January 25, 2019
2018 was a rollercoaster ride for the travel industry. From continued airline failures, Brexit uncertainty and the growing use of digital technologies such as AI – travel companies have seen their fair share of ups and downs. The landscape in which travel agents operate has been continuously changing. With this in mind, I wanted to explore a few likely trends and predictions that travel firms should take note of this year:
1. Experiences will become a bigger part of travel agency offerings
Despite the common belief that the role for “bricks and mortar” travel agents is waning, figures from Mintel has revealed that the rise in demand for expert advice is contributing to their revival. Some travellers are becoming overwhelmed by the volume of options available to them online, attracting them to travel agents who offer tangible experiences like VR tours, allowing customers to visualise their holiday before purchase. According to Mintel, 59% of millennials would pay extra for a holiday tailormade to their preferences. OTAs are also offering a wider range of experiences than ever before. For example, Ctrip has now gained a dominant position in its home country, China, by successfully meeting the increasing demand for independent and customised travel, as opposed to package holidays. This trend is only expected to rise in 2019 as OTAs continue to take the industry by storm.
2. The competitive landscape is changing
OTAs are no longer competing with just one another- their biggest threats now come from the likes of Google. As recent comments from the Expedia CEO have demonstrated, Google’s key advantage is the prominence of its search engine, and the grip it has on consumers. The search engine has been very active in recent years, building its own travel offerings, including flights, hotels and tours. The travel space will therefore continue to be extremely competitive, and those that are able to offer the best customer experience will come out on top.
3. The importance of AI & new tech will continue to grow
Technology will continue to be a major factor in all global markets, including the travel industry. AI was a key player in travel during 2018 and will continue to drive successful OTAs into 2019, as the world becomes increasingly connected. The vast majority of travellers will have access to digital assistants or some form of AI through their mobile devices, thus new technologies are creating massive upheavals in customer expectations. Amazon is an example of a company capitalising on new tech to target consumers. Their seamless “one click” payments technology gives consumers from all over the world the flexibility to make transactions with the touch of a button in any preferred currency. The technology even allows Amazon Echo owners to make purchases with a voice command. By taking the pain out of the payment process, and reducing the possibility of shopping-cart abandonment, Amazon is at the forefront of driving customer experience. I expect to see an increase in footprint from Amazon in the travel industry in the years to come.
4. Cultivating workforce engagement to match the demand for customer experience
Whilst customer demands are shifting from monetary value towards a customer-centric experience, workforce dynamic is also changing. In an ever-changing digital environment, with multigenerational employees, it’s important to be able to engage and educate them to deliver the best results. One way of achieving this is to ensure your business has a purpose beyond commercial success, and actively involve your employees in delivering towards this purpose. This increases employee engagement, which in turn improves their delivery for your customers. At eNett, our “Repay the eNett Way” programme gives employees the opportunity to contribute to the wider tourism community and work together to support people living in high growth travel destinations.
5. Travel suppliers will take a closer look at payment options
The progressive rollout of IATA’s Transparency in Payments (TIP) initiative has encouraged airlines to more closely consider the end-to-end payments lifecycle, and in some cases establish their own payment strategies. This has also extended to accommodation providers, who are in a similar fashion evaluating the methods by which they prefer to be paid. Every form of payment offers its own cost, benefit, and risk profile for each party in the value chain. Furthermore, some factors of cost and complexity may be hidden, including indirect costs associated with some forms of payment. I anticipate that in 2019 and beyond, the travel value chain will pay more attention to the intricacies of payments processes – and work with each other to develop innovative payment solutions that benefit all parties.
2019 is shaping up to be another exciting year for the travel industry. In such a dynamic industry, it’s hard to predict exactly what lies ahead, but by focusing on customer experience and investing in technology, travel businesses will remain competitive and capitalise on the growth the industry continues to achieve.
