Can innovation tame travel's consumer rollercoaster?
As we steam toward the 2024 travel season (for much of the globe), it seems a good time to take stock of where the industry has been in the past couple of years, and what we might see in the couple ahead.
Riding the Consumer Rollercoaster
Of course, we all know about the resiliency of the industry coming out of COVID. In Experiences, specifically, 2021 saw a doubling of average consumer spending over 2019 levels as travellers threw caution (and money) to the wind and struck out to enjoy everything they’d missed during lockdowns.
Now, as 2024 picks up steam, the industry is coming off a year that saw that average spend drop back to 2019 levels while simultaneously navigating significant global economic challenges like inflation, geopolitical tensions, ongoing supply-chain and employment constrictions, and more…
However, amidst this turbulence, there lies an opportunity for travel brands to innovate and thrive. Throughout 2023, for many that focus was on what Generative AI might be able to do to streamline travel planning. However, as travellers continue to prioritise exploration and in-destination experiences, allocating their discretionary spending towards meaningful adventures, planning isn’t necessarily where value will be created.
Innovating to lift the highs, and the lows…
With experiences showing more and more to be the driving force of travel, it’s well past time for the travel industry to reward those who venture out and explore the world by making it easier than ever to discover amazing (and often surprising) experiences.
To date, the only brands working on that problem have been the experience-focused OTAs. The GetYourGuides and Viators of the world. And even they have made more of their bones in the pre-planning and booking portion of the customer journey. Meanwhile, the vast majority (63% in the latest research from Arival)are booking the week before enjoying their experience. Also known as… in destination.
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To truly meet travellers where they are and help them experience the most on every trip - it will take the entire industry embracing innovative ways of curating, communicating, and selling experiences. Hotels will have to build on their recent focus on promoting onsite offerings and connecting to existing experience offerings by providing more curated, customisable, and mobile-friendly solutions for their guests as a way to counteract the headwinds generated by inflation.
Airlines - who know they need to move beyond their in-house ancillaries (legroom, baggage check, etc…) to continue their growth trajectories - will need to offer their fliers uniquely crafted sets of experiences right before and during their trips - generating new revenue and greater customer engagement.
And destinations, competing for market share in a world where travellers' budgets simply don’t stretch as far, will need to foreground the unique, authentic experiences that drive travellers to select their region. Then, make it convenient, easy, and memorable to enjoy those regions with customer-friendly product discovery and booking solutions.
It will take the entire travel village
Of course with economic headwinds creating uncertainty, it’s hard for any of those organisations to justify the investments needed to do that well. Which is where one of the travel industries greatest strengths - partnerships and collaboration - can come into play.
As I mentioned, travellers' desires to conveniently and easily find and book the perfect things for their trip are unlikely to be solved by one brand alone. It will take a network of brands communicating with them in a hyper-relevant way to deliver on this need. And we are standing by to serve as the foundational backbone of that experience.
#Experiences #ConsumerSpending #Innovation #TravelTech #Personalisation #Collaboration #AncillaryRevenue
Managing Partner at Devox Software | Delivering Tailored Software Solutions for the Marketing Tech Industry
10 个月Craig, thanks a bunch for sharing this! ??
Co-Founder & CEO at Holibob
11 个月Thanks for the comments Sergio Cienfuegos Ornia!? ? Agree there’s often been a perception that replacing outdated and complex tech has slowed the rate of innovation and can be costly. I’d argue that for experiences, the delivery method and booking window is so different to an airline or hotel's core product, that a tech offering should be supplementary, rather than replacing existing set-ups. There’s little benefit in trying to bundle experiences products at the point of a flight booking, which would add a reasonable amount of complexity with limited results.? No doubt there’s light at the end of the tunnel. Brands are realising the benefits experiences can drive, and understanding the nuances in selling them, so taking more innovative approaches in this area!
Director of Business Technology | Driving Digital Transformation & Operational Excellence in the Travel Industry
11 个月Great article, Craig Everett, thanks a lot for bringing this up. I think everyone will agree how it makes a lot of sense for those driving the core products in travel to expand their offering to include attractions, and how that would expand the booking window, which would definitely be a huge improvement for operators on the ground. My biggest concern is that airlines and hotel chains are mostly stuck in old tech and old ways... Changing tech is expensive (especially the old one), and changing minds is even harder. For one thing, I do love how Amadeus, for instance, has been working along these lines for years now, with some very interesting proposals. Would love to hear about similar approched by other big players. On the other hand, there are very well known cases where some of those big players have failed miserably. And this is not helping us move any faster down that road. Is there light at the end of the tunnel? ??
TravelTech communicator | Managing Director Belvera Partners | Helping B2B TravelTech companies gain visibility through PR | Investor | Public speaker | "You can’t separate what you say from how you say it”
11 个月Some good thoughts here Craig, certainly a lot of opportunity in 2024