Top 8 Challenges Affecting the Digital Travel Industry, Right Now

There is a huge variety of challenges that the digital travel industry is having to find solutions to. These challenges call for different responses from the various companies involved, all of which must ultimately serve to improve customer experiences.

Here are the top eight challenges affecting the travel industry right now, and some of the solutions that are being proposed to overcome them.

1. Brand Differentiation

Whether it's a seat on a plane, a room in a hotel, or a car rental, there are many companies out there all selling the exact same product. Companies are now having to find different ways of marketing their particular brand, products, and services to make themselves stand out from their competitors.

Many up-and-coming travel companies and OTAs are building their brands within a particular niche - honeymoon and destination weddings, for example, or adventure holidays, or as region/destination-specific specialists. In doing so, they avoid becoming "all-in-one" travel shops - Jacks of all trades but masters of none. By focusing on one niche or just a few related niches, these brands create differentiation in their marketing efforts, which become more effective as there is less competition.

As David Angotti , Co-Founder of SmokyMountains.com puts it : "While national websites like HomeAway and Airbnb deliver exceptional booking experiences and raise overall industry awareness, the hyper-relevant nature of geo-targeted niche sites is better equipped to deliver additional demand for specific localized markets. For example, high-quality video content that highlights a destination, combined with paid amplification through Facebook, can raise awareness for a specific market. This delivers additional demand and visitors that likely would not have visited the region in absence of this marketing approach. Smaller, niche websites excel at geo-local strategies like this. In addition to increased demand, the niche website increases the overall distribution health of a brand through channel and lead diversification."

2. Budgeting

In the constantly evolving world of technology, along with customer expectations changing faster than it's possible for companies to keep up with, budgeting becomes a very important factor in keeping up with trends.

Companies are being forced to use their budgets in smarter ways and advertise their business through different means.

One way they're doing this is with social media platforms, through which brands are able to promote themselves and connect with their audiences for little or no financial outlay. By taking advantage of the marketing opportunities social media provides, brands can effectively market their products and services in a more cost-efficient manner.

As a popular industry among young people, social media provides a great opportunity for travel brands to connect with target customers where they are, promote their products and services, and gain organic traffic to their websites - all without having to lay out a lot of money.

3. Multichannel Attribution

Multichannel attribution refers to the process of determining which marketing channels lead to conversions and sales, and giving each channel an appropriate amount of budget and attention accordingly.

Having a clear idea of which marketing channels are driving sales means companies can better allocate their marketing efforts. This then helps the business increase its efficiency of spending by only investing time and money into the channels which are driving growth.

Additionally, when a business knows its market and customer demographics, it can engage accordingly and optimize content to fit each platform for specific groups. This again increases the efficiency of a company's budget as it's able to witness higher engagement on these platforms and focus on enhancing the customer experience.

One company doing this particularly well is Marriott International , which created a culinary challenge and associated hashtag which trended on Twitter and Instagram. By using multichannel attribution to identify the best platforms on which to run the contest, the hotel brand was able to reach a diverse range of people, ultimately gaining a much wider audience.

4. Customer security

With the EU's General Data Protection Regulation (GDPR) now in force, customer security and privacy are becoming ever more important. While targeted ads and personalized marketing are massively popular and effective ways of advertising, travel companies need to be careful about what type of information they're using to personalize the ads directed at potential customers.

With ever-changing technologies, including voice, AR, and VR, keeping up with customer security is becoming a much more difficult job. New threats are forcing businesses to have to use new technologies and software in order to protect their customers' data.

If a business is taking the appropriate steps to ensure customers are secure on its site, it encourages repeat business and helps to drive revenue. When a site is secure, not only is a company improving customer experience, but it's also building trust in the eyes of its audience. This provides customers with the peace of mind that their information is being treated with the respect it deserves, and that the company itself is responsible and stable in its position within the digital travel market.

Many customers have stated they would have no problem booking with another brand or company if certain conditions, including price, schedule, or locations, were preferable.

This indicates that customer loyalty is a rarity, with customers having no ties to the company that they are choosing to travel with. Price comparison sites compound this problem by making it simpler than ever for customers to shop around for the best deal. It's also more unusual now for travelers to book their entire vacation in a single package, with innovative platforms such as Airbnb and Kayak providing a much easier booking experience to book flights, hotels, etc. separately.

Loyalty programs are something that many travel companies are setting up to ensure customers keep coming back. Hilton , for example, offers fitness classes in return for loyalty points for its guests. This encourages its customers to return to its hotels to build their loyalty points up.

6. Inspiration

Inspiration for trips and holidays can come from anywhere. Travel companies need to be ready to seize onto this inspiration when it occurs - or even create it themselves - and convert it into sales.

This is why you'll often find travel companies posting beautiful images of travel locations on their social media accounts. These images are designed to spark inspiration in those who view them, and then (hopefully) encourage and inspire holiday bookings.

Platforms such as TripTuner can help generate this inspiration in an audience. TripTuner describes itself as a "travel inspiration engine" and uses powerful artificial intelligence software to help travelers discover new vacation opportunities based on their travel history, searches, and interests. TripTuner also uses data to offer customized and personalized advertisements in order to further inspire customers.

7. Marketing Automation/Segmenting/Messaging Strategies

Many marketing departments must perform repetitive tasks like sending emails, posting to social media, and other mundane actions. However, marketing automation technology can take care of these tasks, leaving marketers free to focus on developing new strategies and interacting directly with their audiences.

Segmenting seeks to divide a broad consumer or business market into sub-groups of customers - known as segments - which are based on some type of shared characteristic/s. These groups are also usually subdivided into further groups of existing customers and potential customers. Segmentation helps marketers deliver the right information to the right people at the right time - by not sending top-of-the-funnel content to those in the middle, for example.

Brand messaging is the language and phrasing that appears on a company's website and other advertising materials. It covers everything from the fonts and images used on marketing materials to the type of music played on advertisements. Brand messaging ultimately informs audiences whether a product or service is aimed at them and can make the difference between success and failure.

The most important thing about brand messaging is that it's consistent across all channels. Your brand should have one identity and one voice, so you need to make sure all those responsible for putting out brand messages are savvy to this fact and have the necessary guidelines and training to make it happen.

8. Social Media

Travel brands are looking at how social media can be used for (almost) free advertising and to create organic buzz around their offerings.

Social media is massively influential to younger generations in particular, with many only using products and services they see advertised on their favorite platforms. Not only this, but they are living lifestyles in accordance with the trends they see on social media, with travel being a massive influencer in this regard. Instagram is a particularly useful social media platform for the travel industry as it allows brands to use hashtags to encourage people to share their travel experiences and create organic content as a result.

Social media is also being used to form relationships and enable communication between businesses and their customers, provide excellent customer service, and encourage loyalty. Being able to communicate with a company using a platform such as Facebook Messenger is, for most people, preferable to sitting on hold on the phone.

Final Thoughts

The challenges facing travel companies are forcing them to come up with new, creative solutions to combat them.

However, those companies which are willing to meet these challenges head-on will see customer experience improve across the board. In turn, this will encourage not only repeat business from those customers who have booked with them previously but inspire new customers to come on board as well.

The various challenges facing digital travel marketers will be hot topics at Digital Travel Connect US 2019 , taking place this October at the Rancho Bernardo Inn, San Diego, CA.

Download the agenda today for more information and insights.

"People want to travel": 4 sector leaders say that tourism will change and grow

The global travel and tourism industry's post-pandemic recovery is gaining pace as the world’s pent-up desire for travel rekindles.

The global travel and tourism industry's post-pandemic recovery is gaining pace as the world’s pent-up desire for travel rekindles. Image:  Unsplash/Anete Lūsiņa

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Shinya katanozaka, gilda perez-alvarado, stephen kaufer.

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  • In 2020 alone, the travel and tourism industry lost $4.5 trillion in GDP and 62 million jobs - the road to recovery remains long.
  • The World Economic Forum’s latest Travel & Tourism Development Index gives expert insights on how the sector will recover and grow.
  • We asked four business leaders in the sector to reflect on the state of its recovery, lessons learned from the pandemic, and the conditions that are critical for the future success of travel and tourism businesses and destinations.

The global travel and tourism sector’s post-pandemic recovery is gaining pace as the world’s pent-up desire for travel rekindles. The difference in international tourist arrivals in January 2021 and a similar period in January 2022 was as much as the growth in all of 2021. However, with $4.5 trillion in GDP and 62 million jobs lost in 2020 alone, the road to recovery remains long.

A few factors will greatly determine how the sector performs. These include travel restrictions, vaccination rates and health security, changing market dynamics and consumer preferences, and the ability of businesses and destinations to adapt. At the same time, the sector will need to prepare for future shocks.

The TTDI benchmarks and measures “the set of factors and policies that enable the sustainable and resilient development of the T&T sector, which in turn contributes to the development of a country”. The TTDI is a direct evolution of the long-running Travel and Tourism Competitiveness Index (TTCI), with the change reflecting the index’s increased coverage of T&T development concepts, including sustainability and resilience impact on T&T growth and is designed to highlight the sector’s role in broader economic and social development as well as the need for T&T stakeholder collaboration to mitigate the impact of the pandemic, bolster the recovery and deal with future challenges and risks. Some of the most notable framework and methodology differences between the TTCI and TTDI include the additions of new pillars, including Non-Leisure Resources, Socioeconomic Resilience and Conditions, and T&T Demand Pressure and Impact. Please see the Technical notes and methodology. section to learn more about the index and the differences between the TTCI and TTDI.

The World Economic Forum's latest Travel & Tourism Development Index highlights many of these aspects, including the opportunity and need to rebuild the travel and tourism sector for the better by making it more inclusive, sustainable, and resilient. This will unleash its potential to drive future economic and social progress.

Within this context, we asked four business leaders in the sector to reflect on the state of its recovery, lessons learned from the pandemic, and the conditions that are critical for the future success of travel and tourism businesses and destinations.

challenges in online travel industry

Have you read?

Are you a 'bleisure' traveller, what is a ‘vaccine passport’ and will you need one the next time you travel, a travel boom is looming. but is the industry ready, how to follow davos 2022, “the way we live and work has changed because of the pandemic and the way we travel has changed as well”.

Tony Capuano, CEO, Marriott International

Despite the challenges created by the COVID-19 pandemic, the future looks bright for travel and tourism. Across the globe, people are already getting back on the road. Demand for travel is incredibly resilient and as vaccination rates have risen and restrictions eased, travel has rebounded quickly, often led by leisure.

The way many of us live and work has changed because of the pandemic and the way we travel has changed as well. New categories of travel have emerged. The rise of “bleisure” travel is one example – combining elements of business and leisure travel into a single trip. Newly flexible work arrangements, including the opportunity for many knowledge workers to work remotely, have created opportunities for extended travel, not limited by a Monday to Friday “9 to 5” workweek in the office.

To capitalize on this renewed and growing demand for new travel experiences, industry must join governments and policymakers to ensure that the right conditions are in place to welcome travellers as they prepare to get back on the road again, particularly those who cross international borders. Thus far, much of the recovery has been led by domestic and leisure travel. The incremental recovery of business and international travel, however, will be significant for the broader industry and the millions who make their livelihoods through travel and tourism.

Looking ahead to future challenges to the sector, be they public health conditions, international crises, or climate impacts, global coordination will be the essential component in tackling difficult circumstances head-on. International agreement on common – or at least compatible – standards and decision-making frameworks around global travel is key. Leveraging existing organizations and processes to achieve consensus as challenges emerge will help reduce risk and improve collaboration while keeping borders open.

“The travel and tourism sector will not be able to survive unless it adapts to the virtual market and sustainability conscience travellers”

Shinya Katanozaka, Representative Director, Chairman, ANA Holdings Inc.

At a time when people’s movements are still being restricted by the pandemic, there is a strong, renewed sense that people want to travel and that they want to go places for business and leisure.

In that respect, the biggest change has been in the very concept of “travel.”

A prime example is the rapid expansion of the market for “virtual travel.” This trend has been accelerated not only by advances in digital technologies, but also by the protracted pandemic. The travel and tourism sector will not be able to survive unless it adapts to this new market.

However, this is not as simple as a shift from “real” to “virtual.” Virtual experiences will flow back into a rediscovery of the value of real experiences. And beyond that, to a hunger for real experiences with clearer and more diverse purposes. The hope is that this meeting of virtual and actual will bring balance and synergy the industry.

The pandemic has also seen the emergence of the “sustainability-conscious” traveller, which means that the aviation industry and others are now facing the challenge of adding decarbonization to their value proposition. This trend will force a re-examination of what travel itself should look like and how sustainable practices can be incorporated and communicated. Addressing this challenge will also require stronger collaboration across the entire industry. We believe that this will play an important role in the industry’s revitalization as it recovers from the pandemic.

How is the World Economic Forum promoting sustainable and inclusive mobility systems?

The World Economic Forum’s Platform for Shaping the Future of Mobility works across four industries: aerospace and drones; automotive and new mobility; aviation travel and tourism; and supply chain and transport. It aims to ensure that the future of mobility is safe, clean, and inclusive.

  • Through the Clean Skies for Tomorrow Coalition , more than 100 companies are working together to power global aviation with 10% sustainable aviation fuel by 2030.
  • In collaboration with UNICEF, the Forum developed a charter with leading shipping, airlines and logistics to support COVAX in delivering more than 1 billion COVID-19 vaccines to vulnerable communities worldwide.
  • The Road Freight Zero Project and P4G-Getting to Zero Coalition have led to outcomes demonstrating the rationale, costs and opportunities for accelerating the transition to zero emission freight.
  • The Medicine from the Sky initiative is using drones to deliver vaccines and medicine to remote areas in India, completing over 300 successful trials.
  • The Forum’s Target True Zero initiative is working to accelerate the deployment and scaling of zero emission aviation, leveraging electric and hydrogen flight technologies.
  • In collaboration with the City of Los Angeles, Federal Aviation Administration, and NASA, the Forum developed the Principles of the Urban Sky to help adopt Urban Air Mobility in cities worldwide.
  • The Forum led the development of the Space Sustainability Rating to incentivize and promote a more safe and sustainable approach to space mission management and debris mitigation in orbit.
  • The Circular Cars Initiative is informing the automotive circularity policy agenda, following the endorsement from European Commission and Zero Emission Vehicle Transition Council countries, and is now invited to support China’s policy roadmap.
  • The Moving India network is working with policymakers to advance electric vehicle manufacturing policies, ignite adoption of zero emission road freight vehicles, and finance the transition.
  • The Urban Mobility Scorecards initiative – led by the Forum’s Global New Mobility Coalition – is bringing together mobility operators and cities to benchmark the transition to sustainable urban mobility systems.

Contact us for more information on how to get involved.

“The tourism industry must advocate for better protection of small businesses”

Gilda Perez-Alvarado, Global CEO, JLL Hotels & Hospitality

In the next few years, I think sustainability practices will become more prevalent as travellers become both more aware and interested in what countries, destinations and regions are doing in the sustainability space. Both core environmental pieces, such as water and air, and a general approach to sustainability are going to be important.

Additionally, I think conservation becomes more important in terms of how destinations and countries explain what they are doing, as the importance of climate change and natural resources are going to be critical and become top of mind for travellers.

The second part to this is we may see more interest in outdoor events going forward because it creates that sort of natural social distancing, if you will, or that natural safety piece. Doing outdoor activities such as outdoor dining, hiking and festivals may be a more appealing alternative to overcrowded events and spaces.

A lot of lessons were learned over the last few years, but one of the biggest ones was the importance of small business. As an industry, we must protect small business better. We need to have programmes outlined that successfully help small businesses get through challenging times.

Unfortunately, during the pandemic, many small businesses shut down and may never return. Small businesses are important to the travel and tourism sector because they bring uniqueness to destinations. People don’t travel to visit the same places they could visit at home; they prefer unique experiences that are only offered by specific businesses. If you were to remove all the small businesses from a destination, it would be a very different experience.

“Data shows that the majority of travellers want to explore destinations in a more immersive and experiential way”

Steve Kaufer, Co-Founder & CEO, Tripadvisor

We’re on the verge of a travel renaissance. The pandemic might have interrupted the global travel experience, but people are slowly coming out of the bubble. Businesses need to acknowledge the continued desire to feel safe when travelling. A Tripadvisor survey revealed that three-quarters (76%) of travellers will still make destination choices based on low COVID-19 infection rates.

As such, efforts to showcase how businesses care for travellers - be it by deep cleaning their properties or making items like hand sanitizer readily available - need to be ingrained within tourism operations moving forward.

But travel will also evolve in other ways, and as an industry, we need to be prepared to think digitally, and reimagine our use of physical space.

Hotels will become dynamic meeting places for teams to bond in our new hybrid work style. Lodgings near major corporate headquarters will benefit from an influx of bookings from employees convening for longer periods. They will also make way for the “bleisure” traveller who mixes business trips with leisure. Hotels in unique locales will become feasible workspaces. Employers should prepare for their workers to tag on a few extra days to get some rest and relaxation after on-location company gatherings.

Beyond the pandemic, travellers will also want to explore the world differently, see new places and do new things. Our data reveals that the majority want to explore destinations in a more immersive and experiential way, and to feel more connected to the history and culture. While seeing the top of the Empire State building has been a typical excursion for tourists in New York city, visitors will become more drawn to intimate activities like taking a cooking class in Brooklyn with a family of pizza makers who go back generations. This will undoubtedly be a significant area of growth in the travel and tourism industry.

Governments would be smart to plan as well, and to consider an international playbook that helps prepare us for the next public health crisis, inclusive of universal vaccine passports and policies that get us through borders faster.

Understanding these key trends - the ongoing need to feel safe and the growing desire to travel differently - and planning for the next crisis will be essential for governments, destinations, and tourism businesses to succeed in the efforts to keep the world travelling.

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challenges in online travel industry

Companies within the travel industry have faced, and continue to face, unprecedented challenges and uncertainty due to the Covid-19 pandemic. In 2020, as travel came to a virtual standstill, the global market value for online travel intermediaries declined by 60.1% YoY to $236.7bn.

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Listed below are the key industry trends impacting the online travel theme, as identified by GlobalData.

Artificial Intelligence (AI) and Machine Learning (ML)

ML is a subset of AI and is a process of learning from different types of data to make accurate predictions. ML in tourism mainly uses data including statistics, photos, maps, and texts. It is used in three stages: pre, during, and after the trip. It provides the necessary interpretations using models, approaches, algorithms, processes, trends, and systems to make predictions. The interpretations obtained can be used to help decision-makers who work in the tourism industry.

Within online travel, AI will play a central role in offering simplified travel arrangements and enabling the dynamic pricing and personalisation that online travel agents (OTAs) and direct and ancillary suppliers will need to thrive.

The term ‘Big Data’ refers to large, diverse data sets that, when analysed computationally, can reveal patterns, trends, and associations. While its uses are varied, it can be especially helpful for tourism companies, because it can enable predictive and behavioural analysis. Collecting and harnessing data has been at the core of OTAs’ strategies to differentiate themselves, first from offline travel companies and then from rival digital competitors by improving the quality of their offerings and increasing satisfaction with a tailor-made trip.

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For online travel companies, big data analysis requires a significant shift from traditional databases and analysis techniques, and often an investment in data science and related application skills. Job titles within data-focused teams may include data scientists, data engineers, business analysts, machine learning engineers, and several product and infrastructure-focused data teams.

While utilising and applying the insights derived from Big Data has the potential to set online travel companies apart, alongside this come concerns over cybersecurity and data privacy. Going forward, online travel companies will have to invest in more advanced cybersecurity practices and talent to reassure customers and communicate the steps taken to ensure data privacy and security.

Travel apps

With the advent of smartphones, there has been a shift towards mobile and app-based platforms for many personal computing tasks. According to a 2019 report by Travelport, people now look at their mobile phone every 12 minutes on average and nearly 80% say they cannot live without it and never switch it off. With this comes a new set of expectations, as consumers expect brands to be everywhere they are.

Travel app development and downloads have the potential to increase going forward because of requirements to show vaccination or negative Covid-19 test status when traveling internationally and for some domestic venues.

Across all age groups of respondents in GlobalData’s Q4 2021 Consumer Survey, it is evident that the popularity of online platforms far exceeds offline booking options. Following the growth of smartphones, travel app-related patents have continuously increased, even during Covid-19.

Conversational platforms

There are now several popular conversational platforms on the market. They can be broken down into two main types: those which converse via voice activation, such as Siri or Alexa, and those which use text to converse, such as WeChat, WhatsApp, or Messenger. Conversational platforms have the added benefit of potentially saving time and effort, preventing customer mistakes, offering a greater means for personalisation and customer satisfaction, 24/7 access, as well as new avenues to collect and store consumer data.

These channels can become an essential element of a company’s success by encouraging direct engagement, interaction, and often, instant problem-solving.

Text-based chatbots have become relatively mainstream in online travel. According to a study by Travel Daily News, 84% of respondents claim they regularly use chatbots provided by travel brands for booking. Meanwhile, voice-activated platforms are still relatively nascent but are finding greater utilisation as this technology garners more investment and engagement.

Augmented and virtual reality

Augmented (AR) and virtual reality (VR) have long been on the list of emerging trends to watch, not only in travel but across many industries like gaming, healthcare, automotive, and engineering. Until now, these technologies have been somewhat niche areas that seemed a long way from becoming mainstream.

Furthermore, consumer purchasing decisions are being driven by the digitally advanced or ‘smart’ features of a product or service. Comfortable with technology, digitally savvy Gen Z and millennials’ purchasing habits are often driven by advanced digital features. Millennials are similarly influenced by digitally smart products, with 85% of this age group being ‘always’, ‘often’, or ‘somewhat’ influenced by smart digital features. As such, this younger generational segment will likely be influenced by tech-forward products, platforms, and services.

As large technology companies such as Google and Apple have made significant investments into these technologies, developing AR and VR capabilities is now cheaper, easier, and quicker. Going forward, AR and VR have several potential uses within online travel and are playing a crucial role in transforming the tourism landscape and boosting travel experiences for tourists.

Blockchain and cryptocurrency

Blockchain is emerging as a powerful technological force that is set to disrupt the travel industry’s status quo. In fact, blockchain is already being heralded as a game-changer for many different industries.

While blockchain has the potential to transform a highly fragmented travel industry, 19% of respondents regard blockchain as ‘all hype and no substance’, according to GlobalData’s Emerging Technology Sentiment Analysis poll conducted in Q3 2021. However, 31% of respondents believe that blockchain is overhyped but sees its potential use, while 28% believe the technology will live up to its promises. Major companies such as TUI are already adopting blockchain technology in booking, reservation, and payment systems and significant sums of money are being invested in start-up ventures.

In relation to blockchain, cryptocurrency is also making several inroads into the travel space. Many travel companies are beginning to embrace crypto as a form of payment, from the travel site GetYourGuide, Travala.com, to the Bobby Hotel in Nashville, Tennessee, which accepts dogecoin and other cryptocurrencies.

For travellers, the biggest advantage of using cryptocurrency is avoiding foreign exchange fees. Cryptocurrencies also offer some price stability in countries where currencies are unstable and help travellers avoid fluctuating exchange rates.

Cybersecurity

Holding various levels of personal data, travel, and tourism is a hotbed for cybersecurity threats. As related industries begin to invest heavily in technologies such as AI, internet of things (IoT), and Big Data to offer the ultimate personalised’ experience, the threat increases. There is a lack of investment from many in this theme—to be winners this needs to be identified with a clear, efficient strategy in place. Covid-19 has further accelerated the move online.

Businesses are streamlining business operations to accommodate changing needs, and the travel and technology sectors are becoming more intertwined, causing the travel sector to be more vulnerable to cyberattacks.

The global cybersecurity skills gap is exacerbating the increased demand for effective cybersecurity, with the industry in critical need of more qualified people. According to the International Information System Security Certification Consortium, or (ISC)², the size of the workforce with cybersecurity skills is 65% below what it needs to be, with the shortfall of skilled workers estimated to be 2.7 million.

Digital Covid-19 certificates

In response to Covid-19, creating an efficient, safe, and secure traveller experience has become paramount to ensure a smooth recovery. Governments worldwide have taken to issuing their citizens with digital and verifiable records of their Covid-19 status. This includes certificates for vaccination and testing, which digitally encodes the minimum information necessary to confirm a person’s vaccination or test status into a machine-readable format, such as a QR code. This may exist within a purely digital solution such as in a smartphone app or can be on a paper certificate or its electronic PDF equivalent.

For instance, on July 1, 2021, the European Union (EU) implemented the EU Digital Covid Certificate (EU DCC) for digitally verifiable Covid-19 certificates. The EU DCC includes three types of digital certificates, for demonstrating either proof of vaccination, proof of a negative test result, or proof of recovery from Covid-19. The EU DCC has been a crucial element of Europe’s response to the pandemic and has been key to supporting the European tourism sector.

The sharing economy

The sharing economy phenomenon has been growing for over a decade. Spurred by rapid digitalisation and the penetration of smartphones, sharing economy platforms have been transforming production and consumption systems in cities around the world. Sharing economy platforms have emerged on the back of radical changes in consumer habits, Airbnb, Uber, and their counterparts have revolutionised entire industries with their so-called “creative disruption”.

Certain sharing economy players have grown into global companies in the space of only a few years. Airbnb is now active in more than 190 countries while Uber operates in more than 300 cities. However, as the economic power of these technology-driven companies has grown, regulatory and policy opposition has cropped up across towns and cities worldwide.

Aligned with the sharing economy model, a growing number of people are demanding a form of consumption that entails a high degree of personal interaction, and a community experience, with products offered by individuals rather than faceless companies. One of the many drivers of this trend is the change of attitude that is typical among the younger generations. This age group increasingly seeks out authentic experiences that allow for immersion in local culture.

The subscription economy

Over the past few years, there has been a seismic shift in growth strategies for business, brought about by a growing preference for subscription services from both businesses and consumers. According to McKinsey & Co, subscription businesses in the e-commerce market grew more than 100% annually from 2013 to 2018. Covid-19 has further accelerated the existing demand for subscriptions as more consumers have become accustomed to the reliable and time-saving benefits of subscription services, which travel companies can capitalise on as travel demand returns.

Skift Research identified subscriptions as a ‘megatrend’ in travel with these strategic initiatives accelerating as a subscription is seen as the next frontier of loyalty in travel. This stems from subscription and membership platforms representing a compelling way for travel companies to create lasting relationships with travellers and to generate a stable income stream. Given this, it is likely that subscription-based travel platforms will increase in popularity.

Climate conscious options

Travellers’ awareness of the climate crisis has increased continuously over recent years, in turn, reshaping expectations. With changing traveller behaviour and preferences, legislation and policy makers are also putting increased pressure on travel and tourism companies to increase sustainability performance. Indeed, in the past years, there has been growing regulatory pressure to monitor and report progress on greenhouse gas (GHG) emissions reduction from industry initiatives, insurers and financial institutions, NGOs, governmental bodies, as well as country-specific administrations.

According to the World Travel & Tourism Council (WTTC), OTAs typically have significantly lower carbon emissions compared to other industry players such as accommodation providers, aviation, and cruise lines. However, as a result of increasing regulatory pressures and changing consumer expectations, companies are developing and integrating new capabilities to encourage climate-conscious travel.

This is an edited extract from the Online Travel, 2022 Update – Thematic Research report produced by GlobalData Thematic Research.

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Report Overview

Online travel has lived through two past recessions – the tech bubble crash and the global financial crisis – but it has never seen anything like this outbreak before. Glenn Fogel, CEO of Booking Holdings, warned that this current crisis is worse than all previous “major” disruptions combined.

This report considers how online travel is being impacted by the ongoing COVID-19 outbreak at both the industry and individual company level. We believe that the largest seven public online travel agencies will lose at least $11.5 billion in revenue this year due to the virus. The impact could even go higher, potentially as much as $20 billion in missed revenue.

We also look across the globe different business models to understand how companies differ from each other. Chinese OTAs are seeing a small bounceback in March while U.S. and European OTAs continue to see their business decline. We also find some signs that businesses which cater to the short-term rentals and airline segments are outperforming the hotel business.

Finally this report analyzes public statements made by the largest three online travel agencies in the world, Booking Holdings, Expedia Group, and Trip.com. We break down and quantify what those management teams have said specifically about COVID-19.

Online Travel and COVID-19

The online travel sector will be highly impacted by the ongoing COVID-19 pandemic that has shut down travel both across and within borders. Online travel has lived through two past recessions – the tech bubble crash and the global financial crisis – but it has never seen anything like this outbreak before. Glenn Fogel, CEO of Booking Holdings, warned that this current crisis is worse than all previous “major” disruptions combined.

Steep Transaction Drop at Major Online Booking Companies

We worked with SimilarWeb to develop a proxy for online travel transactions. SimilarWeb tracks web traffic and in this case was able to drill down to specific parts of the domain, in particular the “thank you” check-out page that a user only visits after completing an accommodation transaction. By isolating this page, we can separate out hotel (and short-term rental) lookers from bookers.

We analyzed data for four major global booking companies: Booking Holdings, Expedia Group, Airbnb, and Trip.com Group. We first aggregated individual subsidiary domains to the top-level parent company (e.g. expedia.com, vrbo.com, orbitz.com, and hotels.com all roll up to Expedia group). Next, data was combined from across seven countries: The U.S., UK, Italy, France, Germany, Japan, and Hong Kong. (unfortunately, SimilarWeb does not have mainland China web traffic data, which skews the trip.com numbers).

Lastly, we took a moving average to smooth out the data and then indexed it to 100 at the start of the second half of 2019 so that we could compare how transaction volume had changed in relative terms. By doing this, we could compare major OTAs to each other even though each would have a different absolute level of transactions.

The results show a stunning decline in accomodation activity across the globe and all major online travel agencies, down by 70-90%. Keep in mind that this index tracks transactions, but average length of stay and average room rate have both likely dropped as well. This means that when translated into dollar terms, gross bookings could be down by even more, likely 80-95%+, depending on the site.

challenges in online travel industry

We have imperfect data on Trip.com (formerly known as Ctrip) as SimilarWeb does not have access to Mainland China web traffic but using Hong Kong and Japanese transaction traffic as a proxy reveals the global trajectory of the coronavirus outbreak. The other three OTAs, which have more exposure to the U.S. and Europe, rolled over in mid-February and are currently at their lows.

Trip.com on the other hand, had a Lunar New Year spike in December and then immediately collapsed in January. This is of course in-line with the timeline for COVID-19’s spread across Asia first and then into the U.S. and Europe. Trip.com bounced off lows in transaction volume from January through mid-February. It saw a mini-recovery, with transactions doubling relative to the lows starting in mid-February and continuing through March. This is consistent with early reports of a cautious recovery in Chinese domestic travel . But, as the chart shows, a doubling from such a small base hardly brings Trip.com back to the transaction volume levels it was earning before this crisis. The company has stabilized but is a long way from having a truly clean bill of health.

Estimated Online Travel Industry Revenue Loss in 2020

To understand just how severe the impact of coronavirus on online travel could be, Skift Research has attempted to quantify the revenue impact of this outbreak in a consistent and comparable way.

We took two approaches to this. First, we looked at how 2020 revenue forecasts published by Wall Street analysts had changed since the beginning of the year. By this measure, Wall Street in aggregate expects that the top seven publicly-traded online travel companies will lose $11.5 billion of revenue globally due to Coronavirus in 2020.

Secondly, we looked into the relationship between stock prices and revenues to derive what the market could be implying for future revenues. Specifically, we took the price-to-sales ratio that the stock had traded at on average for the last two years and applied it to the current value of the stock to estimate implied revenue losses. The assumption here is that if markets are efficient, then the implied loss is the revenue drop that will need to occur for the stock to return to its long-term valuation ratio. This is, of course, an assumption unlikely to be correct, but it is a good back-of-the-envelope method for estimating the revenue damage to online travel that investors currently expect. Currently, this method gives somewhere in the range of $26 billion of lost revenue.

At the end of this report, we have an even more detailed discussion of the potential revenue losses at the three largest travel booking sites: Expedia, Booking, and Trip.com. This includes breaking down WallStreet expected revenue losses by quarter, rather than annually and an overview of management’s guidance of the business impact from COVID-19.,

challenges in online travel industry

Neither of these methods is perfect but it does illustrate an interesting dichotomy. The ‘inside’ view of industry-focused experts are far more optimistic than the ‘outside’ view coming from the wisdom of the crowds.

In fact, the crowds expect COVID-19 to be nearly twice as bad as the industry experts! The truth is likely somewhere in the middle. But it speaks to a potential over-optimism among industry experts that we will be on the road to recovery by late this year.

We would reiterate what we warned in our report last week, The Impact of COVID-19 on the Hotel Industry , that “it seems optimistic to think that this crisis will be over by Q3 or Q4 2020. Hoteliers need to prepare for a ‘new normal.’”

Online Travel vs. Travel Suppliers

We believe that, for the most part, online travel companies are in a less vulnerable position entering this recession than their travel supplier peers like hotels and airlines.

First of all, the larger online travel agencies have more geographic diversity than pretty much any other company in travel. This means that when things were at their worst in China, the OTAs could still take bookings in the U.S. and Europe. And now that the virus has moved its center of gravity further west, the OTAs can still benefit from less affected regions like South America as well as the nascent recovery in China .

This doesn’t mean that the OTAs are less impacted within a given region, but this diversity does help to ‘smooth’ the ride for them. In contrast, even the largest hotel chains tend to be more concentrated with a few ‘home’ markets that account for the majority of properties and revenues. This means that these companies feel the full brunt of quarantines all at once, whereas for the OTAs these quarantines are more likely to ‘roll’ across various territories.

In addition, online travel businesses are asset light with a very high share of variable costs like sales, marketing and IT spend that can be reduced proportional to drops in demand. As an example, at Booking Holdings, these variable costs make up 68% of operating expenses. In contrast, IATA estimates that only 50% of airline operating expenses are fully variable. To reduce cost, Booking Holdings and Expedia Group have cut back on their advertising significantly and Airbnb has even gone so far as to halt all marketing .

Personnel expenses accounted for a further 25% of costs at Booking Holdings. Headcount is semi-variable as it can be reduced rather quickly but most managers are reluctant to do so dramatically as it is hard to rebuild skilled teams once they are disbanded. But nonetheless, 90%+ of Booking Holdings’ expenses are variable or semi-variable. This gives them, and all online travel agencies which have similar costs structures, much-needed flexibility in times of crisis. Airlines and hotels on the other hand are stuck with expensive finance and capital expenditure charges for their heavy assets like airplanes or real estate, even as those assets sit empty.

The final silver-lining for online travel agencies that we often hear as conventional wisdom is that economic downturns boost commissions.

The balance of power between online travel agencies and their suppliers has swung dramatically in recent years. Aggressive hotel investment in first-party loyalty programs and marketing have encouraged more consumers to book direct. Plus, hotel consolidation has given the big brands greater leverage to negotiate down commissions. Illustrative of this, we believe that Expedia generated ~13% of Marriott’s U.S. bookings while Marriott properties may have accounted for as much as 25% of Expedia’s U.S. bookings in 2018.

However, in a recession, this pendulum might swing back towards the OTAs. Consumers hurt by a recession will care less about attaining loyalty status and more about the absolute lower price. And OTAs, which allow consumers to comparison-shop and pick out the best price themselves, will benefit. In addition, hotel revenue managers will be far less concerned about how much inventory they put onto the OTA sites and at what rates they do so than they were previously. In a low demand environment, filling beds is far more important than commission structure, rate parity, or even holding the line on discounting.

We believe much of this to be true, but caution that this narrative may be overplayed within the industry. For instance, when we looked back at OTA take-rates, we were only able to find limited evidence supporting the theory that booking sites benefit in a recession.

For instance, at two largest global OTAs, Booking Holdings and Expedia Group, there is no noticeable change in effective take rates during the 2008/2009 financial crisis, if anything they declined.

challenges in online travel industry

Digging deeper into the data, we looked at marginal take rates, the commission earned on incremental new bookings earned in a given year (i.e. new revenue divided by new bookings in a given year). Here, we see a notable increase at Booking Holdings during the financial crisis. Our work shows that Booking Holdings generated a 24% commission on new incremental bookings that came onto the platform in 2009, above and beyond those that would have been otherwise earned in 2008 and other past years.

This potentially indicates a mix shift, where new independent hotels desperate for additional distribution flooded onto the platform in 2009 in the depths of the global recession, and these small hotels paid the highest tier of Bookings’ commission.

challenges in online travel industry

However, we did not see this trend replicate itself at Booking’s biggest rival Expedia Group. It also should be noted that as we do not have any historical data beyond 2004, this is just one past event. We do believe that this current downturn will set the stage for OTA-supplier power dynamics to begin shifting back towards the booking sites but it would be unwise to extrapolate too much onto this crisis from a single sample.

Online Travel Sub-Sectors

The online travel sector encompasses several different business models and clienteles. We wanted to delve into three major business types – full-service OTAs, short-term rental OTAs, and Metasearch – to understand how each is being impacted.

We turned back to SimilarWeb to answer this question from a traffic perspective. This time we looked at total page visits, not just limiting ourselves to transactions. That’s because metasearch sites will have different transaction conversion rates than booking sites and we wanted to be able to compare apples-to-apples metrics. We also used individual domains, rather than rolling up to the parent level, so that we could see how a parent company’s metasearch sites performed differently from its other properties. The websites analyzed were airbnb.com, booking.com, expedia.com, kayak.com, priceline.com, skyscanner.com, tripadvisor.com, trivago.com, vrbo.com.

Each site was aggregated across seven countries: The U.S., UK, Italy, France, Germany, Japan, and Hong Kong (e.g. booking.com, booking.it, and booking.de all roll up to booking.com). Again, we created a moving average and index to compare relative changes in page visit volume.

What we found was that in aggregate, web traffic to online travel websites is down by 70% globally. However, splitting the online sites into different sub-sectors shows varying degrees of damage.

challenges in online travel industry

Online booking sites focused on short-term rentals seem to be outperforming their hotel-heavy, full-service peers. We suspect that this reflects the recent phenomenon of families temporarily leaving their homes in dense cities, where the coronavirus outbreak is worse and where home confinement in a small apartment is more restricting, to temporarily relocate to less-crowded suburban or rural destinations. This appears to be true at both Airbnb and Vrbo.

challenges in online travel industry

The comparison of Expedia Groups’ main websites demonstrates this relative dynamic nicely. Vrbo is the best performing of all three sites with its focus on short-term rentals, many of which are full-sized homes in vacation destinations. The full-service OTA is in the middle of the pack, whereas hotel-heavy metasearch site Trivago is doing the worst.

challenges in online travel industry

It should be noted that Trivago is among the worst performing of major metasearch domains, though it is mostly just a matter of degrees of bad. It seems that some of the more airline focused metasites like Kayak and Skyscanner are doing marginally better. This is consistent with messaging from Trip.com CEO that accommodations are being hit harder than transportation like airlines.

Metasearch suppliers are pulling back spending due to the demand drop. Recent research from Koddi showed that metasearch CPCs have dropped 40%. And the cost of the bid required for a top search result position has fallen 74%.

challenges in online travel industry

Finally, the full-service OTAs. Interestingly, our analysis of the SimilarWeb data shows that regardless of different brand or management strategies that all have moved in tandem. There is effectively no difference in the traffic performance of these three major OTA domains.

challenges in online travel industry

Ultimately we are measuring not who is doing the best, but who is doing ‘less-worse.’ All of our data illustrates the dramatic drop-off in travel demand across all brands and sites.

That said, there are some interesting nuances both across and even within companies. In the following sections we dive deeper into the largest three online travel agencies in the world, Booking Holdings, Expedia Group, and Trip.com to analyze what those management teams have said specifically about COVID-19.

Booking Holdings

Booking Holdings provided business guidance on its earnings call in late February, but as trends worsened, it quickly withdrew those numbers a little over a week later. Then, in late March, the company put out a statement to say its executives were forgoing salaries and that the company would be slashing expenses, including major cuts to marketing budgets.

On its fourth quarter 2019 earnings call on February 26th, management introduced negative guidance for the first quarter of 2020. Most importantly, the company guided that its revenues fall by 5–10% year-on-year in U.S. dollars. That guidance was withdrawn a little over a week later, on March 9th, as the coronavirus spread into Booking’s core markets of Europe and the U.S.

Booking’s management said that they saw healthy growth in January and expected February, “to be approximately flat.” So, all the negative numbers really hit Booking Holdings in March.

If we assume that each month is about equal and that Booking continued its Q4 growth rate of 4% into January, given that we know the growth in February was 0%, we can back into what Booking’s guidance implies about March performance. Booking Holding’s February guidance implied that March revenues would be down by 30% year-on-year.

Then on April 8th, as part of raising cash by issuing new bonds,Booking said that its saw room night reservations, excluding the impact of cancelations fall by over 85% year-on-year “in recent days.” That’s certainly worse than all past major crises combined and ties out with recent STR data reported by Hotel News Now shows that U.S. hotel occupancy dropped 67.5% and RevPAR decreased 80.3% to $18.05 during the week of 22-28 March.

The company now expects that 2Q 2020 will be “significantly” more impacted by COVID-19 than its 1Q 2020 results. If this weeks are the most acutely damaging, then

CEO Glenn Fogel said on March 23, that this current crisis is worse than all previous “major” disruptions combined. Let’s go back in time to give that some context.

Booking has been extraordinarily resilient in past crises. Its quarterly revenue fell by -12% in Q3 2001. The recession and wars that followed 9/11 saw Booking’s revenue trend at -20%. During the global recession of 2008/2009, Booking never even saw revenue shrink. Its revenue growth decelerated by 13 percentage points from 34% trended year-on-year growth to 21%. The 2012/2013 European sovereign debt crisis saw a 20-percentage point fall in trended growth rates from a 41% to 21%.

challenges in online travel industry

If you were to add up the 12% fall after 9/11, 20% drop in 2003, 13% deceleration in 2008/2009 and 20% decline in 2012/2013 you would be looking at a 65% slowdown in revenue. From a base trend of 3-4% growth, this drop could imply around a 60% year-on-year decline in Q2.

Given the acute pain of an 85% drop in the first weeks of April, that number feels plausible to us for the full quarter. A 60% fall in revenue over the second quarter of 2020 implies $2.6 billion in lost revenues.

We can cross check this number with other sources. For instance, Wall Street analysts have cut their estimates for Bookings’ revenue significantly. In January of this year, they expected Booking’s revenue to grow by 7% in 2020 to over $16 billion. Today, they expect full year revenue to decline by 21% to $12 billion; a full year revenue loss of $4.2 billion.

We can further dissect these estimates by quarter. Here we see that almost all of the damage is projected to come in the second and third quarter, with the fourth quarter relatively unimpacted. That means there is further downside to these numbers if the outbreak lasts longer than expected or travel does not recover quickly.

challenges in online travel industry

Using the same methodology described in earlier, we can also check with the stock market and see what it implies about future revenue. This is again a crude estimate but based on stock price movements over the last few weeks, we believe that investors are pricing in a $7 billion cut in earnings for Booking Holdings. This figure is pretty much in-line with the one we derived earlier based on management’s guidance.

In sum, the range of estimates for the dollar impact to Booking Holding’s top line varies from $4–7B over the course of 2020 and will likely be at least $2.6B over the next three months.

Expedia Group

When Expedia Group held its fourth quarter earnings call on February 13, 2020, coronavirus was still primarily a Chinese problem, not a global warning. At Expedia, management was mostly unconcerned, and the company still expected to do double-digit EBITDA growth for the full year after a $30–40 million hit in Asia-Pacific. Executive Chairman Barry Diller did caution that, “if it’s [coronavirus] not contained, … the entire world is going to shut down.”

As month later, as that warning became the reality, Expedia withdrew its 2020 guidance on March 13 and, five days later on March 18, borrowed $1.9 billion of cash from a pre-existing revolving loan facility to bolster its balance sheet heading into this crisis.

Let’s dig into that initial statement about Expedia’s loss in Asia-Pacific. The dollar figure is small only because Asia-Pacific is a small part of the company’s operations. In percent terms, Eric Hart, acting CFO and Chief Strategy Officer, said that the overall region has seen business fall by upwards of 50%, and that, “as you get closer… to China that [drop] can get very much north of that.”

It just so happens that the timing of this statement coincides with the peak of daily new COVID-19 cases in mainland China.

challenges in online travel industry

We know from STR data that RevPARs in China were down 90% at the worst point in time. That Expedia was not as bad speaks to the benefit of geographic diversity that OTAs hold over hotels, which are typically concentrated in a handful of countries.

With the virus shifting to Europe and the U.S., Expedia’s core markets, let’s assume that rate holds. A 50% decline in revenues Q2 2020, implies $1.8 billion in lost revenue during those three months.

Wall Street analysts see a slightly steeper decline and expect Expedia to lost $1.95 billion of revenue in Q2 2020 and $4.7 billion for the full year, equivalent to a 30% drop in revenues for 2020.

challenges in online travel industry

Finally we can turn back to our market analysis of lost revenues. This calculation suggests roughly an $8.1 billion loss of revenues for Expedia in 2020. That would imply a full year decline of 59%.

Trip.com Group

Trip.com Group (formerly known as Ctrip, also includes Skyscanner and other subsidiaries), as the largest online travel agency in China, is uniquely positioned to give commentary on the scope and duration of the coronavirus’ impact on travel. Fortunately, they have been one of the most forthcoming online travel companies as regards COVID-19.

Trip.com said that in the days and weeks following the Lunar New Year, when Chinese travel restrictions to combat coronavirus were first put into place, the company had seen tens of millions of cancellations totaling a gross merchandise value (roughly equivalent to gross bookings) of RMB 31 billion. At current exchange rates that translates to ~$4.4 billion. To put that number in proper context, Trip.com sold RMB 865 billion ($123 billion) GMV of travel in 2018 so these cancellations represent just about 4% of a full year.

On top of the cancellations is the lost revenue from travelers who have skipped new travel bookings altogether, whether by government mandate or personal preference. Trip.com CFO Cindy Xiofan addressed this as well. On the company’s March 18th earnings call, she said that in the first quarter of 2020, the company expects to see net revenue decrease by 45-50% year-on-year.

This guidance implies 1Q 2020 revenue of $598 million, down from $1,196 million in 1Q 2019. Trip.com also broke out the expected COVID-19 impact by business segment in 1Q 2020. CEO Jane Sun said she expects accommodation revenues to be hit the worst, down 60-65%; next most impacted are packaged-tour and corporate travel, both down 50-60%; and finally she expects transportation ticketing to be down 35-40%.

challenges in online travel industry

Turning to Wall Street, analysts have cut 1Q 2020 estimates by $712 million and now expect a -52% decline in revenue, in-line with corporate guidance. They expect this trend to continue through the second quarter of the year with revenues down a further -48%, or a $740 million drop from previous estimates.

However, looking out further into the year, Wall Street analysts are modelling that the coronavirus damage will quickly recede and have barely cut estimates for the 4th quarter at all. In fact, they expect Q4 to return to positive year-on-year growth, up about 8% compared to 4th quarter 2019.

challenges in online travel industry

All told, analysts have chopped just around $1.9 billion of revenue from Trip.com in 2020 and expect the full year to be 23% lower than 2019. But is that too optimistic, especially considering the assumption of a nearly full recovery by the end of the year? The Market would seem to think so, as it is roughly pricing in $2.6 billion of lost revenue in 2020, which would put the year down -38%.

In defence of the analysts, they are picking up on the cues of CEO Jane Sun who ended her most recent analyst call in mid-March on a note of optimist. She said that Trip.com is seeing a “V-shaped” recovery in travel demand. After two months of non-existent demand, now Sun says Trip.com is “already seeing… [positivity] in the China domestic travel business.” Airlines are re-launching shuttered routes and as regards pricing, though “at the beginning, the price was very cheap because I think all the business partners wanted to make sure consumers have confidence for the recovery. Now the price is climbing up, not to the full price yet, but it’s on a good trend, climbing up.”

China was the first to grapple with the coronavirus threat and now is the first to take tentative steps towards recovery. Hotel data from STR backs up Sun’s assertion . It’s research shows that overall occupancy levels in Mainland China have risen from a low of 7.4% in the first week of February to 31.8% by March 28th.

However, we caution against taking this data too optimistically. It is possible that once lockdown rules are lifted in China that the virus could re-emerge. The Wall Street Journal reports that some health experts believe that China may already be seeing a small number of COVID-19 cases begin spreading again as the quarantine is loosened.

The early return of Chinese travel appears to be primarily local weekend trips or small corporate firms. And it is not a given that we will soon see a return to large scale corporate and international leisure from China. Even if Chinese had an appetite for international travel, there is nowhere for them to go at the moment as many of China’s largest outbound markets like Singapore and Japan are currently tightening their quarantines.

The final concern, and one that China shares with the rest of the world is that economic activity may not be quick to recover, even if the virus remains contained. If the damage to the Chinese economy is long-lasting then travel could lag long after the virus is gone.

4 Challenges Faced by Online Travel Agents in 2024

4 Challenges Faced by Online Travel Agents in 2024

The rise of digitalization has disrupted the travel industry. In this modern era, the tech-savvy travelers’ needs are fast evolving, and meeting their expectations is crucial and challenging. Travelport research found that 33% of travelers are more likely to book using OTA. OTAs are the preferred choice for convenience, global access, price transparency, etc., and play a key role in the hotel distribution channel. It’s not just a matter of being able to keep up but staying in front and maintaining a competitive edge over their competitors. 

Read our Infographic to learn more about the challenges faced by Online Travel Agencies.

Challenges faced by OTAs

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Disclaimer: The author is solely responsible for the content in the Infographic and Vervotech does not exert any control or influence over the author's opinions or statements.

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Competing Products and Business Practices. During the term of this Agreement, Referral Partner shall promptly inform Company of Referral Partner promotion, marketing, or distribution of any product or service offering similar functionality to Services. Referral Partner (a) shall conduct its business under this Agreement in a manner that reflects favorably upon Company, Services, and Company's goodwill and reputation, (b) shall not engage in illegal, deceptive, misleading, or unethical trade practices, and (c) shall not, and shall not permit any of its subsidiaries or affiliates, or any of its or their respective directors, officers, managers, employees, independent contractors, representatives, or agents to, promise, authorize, or make any payment, or otherwise contribute any item of value, directly or indirectly, to any third party and in each case, in violation of the applicable anti-bribery or anti-corruption law.

Data Protection and Privacy. In the performance of the services set forth herein Referral Partner may receive or have access to personal data of the Company and its personnel. Referral Partner agrees to comply with the terms set forth in this Agreement, in its collection, receipt, transmission, storage, disposal, use and disclosure of such personal data. Referral Partner agrees to ensure compliance with applicable laws, rules and regulations, including but not limited to laws, rules and regulations related to personal data protection and data privacy. To the extent the Referral Partner will share any personal data with the Company, the Referral Partner shall be responsible for obtaining informed consent from such individuals for the processing of their personal data. The Referral Partner agrees to take all necessary steps to ensure compliance, including but not limited to executing appropriate contractual agreements as may be necessary as per applicable laws.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties. Referral Partner represents and warrants that (a) it has the full corporate right, power and authority to enter into this Agreement and to perform its obligations hereunder, (b) the execution of this Agreement and the performance of its obligations hereunder does not and will not conflict with or result in a breach (including with the passage of time) of any other agreement to which it is a party, and (c) this Agreement has been duly executed and delivered by such Party and constitutes the valid and binding agreement of such Party, enforceable against such Party in accordance with its terms. Referral Partner further represents and warrants that it shall comply with all applicable data privacy laws while performing its obligations under the Agreement, and that it has all rights necessary to provide the Referral Form to Company for Company’s use pursuant to this Agreement. Referral Partner specifically represents and warrants that it has procured from all data subjects whose personal information it is disclosing to Company an explicit consent to disclose their personal information to Company for use in contacting them for marketing and/or other business purposes.

GENERAL DISCLAIMERS- EACH OF COMPANY AND REFERRAL PARTNER ACKNOWLEDGES AND AGREES THAT, IN ENTERING INTO THIS AGREEMENT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IT HAS NOT RELIED UPON ANY WARRANTIES, EXPRESS OR IMPLIED, AND THAT NEITHER PARTY HAS MADE ANY REPRESENTATIONS, ASSURANCES, OR PROMISES THAT COMPANY WILL RECEIVE ANY NEW REFERRED CUSTOMERS OR NEW BUSINESS OR THAT REFERRAL PARTNER WILL RECEIVE ANY REFERRAL FEES AS A RESULT OF THIS AGREEMENT. COMPANY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHICH ARE PROVIDED AS-IS, WHETHER EXPRESS, IMPLIED, OR STATUTORY, ORAL OR IN WRITING, ARISING UNDER ANY LAWS, INCLUDING WITH RESPECT TO ERROR-FREE OPERATION, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

In consideration of the Services provided by the Referral Partner in accordance with the Agreement, Company will pay to the Referral Partner as per the Referral Fee specified below, which shall be Company’ s sole payment obligation.

Referral Fee: For any invoices issued pursuant to Qualified Sales received by Company from customer during the referral period, Company shall pay Referral Partner a Referral Fee as per the % (mentioned on the referral Page) of the amount actually collected by Company from customer as a one-time Referral Fee.

Company shall make payment of undisputed invoice raised by Referral Partner within Sixty (60) days of the date of Company' invoice to customer for the Qualified Sales.

Company shall not pay or reimburse Referral Partner for any expenses related to this Agreement, unless expressly agreed to by Company in writing, before such expenses were incurred.

Limitation on Referral Fee:

Company will not pay more than one (1) Referral Fee in connection with any given Qualified Sales.

Referral Partner will receive the Referral Fee only as one-time fee.

Referral Partner will not be entitled to receive any Referral Fees for any subsequent services which are beyond the first transaction.

A renewal of a Qualified Sale shall not be considered a new Qualifying Transaction and shall not entitle Referral Partner to any Referral Fee.

Referral Fee shall be paid only when the actual invoicing amount have been collected from Qualified Sales. Referral Partner shall not be entitled to receive payment of Referral Fees for Qualifying Transactions remaining unpaid.

LICENSES AND OWNERSHIP

Company Marks. Subject to the terms and conditions set forth in this Agreement and solely for the purposes hereof, Company grants to Referral Partner a non-transferable, non-exclusive license, without right of sublicense, to use the Company trademarks, service marks, and logos as approved by Company (the “Company Marks”) to perform its obligations set forth in this Agreement. The use of all Company Marks, including placement and sizing, shall be subject to Company’s then-current trademark use guidelines, if any, provided by the Company. If the Company Marks become, or in Company’s opinion are likely to become, the subject of an infringement claim, Company may at its option modify or replace the Company Marks and require Referral Partner to cease use of the allegedly infringing Company Marks. Referral Partner shall promptly provide Company with samples of all materials that use the Company Marks for Company’s quality control purposes. If, in Company’s discretion, the Referral Partner’s use of the Company Marks does not meet Company’s then-current trademark usage policy, Company may, at its option, require Referral Partner to revise such material and re-submit it under this Section prior to display, or release of further materials bearing or containing such Company Marks. Except for the right to use the Company Marks set forth above, nothing contained in this Agreement shall be construed to grant to Referral Partner any right, title or interest in or to the Company Marks, and all right, title, and interest in and to the Company Marks shall be retained by Company. Referral Partner acknowledges that Company asserts its exclusive ownership of the Company Marks and the renown of the Company Marks worldwide. Referral Partner shall not take any action inconsistent with such ownership and further agrees to take all actions that Company reasonably requests to establish and preserve its exclusive rights in and to the Company Marks. Referral Partner shall not adopt, use, or attempt to register any trademarks or trade names that are confusingly similar to the Company Marks or in such a way as to create combination marks with the Company Marks.

Company Materials. Subject to the terms and conditions set forth in this Agreement and solely for the purposes hereof, Company grants to Referral Partner a non-transferable, non-exclusive license, without right of sublicense, to distribute the Company Materials exactly as provided to Referral Partner by Company to perform Referral Partner’s obligations under this Agreement.

Ownership. As between Referral Partner and Company, Company retains all right, title, and interest to (a) the Company Marks, (b) the Services, any of its products, material or pre-existing intellectual property rights (c) the high-level description of the Company Products and the Company Materials, and (d) all Intellectual Property Rights related to any of the foregoing. There are no implied licenses under this Agreement.

No Intellectual Property Rights. Parties agree that no intellectual property rights are conceived or developed under this Agreement. If any intellectual property rights are conceived or developed, the intellectual property rights will vest with Company, unless otherwise agreed by the parties.

CONFIDENTIALITY

In connection with this Agreement, “Confidential Information” means all data and information of a confidential nature of Company disclosed by Company to the Referral Partner under this Agreement, as well as information that Referral Partner knows or reasonably should know that the Company regards as confidential, including business practices, software, technical information, future product/services plans, programming/design techniques or plans, know-how, trade secrets, prospects, customers, end users suppliers, development plans or projects, and services. Confidential Information may be communicated orally, in writing, or in any other recorded or tangible form.

Confidentiality. Referral Partner shall maintain in confidence all Confidential Information disclosed to it by the Company. Referral Partner shall not use for any purpose outside the scope of this Agreement, or disclose to any third party such Confidential Information except as expressly authorized by this Agreement. To the extent that disclosure is authorized by this Agreement, the Referral Partner shall obtain prior agreement from its employees, contractors, agents, and consultants to whom disclosure is to be made to hold in confidence and not make use of such information for any purpose other than those permitted by this Agreement. Referral Partner shall use at least the same standard of care as it uses to protect its own most confidential information (and in no event less than reasonable care) to ensure that such employees, contractors, agents, and consultants do not disclose or make any unauthorized use of such Confidential Information. Referral Partner shall promptly notify the other upon discovery of any unauthorized use or disclosure of the Confidential Information. Notwithstanding any other provision in this Agreement to the contrary, the obligations set forth in this section 7 shall survive any termination or expiration of this Agreement for perpetuity.

Exceptions. The obligations of confidentiality contained in this section 7 shall not apply to the extent that it can be established by the Referral Partner by competent proof that such Confidential Information:

was already known to the Referral Partner, other than under an obligation of confidentiality, at the time of disclosure by the Company;

was generally available to the public or was otherwise part of the public domain at the time of its disclosure to the Referral Partner;

became generally available to the public or otherwise became part of the public domain after its disclosure, other than through any act or omission of the Referral Partner in breach of this Agreement; or

was disclosed to the receiving Party, other than under an obligation of confidentiality, by a third party who had no obligation not to disclose such information to others.

Authorized Disclosure. Notwithstanding any provision to the contrary, the Referral Partner may disclose Confidential Information (a) to the extent required by law or any governmental authority, or (b) on a “need to know” basis under an obligation of confidentiality to its legal counsel or accountants, provided, that such Referral Partner shall to the extent practicable (and except to the extent it would jeopardize the filing or prosecution of letters patent) use commercially reasonable efforts to assist the Company in securing confidential treatment of such information required to be disclosed. Prior to disclosing any Confidential Information under this section 7 Referral Partner shall take reasonable steps to give the Company sufficient notice of the disclosure request for the Company to contest the disclosure request.

Referral Partner shall indemnify, defend, and hold Company harmless from and against any and all liabilities, losses, damages, costs, fees, and expenses (including reasonable attorneys’ fees) resulting from or arising out of any Claims based on allegations that (a) Referral Partner breached any obligations including with limitation Confidential Information, representation or warranty contained herein, or has breached any applicable laws, rules and regulations, or (b) Referral Partner made a representation or warranty regarding Company or the Services that is inconsistent with the written high-level description of Services provided to Referral Partner by Company, or is otherwise unauthorized by Company.

Indemnification Procedure. An indemnifying party hereunder shall be liable for any costs and damages to third parties incurred by the other party which are attributable to any such Claims, provided that such other party (i) notifies the indemnifying party promptly in writing of the claim, (ii) gives the indemnifying party the sole authority to defend, compromise or settle the claim, with prior approval of the Company and (iii) provides all available information, assistance, and authority at the indemnifying party’s reasonable request and at the indemnifying party’s reasonable expense to enable the indemnifying party to defend, compromise, or settle such claim. Any indemnifying party hereunder shall diligently pursue any defense required to be rendered hereunder, shall keep the indemnified party informed of all significant developments in any action defended by the indemnified party, and shall not enter into any settlement affecting the indemnified party’s interests without the prior consent of the indemnified party.

LIMITATION OF LIABILITY

COMPANY SHALL NOT BE LIABLE TO REFERRAL PARTNER OR ANY THIRD PARTY FOR ANY INDIRECT DAMAGES INCLUDING TOWARDS COSTS OF PROCUREMENT OF SUBSTITUTE GOODS, LOST PROFITS OR ANY OTHER SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, HOWEVER CAUSED, AND WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCTS LIABILITY OR ANY OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE MAXIMUM AGGREGATE LIABILITY OF COMPANY FOR DIRECT DAMAGES FOR ANY REASON SHALL BE LIMITED TO AMOUNTS PAID BY COMPANY IN RESPECT OF THE QUALIFYING SALE . THESE LIMITATIONS WILL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY REMEDY.

NON-SOLICITATION OF PERSONNEL

The Referral Partner shall not engage or hire as an employee or engage as independent contractor, Company’ s employees or independent contractors during the term of this Agreement and for a period of one (1) year following expiration or termination of this Agreement except as may be mutually agreed in writing.

TERM AND TERMINATION:

Term. The term of this Agreement shall be one (1) year from the Effective Date unless terminated earlier in accordance with the provisions of this Section. This Agreement shall renew automatically for additional one-year terms unless one Party provides the other written notice no later than thirty (30) days prior to the expiration of the then-current term of the Agreement of its intention to allow the Agreement to expire at the end of such term.

Termination for Breach. Either Party may terminate this Agreement for cause resulting from the material breach of this Agreement by the other Party by providing the breaching party written notice of such material breach and the intention to terminate for cause. The Party receiving such notice shall have thirty (30) days to cure such material breach. If at the end of such thirty (30) day period, the breach has not been cured to the reasonable satisfaction of the Party seeking to terminate the Agreement, the Agreement shall terminate.

Termination for Convenience. Either Party may terminate this Agreement for convenience upon ninety (90) days’ written notice.

Effect of Termination; Duties of the Parties Upon Termination. Upon any termination or expiration of this Agreement, Referral Partner shall (a) refrain thereafter from representing itself as a promoter or marketer of Company Products, or as a referral partner of Company, (b) immediately cease all use of any Company Marks, and (c) return to Company the Company materials and Confidential Information and all tangible items in Referral Partner’s possession or under its control containing Confidential Information of Company. Upon any termination or expiration of this Agreement, Company shall return to Referral Partner all tangible items in Company’s possession or under its control containing Referral Partner’s Confidential Information. Upon any termination or expiration of this Agreement, all licenses granted under this Agreement shall terminate.

Survival. Any clauses which by their very nature survive termination of the Agreement, will survive.

MISCELLANEOUS:

Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. As used in this Agreement, the singular shall include the plural and vice versa, and the terms “include” and “including” shall be deemed to be immediately followed by the phrase “without limitation.” The captions and headings in this Agreement are inserted for convenience and reference only and in no way define or limit the scope or content of this Agreement and shall not affect the interpretation of its provisions.

Governing Law and Dispute Resolution: This Agreement will be governed by and construed in accordance with the laws of the India, without reference to its conflict-of-laws principles. The Parties shall resolve any difference or dispute arises out of this Agreement by way of negotiations. If such negotiation process fails, then all disputes arising from or related to this Agreement shall be resolved before exclusive jurisdiction of courts in Pune, India.

NOTICES: All notices including hereunder shall be given in writing by hand delivery, courier service or email at the addresses set forth below:

If to Company

If to REFERRAL PARTNER

Attention: Sanjay Ghare

Email: [email protected]

Address: 3rd Floor, Amar Tech Centre, Sakore Nagar, Viman Nagar, Pune, Maharashtra 411014

Non-Waiver: A party's failure or delay in enforcing any provision of the Agreement will not be deemed a waiver of that party's rights with respect to that provision or any other provision of the Agreement. A party's waiver of any of its rights under the Agreement is not a waiver of any of its other rights with respect to a prior, contemporaneous or future occurrence, whether similar in nature or not.

Captions: The captions in the Agreement are not part of the Agreement, but are for the convenience of the parties. References to Sections are to sections of this Agreement.

Counterparts. Any documents signed in connection with the Agreement may be signed in multiple counterparts, which taken together will constitute one original.

Severability: In the event any term of the Agreement is held unenforceable by a court having jurisdiction, the remaining portion of the Agreement will remain in full force and effect, provided that the Agreement without the unenforceable provision(s) is consistent with the material economic incentives of the parties leading to the Agreement.

Relationship between the Parties. The relationship of Referral Partner and Company is that of independent contractors. Regardless of the use of the word "partner" in the title of this Agreement, neither Party is, nor shall be deemed to be, a partner, joint venturer, agent, or legal representative of the other Party for any purpose. Neither Party shall be entitled to enter into any contracts in the name of or on behalf of the other Party, and neither Party shall be entitled to pledge the credit of the other Party in any way or hold itself out as having authority to do so. No Party shall incur any debts or make any commitments for the other, except to the extent, if at all, explicitly provided herein.

Assignment. Referral Partner shall not assign or transfer this Agreement, in whole or in part, whether by operation of law or otherwise, or delegate any of its obligations hereunder, without the express written consent of Company. Subject to the foregoing, this Agreement shall be binding upon the successors and permitted assigns of the Parties. Any assignment in violation of the foregoing shall constitute a material breach of this Agreement and shall be null and void.

Force Majeure. Neither Party shall be liable for any failure or delay in fulfilling the terms of this Agreement due to fire, strike, war, civil unrest, terrorist action, government regulations, acts of nature or other causes which are unavoidable and beyond the reasonable control of the Party claiming force majeure.

Entire Agreement. The Agreement constitutes and contains the complete, final and exclusive understanding and agreement of the Parties and cancels and supersedes any and all prior negotiations, correspondence, understandings, and agreements, whether oral or written, between the Parties respecting the subject matter thereof. Parties agree that, their engagement with each other is on non-exclusive basis and either Party is free to appoint any third party for performance of their respective obligations.

Electronic Record. This Agreement is an electronic record in the form of an electronic contract formed under Information Technology Act, 2000 and rules made thereunder and the amended provisions pertaining to electronic documents / records in various statutes as amended by the Information Technology Act, 2000. This Agreement does not require any physical, electronic or digital signature. This Agreement constitutes a legally binding document between the Subscriber and the Company.

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Referer's Information:

Referral information:, referral details:.

Pravin

Pravin Mahadik

Chief Financial Officer

Pravin Bandu Mahadik is an ICMAI fellow and accomplished Cost and Management Accountant (CMA) with over a decade of experience in accounts and finance.

As a leader, Pravin has worked across various financial domains, including commercial operations, accounts and finance, auditing, taxation, MIS, transfer pricing, and export management.

He consistently introduces and implements systems to fortify financial control and improve Vervotech’s net organizational efficiency.

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Marvel Puri

Chief Revenue Officer

As chief revenue officer (CRO), Marvel is responsible for every process at Vervotech that generates revenue. He has been instrumental in connecting different revenue-related functions, from sales, customer success, pricing, and revenue operations. His focus-driven approach to improving sales performance, and creating great product and pricing strategy, and delivering customer satisfaction has helped Vervotech to acquire 100 clients within a short stint of 2 years.    

With the experience of over 15+ years in sales and business development at SaaS-based organizations, Marvel has flourished throughout his career by creating and leading experienced and diverse teams. To Marvel, growth has not only been to hit quotas but is broad and holistic: open new paths to revenue and build the processes to get there.

Ganesh Pawade

Ganesh Pawade

Ganesh is a Problem Solver and a Thought Leader. Throughout his 13 yrs professional journey, he helped businesses to identify their platform areas, define solutions and architecture, and make a more technically-informed decision on their current and future business as well as the technology roadmap.

His passion for good code often results in him being engaged in animated discussions with his team of architects and engineers, pushing them to think beyond what is possible. His specialties include Solution Architecture, Full stack specialist, AWS, Azure and Google cloud.

Dharmendra Ladi

Dharmendra Ladi

Dharmendra Ladi has been instrumental in positioning Vervotech as the “World’s Best Mapping Provider” and is focused on transforming how the industry presents accommodation data to its customers. With his 14+ years of experience in travel and innovative technologies, he is the principal architect behind designing Vervotech’s AI-driven products that are today helping its clients worldwide do business seamlessly.    

He leads new product development. Under his leadership, Vervotech has is credited with going from 0 to 100 customers within 2 years of business establishment. Dharmendra is also an inspiring thought leader, and regularly speaks at large scale events, webinars and has been interviewed by multiple media houses.

Sanjay Ghare

Sanjay Ghare

CEO & MD

Sanjay brings over 16+ years of entrepreneurial, general management, and senior executive experience with proven expertise in business development, corporate strategy, and product & program management. Sanjay, being an Industry veteran, and an influencer, leads and drives Vervotech’s vision of “Organizing World’s Accommodation Data.” Before he founded Vervotech, he was a VP of Tavisca Solutions, where he took the started SaaS division and grown with customers in  more than 15 countries.    

With his business acumen, Sanjay is on the trajectory of revolutionizing the accommodation data segment. He’s also a member of the Forbes Technology Council and often puts actionable growth strategies into perspective in his Forbes column.       

challenges in online travel industry

Anurag Mittal

Chief Marketing Officer

Anurag Mittal is a seasoned technology executive who has led multiple marketing teams at SaaS-based organizations. At Vervotech, Anurag is responsible for marketing and strategy formulation and setting up a growth-oriented marketing & prospecting team. Anurag comes with an experience working with Organizations like Deloitte and ACCELQ, where he led the marketing initiatives for their SaaS product lines and has worn many hats including devising marketing strategies for business growth, managing GTM with alliances and partners, conceptualizing and orchestrating marketing campaigns, end-to-end event management, and demand generation activities to deliver a qualified sales pipeline.    

He has been strategic face for the launch of Vervotech’s website and digital presence and have led several winning campaigns that has led to successful brand development and customer acquisition.    

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Rohit Shukla

Chief Product Officer

As Vervotech’s Chief Product Officer, Rohit is responsible for the product strategy and teams working to advance Vevotech’s position as a leading accommodation data company for OTAs, bed banks, DMCs, and Tour operators.

Rohit has been in the technology space for the last 15+ years, working with companies at different stages of growth within Travel, E-commerce, and FinTech Industries. In his previous roles, he drove product strategies for start-ups and SMEs and was instrumental in building platforms and product lines that generated $900 million in revenues and half a million paid customers. The products included flights, hotels, car rentals, activities & vacation packages.

Archana Garg

Financial Advisor

Archana has more than 15 years of experience in finance and operations management. Archana is proven leader in building and scaling companies as a result of her focus on financial strategy and operational excellence. She is motivated by understanding the customers she serves, and providing value at all levels of a business while building strong relationships with her colleagues.

She is a Chartered Accountant and is responsible for driving the Vervotech’s overall financial strategy, including the growth plans. Her experience navigating high growth companies, developing new business strategies and overall operational mindset delivers meaningful results for growth stage of Vervotech.

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challenges in online travel industry

Using Standards to Solve the Challenges of the Online Travel Industry

online travel industry

The online travel industry is one of the largest growing industries but with the current setup, it is hard to believe that we have actually taken longer to reach where we are today. Taking into account the advancements in technology, we are indeed left back while the other industries with comparatively fewer resources have evolved faster and are much more open to all.

Let’s have a look at the biggest problems the online travel industry is facing today followed by what can be done to minimize or curb them.  

Challenges of the Online Travel Industry  

  • Huge fees:  This is perhaps the most painful problem for hotels and airlines. The fees charged by the online travel industry and global distribution systems are going through the roof.  
  • Outdated technology:  Despite the huge growth in technology, the systems and technologies used by the travel industry are outdated and lack standards. This results in information having to make 5-10 hops before it reaches the travel agent. The result is an extensive lag, which is in minutes, rather than milliseconds, increasing the cost of transmitting this information from suppliers to end users dramatically.  
  • No master plan:   The travel tech ecosystem is incredibly complicated. This makes it very difficult for new companies to enter it. Since there is no master plan, there are few established standards and the market leaders are just maintaining their status quo.  
  • The way it has evolved.  
  • The legacy structure of underlying databases.  
  • The way it has worked for this long.  

Due to too many inputs, some regulations, some supplier-mandated, some intermediary-mandated and some technically-mandated, the travel data structures have become labyrinth and complex.  

  • Huge access fee and unavailability of data:   There is no freely available aggregated data and it is necessary to have a commercial agreement to get access to any travel industry information. To get this commercial access, a huge access fee is required which becomes a big hurdle to clear for many startups.  
  • No perfect structure:   There is a great deal of information available in the travel industry but no clear way to get it. The large travel companies are siloed, bureaucratic and hierarchical making it difficult to get information from one fixed source.  

Actions we can take to curb these problems  

Make it possible to have a universal app connecting multiple carriers and airports. End-users must not require to install tens of apps for hotels, flights and transfers differently. One app must solve all the problems in one place and that is exactly what our travel mobile booking app is designed to offer. For end users, it brings all their necessities in one place and for businesses it brings the power of their entire travel business at their fingertips.  

  • Hotels must provide an API endpoint to third party developers facilitating easy access to their prices and itinerary availability.  
  • There must be multiple market places for hotel rooms, where companies can buy individual rooms and room blocks as well.  
  • The APIs and Standards must be organized in one place making them open for use, improvement and contribution.  
  • There must be modern and usable methods of interoperability.  

We have indeed come a long way and surprisingly there is a lot remaining to achieve. With established leaders giving easy and open access to their APIs and allowing other companies and organizations to contribute and improve them, true innovation will not remain far away.  

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Home » Digital Transformation » How Will Digital Transformation (DX) Impact The Travel And Tourism Industry?

How Will Digital Transformation (DX) Impact The Travel And Tourism Industry?

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  • Updated December 21, 2022

How_Will_Digital_Transformation_(DX)_Impact_The_Travel_And_Tourism_Industry_

In recent years, the travel and tourism sectors have been under pressure to modernize and digitize their operations and offerings. With the rise of digital-native companies, such as Airbnb and Uber, traditional travel players have been forced to reevaluate their businesses and adopt digital solutions, processes, and technologies to remain relevant and competitive. This shift towards digital is often referred to as digital transformation or DX and can even help develop a more sustainable industry footprint.  

Digital transformation (DX) is having a profound impact on the travel industry. Digitally enabled growth helps develop the entire tourism cycle through various forms of digital disruption. Digital transformation considers everything from the customer journey, customer preferences, sustainable development goals, and efficient decision-making to overhaul business processes and revolutionize tourism and travel.

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In this blog post, we’ll explore how DX impacts the travel industry and some specific ways it’s changing how we book travel. We’ll also discuss some of the industry’s challenges in its DX journey. 

How Is DX Impacting The Travel Industry? 

How_Is_DX_Impacting_The_Travel_Industry_

DX is impacting the travel industry in several different ways. First and foremost, it’s changing how travelers research and book their trips. In the past, most people would go to a travel agent to plan their vacation. However, with the advent of the internet, travelers can now do their research online. They can read reviews, compare prices, and book their flights, hotels, and rental cars without ever speaking to a human being. 

A recent report by the World Economic Forum stated, “ The industry has been at the forefront of digital disruption, changing the way we travel in recent years. However, our research suggests it should brace itself for another wave of digitally fuelled transformation.”

This shift towards self-service has had a significant impact on traditional travel companies. For example, many airlines have Eliminated or reduced fees for booking through their website instead of through a call center. Hotels have also started to offer more self-service options, such as check-in kiosks and mobile check-in. And tour operators are increasingly offering digital booking options as well. 

In addition to changing how travelers book their trips, DX is also changing how they take them. Thanks to advances in mobile technology, travelers can now use their smartphones and tablets to do everything from checking in for their flights to ordering room service at their hotels. They can even use apps like Citymapper to navigate unfamiliar cities without carrying around a paper map. 

The rise of mobile technology has also impacted how people interact with each other while on vacation. For example, social media platforms like Instagram and Snapchat have allowed people to share real-time photos and videos of their experiences with friends and family members. This has changed how people document and remember their trips – rather than waiting until they get home to develop a photo album or write a blog post about their journey, they can share highlights as they happen. 

While there are many benefits associated with DX in the travel industry, some challenges also need to be addressed. Data privacy is an example of one of the industry’s biggest challenges. As more companies collect data about their customers (including contact information to credit card numbers), there is an increased risk of data breaches.

Another challenge is fraud – with so many people now booking travel online, there has been a rise in scams targeting travelers (such as fake hotel websites). And finally, there is the issue of sustainability. As more people take advantage of technological advances such as air sharing and electric cars, there is an increased need for sustainable practices throughout the travel industry to enjoy traveling without damaging our planet beyond repair. 

The Top Five Digital Transformation Trends In The Travel Industry

The_Top_Five_Digital_Transformation_Trends_In_The_Travel_Industry

So what are the top digital transformation trends in the travel industry? Here are five of the most important ones:

Mobile Technology

As we’ve already discussed, mobile technology is changing how travelers book their trips and navigate their destinations. In addition, it’s also being used to create new experiences – such as augmented reality (AR) tours that allow people to explore a destination without leaving their homes. 

Artificial Intelligence (AI)

Artificial intelligence (AI) is used in several ways throughout the travel industry. For example, some airlines use it to provide customer service, while others use it to improve flight safety. And hotels are starting to use AI to personalize the guest experience by offering custom recommendations based on past stays. 

Virtual Reality (VR)

VR is being used to give travelers a taste of their destination before they even leave home. For example, Marriott Hotels has launched a VR experience that allows people to “stay” in one of their properties and explore the surrounding area. And some tour operators are using VR to create virtual tours of popular destinations. 

Data-Driven Analytics

Data-Driven analytics is being used by travel companies to better understand their customers and what they want. This information can then be used to improve the customer experience – for example, by offering custom recommendations or providing discounts on future bookings. 

Blockchain is a digital ledger that can store transactional data. Some travel companies are already using it to store data about customer bookings and track luggage movement. And it has the potential to be used for a variety of other applications, such as identity verification and fraud prevention. 

Digital transformation is currently having a major impact on the travel industry – and this will likely continue in the future. So, staying up-to-date with the latest trends and technologies is essential if you’re involved in the travel industry. Otherwise, you risk being left behind.

Omnichannel Sales and Marketing for the Travel Industry

Omnichannel_Sales_and_Marketing_for_the_Travel_Industry

Digital transformation has changed how travelers book their trips – and it’s also changing how travel companies sell their products. In particular, there has been a shift from traditional offline sales and marketing methods to omnichannel sales and marketing.

Omnichannel sales and marketing is an approach that uses a combination of channels (such as online, offline, social media, etc.) to reach customers. And travel companies must adopt this approach because travelers use various channels to research and book their trips.

For example, a traveler might start by doing some initial research on Google before moving on to reading reviews on TripAdvisor. They might then visit the websites of various hotels and airlines to compare prices. And finally, they might book their trip on an online travel agency (OTA) such as Expedia. 

If a travel company wants to reach this traveler, they need to have a presence on all these channels. They also need to ensure that their sales and marketing messages are consistent across all these channels. Otherwise, they risk losing the customer’s attention and their business.

The Rise Of Digital Tourism

The_Rise_Of_Digital_Tourism

Digital transformation is also changing the way that people travel. In particular, there has been a rise in digital tourism, defined as “the use of digital technologies to enhance the experience of tourists and visitors.”

One example of digital tourism is mobile apps to help people navigate their destinations. Google Maps is one of the most popular navigation apps, but many destination-specific apps can be used to find attractions, restaurants, and other businesses.

Another example of digital tourism is the use of social media to share travel experiences. Hashtags such as #travelgram and #wanderlust are often used by travelers to share photos and videos of their trips with friends and followers. And some destinations are even using social media to market themselves – for example, the city of Las Vegas has its own Instagram account with over two million followers.

The Evolution Of The Travel Industry: DX

The_Evolution_Of_The_Travel_Industry__DX

Some of the most significant changes that we can expect to see in the future include:

  • A continued shift from offline to online sales and marketing
  • An increase in personalization
  • The use of data analytics to improve the customer experience
  • The adoption of new technologies, such as blockchain, AR, and VR

The digital transformation of the travel industry is inevitable. It has already started and is continuing to evolve at a rapid pace. Travel companies must be aggressive about adopting new digital innovations and processes to stay ahead of the curve. Otherwise, they risk being left behind by their competitors. 

Digital transformation can seem daunting, but it doesn’t have to be. By taking things one step at a time, you can transition to a digital-first business model. And if you need help, plenty of digital marketing agencies specialize in the travel industry and can assist you with your digital transformation journey.

The Future Of Travel

Digital transformation is set to continue reshaping the travel industry in the years to come. Some of the most important trends to watch out for include:

The continued rise of digital tourism

  • The increasing use of data analytics
  • The adoption of blockchain technology
  • The growth of omnichannel sales and marketing 

What does this all mean for the future of travel? It’s hard to say for sure. But one thing is certain – digital transformation is here to stay, changing how we travel. A more critical question is how digital transformation (DX) will impact the travel industry in the digital era.

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Major Challenges Faced By Online Travel Agencies

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challenges in online travel industry

Online travel agencies (OTAs) operating in the travel industry face several unique challenges that are specific to the nature of their business.

Some of the main challenges faced by Online Travel Agency include:

  • Price Competition : Price sensitivity is a significant factor in the travel industry. Customers often prioritize finding the best deals, which can lead to price wars among Online Travel Agencies. This puts pressure on profit margins and makes it challenging to build brand loyalty.
  • Supplier Relations : OTAs rely on partnerships with airlines, hotels, car rental companies, and other travel suppliers. Negotiating and maintaining these relationships can be challenging, as suppliers may demand lower commissions or exclusive deals with competitors.
  • Dynamic Pricing : The travel industry often uses dynamic pricing, where prices fluctuate based on demand, seasonality, and other factors. Online Travel Agency must constantly update their pricing information to provide accurate and competitive rates to customers.
  • Customer Trust and Data Security : OTAs handle sensitive customer information, including payment details and passport information. Ensuring data security and gaining the trust of customers is a constant challenge, particularly in the face of data theft and cyber-attacks.
  • Competing with Suppliers : Many travel suppliers, such as airlines and hotels, also sell directly to customers through their websites. OTAs must compete with these suppliers while offering added value to customers in terms of convenience and comparison.
  • Distribution Costs : Acquiring customers and driving traffic to their platforms can be costly for OTAs. They often spend significant amounts on marketing and advertising to remain visible in a crowded market.
  • User Experience : Providing an intuitive and user-friendly booking experience is crucial. Customers expect a seamless process from search to payment. Any friction in the booking process can lead to abandoned bookings and lost revenue.
  • Mobile Optimization : With the increasing use of smartphones for travel booking, Online Travel Agency must ensure that their websites and apps are optimized for mobile devices to capture a growing segment of the market.
  • Customer Reviews and Reputation Management : Negative customer reviews and public relations issues can significantly impact an OTA's reputation and deter potential customers.
  • Emerging Technologies : OTAs must keep up with emerging technologies, such as artificial intelligence, augmented reality, and blockchain, to provide innovative solutions and stay competitive.

To thrive in the travel industry, OTAs need to continuously adapt to changing market conditions, invest in technology, provide exceptional customer experiences, and differentiate themselves from competitors through unique value propositions.

To succeed in this competitive landscape, online travel agencies must continually adapt, innovate, and find ways to differentiate themselves, whether through personalized offerings, exceptional customer service, or unique partnerships with travel suppliers. Additionally, they must stay attuned to industry trends and evolving customer preferences to remain relevant and profitable.

We need strategic approaches and solutions to ensure the long-term success of Best Online Travel Agency .

Here are some possible solutions to the major challenges mentioned :

  • Intense Competition :   By offering unique travel experiences, specialized services, or exclusive deals Online Travel Agencies can differentiate themselves. This also helps in building a strong brand image and gaining customer loyalty and trust.
  • Price Differences :   An Online Travel Agency can provide the best deal to its customer, after negotiating with travel providers to ensure rate parity and align pricing strategies.
  • High Marketing Costs :   Implement loyalty programs to retain customers and reduce the need for costly acquisition campaigns.
  • Technology and Security Challenges :   Consistently update and secure their platforms to protect customer data.
  • Regulatory and Compliance Issues :   Establish dedicated teams to monitor and ensure compliance with various regulations across different regions.
  • Customer Trust and Service Quality :   Offer 24/7 customer support to address traveler concerns and issues promptly.Be transparent about policies and fees, and resolve customer complaints swiftly and fairly.
  • Economic and Environmental Factors :   Offer eco-friendly and sustainable travel options to cater to environmentally conscious travelers.
  • User Experience and Mobile Optimization :   Ensure the website and mobile app has a responsive design for a seamless user experience.
  • Dependency on Search Engines :   Continually invest in search engine optimization to maintain strong search engine visibility.
  • Rate Parity Issues :   Negotiate with suppliers for more favorable rate parity clauses; OTAs can emphasize value-added services like free cancellation, additional benefits, or loyalty rewards.
  • Market Volatility :   By implementing dynamic pricing strategies Online Travel Agency can minimize the impact of market volatility such as price fluctuation and customer behavior.

In an industry as dynamic as online travel, the ability to adapt to these challenges is essential for OTAs. Continuous innovation, adaptation to evolving customer preferences, and a commitment to improving customer experience and service quality are key factors in overcoming these challenges. OTAs that successfully address these issues will be better positioned for long-term success.

The challenges that you have to face in an Online Travel Agency can be easier to handle if you choose the right technology partner. You can easily overcome all the above challenges by finding a reliable and experienced Travel Technology Solution partner like SRDV .

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  • Trends 2024

Travel Trends 2024: How the Digital Revolution Is Shaping the Future of Our Industry

Aurelio Maglione

Table of Content

Digital transformation in the travel industry, sales channels: balancing the old and the new, direct bookings vs resellers, marketing channels and strategies for 2024.

The world of travel is experiencing an unprecedented era of transformation: as we enter 2024, the industry continues to deal with the aftermath of the global pandemic and adapt to new consumer behaviors, technological advancements and evolving market dynamics. In 2023, we have witnessed a robust recovery, with international travel volumes approaching pre-Covid levels . However, this doesn’t mean a return to the old ways, as customer preferences have changed significantly in recent years.

There is a growing appetite for personalized, flexible and sustainable travel options, with digital nomadism redefining the concept of both leisure and business travel, blurring the lines between the two. In addition, the rise of experiential tourism is shifting the focus from sightseeing to immersive cultural adventures. Sustainability has also moved from a niche consideration to a mainstream demand , as most people are increasingly aware of their environmental footprint and seek out eco-friendly accommodations and responsible travel experiences. This is more than a fad: it is a broader societal movement that is forcing the tourism industry to rethink its practices and offerings.

For tour operators and activity providers, staying abreast of these changes is essential to survival and growth. To better understand the travel trends that will shape the future of the industry in 2024, we interviewed over 100 industry professionals from all across Europe. This article is designed to accompany our infographic detailing their responses . We hope it will provide valuable insight into the key drivers behind their business strategies and offer actionable takeaways to help you replicate their success. Without further ado, let’s dive right in!

sustainability

Tourism is undergoing a profound digital transformation, reshaping the way services are delivered and experienced. The emergence of smart technology in accommodations, such as IoT-enabled rooms, and the use of big data for personalized recommendations are examples of how technology is becoming an integral part of the travel experience itself. This integration presents an opportunity for providers to deliver unique value to their customers and stand out in a competitive marketplace.

The pivotal role of booking systems

The pivotal role of booking systems

Booking systems are at the heart of this digital revolution and have quickly become a critical interface between the supplier and the customer. Not surprisingly, 89% of respondents to our survey use them to easily manage bookings, sell tickets online and connect with leading OTAs. Let’s explore the top 5 features they find most beneficial in a booking system:

Key features of booking systems

Key features of booking systems travel trends 2024

  • Online payments: Offering secure, versatile online payment options is essential. This includes accepting multiple payment methods such as credit cards, PayPal, and digital wallets to serve a global customer base.
  • Dashboard calendar: An intuitive dashboard calendar facilitates the management of bookings, availability, and scheduling. This feature enables suppliers to stay organized and respond quickly to changes, minimizing overbooking and scheduling conflicts.
  • Booking widget: A customizable booking widget on the supplier’s website allows the booking process to be seamlessly integrated into the user experience. This results in a smoother booking flow and encourages more direct bookings.
  • Channel manager: With the proliferation of distribution channels, a channel manager becomes vital. It ensures real-time synchronization of availability across multiple platforms such as OTAs, the official website of the supplier and other portals, reducing the risk of overbooking and facilitating inventory management.
  • Booking management: Efficient booking management includes features such as easy cancellations or changes, automated confirmation and reminder emails, and customer management tools. This improves the overall customer experience and operational efficiency.

As the leading booking system provider in Europe, Regiondo has been at the forefront of incorporating these essential features. The platform offers a comprehensive solution that not only addresses the basic needs of booking and payment processing, but also provides advanced tools such as resource management , marketing integrations and detailed analytics. This makes Regiondo a model for digital transformation in the travel industry, demonstrating how technology can facilitate business operations and enhance the customer journey. To learn more about how Regiondo can help your business thrive, book a demo with one of our consultants.

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In 2024, the sales channels of the travel industry will continue to evolve: understanding how to balance them is key to maximizing reach and profitability.

Offline vs online dynamics

The travel industry has historically relied on a mix of offline and online distribution channels. While online channels have seen tremendous growth, especially in the wake of digital transformation, offline channels such as in-person travel agents and booking offices still play an important role, especially for certain markets and demographics.

Offline vs online dynamics

Current balance: In our Trends 2024 survey, we asked participants to break down the share of sales they make online vs. offline. The weighted average shows that 56.67% of tickets are sold through digital channels, while the rest (43.33%) are sold through phone, in-person, and other offline channels. In summary, the current landscape is skewed towards online, driven by the convenience, accessibility and wide range of options it offers. However, offline continues to thrive by catering to customers who value personal interaction and customized service.

Future trends: The future points to a more integrated approach, with a growing emphasis on phygital experiences that blend physical and digital elements. For example, interactive digital displays in physical travel agencies could increase customer engagement.

Another issue we wanted our experts to weigh is their relationship with distribution partners. Specifically, we asked them to disclose the number of online bookings they receive through direct channels (website, official social media pages, emails) versus those received through resellers. The results paint a clear picture, with a weighted average of only 33% of tickets sold through intermediaries. But let’s take a closer look at the pros and cons of these two types of channels:

Direct bookings vs resellers travel trends 2024

Direct Bookings

  • Pros: Higher margins, direct relationship with customers, greater control over customer experience.
  • Cons: In order to attract direct bookings, you need to invest in marketing, technology and a strong brand presence.
  • Pros: Extended reach, especially in markets where your brand has less presence; reduced marketing costs.
  • Cons: Lower margins due to commissions, less control over the customer experience.

Leveraging Both

In our humble opinion, the key is to find the right balance. Leverage resellers to reach new markets and demographics, while building a robust direct booking strategy to drive customer loyalty and brand identity.

The Role of OTAs (Online Travel Agencies)

Among the various resellers, OTAs have become a dominant force in the travel booking landscape. As you know, they offer exposure to a huge audience, but at the cost of commissions. Speaking of which, we asked our survey participants about the average percentage of commission they pay to OTAs on each order. The results are interesting: 1 in 3 respondents said they don’t work with OTAs at all to save on these costs. As for the rest, the vast majority pay fees ranging from 20% to 29% of the price of their tickets.

the role of otas

We also asked our industry experts to identify which OTAs drive the most bookings for them from a selection of the most popular. Their response highlights how fragmented the digital distribution landscape can be, as a quarter of respondents said the resellers they have the most lucrative relationships with are not on our list. Still, when it comes to the top dogs, this is the podium:

  • GetYourGuide
  • TripAdvisor

Love ’em or hate ’em, OTAs continue to be a mainstay of the leisure industry, which is why we want to draw your attention to three important key elements that will help you get the most out of the commissions you pay:

  • Perform a cost/benefit analysis: As we have seen, commissions can vary widely, typically ranging from 15% to 30%. It’s important to understand the cost/benefit ratio and how it impacts overall profitability.
  • Negotiate: Negotiate better rates as your business grows, bundle services to increase the value of each booking, and use OTAs for visibility while encouraging repeat bookings through your direct channels.
  • Follow these best practices: Ensure your listings are up-to-date and engaging, take advantage of OTA marketing tools and analytics, and tap into OTA platforms for market insights and trend analysis.

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As the travel landscape continues to evolve with ever-changing customer preferences, it can be difficult for tour and activity providers to understand the most effective marketing strategies to employ. So we asked our experts to list the marketing channels that drive more bookings for their businesses. Here are their top 5:

Marketing Channels and Strategies travel trends 2024

SEO (Search Engine Optimization)

SEO (66% of respondents) continues to be a cornerstone of digital marketing strategies. It’s critical for increasing visibility in search engine results, driving organic traffic and building online authority.

  • Key areas of focus: Local SEO is especially important for travel businesses to ensure they appear in searches for local attractions and services. Optimizing for mobile and voice search is also essential as these trends continue to grow.
  • Content marketing: Creating valuable, engaging content that answers potential travelers’ questions can significantly improve search rankings and drive organic traffic.

Word of mouth

Word of mouth (61% of respondents) is a powerful tool, especially in the digital age. It can happen organically or be encouraged through referral programs.

  • Leverage social proof: Encourage happy customers to share their experiences online, whether through social media, blogs or video content.
  • Referral programs: Implementing referral incentives can motivate past customers to spread the word to friends and family.

Social media (Organic)

Organic social media marketing (54% of respondents) is about building community and engaging authentically with your audience.

  • Platform-specific strategies: Tailor content to the strengths and audience of each platform, whether it’s visually-driven Instagram, conversation-centric X (previously known as Twitter), or the increasingly popular TikTok.
  • Engagement and community building: Posting regularly, interacting with followers, and creating shareable content are key strategies.

Social media and Search ads

Paid social media and search advertising (29% of respondents) is a critical component of a comprehensive marketing strategy.

  • Targeted campaigns: Use the granular targeting options available on platforms like Facebook, Instagram, and Google to reach specific demographics, interests, and behaviors.
  • Retargeting: Implement retargeting campaigns to capture prospects who have shown interest but haven’t yet booked.

Online reviews (25% of respondents) continue to have a significant impact on consumer decisions in the travel industry.

  • Online reputation management: Actively manage your presence on review platforms such as TripAdvisor, Google Reviews and Yelp.

But how much should you spend on marketing? As a point of reference, the estimated average marketing budget for respondents to our survey is €972.82 per month. The key, however, is to take a balanced (no pun intended) approach. While it’s tempting to focus on the latest trends, it’s more important to allocate resources across channels based on their performance and your target audience. We recommend regularly reviewing and adjusting your marketing budget based on analytics and ROI. This may mean shifting funds from underperforming campaigns to those that are delivering better results, or investing in new platforms and technologies.

travel trends 2024

As we look ahead to 2024, the travel industry is at a pivotal crossroads, marked by rapid technological advances, changing consumer behavior and evolving market dynamics.

Key points:

  • Digital transformation: The integration of technology into the travel experience, particularly through advanced booking systems such as Regiondo, is fundamental. The adoption of digital tools and features such as online payments, dashboard calendars, and AI-driven personalization can significantly improve efficiency and customer experience.
  • Sales channels: A balanced approach between offline and online distribution channels, and between direct bookings and resellers (primarily OTAs), is critical for long-term success.
  • Marketing strategies: The marketing landscape of 2024 will require a mix of advanced digital marketing, content marketing through storytelling, strategic influencer partnerships, local SEO optimization, and well-planned budget allocation across channels.

Looking ahead, the call to action for travel and activity providers is clear: adapt, innovate and thrive. Embrace digital transformation with open arms, understanding that technology is not just a tool, but a bridge to connect with and better serve your customers. Align your sales and marketing strategies to leverage multiple channels and respond to the changing needs and habits of travelers. Most importantly, stay attuned to your audience’s preferences and values to ensure your offerings resonate with their desire for unique, sustainable and culturally rich experiences.

The future of travel is bright and full of possibilities. Let’s embark on this journey together, innovating and evolving to create memorable experiences for tourists around the world.

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What Are the Biggest Challenges Facing the Travel Industry?

Overtourism, sustainability, and other issues dominated conversations about the travel industry pre-COVID. Have things changed since the pandemic? What are the biggest issues facing the industry today.

Tauck 's Jennifer Tombaugh, in this clip from TMR's Check-In podcast, gives her takes on what is going to challenge the industry going forward.

The full episode is available here . 

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5 Mega Challenges Facing the Global Travel and Tourism Industry

Travel and tourism industry

The global travel and tourism industry sits smack in the eye of a perfect storm. On the one hand, demand is up. Planes are packed. Our wanderlust is lustier than ever. On the other hand, rising inflation, lagging infrastructure, geopolitical uncertainty, staffing shortages, and COVID’s lingering impact have all converged into the stuff of nightmares — for travelers and the travel industry alike.

As researchers and advisors to global tourism boards and brands across the travel and tourism ecosystem, we are seeing some of these challenges hit certain players harder than others. On the bright side, recovery is on the horizon. But some geographies and industry sectors will face steeper challenges as five major headwinds converge upon them. We’re seeing opportunities for brands to get ahead of the storm and put the wind at their back.

These are the top five challenges facing the travel and tourism industry today, along with our perspective on navigating the way forward.

Travel Insight #1: Inflation means trade-offs and discretionary travel may lose out

Just when tourism was on the rebound, rising inflation came nipping at the heels of a travel boom. Escalent’s forthcoming 2022 Holiday Shopping & Travel Study revealed only 42% of consumers feel confident they’ll achieve their 2022 holiday travel plans (down 24 percentage points from 2021), and 49% of consumers are uncertain their holiday plans will be achieved (up 23 percentage points from 2021).

For the travel and tourism industry, inflation is a huge concern since it drives up product prices and affects consumers’ willingness to spend on discretionary travel. According to Euromonitor, 63% of travel executives said inflation was having a moderate to extensive impact on their businesses. Subsequently, over half of global travel companies acted in kind, by raising all or some of their prices. This was even higher in the Americas, where 59% of the companies raised all or some of their prices. Meanwhile, 44% of businesses accepted that they would suffer from having a lower profit margin by absorbing the inflationary costs rather than passing them on to their consumers to limit impact on their travel plans.

During inflationary times, it is common to see brands cut back on their marketing and advertising spend. While this reduces costs short term, it can be a setback to building long-term brand trust. In times of uncertainty, consumers tend to gravitate towards certainty, something a trusted brand can confer. And a destination is a brand. The more trust you can build amid uncertainty, the better.

Travel Insight #2: The ripple effects of geopolitical disruption

Geopolitical instability is also a key concern for the travel and tourism industry. The outlook for global travel and tourism for inbound spending is expected to be at 45% of 2019 levels, according to Euromonitor’s travel forecast model. The war in Ukraine is estimated to have caused a $7 billion decline in global inbound tourism, while Russian outbound tourism has all but collapsed under economic sanctions, airspace closures and flight bans. The loss of big-spending Russian visitors will impact travel destinations globally, but especially in Europe, the Caribbean and Turkey.

What happens when your high-value source market can’t travel? The ripple effects of geopolitical disruption are felt across regional clusters, forcing travel and tourism entities to rethink their source markets and reset their tourism marketing and targeting strategy.

Travel Insight #3: The travel and tourism infrastructure is in trouble

The pent-up travel demand is causing additional strain on the existing infrastructure, particularly for the airline sector. Problems with safety protocols and compliance with new national and international health standards are predicted to be made worse by capacity constraints when the industry recovers. This is expected to result in (even) longer lines, (more) crowded terminals and operational bottlenecks.

Social distancing measures have been lifted in many countries, including the US. But measures are still in place in many airports around the world, thus reducing airport capacity. Airports that operated close to their saturation capacity before the COVID crisis can expect to reach their maximum saturation capacity at just 60%–75% of their pre-COVID peaks.

According to ACI World, as air transport demand recovers, passenger demand will put more pressure on existing airport infrastructures. This may have socio-economic consequences, if not addressed in time. If long-term capacity constraints are not addressed through capital investments, it is estimated to lead to a reduction of up to 5.1 billion passengers globally, by 2040. For every million passengers that airports cannot accommodate due to airport capacity constraints in 2040, there would be 10,500 fewer jobs and 346 million USD less in GDP contribution from the industry.

Airports are often the “first impression” of a destination. A traveler’s airport experience sets the stage for the rest of the journey. When greeted with chaos and delays, even the most intrepid traveler can sour on the experience. Recently the US has made modest steps towards infrastructure improvement, including the Infrastructure Investment Act passed in November 2021, which includes spending for airports. While its impact will not be immediately felt, many travel associations have applauded the passing of this long overdue legislation.

Travel Insight #4: There’s no quick fix for the staffing shortage

If you’ve stepped foot in an airport this summer, you already know. The travel industry is facing a severe staffing challenge, particularly for customer-facing roles at hotels and airlines. Industry CEOs acknowledge that they are struggling to add staff to meet demand.

Airlines, in particular, are struggling to fill staffing requirements. Boeing’s 2021 Pilot and Technician Outlook voices concern that many airline workers who were furloughed during COVID may have left the industry permanently. The commercial airline industry needs 612,000 new pilots, 626,000 new maintenance technicians and 886,000 new cabin crew members over the next 20 years. Hotels and hospitality are also struggling, making it harder to deliver on guests’ expectations. Many hotels are shifting housekeeping services to a by-request-only model and some are cutting back on food and beverage amenities, including room service and restaurants.

What’s the precautionary tale to take away from this staffing mess? It can take decades to build brand trust, and one canceled flight, one bad stay, to destroy it. How people experience your brand — no matter if it’s in the best of times or the worst of times — stays with them. Travelers expect consistency from major brands. It will take time and investment for many airline and hospitality brands to rebuild trust in the quality and consistency of their brand experience.

Travel Insight #5: COVID is with us for the long haul

COVID travel restrictions are still impacting many elements of world tourism, with countries like China continuing to impose stringent restrictions and quarantines on visitors as well as Chinese outbound travelers.

In Asia Pacific, 83% of travel businesses report that ongoing COVID restrictions continue to have a moderate to extensive impact. This compares with 59% in Western Europe, according to Euromonitor. Although less, compared to 2021 levels, COVID concerns among travelers persist. Ongoing concerns, including new variants, affect the travel decisions of 55% of travelers, according to another recent study. Travelers are planning their trips cautiously, and nearly 70% are avoiding certain destinations, with 56% preferring close destinations and 56% avoiding crowded places.

Just as sanctions have grounded Russian travelers, COVID restrictions are keeping Chinese travelers homebound. Popular destinations for Chinese tourists such as Japan, Thailand, Singapore and Australia continue losing out on billions in tourism revenue. And countries with strict quarantine requirements like Japan continue to struggle. Between June 10 and July 10 this year, Japan hosted only 1,500 international tourists, according to data from Japan’s Immigration Services Agency. That’s down 95% from the same period in 2019. Who wants to spend half their holiday in quarantine? Destinations like Japan have focused on promoting domestic travel, but with COVID with us for the long haul, doubling down on domestic travel marketing and promotions is not a sustainable strategy.

Turn disruption into opportunity with tourism industry research and consulting

Escalent specializes in travel and tourism market research, traveler behavior, tourism investment strategy and consultative support across the travel and tourism ecosystem. Learn more about our Travel & Tourism practice and let us help you ride out the storm and go forth with confidence.

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SOURCES CITED

(forthcoming) Escalent 2022 Holiday Shopping and Travel Study Please contact us if you would like to be notified when the report is available. View press release .

Voice of the Industry: Travel Survey, Facing New Challenges, Euromonitor, May 2022

Travel: Quarterly Statement Q1 2022, Euromonitor, May 2022

Holiday Barometer among Europeans, North Americans, Asians & Oceanians, Ipsos, June 2022

Japan is open to travel. So why aren’t tourists coming back? CNN, July 31, 2022

Deloitte travel outlook, The winding path to recovery 2022

Half of US Hospitality Workers Won’t Return in Job Crunch, Bloomberg, July 2021

Staff Shortages: World Travel & Tourism Council Travel Survey, May 2022

Related Industry: Travel & Tourism

Related Solution: Brand Positioning , Customer Experience Management , Market Assessment

Related Expertise: Secondary Research

Vivek Neb

Vivek leads Escalent’s Travel & Tourism practice where he works with tourism boards, airlines, hotels and hospitality brands across the globe, including in China, Africa, Southeast Asia, and the Middle East. A featured thought leader at global travel and tourism forums such as ITB, TTRA, and PCMA, his expertise spans the Travel & Tourism value chain. Vivek is an experienced business executive with expertise in various business elements including operations, business development and P&L management. A seasoned insights leader, he advises clients on market assessment  and entry strategy, market sizing and growth strategies. An engineer by training, he holds an MBA in Strategy & Marketing from the Indian Institute of Management. Vivek has a keen interest in human psychology and believes that a transparent, win-all proposition is the key to creating a sustainable people-centric business.

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challenges in online travel industry

How safety concerns over Boeing planes affect the air travel industry

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The headaches just keep piling up for Boeing: The Justice Department recently launched a criminal investigation into the January incident involving an Alaska Airlines flight, according to an exclusive by the Wall Street Journal . And string of safety incidents on Boeing planes over the last week has once again turned the spotlight on Boeing and the well-documented safety concerns over its planes.

But as U.S. air travel continues to break records, does failing trust in Boeing and its planes actually hurt the industry?

Since an airplane door panel blew out midair on a 737 Max 9 in January , consumer trust in Boeing has taken a serious hit, said Nicki Zink with Morning Consult.

But as for the carriers who fly those planes, “actually, trust in airlines is creeping up a little bit following the end of 2022,” she said. “It’s small, but I think still really notable because it’s actually quite hard for brands to build trust.”

And Mike Gallinari with Mintel said that he doubts many travelers will actually stop flying in Boeing’s planes.

“Taking time out of this booking process to research the craft that the flight might be on and book around that if so desired — I think that’s just a level of work and complexity that your average air passenger isn’t going to undertake,” he said.

And when you consider alternatives like driving, “it’s still far safer to fly than any other form of transportation,” noted travel writer Tim Leffel .

Travelers may think poorly of Boeing, he said — but they’d still rather fly to visit grandma than stay home.

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Boeing Delivery Delays Worsen Airline Industry’s Woes

U .S. air carriers expressed concerns on Tuesday over their capacity expansion plans due to prolonged delays in jet deliveries from Boeing , as the impact of the planemaker’s safety crisis deepens within the airline industry. The industry has revised delivery expectations for the year, creating hurdles in meeting the surging travel demand.

Boeing has faced intensified regulatory scrutiny following a significant mid-air panel blowout incident involving an Alaska Airlines flight on January 5, prompting investigations into the company’s safety and production standards.

United Airlines CEO Scott Kirby highlighted that Boeing deliveries would significantly lag behind this year, with uncertainties surrounding the certification of the MAX 10 model.

Shares of United Airlines dipped by 1.7%, while Southwest Airlines plummeted nearly 15% following its downward revision of Boeing delivery forecasts for the year. Boeing’s stock also fell by 4.3% since the beginning of the year, reflecting investor concerns.

The National Transportation Safety Board announced plans for a public investigative hearing into the Alaska Airlines incident in August, including testimonies from Boeing and other involved parties.

The incident aircraft had prior maintenance scheduled for January 5 due to pressurization warning lights, indicating operational challenges.

Southwest Airlines, anticipating a significant reduction in MAX deliveries from Boeing, adjusted its 2024 capacity projections, signaling potential challenges for the airline’s operations. Additionally, United Airlines explored alternative options, including purchasing more Airbus A321neo jets to mitigate the impact of MAX 10 delays.

Boeing implemented measures to address quality issues, including weekly compliance checks and additional equipment audits, to enhance production standards and ensure aircraft quality. However, challenges persist as the company aims to navigate through its delivery backlog amid ongoing safety concerns.

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Calls for reform to manage potential risks of modern slavery in the UK's hospitality industry

by University of Surrey

Calls for reform to manage potential risks of modern slavery for the UK's hospitality industry

The UK's tourism and hospitality industries, having a high concentration of migrant workers, face complex challenges in managing the risks of labor exploitation and modern slavery—according to a study from the University of Surrey.

The possible risk indicators for modern slavery are due to a potentially vulnerable workforce, fragmented franchising, oversight challenges, and seasonal/temporary working arrangements.

Researchers have introduced the concept of the "(in)conspicuous exploitariat," highlighting the delicate balance between (dis)empowerment and the risks and opportunities within these vital sectors.

The study identifies three major drivers contributing to the risks of labor exploitation and modern slavery for the UK's tourism and hospitality industries:

  • Power imbalances are exacerbated by multi-tiered recruitment, precarious contracts, and scarcity of opportunities for workers to organize, with unionization levels remaining low.
  • Larger hotel chains recognize modern slavery and exploitation as risks, but more explicit attention to the issue is required.
  • Insecurity among migrant workers adds another layer of vulnerability, making workers potentially reluctant to seek help or assert their rights.

Professor Karen Bullock, lead author of the study and Professor of Sociology at the University of Surrey, said, "Our research has shed light on the vulnerability of workers in these industries and the potential threats arising from evolving employment models. It's crucial for policymakers and employers to take note of these findings for informed decision-making and risk mitigation."

While the UK government acknowledges the importance of combating exploitation, the study highlights potential institutional misalignments and governance gaps, advocating for a more nuanced understanding of labor issues in domestic supply chains.

Researchers analyzed data from interviews with industry professionals and stakeholders to unravel the complexities faced by the hospitality industry.

Professor MariaLaura Di Domenico, co-author of the study and Professor of Entrepreneurship, Work, and Organisation at the University of Surrey, said, "Collective action—from policymakers shaping regulations to businesses fostering best practices—can help to empower workers and ensure that exploitation has no place in our societal fabric."

The study also highlights the importance of recognizing and commending hotels and other hospitality organizations that adopt exemplary employment practices, potentially serving as models for the industry. As consumers become more informed, managers are urged to exchange information on best practices and take proactive steps to minimize potential risks associated with modern slavery and labor exploitation.

The paper is published in the journal Tourism Management .

Provided by University of Surrey

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The trouble with travel distribution

A decade after the Internet spurred airlines, hotels, and other travel players to sell directly to customers, the sector’s ecosystem is fracturing. Companies are abandoning the systems that are supposed to provide consumers with one-stop shops to book flights, accommodations, and other services. Lawsuits are being filed. And the very people whose interests should be paramount—customers—are being caught in the cross fire. That’s giving newcomers a chance to swoop into a sector that today boasts annual online sales of almost $100 billion, around a third of all global e-commerce activity.

This turbulence isn’t a bad thing: the travel sector has reached the next phase in its evolution, and some creative destruction is necessary. In fact, companies are already investing billions of dollars in the next wave of travel e-commerce, from revamping Web sites to changing the technology infrastructure. Consolidation is also creating opportunities that didn’t exist before. But the critical question is whether the sector’s players can find a sustainable path forward before new rivals blaze the trail for them. To name just two candidates: Google recently paid $700 million for ITA Software, whose algorithms form the backbone of 65 percent of flight sales by carriers, while Apple has filed a series of patents for a mobile-device application called iTravel.

The bottom line is that travel suppliers, aggregators, and service providers each need to define the sector’s next wave quickly. We suggest that industry incumbents move away from a model focused almost exclusively on reducing channel costs and toward one that seeks to maximize returns by best serving customer needs. And the incumbents must understand that the customer experience not only begins before the time of sale—and even before the time of search—but also extends well after purchase and travel. The changes we recommend don’t require reinventing the wheel: many solutions already exist, but the sector’s myopic focus on costs rather than returns prevents their implementation. Balanced business models that give all value-adding players a seat at the table are what’s needed.

A troubled history

For a long time, suppliers in the travel sector regarded themselves as service providers and let distributors handle the technology-intensive process of actually selling airline seats or hotel rooms. The airlines facilitated this approach in the 1960s by creating global distribution systems such as Apollo and Sabre—used by travel agents to search inventory across the world—only to spin them off in the late 1990s, when cash got tight and valuations looked rich.

As with many other sectors, the Internet’s arrival changed everything. Online travel booking took off as aggregator sites, such as Expedia, began to give consumers a one-stop shop, in return demanding commissions that forced airlines and hotel operators to rethink their hands-off strategy. US airlines responded by creating a rival online travel agency, Orbitz, but their return to the distribution business was short lived: as financial pressures on the airlines’ core business continued to build, they spun off Orbitz. Recognizing the low-cost direct sales model offered by the Web, the airlines set about redirecting shoppers from aggregators’ sites to their own.

American Airlines (AA), for example, withdrew inventory from Orbitz in late 2010; in solidarity with Orbitz, Expedia fired back by removing AA’s listings (the airline is now back on both sites). Enterprise Rent-A-Car also left Orbitz, citing high costs, while US Airways piled onto AA’s disputes by filing suit against Sabre on antitrust grounds. Such disputes are common whenever industries confront the problem of who owns the content and who owns the customer: cable television companies, for example, regularly battle networks over channel-access issues, and insurers have created their own Internet portals to combat the brokers’ entrenched power.

The travel sector’s problem, however, is that the underlying model is fracturing. Traditional travel agencies now tend to tailor their services to business travelers, rather than provide options and products for a broad set of customer segments. Suppliers are making huge investments to lure customers to their direct channels, inadvertently reducing return on investment (ROI) by lifting costs with little immediate increase in revenue. Online aggregators are not only pushing suppliers out and undermining their one-stop-shop proposition, but also digging their heels into a format that emphasizes price as the primary product differentiator. Fundamentally, and most damagingly, consumers increasingly find that they don’t have what they really want: all travel options at their disposal in one place. If this problem persists, they will become more willing to consider superior alternatives.

The path ahead

So what should be done? We have identified four imperatives for travel companies: making customers the strategic focus, using data to understand them, serving them better through partnerships, and providing the best end-to-end experience to promote both sales and ongoing loyalty.

1. Focus on customers, not channels

The travel sector’s approach for two decades has been to push customers toward lower-cost yet more uniform distribution channels. We believe this is the wrong response to a growing mandate for product differentiation: while some customers value price above all else, that attitude is far from universal. Travelers differ in clear ways when it comes to their requirements—both in their traveling needs (which inform product design) and their shopping needs 1 1. For more on this topic, see Carmen Nobel, “Clay Christensen’s milkshake marketing,” Harvard Business School Working Knowledge , February 14, 2011. (which inform merchandising design and are relevant for distribution). Suppliers should shift from a business-to-business, channel-centric approach to a decidedly customer-centric one: the overarching goal should be to win customers, not to fight a zero-sum game with intermediaries (for more on how to win customers, see the below interactive exhibit, “Understanding travel’s core customers”).

In an ideal world, suppliers would tailor services to each individual. Reality makes that goal almost impossible to achieve, but travel companies can and should craft focused solutions for a range of broad customer segments. Price-driven leisure travelers, for instance, are drawn to transparency and comparability above all else, shopping at an average of three to four Web sites before making a purchase. So why don’t airlines, hotels, and car-rental companies bring price comparability to their own sites? This is exactly the model adopted by US insurance companies that quote competitors’ prices alongside their own. While there is some risk of customer defection—especially among price-focused travelers—that’s mitigated by the fact that this approach helps earn customer trust and draws valuable insights (about consumer preferences and behavior) that enable more effective merchandising.

Customers in another segment—unmanaged business travelers—are too small to justify the expensive services of large travel-management companies. However, less costly and more efficient technologies make it easier to service this “long tail” of corporate travelers, and suppliers and travel-management companies alike recognize the potential ROI of moving them to online channels. Unmanaged business travelers seek less expensive versions of the services received by larger accounts, such as expense-management tools, profile management, and company loyalty programs. Meeting this demand will be complicated, but in industries such as banking and telecommunications we see a potential answer by combining a customized product offering with a different sales model. Consortiums and partnerships are likely to be the key to success—for example, imagine deploying a sales force to sell airline product bundles to small- and medium-sized businesses, empowered by the latest external advances in tracking and reporting tools.

A channel-based mind-set limits the willingness of players, particularly suppliers, to make such moves. Instead, they tend to focus on market share targets for channels (and attempt to achieve these targets with initiatives such as Web site overhauls), without considering what it takes to shift preferences by consumer segment. New capabilities, not cosmetic changes, are what are really needed. Focusing on customer-based ROI rather than on channel targets forces executives to ask themselves how much they are going to invest—in which capabilities and targeting which customer shopping needs—to produce which results.

2. Win in the era of ‘big data’

Travel companies have access to mind-boggling customer data: everything from basic personal information to preferred airline seats, in-flight-entertainment preferences, meals at hotels, and credit card usage. They have the means to paint detailed pictures to drive marketing initiatives that more deeply engage customers, yet few—if any—of them truly maximize the potential of the data at their disposal. There’s no doubt that the synthesis of sales, pricing and revenue management, loyalty, and IT required to deliver on data’s promises is daunting. But there’s equally no doubt that companies from outside the travel sector specifically tooled to make the most of data are going to figure things out, enter the market, and try to steal customers.

Amazon.com, for example, became the thorn in the side of every bookseller—and, eventually, every retailer—by mining data to craft individualized customer experiences full of conversion-ready streams of recommendations. Amazon is notably absent from travel, at least for now. Google, however, has tens of billions of dollars in cash reserves and hundreds of employees whose job description is data mining. And its acquisition of ITA, a critical airfare search provider, already allows Google to provide users with instant travel itineraries and links to purchase (to see it in action, simply Google “NYC to LAX”).

Meanwhile, suppliers are moving slowly. British Airways recently announced that it would equip flight attendants with iPads rather than paper manifests. This provides a way to capture and use unprecedented levels of customer data, but this capability is only a small step forward—in many ways, incumbents remain squarely on the back foot in the emerging era of big data. It’s not too late: suppliers have a wealth of information and resources they could use to test new ideas. But they need to ask themselves which data they could be collecting, which existing data are not being mobilized, and which capabilities they should be building (or partnering to acquire) to compete on the big data battlefront. 2 2. For more on how data, customization, and experimentation will be a new hallmark of competition, see Brad Brown, Michael Chui, and James Manyika, “ Are you ready for the era of ‘big data’? ,” mckinseyquarterly.com, October 2011.

3. Unlock the power of partnerships

Imagine if you could type (or speak) the following instruction into your smartphone: “Book my usual flights from Dallas to New York, out Monday and back Wednesday, usual hotel, rental car”—and quickly receive an itinerary compliant with your corporate travel policies. What would it take to achieve that? We see far too many travel companies seeking to undertake local, discrete tasks well and not simultaneously thinking broadly about the kinds of solutions that really engage and stimulate customers. Considering a customer’s mind-set and thinking more creatively about products and services should be a priority, and that may require working with, as well as against, competitors. One good example of this approach is the recently launched hotel search and booking site, RoomKey.com, founded by Marriott International, Hilton Worldwide, Hyatt Corporation, InterContinental Hotels Group, Choice Hotels International, and Wyndham Hotel Group.

In the world of consumer packaged goods, we’ve seen such partnerships take off: retailers and manufacturers now share unprecedented levels of information across their supply chains, enabling far more effective merchandising decisions and physical-distribution and logistics outcomes. Yet the most public dispute in travel—among AA, Expedia, and Orbitz—is the equivalent of a consumer-packaged-goods company pulling its products from a retailer’s shelves: it benefits no one.

Our point here is twofold. First, creating new technologies is not necessarily the answer to all the challenges in travel today; indeed, the technical capacity to deliver what consumers need arguably exists already, dispersed in pockets across a dysfunctional ecosystem. Second, the potential of partnerships—lateral (supplier–supplier), vertical (supplier–aggregator–provider), or with companies beyond the travel sector—remains to be unlocked. Succeeding here may be more about identifying companies with similar interests and synergistic capabilities than about throwing new money and new technology after problems rooted in structural issues of coordination.

4. Master the entire customer experience

Selling a product isn’t the beginning of a company’s relationship with customers; that starts when they first become aware of its brand. Equally, the relationship doesn’t end at the point of sale, because every interaction with customers is an opportunity to foster their loyalty or lose their future business. 3 3. For more on how consumers make purchasing decisions, see David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik, “ The consumer decision journey ,” mckinseyquarterly.com, June 2009. Customer solutions in the travel industry often span multiple players, providing each with an opportunity to showcase its strengths and make a case for becoming a traveler’s favorite. Some companies are actively seeking to forge tighter bonds with customers: for example, KLM Royal Dutch Airlines will soon launch a service that allows its passengers use their Facebook or LinkedIn profiles to choose seatmates on upcoming flights. Malaysia Airlines is releasing a Facebook service that lets travelers check if friends are on their same flight or headed to their same destination. Like British Airways’ use of the iPad, these innovations deploy technology to shape the customer experience , not just to conduct booking and customer service transactions.

A critical prerequisite for influencing the customer experience is the dissolution of organizational barriers—not only budgets and planning processes but also ownership of information—to gain a comprehensive view of the customer journey. There should be a single customer databank, not separate ones for information on loyalty, transactions, and pricing. And to make the customer-centric approach a reality, unprecedented levels of coordination among multiple business units (including those responsible for loyalty programs, pricing, sales, marketing, and information technology) are also required. Far too few companies in the travel sector have taken the steps needed to achieve this level of unification.

The digital revolution has upended business as usual in almost all industries, and travel is no exception. Consumers are empowered by information: they have near-instant access to their flight, hotel, and car-rental options; virtual price transparency; and the ability to play suppliers off against one another. The game is now about delivering a superior customer experience. If players can do that, the investment returns will follow.

Robert Carey is an associate principal in McKinsey’s Atlanta office, where David Kang is a consultant; Michael Zea is a principal in the Stamford office.

The authors wish to acknowledge the contributions of Andrew Curley, Alex Dichter, and Bryan Hancock to the development of this article.

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  2. 7 Marketing Challenges in the Travel Industry Today

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  3. Digital Transformation in the Travel and Tourism Industry

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  4. Travel industry embracing digital transformation with Drupal

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  5. Travel Industry Trends and Statistics [Infographic]

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  6. How can the Travel Industry Leverage AI and ML for better Customer

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VIDEO

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  3. 2024 Travel Industry Outlook

    Download the full report. Our 2024 travel outlook takes a closer look at five trends expected to shape the industry this year: Suppliers find ways to touch up the travel experience. High interest rates and elevated costs of some goods can make it difficult to update, let alone upgrade, hotels. And some of airlines' biggest challenges have ...

  4. The impact of AI on the travel industry

    The travel industry is facing new disruptions from AI. ... Ella Alkalay Schreiber: Machine learning is important, gen AI is important, predictive AI is important—but the actual challenge is to understand the data, ask the right questions, read prediction versus actual, and do this in a timely manner. The actual challenge is the human thinking ...

  5. Top 8 Challenges Affecting the Digital Travel Industry, Right Now

    Here are the top eight challenges affecting the travel industry right now, and some of the solutions that are being proposed to overcome them. 1. Brand Differentiation. Whether it's a seat on a plane, a room in a hotel, or a car rental, there are many companies out there all selling the exact same product.

  6. Rebooting customer experience in travel

    Common challenges include inconsistency in CX across products, services, and digital; difficulty predicting customers' sentiment without having to ask them; and time lags in going to market with updates, releases and enhancements. This report explores the critical role of CX in the travel industry at this pivotal moment in time.

  7. The future of travel and tourism as per 4 sector leaders

    The global travel and tourism sector's post-pandemic recovery is gaining pace as the world's pent-up desire for travel rekindles. The difference in international tourist arrivals in January 2021 and a similar period in January 2022 was as much as the growth in all of 2021. However, with $4.5 trillion in GDP and 62 million jobs lost in 2020 ...

  8. Online Travel: Industry trends

    Online Travel: Industry trends. Companies within the travel industry have faced, and continue to face, unprecedented challenges and uncertainty due to the Covid-19 pandemic. In 2020, as travel came to a virtual standstill, the global market value for online travel intermediaries declined by 60.1% YoY to $236.7bn.

  9. The Impact of COVID-19 on the Online Travel Industry

    This report considers how online travel is being impacted by the ongoing COVID-19 outbreak at both the industry and individual company level. We believe that the largest seven public online travel agencies will lose at least $11.5 billion in revenue this year due to the virus. The impact could even go higher, potentially as much as $20 billion ...

  10. 4 Challenges Faced by Online Travel Agents in 2022

    The rise of digitalization has disrupted the travel industry. In this modern era, the tech-savvy travelers' needs are fast evolving, and meeting their expectations is crucial and challenging. Travelport research found that 33% of travelers are more likely to book using OTA. OTAs are the preferred choice for convenience, global access, price ...

  11. Digital Transformation for Travel Agencies and Professionals

    The travel industry has been in recovery mode for the past few years, with overall global performance finally returning to 2019 levels in 2023. Driven by a global wave of digital adoption, the ...

  12. Challenges the Online Travel Industry Face and How to Solve Them

    Challenges of the Online Travel Industry. Huge fees: This is perhaps the most painful problem for hotels and airlines. The fees charged by the online travel industry and global distribution systems are going through the roof. Outdated technology: Despite the huge growth in technology, the systems and technologies used by the travel industry are ...

  13. (Pdf) Recent Trends a Current Trends and Challenges in Online Travel

    Online transactions in the tourism industry are continuously increasing despite tough economic problems in this arena and fewer travellers overall. This industry is the leading application in the ...

  14. Ask Skift: What Are the Biggest Challenges the Travel Industry Faces?

    Geopolitical instability also poses significant challenges. Global economy: The global economic outlook, while improving, is weak, and inflation continues to weigh on economic activity. 45% of ...

  15. How Will Digital Transformation (DX) Impact The Travel Industry?

    While there are many benefits associated with DX in the travel industry, some challenges also need to be addressed. Data privacy is an example of one of the industry's biggest challenges. As more companies collect data about their customers (including contact information to credit card numbers), there is an increased risk of data breaches. ...

  16. Key Challenges of Online Travel Agencies in today's world

    Online travel agencies (OTAs) operating in the travel industry face several unique challenges that are specific to the nature of their business.. Some of the main challenges faced by Online Travel Agency include: Price Competition: Price sensitivity is a significant factor in the travel industry. Customers often prioritize finding the best deals, which can lead to price wars among Online ...

  17. Travel Trends 2024: The Future of the T&A Industry • Regiondo

    Conclusion. The world of travel is experiencing an unprecedented era of transformation: as we enter 2024, the industry continues to deal with the aftermath of the global pandemic and adapt to new consumer behaviors, technological advancements and evolving market dynamics. In 2023, we have witnessed a robust recovery, with international travel ...

  18. What Are the Biggest Challenges Facing the Travel Industry?

    by Daniel McCarthy / October 25, 2021. Overtourism, sustainability, and other issues dominated conversations about the travel industry pre-COVID. Have things changed since the pandemic? What are ...

  19. Collaboration and competition in the online travel industry: a

    ABSTRACT. In the online travel industry, many hotels collaborate with online travel agencies (OTAs) to attract new customers to book hotels. Meanwhile, hotels and OTAs compete with each other for repeat customers because hoteliers are unwilling to pay a commission to OTAs for the same customers again.

  20. 5 Mega Challenges Facing the Global Travel and Tourism Industry

    Travel Insight #2: The ripple effects of geopolitical disruption. Geopolitical instability is also a key concern for the travel and tourism industry. The outlook for global travel and tourism for inbound spending is expected to be at 45% of 2019 levels, according to Euromonitor's travel forecast model. The war in Ukraine is estimated to have ...

  21. Challenges Facing Travel Agencies 2022 & Travel Professionals

    16 Top Challenges Facing Travel Agencies 2022 and Beyond Inflation. The current evolution of inflation in the U.S. economy will have a horrible effect on the travel and tourism sector of the travel industry. During the inflationary and stagflationary periods of the 1970s, 80s and 90s price increases on all aspects of leisure and business travel ...

  22. Future of tourism: Tech, staff, and customers

    As travel resumes and builds momentum, it's becoming clear that tourism is resilient—there is an enduring desire to travel. Against all odds, international tourism rebounded in 2022: visitor numbers to Europe and the Middle East climbed to around 80 percent of 2019 levels, and the Americas recovered about 65 percent of prepandemic visitors 1 "Tourism set to return to pre-pandemic levels ...

  23. New Airbnb CFO Takes Helm at Inflection Point for Travel Industry

    Ellie Mertz, Airbnb's new chief financial officer, knows about managing a crisis. When the pandemic gripped the world in early 2020, Mertz was part of the leadership team at the short-term stay ...

  24. What a U.S.TikTok ban could mean for travel industry

    The travel industry has embraced the site. Among the companies with big TikTok followings are Ryanair with 2.2 million, Expedia and Trip.com with 1.5 million and Booking.com with 1.2 million. ... Even in the event that a ban becomes law and withstands a legal challenge, Mullen said she expected U.S. companies could continue to use TikTok to ...

  25. Challenges facing the travel industry in 2024

    Challenges facing the travel industry in 2024. March 14th 2024. Business Objectives. Drive loyalty. Drive profitability. Earn media/increase exposure. Share. From maintaining online reputation to customer retention we discuss the challenges facing the travel industry in 2024 and how a travel PR strategy could drive impact.

  26. Will safety issues at Boeing seriously impact air travel?

    How safety concerns over Boeing planes affect the air travel industry . Elizabeth Trovall Mar 11, 2024. Heard on: A National Transportation Safety Board handout shows the Alaska Airlines Boeing ...

  27. Boeing Delivery Delays Worsen Airline Industry's Woes

    The industry has revised delivery expectations for the year, creating hurdles in meeting the surging travel demand. Boeing has faced intensified […] Must Read Posts: FBI Informant's ...

  28. Calls for reform to manage potential risks of modern slavery in the UK

    The UK's tourism and hospitality industries, having a high concentration of migrant workers, face complex challenges in managing the risks of labor exploitation and modern slavery—according to a ...

  29. The trouble with travel distribution

    A decade after the Internet spurred airlines, hotels, and other travel players to sell directly to customers, the sector's ecosystem is fracturing. Companies are abandoning the systems that are supposed to provide consumers with one-stop shops to book flights, accommodations, and other services. Lawsuits are being filed.

  30. State Dept says Blinken to travel to Austria, South Korea ...

    WASHINGTON — U.S. Secretary of State Antony Blinken on Thursday will depart for Vienna, U.S. State Department spokesperson Matthew Miller said, on a wider trip during which he will also visit South Korea and the Philippines. READ: Marcos to meet Blinken next week as South China Sea tensions rise Blinken will attend a meeting of the U.N. Commission on Narcotic Drugs in Vienna on Friday and ...