Tour operators

Guest Post: The path ahead for the travel industry from the bottom of the valley

Posted by Lee Hayhurst on
Guest Post: The path ahead for the travel industry from the bottom of the valley

Sooho Choi, global head of travel and hospitality at Publicis Sapient, sets out what he sees as the key trends for the sector in 2021 for businesses that can ‘hang in there’  for the return of travel

As we enter 2021, challenges for the travel sector unfortunately look set to continue for some time yet.

With a new national lockdown announced in the UK, and Britons banned from non-essential travel; international and domestic travel restrictions are expected to be in place until at least March, possibly longer. Travel for most, remains a distant dream.

However, while travel may be on hold for the first quarter, there is light at the end of the tunnel for the struggling industry.

As multiple vaccines begin a robust roll-out, there is still hope for a strong second half of the year.

Although most models forecast that it will take multiple years to reach and exceed 2019 levels in the sector, I believe the industry is currently in the bottom of the valley and anticipate the pent-up demand for travel to result in robust growth in the second half of 2021 should the vaccine strategy prove successful.

We saw several trends emerge in 2020 that will continue through 2021 and in many cases, for the long-term.

Contactless is here to stay

In 2021, contactless will move from temporary intervention to integrated service expectation as people rely on contactless technology more to make them feel safe.

The travel and hospitality industry will continue to improve contactless experiences such as mobile keys at hotels and fully self-service bag tags in airports.

These not only increase physical distancing and keep travellers safe but also support customers’ increasing expectation for self-service.

Leisure will lead the charge

Organisations traditionally reliant upon high spend business travel, groups and events must pivot to win in leisure, or they will continue to struggle.

In-person mega events such as CES and Dreamforce won’t be taking over entire large cities for quite some time, if ever again.

Instead, those organisations must focus on smaller events engaging business customers concurrently with leisure,  diversifying their products to meet the needs of the leisure traveller.

Domestic and short-haul demand will grow

We fully expect long-haul travel corridors to reopen as a substantial portion of the world population is inoculated.

However, it will take time. Meanwhile, domestic vacation and short-haul flights where travel corridors are open will be the life blood to help airlines and the broader travel sector survive in Q2 and beyond.

Travel brands that can engage families and vacationers in meaningful personalised ways across the end-to-end journey are at an advantage.

Differentiation will take place digitally

As a brand’s digital presence increasingly becomes part of the ‘product’, the minimum criteria to win includes a scalable and adaptable digital footprint that can systematically activate against a robust and insightful set of customer data.

Today it is possible for a traveller to have a nearly completely contactless journey to a holiday destination.

Looking ahead, data and digital technology will not only enable services traditionally captured and delivered through numerous interactions at the destination itself but can actually anticipate and predict the needs of the traveller.

Hobbies, dining and beverage choices, family activities, tailored to the customer’s budget and brought to life with the exact amount of physical interaction that the customer wants and is comfortable with.

To enable this, expect to see increased investments in customer data platforms, analytics, and technology modernisation and integration.

Booking windows will continue to diverge

Travel companies will look to secure long term bookings from customers now for winter 2021 and Summer 2022 respectively, tapping into a growing pent-up demand where customers are starting to mentally plan for life ‘beyond the pandemic’.

Equally, once restrictions are lifted, we will see a continued rise in short-term bookings and last-minute travel as customers look to take advantage of improved testing, more granular data on outbreaks and changes in government and border restrictions.

The travel experience will evolve to accommodate a more volatile and dynamic world

Bookings, modifications and cancellation policies, and the associated experiences will evolve to reflect the dynamic nature of the pandemic and give customers confidence to travel.

Businesses with outdated procedures and systems will have no choice but to update their policies and technology to meet this new reality.

Is 2021 the year where non-refundable pricing finally dies? Customers will demand this option from their travel provider or simply, go elsewhere. Businesses will also need to find a more flexible staffing model to accommodate increases and decreases in demand.

Proof of health will become as important as a valid passport

With growing privacy concerns both in the EU and more globally, establishing a global health passport standard may be seen by some as an opportunity for governments to collect data.

However, the requirement that people are healthy before they can travel provides a very compelling argument.

With many different views on how this could be enabled, different views on testing efficiency and varying vaccines, it is unlikely we will see one standard emerge in 2021

However, we do expect proof of health through vaccine or negative test results associated with specific travel corridors to continue to remain at least into the summer.

In conclusion, 2021 is likely to be critical year for travel, with the industry needing to adapt in real-time to changing restrictions, legislations and consumer demand to be able to claw back lost revenue in the latter half of the year.

The silver lining however, is that travel always bounces back. People will always want to travel, probably more so after the pandemic than ever before, with a new found appreciation for liberty and escapism.

If the travel industry can hang in there, use this time to adapt their businesses, streamline and remove friction points for a better digital experience, we foresee a much brighter future for travel brands and customers alike.

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travolution.
By posting your comments you agree to accept our Terms & Conditions.

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.