalty programs. Big airlines are slow with updating their infrastructure and policies, and as of now their loyalty programs are horribly overvalued. There is a technical possibility to offer a flight ticket for 1/10 of its price and and ALSO make 10X the money on that transaction, because they facilitate the booking of flights with consumers miles.

There are $300 Billion worth of frequent flyer miles in circulation, with only a small fraction being redeemed. When the redeeming of miles gets really easy, you’re going to see these liabilities for the loyalty programs be realized. I talked with the innovation director at KLM about this, and they don’t really have a plan for if that happens.”

Mike Woodrum, Co-founder at Anjin Secure Car:

“I do not see AR or VR making a great disruption in the travel industry in the next 3–5 years, at least not in their current shape. These experiences are still too cartoonish, and both the travel business operators and the customers are used to working with 2D pictures and texts to describe the trips and places. Finding the best routes abroad used to be a problem — now you can spend 5 minutes on Yelp or Google maps and get all the reviews and directions you want.

However, if Snap or Instagram find a way to integrate AR/VR into their user experiences, this might create a new hype wagon, and the travel operators will surely hop in. Just imagine the impact of your photo made on a beautiful beach, hand-to-hand with a celebrity…Giving the viewer some enhanced way of experiencing that perfect beach scene through a celebrity or influencer could be significant. I just don’t see this be travel lead — instead smart travel marketers will figure out how to hitch onto this wagon.”

Clarissa Gunawan, CTO at PointGrey:

“I believe that people would travel more, due to the increasing number of middle class citizens, who can easily afford to travel. They are probably going to focus on how to make their traveling easier. For example, the use of security technologies as Nest is accommodating for both travellers and renters, as it can easily give sense of security of belongings to both parties.

AI would probably dominate, as they can translate different languages, suggest recommend places to go and eat etc. Chatbots would only be good if the personalization AI can effectively pinpoint the guest’s wants and needs. I think that there will be a good mix of digital and digital detox travelling. If I was on a business trip then I would like a full digital convenience. On the other hand, if I was on family vacation, I want a digital detox.”

Mehdi Tanouti, CEO at RoadMate:

“We believe the next few years will see the rise of pay as you go services, such as undockable bikes, electric scooters and similar small electrified vehicles in major cities in the world. As to how users will interact with those new transportation options, I believe that people will simply use the best mobility aggregators capable of giving them the best option there is out there.

I don’t think Siri or similar voice-based interface will play a big role unless the mobility aggregators themselves decide to equip their systems with such a capability, or if Google/Apple /Amazon decide to enter the travel industry. So far, we see Uber developing autonomous cars, and even drones, so there definitely are big changes ahead.

Ultimately, too many transportation options lead to confusion from the user perspective, unless and AI can help aggregating all these options and digest the information to only present the user with the mobility option that better fits their needs. That is precisely what we are working on at the moment at RoadMate.”

Théophile Berlioz, COO at Revolugo:

“The travel booking process will be heavily simplified thanks to a more design-focused mindset. The ultimate goal is to make it one-click. Just as we trust our GPS enough to blindly follow it, we will follow travel recommendations. Time for this change has come, traditional OTAs sell the way they did 10 years ago and the access to global travel hotel and flight inventory is getting easier for travel startups. The next generation OTAs will have an incredible ability to gather data from different sources, structure them and train the AI algorithms to get the most out of them. These skills will be decisive to win the one-click booking race.”

Final thoughts on the future of travel industry

This is not the end of the topic, so expect part 2 of the article on the future of the travel industry quite soon. Thus said, a variety of startup founders and C-suite executives believe the digital tech will heavily impact the future of the travel industry. They might be right or wrong, we will find this out quite soon, as three years is quite a short term, actually.

How do YOU think the travel industry will evolve? Let us know what’s on your mind!