As IT consultancy ICE marks ten years in travel technology, director Ian Richardson takes a look at how the industry has evolved into a tech-driven ecosystem, completely different from the one that entered this millennium.
The travel industry has been an ever-evolving mechanism over the last century.
Transport innovations like the introduction of airplanes and the electrification of the railways opened the floodgates of travel and tourism.
However, it is with the technological advancements of the last decade, that true evolution took place.
With technology changing the way people move around, world travel has become seamless. The average traveller is spoilt for choice in terms of travel information available online.
This has given rise to challenges and opportunities, creating a new wave of entrepreneurial innovation.
An era of technology disruption has challenged the traditional travel set-up with digital ecosystems and connected technologies.
Consumers have become more aware, time-conscious, and demanding. Industry executives have understood that transformation to digital business entails operational models that connect with customers at every touch point and channel along their journeys.
Connectivity of data across the full breadth of the travel journey has emerged as the go-to strategy. This has witnessed the emergence of a more connected, more data-empowered, more digitally transformed travel industry.
Travel companies have moved from a product-centric model to a consumer-centric model, where the ‘customer is the king’.
It is the customer who ultimately influences demand and affects the revenues of a business.
Recognising the importance of the customer, forward-thinking companies are linking the front end of businesses with the back end.
A seismic shift is occurring in the travel marketplace with an increased focus on digital capabilities that reinvent customer engagement strategies.
Personalised client experience is the ultimate goal. To that end, the travel industry has undergone a digital transformation aimed at client satisfaction through the entire travel journey.
With a shift in power from the industry to the consumer, traditional marketing has also gone through a radical change.
Disruptive technologies and trendy methodologies are being embedded in IT systems to keep ahead of competition.
Digital connectivity has ushered in business models that connect travel assets seamlessly as well as engage with consumers one-to-one.
Companies are fast adopting technologies, tools and techniques to capture the maximum consumer share for higher returns on investment and shareholder confidence.
From smart phones to wearables – the digitalisation of travel industry
As we look back over the last ten years, we revisit the major technological advancements that changed the travel industry and consumer expectations and that we at ICE have kept up to speed with.
Rise of the smart phone and tablet
In an ‘always connected’ ecosystem, the customer is always online with technological advancements constantly empowering him to make informed decisions.
The rise of smart devices and easy internet access, means the customer can research and book travel on a whim, and at any time of the day.
Online travel firms like Skyscanner and Booking.com have tapped the digitally savvy traveller with mobile app offerings that engage the customer anywhere, anytime, across multiple devices.
This has shifted the UI/UX to the touch screen, with the customer able to make his travel decisions with a touch of a finger.
International Calling Cards are passé as technology driven devices empower connectivity on-the-go.
Reliance on physical maps has give way to the digital Google map on your device.
No more lugging around a camera or batteries, when you can snap thousands of pictures on your smart device, and share them on social media instantly.
Smart phones and tablets have changed the way travel is planned and experienced, from booking, to the actual travel experience.
The gig economy disruptors
The constant endeavour to innovate has given rise to disruptors in the online marketplace – Airbnb, Boatsetter, Uber, and many more.
The success of the Airbnb model has pushed even the more traditional OTAs like Booking.com to allow home owners to rent out their place for short-term lodging.
Boatsetter has adopted the Airbnb method to implement a peer-to-peer boat rental service.
The transportation industry too has cashed-in on various incidental services to engage travellers from pre-to-post journey.
The phenomenal success of Uber’s technology implementation in local travel has ushered in a new era of travel-on-the-go using the smart phone and cloud technologies.
The bus sector has not lagged behind, collaborating with booking providers to provide customers with more ancillary features and services for a seamless travel adventure.
Cruising becomes more popular
Cruising has emerged as the fastest growing travel segment, with demand outpacing the supply.
While the average annual passenger growth rate was 7.4%, the annual occupancy percentage exceeded 100%, over the past year alone.
This indicates sustained consumer interest in cruising. According to the Clia 2016 State of the Industry Outlook, the demand for cruising has increased by 68% over the last decade.
This has brought to the fore significant opportunities that redefine the cruise market.
FCCA/Clia member cruise lines have added more than 23,000 lower berths across nine innovative, feature-rich ocean-going vessels in 2016.
The 2017 forecast is a 5% increase over 2015, driven by six new ocean-going vessels at an investment of $4.8 billion.
Explosion of Big Data
The travel industry generates voluminous data in real-time. Travel platforms, airline and cruise sectors, have witnessed a profound increase in data at every point of the travel journey.
High-end computing and business intelligence unlock the hidden potential of Big Data, with deeper and faster analytics, the ultimate building blocks in the travel marketplace.
The data-driven insights drive powerful results in areas like customer acquisition, customer segmentation, operational and fleet efficiency, and yield and revenue management.
Prolific use of Cloud Technologies
The rise of public cloud services like AWS and Azure has meant that products are delivered quicker to market than ever before.
This has found relevance in the delivery of seamless travel, as travel companies extend services across channels and touch points.
As the travel industry is characterised by ‘peak and trough’ cycles, the ability to respond to seasonal trends is very significant to business success.
The digital flexibility to quickly ramp up or ramp down services and capacity, supports travel logistics and operational efficiencies.
This is of most relevance in airline and cruise sectors, that are highly competitive and asset intensive.
Personalisation of the customer experience
Whether in mainstream travel or cruise, the customer experience is now being personalised throughout the entire lifecycle to enhance customer satisfaction, ensure brand loyalty and marketing return on investments.
The travel industry is on a constant path of innovation, for an intuitive hands-on bespoke travel experience that aligns with the customer expectations.
Wearable technology adds to the IoT ecosystem
The rise in wearable technologies has seen a sharp increase in the last three years, as devices match applications for a seamless and contextual travel experience.
This is likely to continue based on the 3 C’s of mobile travel world – connection, convenience and context.
A number of travel companies, especially cruise lines, are already offering wearable tech to enhance on-board or in resort customer experience.
This forms part of the IoT interface, with data collected at every point for insights and decision making.
Next we will take a glimpse into what to expect in the coming years.
As competition becomes more intense, and customer expectations evolve, we examine how the travel industry is expected to embrace new technologies and platforms to create a more immersive and bespoke travel experience.
Continued growth of the cruise industry
The cruise sector will find continued global expansion, with passenger growth breaking records every successive year.
As per Clia data, the current cruise ship order booked from 2017-2026 includes 97 new ocean-going and river vessels.
As more ships are fitted with renewable tech, the CO2 emissions of these environment-friendly ships will be significantly lesser than that of conventional cruise ships.
The size of ships booked will increase, translating into more capacity and pax on-board. This means an ever-more emphasis on personalising the customer experience.
With Millennials expected to embrace cruise travel more than ever before, expedition cruising and adventure travel will also grow at a higher pace.
So more emphasis will be placed on enabling internet connectivity in areas of the world with less satellite coverage, to cater to the 24/7 social connect demand of the younger generation.
The smart ship concept will be a key differentiator in this highly competitive sector.
We can expect to see more wearable tech, but instead of cruise companies giving a device to each passenger, the cruise functionality will be integrated into the personal wearable of the cruiser, whether it be Fitbit, Gear or Apple.
The key emphasis will be to elevate the cruise experience with an interactive guest experience platform.
While devices will track customer location and activities in real-time, the customer intelligence gathered will be used to provide an unprecedented customisation and service at sea.
High-tech cruising will provide a seamless experience at sea in a giant IoT environment, with thousands of interactive sensors for a digital concierge-like experience.
Robust applications of Machine Learning and AI
While Machine Learning will develop iterative models for more and more granular insights for upsells and personalisation, Artificial Intelligence (AI) will power chatbots for customer engagement the moment he logs into a travel mobile app.
AI can also be expected to find use as virtual concierges, providing a complete bespoke experience to the customer through the entire travel lifecycle.
VR and AR will be the new enhancements
With customer expectations changing, travel companies are expected to invest more and more on technological innovations, to engage the customer and maintain competitive advantage.
NewGen smart devices will see maximum application in travel and cruise industry, for an immersive seamless experience.
VR will find applications of try-before-you-buy, with virtual walk-throughs of destinations or hotel rooms, and additional smart phone integration.
AR apps integrated with wearable technology can be expected to position never-before travel deliveries in areas of seamless navigation, information on-the-go with AR aggregators, phone apps and more.
Blockchain technology will bring disruptions
Blockchain is already revolutionising Fintech and will emerge as a powerful payment solution in the online travel industry.
In particular, it will find wide acceptance in the cruise sector, for its transparency capabilities like vessel maintenance and identification.
From removing problems like over booking, or fraud in refunds and chargebacks, to real-time alerts for data breaches, the sky is the limit for blockchain disruptions in the travel industry.
Cybersecurity and data compliance will be key concerns
With the travel industry increasingly converging online and the volume of data huge, cybersecurity and data compliance will be critical to travel technology applications.
As all-important data related to customer and OTAs are stored in the system, regulatory compliance of data security will also become mandatory.
The huge database of customer records, and high transaction volume, will make travel businesses most vulnerable to cyber attacks.
Cases of data breach, malicious attacks and ransomware, will be more frequent. This will pose a serious challenge for the travel industry, especially in the light of the forthcoming GDPR ruling.
Companies that do not take data security seriously will not only incur losses of millions of dollars, but also lose out on both investor confidence and customer loyalty.
A move from product based systems back to the bespoke
With more of flexible and open cloud development platforms, there will be speedier technology implementation and robust development.
Consequent lower costs will enable travel companies to develop their own systems with innovative niche applications designed to engage the customer more and more.
Customisation will thus emerge central to the business model, with actionable insights and bespoke delivery throughout the customer journey.
The continuing evolution of technology has made a tremendous impact on the travel industry.
Changing markets and evolving customer demands have compelled businesses to adapt, evolve and innovate.
From asset management to service deliveries, technology has become the game-changer in travel.
Advances and applications are persistently working to provide the customer an end-to-end optimal experience throughout the journey lifecycle.
Over the years, ICE Technology Services has charted its own course towards success in travel technology implementation.
It has supported its clients with digital capabilities, helping to facilitate their booking journeys in a multi-device environment.
Big data solutions developed for tour operators and cruise lines form part of its key deliverable.
Presently, the ICE team manages global solutions across three continents, working seamlessly in a Big Data environment for business insights and solutions.
Besides, private cloud as a service was successfully implemented out of the ICE data centres.
Solutions have also embraced more and more hybrid and full public cloud for its clients.
ICE has developed integrated solutions that view the customer journey seamlessly across all devices and touch points.
So a single unified picture of the customer is obtained, from the point of booking to arriving home.