Travel Industry

Part
01
of four
Part
01

Travel Industry - Future Trends

Three future trends, as predicted by experts, expected to shape the travel industry in the next 3-5 years, include increasing family travel, increasing use of AR/VR/AI, and increasing solo travel. Below are the explicit findings on the request.

Travel Industry - Future Trends:

1. Increasing Family Travel:

Overview of the Trend

Why it is Considered as a Trend

How it is Affecting the Industry

Examples of Apps that are Leaning into the Trend

2. Increasing use of AR/VR/AI:

Overview of the Trend

  • According to Your Story report, there has been an emerging trend of increasing usage of AR/VR/AI in the travel industry.
  • For instance, VR can be used by the user/traveler to have a virtual trip to a place as if he/she is visiting the place in person. For AR, the user/traveler can have smart applications on his/her device that provide information on history to the latest stories about the place he/she wants to visit.

Why it is Considered as a Trend

How it is Affecting the Industry

  • The utility offered by AR/VA/AI offers immense services such as in-built intelligence, virtual guide, and information about tickets, rides, and accommodation amenities to the consumers.

Examples of Apps that are Leaning into the Trend

3. Increasing Solo Travel:

Overview of the Trend

Why it is Considered as a Trend

  • Solo traveling is expected to grow among a wide variety of consumers ranging from young singles to widowed seniors.

How it is Affecting the Industry

  • According to Revfine report, solo traveling is no longer unusual, and its needs are diverse; thereby, travel companies need to realign to cater to such requirements.

Examples of Apps that are Leaning into the Trend


Research Strategy:

We started the research by directly searching for industry reports, market studies, articles, and media publications related to future trends expected to shape the travel industry in the next 3-5 years. The idea here was to find information published by industry experts that would provide insights that can answer the research questions. We came across reports/articles published by sources such as Travel Daily News, Your Story, and Revfine that provide information on trends affecting the travel industry in the next 3-5 years. Additional, sources such as Budget Travel, Tortuga Back Packs Blog, and Family Vacation Critic, provide examples of apps leaning into the trends above.

Part
02
of four
Part
02

Travel Industry - Current Trends

Some of the current global trends surrounding the travel industry are personalization, use of chatbots, voice search, blockchain technology, and use of data/artificial intelligence (AI). Complete details about each trend are presented below.

TREND #1: Personalization

Overview of the Trend

  • Most travel brands have been interested in the concept of owning a traveler.
  • Companies are looking to offer travelers more than just airline seats and hotel rooms.
  • Business and leisure travelers are now looking for applications that can act like personal assistants available 24/7 guiding them before, during, and after trips.
  • A personalized approach is now viewed more as an expectation than something extraordinary.
  • Personalization has become a priority among modern trends in the travel and tourism industry.

Why it is Considered a Trend

  • Globally many airlines are providing pre-travel flight statuses and traffic updates.
  • Many apps are offering mobile airport mapping to guide travelers through airports, or better yet, enhance experiences on board with mobile in-flight entertainment.
  • Many progressive brands have already started to introduce customized offerings and personalized services to their clients.

How It is Affecting the Industry

  • The trend is affecting the travel industry on a larger scale.
  • Loyalty to a particular brand is increasingly being replaced by something that could be defined as a traveler’s loyalty to his dreams.
  • Personalization has kept the travel brands working more on tailor-made experiences for their customers.
  • From the decision-making phase to the initial touchpoints to the time spent in accommodation (in a restaurant, or during the phases of activity), personalization is transforming the travel industry.

Examples of Apps

  • Airbnb wants to become not just an app that helps users book accommodation but an all-inclusive travel company.
  • With its relatively new Trips feature, Airbnb lets users experience activities at their destinations.
  • The Airbnb application suggests activities like horseback riding or fishing.
  • The users can see authentic local places recommended by local users.

TREND #2: Use of Chatbots

Overview of the Trend

  • Chatbots are growing at a faster pace within the travel industry and can provide customer service, educate customers, and sell products and services.
  • Chatbots demonstrate topnotch ability to accurately and continuously sort through data and deliver rapid responses to consumer problems or queries.

Why it is Considered a Trend

  • 'Chatbot' has become a buzzword across the travel industry.
  • For well over a decade, the digital revolution has substantially disrupted the travel industry (ex. online travel agents, online flight bookings, web check-ins, etc.).
  • The increasingly ubiquitous use of travel chatbots is the latest instance of that ongoing transformation.

How It is Affecting the Industry

  • The trend is affecting the travel industry by boosting the viewability of the business. Research has shown that over 55% of millennials are inclined to positively view businesses that use chatbots.
  • The industry is witnessing a demand for platform-agnostic chatbots that are easy to integrate, scalable, secure, and reliable.
  • The chatbots are evolving as a key peg of the digital experience strategy of the travel ecosystem.
  • Research shows that chatbots have immense potential to provide seamless, personalized user experience, helping the travel industry to scale horizons.

Example of App

  • Hipmunk is an online travel company located in San Francisco.
  • Its AI-powered chatbot assistants for Facebook Messenger, Slack, and Skype allow users to ask Hello Hipmunk questions such as "When is the best time to go to Iowa from Washington?" or "What is the cheapest hotel chain in Florida?"
  • Hello Hipmunk works for group chats too, so planning family trips is possible without leaving the chat room.

TREND #3: Voice Search

Overview of the Trend

  • Today, many people use voice to search within the travel industry.
  • Travelers are becoming a lot more comfortable using voice search for their travel purpose.
  • Developments in voice search technologies have brought big changes in how we search and book travel.
  • Travelers are now finding a flight using an Instagram photo, ask Siri to check our flight updates, and speak to Alexa to search for car rentals or hotels.

Why it is Considered a Trend

  • One in three travelers across the globe is now interested in talking to a digital assistant to research or book travel according to research by Google.
  • According to Digital Travelport, voice search was also predicted by the experts as one of the trends that will gain traction in 2019.
  • Over the last two years, voice search grew to mainstream adoption, and many travel brands have started to experiment with voice capabilities.

How It is Affecting the Industry

  • According to Digital Travelport, voice search is making it easier to book and manage trips (maybe even too easy, as one easyJet app reviewer said) and it’s thanks to mobile.
  • Smartphones have become essential tools for booking travel with Alexa, Siri, and Instagram our own personal travel agents ready to find us our next trip.

Example of App

  • Kayak has recognized this trend and lets its users ask Alexa to book flights, hotel rooms, car rentals, and activities as well as to figure out where they can travel on a certain budget.

TREND #4: Blockchain Technology

Overview of the Trend

  • The travel industry is leveraging the potential of smart contracts on blockchains.
  • Smart contracts can help people exchange money, property, shares, or anything of value transparently and securely.
  • Companies are helping users find accommodation and offer a curated list of hotels.
  • Blockchain is important for the industry of traveling as it relies on data transfer between multiple companies' travel agencies, air carriers, and hotels.
  • With the blockchain, the personal details of a traveler are always securely stored and transmitted across the network.

Why it is Considered a Trend

  • Many travel industry players such as Winding Tree, Cool Cousin, Webjet, Sandblock, Accenture and Travelchain, have already implemented the blockchain technology.

How It is Affecting the Industry

  • Blockchain is turning the travel industry into a very advantageous industry, as this technology can provide more security and transparency to critical touchpoints.
  • A travel blockchain enables travel agencies to send information to different firms. Blockchain is making this operation more secure and more transparent since the responsibility gets spread throughout the whole network.
  • It is also increasing the level of trust among all involved parties.

Example of App

  • The Cool Cousin app is focused on curating travel experiences seeking to provide a better alternative for tourists. The company’s blockchain-based ecosystem incentivizes local guides to monetize their local knowledge to offer a more accountable and authentic tour opportunity for the application’s users.

TREND #5: Use of Data/Artificial Intelligence

Overview of the Trend

  • By using predictive analytics, travel industry professionals are getting the personalization right.
  • Companies within the travel industry are learning more and more about their customers each time the customer uses their apps or utilizes their services.
  • This is made possible through machine learning which is an artificial intelligence technique that identifies patterns in large amounts of data.

Why it is Considered a Trend

  • Over the last few years, companies are using a wealth of data, combined with AI and machine learning, to create great customer experiences.
  • From the release of fare prediction apps to airlines and OTAs presenting personalized offers based on traveler behaviors, data has been the driver behind some of the biggest success stories in our industry.

How It is Affecting the Industry

  • The trend is enabling travel companies to enhance and improve their "personalization" by processing data that provides insights into an individual traveler’s behavior.

Examples of Apps

  • Hopper saves users time, money, and anxiety in their quest to book the perfect trip by offering travelers recommendations and alerts based on highly accurate pricing predictions. The app accesses bookable travel options using Travelport’s next-generation APIs with powerful machine learning to uncover unique deals and packages for a personalized search and booking experiences on mobile devices.
  • Booking.com uses predictive analytics not only in product development but also across multiple departments, including customer service.

Research Strategy:

To find out the trends, we first checked for market reports within the travel industry where we were hoping to find information on current trends and data. Using this approach we were able to find out two trends using the Digital Travelport reports, where we cited two predicted trends (use of data/AI and voice search). While these were backed up by expert analysis, we still wanted to find out if these are currently trending. We then adopted our next approach of scouring through the vast database of travel-based articles and industry trends. The idea here was to find the trends commonly occurring in various articles, publications, etc. We came across many such sources like Haptik, Entrepreneur, and Intrepid Travel, among many others. Using the same approach we were able to identify three more trends.
Part
03
of four
Part
03

Travel Industry - Marketing Trends

Some current marketing trends surrounding the travel industry include the strategic utilization of user-generated content (UGC), an emphasis on personalization, reliance on mobile, compelling visual content, demand for "experience platforms," and other trends discussed below.

Strategic Utilization of User-Generated Content (UGC)

  • According to Movable Ink, one of the digital marketing trends reshaping the travel industry includes the strategic utilization of user-generated content (UGC). Other insights that confirm this trend come below.
  • From photos to video, text, fan art, or just another selfie, user-generated content has become a powerful and very affordable commodity/tool for big brands, small businesses, as well as middlemen in the travel industry. User-generated content is becoming relevant because recommendations from real persons that have tried a product or service and confirmed them right/true are more convincing than regular adverts. Traveling involves an emotional experience, and globetrotters around the world are delivering a constant "stream of stunning, visually-driven UGC" relevant to travel brands.
  • Some apps in the travel sector that are leaning into the trend of user-generated content include Journo Travel Journal, Street Complete, SWISH Video, RunGo, and Wattpad.
  • Streetography is a travel app that leverages "user-generated photos" to displays compelling visual contents such as the preview of neighborhoods to attract travelers. It has maps of the United States, Canada, the United Kingdom, France, Russia, and Australia.
  • About 32 to 39% of millennials do not book a hotel or pay for travel accommodation without reviewing some sources for UGC. About 95% of travelers go through reviews before booking for travel accommodation, such as a hotel room. The average time spent by travelers in reviewing user-generated content to make a booking decision is 30 minutes.

Emphasis on Personalization

  • According to Movable Ink, one of the digital marketing trends reshaping the travel industry includes the focus on personalization. Additional insights that confirm this trend come below.
  • Travel brands are starting to realize that a more tailored approach to marketing is needed to understand the customer journey, as well as what travelers demand at the moment. Thus, travel brands are going beyond the "broad-based target segments" or commodity products and are using personalization to offer the right product, for the right customer, at the most appropriate (right) time.
  • A recent rating of travel apps by Travel and Leisur reveals that the best 50 travel apps include Hello Scout. Hello Scout is a concierge app utilized by boutique hotel companies such as Joie de Vivre, Viceroy, OLS, Waterford, and Provenance to provide personalized services through in-app chat. Travelers/guests use the app to get insider tips (customized/personalized information based on their interest) before booking restaurant reservations.
  • Google Trips is a new travel app that pulls hotel as well as flight data from linked Gmail account of users to automatically design trip portfolios used as destination-specific city guides. The app utilizes consumer behavior record/history "to determine personal preferences," and create customized travel recommendations relevant to restaurants, local events, as well as activities.
  • About 57% of tourists (travelers) feel that brands need to personalize their shopping experience in line with their personal preferences, behaviors, as well as past choices.
  • Best Western (a hotel brand that targets travelers through personalized experiences) recently implemented a personalized campaign to entice users to download its mobile app. The email-based campaign was customized/personalized and made sure users get directed to the right app location store based on their devices (Android users to Google store and Apple users to Apple store). Recommended destinations for travelers were personalized based on their current geolocation, previous behavior, as well as the characteristics of the individual recipient. Consequently, app downloads increased by 143%, compared to similar campaigns implemented in the past, and click-through rates improve by 10%.

Real-Time Data Optimization

  • According to Movable Ink, one of the digital marketing trends reshaping the travel industry includes real-time data optimization. Other insights that confirm this trend come below.
  • Brands in the travel industry are using specific indicators offered by real-time analytics to provide tailored marketing, which influences the buying decisions of travelers that are looking for places to stay, eat, or play. Hospitality brands are providing travelers with dynamically optimized pricing packages as well as deals, thereby putting the right offer before the right customers based on their data at the right time.
  • TripHappy is an application that leverages big-data analytics to search through a collection of about "37 million user reviews to determine" the best accommodation and neighborhoods for travelers to stay in real-time. Results are sorted by price or rating.
  • Sidekix is an app that functions as an urban route planner that helps travelers find the best path to get somewhere. This path doesn't necessarily have to be the shortest route. Sidekix dynamically chooses the best walking directions in real-time based on traveler interests as well as preferences.
  • Geosure is a location-sensitive app that reveals personal security and safety scores in real-time that reflects health risks, political uprisings, as well as environmental threats. The app gives crowd-sourced information regarding thefts, assaults, and other specific incidents that have occurred in a given area.
  • Real-Time data optimization helps travel brands to make strategic marketing decisions. Within the travel industry, it is often difficult to market to the right people at the right time because potential customers have variations based on who they are, "where they come from, and what they are looking for." However, big data is helping travel companies to strategically adopt approaches in their marketing efforts that target the right people at the right place in the right way (in real-time).
  • With bid data analytics, travel brands can enable marketing messages that get sent to travelers based on time, location, and other data.

Reliance on Mobile

  • According to Movable Ink, one of the digital marketing trends reshaping the travel industry include reliance on mobile. More insights that support this trend come below.
  • There is an increasing dependence on mobile across the world. According to TripAdvisor, about 45% of users are making use of smartphones. They make use of smartphones for everything that has to do with their vacations, including travel. There is a need for mobile brands to adapt their corporate services as well as communications to mobile devices. Travel brands such as KLM have already "created an information service" for their passengers using Facebook Messengers used on mobile devices.
  • Other companies already leveraging/relying on mobile in the travel sector include Dealray. Dealray provides an iOS-only app at $9.99 per month for its members. The app is an airfare tracker tool that helps travelers find low-cost flight deals. Freebird is a mobile app that allows travelers to register their flight "up to two days before" departure and helps them book another new ticket on any airline if the initial flight gets canceled or delayed for four hours.
  • About 58% of people prefer to utilize apps when searching for travel information relevant to flights, and 53% prefer using apps to locate accommodation. The connection between these consumers is that they all want "a lightning-fast mobile experience." Consequently, 90% of travel brands are investing in mobile (as of 2019).
  • Chatnbook is a mobile app that allows travelers to indicate their "liked" hotels to get their best rates sent to them. Hostelworld is a mobile app that helps travelers find private rooms, fun communal spaces, as well as booze-fueled events that bring solo travelers together. Walc helps travelers with directions and specifies easy-to-spot landmarks.

Compelling Visual Content

  • According to Movable Ink, one of the digital marketing trends reshaping the travel industry include the use of compelling visual content. Additional insights that give credence to this trend come below.
  • Travel and hospitality are examples of verticals leveraging visual content. Travelers are looking for "images and videos related" to travel brands before finalizing their travel plans.
  • Travelers/trip planners are engaging in various formats and channels (including visual channels). About 49% say look at travel resources/websites, about 30% read/review visible content on social media while 23% watch videos while planning trips.
  • Oasis is a travel app that maintains a compelling visual list that reveals "coveted luxury apartments" and homes for travelers in about two dozen destinations. Areas covered by the app include Rio de Janeiro, Miami, and Milan.
  • Streetography is a travel app that displays compelling visual contents such as the preview of neighborhoods leveraging "user-generated photos."
  • Chatnbook leverages compelling photos to alert hotels that their facility is "liked" by a traveler. These hotels then send their best rates to the interested traveler.

Demand for "Experience Platforms"

  • According to Movable Ink, one of the digital marketing trends reshaping the travel industry include the demand for "experience platforms." Several other insights that give credence to this trend are below.
  • Travel brands are expanding beyond what is typical of their operations. They are going into multiple segments of travelers' experiences. These travel brands are providing platforms or channels that reveal authentic/true experiences. Thus, travelers are relying on travel brands to have their vacation as well as business-trip "experiences shaped and guided" by fewer companies.
  • Travelers desire to have few brands or one travel brand (if possible) to guide as well as to shape more than a single experience or all their travel experiences, and companies are relying on digital to achieve this. The concierge software gets used for "travel arrangement," to locate "nearby attractions and restaurants," schedule activities as well as make reservations for guests to boost their experience. This market segment will grow between 2019 to 2025 due to demand from hotels (including those serving the travel industry).
  • Hostelworld is a mobile app that is typically an experience platform. The app defines several experiences for consumers. It allows them to select private rooms to stay, fun communal spaces to visit, booze-fueled events where they can meet other solo travelers, and allows users to book any accommodation from about 33,000 hostel accommodations of choice across the world.
  • Oasis is a travel app that allows travelers to customize or define several experience points. The app gives travelers options to book luxury apartments and homes. It also provides access to concierge services, which can help travelers with restaurant reservations, theater tickets, as well as tour bookings.

Research Strategy

The study has investigated some current marketing trends surrounding the travel industry. The research investigates some apps that are leaning into the identified trends. It also examines how these trends are affecting the travel industry. The study has analyzed marketing trends affecting the travel industry recently published by Movable Ink and several other expert-level articles/resources. Movable Ink is a company that helps marketers to create personalized visual experiences using email, web, and display tools. The company is trusted by several national and international brands such as Lenovo, NBA, Wall Street Journal (WSJ), Puma, Comcast, and other brands. The study assumes that insights that appear as a trend in reputable publications and are being implemented by several travel brands are trends.
Part
04
of four
Part
04

Travel Industry - Case Studies

Examples of travel companies that have successfully engaged with their customers in innovative or future-driven ways are KLM and United Airlines. Complete details about each company are presented below.

KLM

  • Their strategy is based upon the use of mobile phones to augment the travel experience of its customers by creating an information service for passengers using Facebook Messenger.
  • KLM’s goal is to make its customer experience even better by making it easier for people to talk to agents via social media without compromising privacy. It also aims to expand its social media services.
  • A lot of customers from the airline spent much time on Facebook and Messenger, making them ideal communication platforms.
  • Because people are not allowed to share sensitive travel information on its Facebook Page, KLM brought in the addition of a “Send Message” button to its Page, which permits its customers to seamlessly and privately communicate with its agents.
  • The system ensures that once someone has made a reservation, all the user information regarding their ticket is sent to them through Facebook Messenger including their boarding pass or updates about the status of their flight.
  • This, therefore, enables the user to have all the required information about their trip within reach using an app that they already use, subsequently eliminating the necessity to download anything else.
  • The addition of Messenger, as a new entry point for customers to ask questions and receive flight information including boarding passes, has resulted in a 40% increase in customer interactions by KLM.

United Airlines

  • The strategy involves the introduction of ConnectionSaver, a new tool that is dedicated to help improve the customer experience for those who are connecting from one United flight to the next.
  • This strategy also involves the use of new technology that automatically identifies departing flights that can be held for connecting customers, while ensuring that those who have already boarded the flight arrive at their destination on time.
  • The technology also sends personalized text messages to every connecting customer (those who have subscribed to the notifications), with clear directions to the gate for their connecting flight and information about how long the walk will take.
  • The technology automatically scans flights for customers who are caught up in tight connections, in order to try to determine if the connecting flight can be held without inconveniencing the other customers.
  • This technology also takes into account factors such as the duration it takes for late connecting customers to travel gate-to-gate, as well as the impact the hold may have on other flights and customers.
  • Part of the success of this technology was that during the first four months of its implementation, more than 14,400 customers, who would have otherwise missed their connections, were able to make their flights.
Sources
Sources

From Part 01
Quotes
  • "The outbound family travel market will grow at a Compound Annual Growth Rate (CAGR) of 4.6% from 300 million trips in 2017 to 376 million in 2022, according to GlobalData, a leading data and analytics company."
  • "Sara Grady, Head of Travel & Tourism for GlobalData commented: “As disposable income grows and emerging markets open their borders, we will see trends like multi-generational travel drive trips forward, particularly from hugely valuable source markets like China, and this represents a massive opportunity for the industry if it is able to tap into the specific needs of this complex cohort."
  • "The family travel market is characterized by increasingly sophisticated and disparate traveller demands with the industry now needing to cater to the wants and needs of many different age groups, and consumers who are more than ever, used to having tailored products and services available to them. From the provision of more transformational activities to the seamless availability of technology, all elements must be considered with greater focus."
  • "Grady concludes: “Family travel is moving beyond the traditional sun and beach getaway to offer families some much needed time to reconnect with each other and create lasting memories, increasingly in unique destinations, or on niche holidays, from cultural trips to activity-filled adventures. It has never been so essential to offer travellers something beyond the norm to stand out from the crowd and that caters to their specific demands, irrespective of where they are from."
Quotes
  • "Travel industry challenges 2019 hugely contemplate the usage of cutting-edge technology. AR - Augmented Reality, VR - Virtual Reality and Robotics are significant parts of the emerging industry. At one hand where virtual reality gives a pleasure of digital tours, Augmented reality is a good blend of virtual elements and real-world experience."
  • "For example, with VR, you can have a virtual trip to someplace just like you are visiting by own; with AR, you can have smart applications on your devices while you are exploring a new destination. From history information to latest stories, an app can guide you with all and you do not need to stop by to ask someone whereabouts."
  • "In a similar manner, AI - Artificial Intelligence works as it tracks and analyzes customers’ interests in order to produce tailor-made results. Ample of travel applications and communication tools have in-built intelligence to interpret demands and data. With voice assistance of your chosen language, you can have a virtual guide with you wherever you go."
  • "You can also get information about, tickets, rides and accommodation amenities. Such utility of technologies is one of the greatest breakthroughs in tourism industry."
Quotes
  • "Leisure travel used to be a family affair or something that couples undertook together. While that’s still the case for many, more and more people are choosing to strike out on their own."
  • "Enjoying a solo trip is no longer so unusual and tourist trends increasingly reflect this. The needs of solo travellers are diverse. Some simply want to travel without the distraction of a companion."
  • "Others are young singles looking for social activities or to find a partner. Some widowed seniors even use long-term hotel stays or cruises as a luxurious alternative to conventional elder care. These tourism trends are set to grow and grow."