In a jointly authored piece Emily Weiss, Accenture travel industry group managing director, and Axel Schmidt, senior managing director in the firm’s automotive industry group, look at the future of the mobility sector in travel.
Something of a revolution is going on in the way we move around our towns, cities and even rural spaces.
Traditional travel and mobility offerings are being unbundled and re-bundled and existing industries are being radically reshaped.
We’ve already seen how companies like Uber and Lyft have fundamentally changed how consumers think about getting around.
We’ve also seen how solutions like Google Flights allow people to find the cheapest travel option without having to connect with an airline.
At the same time, the growth of the sharing economy has allowed more organic peer-to-peer mobility options to emerge.
Car sharing, where owners rent their vehicles to others when they’re not using them, is a growing trend.
In fact, vehicle ownership itself is becoming less and less important to consumers.
Recent research from Accenture found, for example, that nearly half of those surveyed were willing to give up car ownership for other mobility options.
How did we get here?
Digital technologies and platforms are clearly driving much of the disruption, as they open up new ways to automate and streamline experiences and new ways to connect consumers with mobility companies—and each other.
With the barriers to entry falling away, new digital-first companies have been able to gain an advantage over traditional players.
Without the decades of technical debt that tend to hamper incumbents, these market entrants have been faster to adopt the kinds of digital solutions like cloud that are increasingly essential for running a business today.
But there’s also been a significant shift in consumer attitudes and preferences. In our always connected and always online world, we’ve become accustomed to one-touch instant results and context-aware hyper-personalisation from digital services.
And we’ve come to expect the same level of service from other parts of our day-to-day lives, including how we travel and get around.
In addition, personal values, like sustainability, have become more influential on our decision-making, transforming the idea of carbon-neutral travel from a future aspiration into a present-day requirement and expectation.
Where are we headed?
To meet these expectations, travel and mobility is being reshaped around customer needs and values.
Consider how things might work in the not-too-distant future. Imagine, for example, if you could book a journey by simply specifying where you want to go, without having to think about how you get there.
What if, having chosen your destination with a single service provider, all the necessary modes of travel—ride-sharing, subway, train, flight—and place to stay were arranged for you as a single package?
What if, along the way, your rides could double up as a meeting room, office, restaurant, or even sleeping place?
What if you could book the whole trip by level of service (e.g. ‘economy’, ‘premium’, or ‘first-class’), with the confidence that everything will be provided in the most comfortable and environmentally friendly way?
It’s a compelling proposition. And it’s a huge opportunity for both the travel and automotive industries. In fact, the mobility market overall is expected to grow to around $15 trillion over the next decade.
In automotive, things are already changing. As much as 22% of automotive-related revenue is expected to come from digital business models over the next ten years.
Companies are looking to service-based offerings, as the value of a vehicle to a passenger starts to be defined as much by the software experience as the hardware engineering.
Travel and automotive at a crossroads
One of the overarching trends here is the convergence of travel and automotive. The distinction between the purpose of travel and mode of travel is blurring.
In both cases, future customer experiences and future growth will be found at the intersection of the two industries.
This convergence offers the prospect of many social, environmental and economic benefits: reduced costs, improved productivity, increased personal safety, greater sustainability, happier travellers, and better access to mobility services for everyone.
To make it happen, of course, the industries will need to work together. No single company will be able to go it alone.
For starters, everyone would need to agree on a level playing field, ensuring that the whole ecosystem works in a mutually beneficial way. New business models, new ways of working, and in many cases, new skills will also be needed.
The first step for existing travel companies should be to prioritise widening the ecosystem. That should include looking for partnerships with technology players, mobility players, and even travel competitors.
This will be important in pooling resources, sharing the investment burden, and accelerating innovation.
As the mobility ecosystem continues to evolve at pace, travel and automotive companies find themselves at a crossroads.
Now’s the time to embrace change, adapt quickly, and choose a path forward together to future growth and prosperity.