Digitalized Tourism: New Revenues, Real-time Experiences and Innovation

Tourism is not only an exciting industry, but also an important sector in many countries around the world. That’s why my Spanish colleagues dived deeper into this topic and had a closer look at the market. Together with IDG Research and Interxion , they organized a round table discussion with a representative group of leading companies from the sector. The goal: to analyze the current state of the sector in terms of technology and digital development. Today, I would like to present you some interesting insights and learnings from this discussion.?

When I heard about the results from the event, I was really excited to share them with you. After all, #digitalization has become a necessity rather than an option in practically all sectors today – and this is true for the #tourism industry as well. With a customer profile that is digital and that demands adaptive solutions, tourism is encountering both opportunities and challenges that it must address. The ongoing digitization of users’ everyday lives and expectations requires a modernization of services to meet their needs and demands in real time. At the same time, to ensure a leap in quality, companies must also guarantee quality connectivity and the digital availability of services.

Transformation needs connectivity

Even though there are many interesting findings from the discussion, one among them struck me most: #Connectivity has emerged as the main factor for the successful #DigitalTransformation of tourism companies. For example, businesses in the industry have intensified their use of #SaaS (Software as a Service) for quick access to innovative analytics, applications, and services. This fact has become so important that it is influencing the design of their cloud strategies.

Modern customers want to access services on their devices at any time and from anywhere. Therefore, connectivity is vital when selecting a cloud provider: a service may experience downtime due to poor latency. However, as a tourism company and customer of IT services, it is not always possible to control end-to-end connectivity for the cloud services you rely on. For example, given that the provider decides where and how to place its infrastructure, there is a loss of control over parts of the connectivity journey with any SaaS provider. If the service is then linked to the rest of the company’s IT infrastructure via the public Internet, the level of control reduces further and a connection might be unreliable due to unknown root causes, as well as leaving open a plethora of different attack vectors. This is a major challenge as any connectivity issues might impair the experience someone has with an application or digital service. It is also necessary to limit access costs and find out how to manage this properly. A solution to this challenge is to interconnect the company’s networks directly with the required cloud services and applications over an interconnection platform, and in this way to gain control over the company’s connectivity infrastructure.

Personalized customer experience

Another key challenge that emerged was the #personalization of the customer experience. In the last two years, users have embraced digital services at a rapid pace. According to recent research by Visa and Payment Innovation Hub, 78% of tourist bookings are now made online. Modern customers are used to a seamless service and expect it of their booking provider as well. As a result, businesses in the sector must put in the work to offer a comprehensive service, along with a greater degree of personalization. The user expects a quality experience through their own devices, so low latency and high availability of all digital services is key to delivering the best possible experience.

Customers want a convenient and personalized trip, and this can cover everything from the type of transport between the airport and the hotel and additional services like restaurant and tour bookings at their destination. The fact that travel options have increased, and customers can make more choices means that we need to know more about their tastes and preferences. To make this possible, we must integrate relevant data to deliver the right personalization at the right time. This growth in data usage should be accompanied by robust data management, protection, and privacy measures for users. This ultimately means that companies in the tourism industry not only need to think about how to connect to different clouds, but also about how to directly interconnect with other partners that are needed to create a personalized data-based travel experience in a flexible, scalable, and highly secure fashion – after all, travel data is extremely personal and needs the best available protection.

Full customer control

The third key challenge we heard about from industry experts is giving customers full control over their booking. Today's user is not willing to suffer through long-winded reservation processes, or endure long loading times of the booking website, or deal with a user interface not offering the required options. Instead, they want to move smoothly through different channels, whether physical or digital, they want to have control over their own customer journey, and of course they demand immediacy, which means modernizing the entire technological structure to respond to these demands.

In this regard, governments are already taking action – for example, Spain enjoyed investments to the tune of more than 25 million Euro at the beginning of 2022, aimed at developing and implementing technological projects in tourism-related companies. With this investment, the Spanish tourism industry will be able to improve their entire digital infrastructure, applications, and processes to respond to the demands of today's customers for immediacy and agility. Say, for example, a user is staying at a hotel and, enroute, has booked an additional activity: They expect to have everything ready on arrival. Internal manual processes slow down the availability or preparation of the service, and do not meet the expectations of modern customers.

Outlook

Of course, there were also other challenges mentioned, like putting technology at the forefront of the business, creating a more flexible cost structure by scaling cloud infrastructure, and ensuring the available talent to optimize the company’s own capabilities to the maximum. But at the center of every finding is the growth in customer demands. These are the driving force of the transformation in the tourism sector – and to be honest, in most other consumer-facing industries.

So, what do you think about the challenges modern tourism has to face? What do you expect for the future of the sector? And what are your experiences?