Digital transformation in the travel industry
Few industries have suffered more from Covid-19 than international travel, which came to a halt in early 2020 as borders closed and millions of people were ordered to stay at home. Last year saw the largest annual drop in air traffic on record: passenger demand fell 65.9% from the 2019 total, according to the International Air Transport Association. The United Nations World Tourism Organization estimates that the economic impact on the industry in 2020 alone was $ 1 billion (£ 710 billion) – a loss that has put around 120 million jobs at risk.
Even though economies have started to reopen in recent months, travel remains one of the last sectors to benefit from the easing of restrictions. In early June 2021, operators were dismayed when the UK government demoted Portugal to its so-called short-term Orange List (meaning people returning from the country would have to quarantine themselves at home for 10 days). The move forced thousands of British tourists who booked vacations in Portugal while it was on the green list to cut their trips short before the restrictions went into effect.
While the travel industry may have suffered the hardest hit, it may be better equipped than most to recover. While businesses across multiple industries have been forced to spend millions of pounds to quickly convert to e-commerce operations, at least travel hasn’t had that problem. The industry was undergoing its own digital transformation for several years before the pandemic.
As proof of its transformation, consider the decline of the high street travel agency. According to a 2019 survey by online travel agency Kayak, 47% of UK adults had not set foot in a travel agency for a decade. One-fifth of respondents had never used one at all – a figure that rose to one-third for those under 35. Instead, travelers have hundreds of online reservation tools (OBTs) at their disposal.
Allowing consumers to organize transportation, accommodation and activities on their own, often all from a one-stop shop, OBTs have grown to provide more convenience and choice at a lower cost. As a result, they almost wiped out physical travel agencies. Three-quarters of Britons booked their last trip online.
“The great digital shift that has taken place over the past decade has transformed the competitive landscape of travel, leisure and hospitality,” said Tim Davis, Managing Director of Pace Dimensions, an international consulting firm. management specializing in these sectors.
This transformation has since extended far beyond booking and payment, he adds. Almost all major airlines now offer a mobile check-in service, for example, while many hotel chains have adopted keyless entry systems. Davis also highlights the growth of loyalty programs, which in most cases have been combined with mobile apps to give users access to enhanced services.
Singapore’s Changi Airport has automated so many processes for users that it is “well on its way to ensuring a passenger’s journey from check-in to boarding is frictionless,” observes Gary Bowerman, chief executive officer of Singapore. ‘Check-in Asia studies.
“This was motivated by two factors,” he says. “First, the use of technology eliminates human error and improves the customer experience. Second, it improves the airport’s reception capacity, which will help it to manage the expected significant growth in the number of passengers. Other Asian airports and major global hubs, such as Hamad International in Doha and Dubai International, have also taken this route. “
New players in particular are using the convenience that digital technology can offer as a selling point. At the House of Gods Hotel in Edinburgh, which opened in 2019, guests can use the ubiquitous WhatsApp mobile messaging service to book accommodation, check in and check out, order room service and submit requests. questions to his staff.
“Using WhatsApp makes everything as easy as possible,” says hotel general manager Ian Stokes. “Our typical customers are heavy users of technology, so we can communicate with them in a way they respond positively. ”
Digital check-in and keyless entry systems are part of the technology offering of aparthotel company Sonder. Its vice president for EMEA, Harsh Mehta, said: “These are essential characteristics of a desirable stay in the aftermath of the pandemic, where separation has become synonymous with health and safety. “
Using digital transformation to facilitate post-pandemic recovery
The travel industry’s early adoption of digital technology means it is relatively well positioned to deliver the kind of contactless, social-distancing experience many travelers will need, says Martin Alcock, director of Travel Trade Consultancy .
“Technology has a key role to play in getting people to travel again,” he says. “When it comes to reassurance, through aspects such as digital vaccine passports; passenger tracking forms; a contactless airport experience; and with regular notifications and updates, technology will be vital in enabling hotels and resorts to provide services in a manner that complies with the law.
Decius Valmorbida, president of travel at Amadeus, a technology provider for the travel industry, agrees. He believes that digital technology will not only help the industry’s recovery; it will also provide “an opportunity to rebuild a better industry”.
One of the main lessons the industry can offer to sectors that have been slower to embrace digital technology, but will need to step up their efforts if they are to meet demand after the pandemic, is the importance of collaboration. . Valmorbida cites digital ID systems as an example of where even rival travel industry players have recognized the benefits of working together.
“The ability to automatically identify individuals using their biometric data at every stage of the journey means that travelers can check in at their hotel or rent a car, for example, without the help of agents,” he said. “Having realized its interconnected nature many years ago, the industry has embarked on a ‘collaborative digital transformation,’ where competing companies also cooperate to improve the infrastructure they all rely on. “
This is the kind of collaboration that could greatly accelerate their collective recovery from the trials and tribulations they have all endured over the past 18 months.