Since 2010, industry conversations and predictions have been diverse: the industry was recovering from a global recession with an unknown long term impact; the growing interest in experiential travel led to uncertainty for business-as-usual; and the impact of technologies such as bitcoin, augmented and virtual realities, AI and voice on the industry were heavily debated.
When we ring in this new year, we’ll also be welcoming a new decade. It’s a time to not only place bets for the years ahead, but for a retrospective to show how far our industry has come.
Since 2010, industry conversations and predictions have been diverse: the industry was recovering from a global recession with an unknown long term impact; the growing interest in experiential travel led to uncertainty for business-as-usual; and the impact of technologies such as bitcoin, augmented and virtual realities, AI and voice on the industry were heavily debated.
There were some hits and misses: the recession left the industry relatively unscathed but the conversation has turned to global unrest’s impact; experiential travel is real, blossoming and now heavily marketed to; and a few of the technologies are already making an impact: artificial intelligence (AI) with predictive engines and chatbots, and voice with travel search and booking integration into Alexa and Google Assistant devices.
We’d be remiss not to mention the headline grabbing battle for direct bookings that took place. Thankfully, we’ve come far since then, tempering those conversations and putting that battle to bed by working more collaboratively with our lodging partners to put our technology strengths to work for them to solve their unique business challenges. Marriott is a great example of this, as we co-announced an “industry first” wholesale distribution solution which was described as an “I-just-saw-an-elephant-fly” moment.
With a new year and decade ahead, we’ve got some predictions of our own – ones that will remove friction for travelers and bring many more flying elephants.
The Obvious Bets
Generational and Geo-economic Shifts
While the “OK Boomer” meme may be a bit extreme, it does illustrate a widening gap among the ages – unique perspectives, interests and values define the generations, changing the face of travel and how travel providers are expected to engage with each.
According to Expedia Group Media Solutions research, younger travelers crave unique experiences and adventure, fully embracing the #YOLO mentality. And now here comes Generation Alpha. The good news for the year ahead: they’re being born to Millennial parents, who aren’t slowing down when it comes to travel. The challenge: They may be young, they may be small, but they are mighty and pack a lot of punch when it comes to influencing family travel decisions.
In a decade, members of Gen A – which is expected to be the most formally educated and wealthiest generation – will be turning 20 years old. In college and/or working, they’ll be making their own travel decisions as they blaze their own way around the world. Expect them to crave a fully digital, frictionless travel experience – exploring new destinations via their home virtual reality sets as they shop for their next trip, bringing loved ones along through augmented reality, advanced bots that instantly serve up one-click bookable travel itineraries that are personalized from where they’ll stay down to where they’ll eat. It’s a safe bet that this generation will be well-traveled, in both the physical and virtual sense.
In the new year, many areas of the world may remain unpredictable due to various factors, such as trade wars or political election climates. Despite any uncertainties impacting travel in the year, the rising middle class globally, and specifically in places like Africa, means people are getting better, and more, access to good wages. And what seems painfully obvious, but we’ll say it anyways, better wages equal more people traveling and powering consumption for years to come.
The Mildly Interesting Bets
The Changing Face of Work
While the 9-5 desk job may still be a norm for many, it’s increasingly becoming less of an occurrence for employees. As companies invest more resources into employees’ well-being and provide more flexible travel and ‘work from anywhere’ policies, employee satisfaction and productivity are getting a boost, increasing happiness and freedom in their personal lives. In the years ahead, people will have more time, and perhaps money, based on provided benefits such as childcare, to be used for things like travel.
However, the art of business travel will never go away, in fact, it will become more important as companies grow and look to carve out a competitive advantage. A company’s travel policy reflects its culture and commitment to its people, becoming a core offering that attracts talent.
Let’s look ahead at the possibilities of connected travel between work and play. Your office closure or your planned time off is reflected on your calendar. Through AI, a personalized trip can be predicted, and you’re notified. “You have PTO coming up, time to book a trip?” “Do you want to extend your business trip next month to London for a family vacation?” And, with a click of ‘yes’, you’re on your way to a personalized itinerary based on your needs and preferences.
Diversity in Accommodations
Business travel to bleisure (extending a business trip for leisure), family travel to those traveling for healthcare – all factors driving diversification in accommodations. With travel demand on Vrbo for houseboats, yachts, RVs and Airstreams up 30% year-over-year, the next wave of unique accommodations has arrived. Diversification is important, as travelers should always have the choice in what bests fit their travel needs, though chain and independent hotels will remain a critical piece of the ecosystem.
By applying AI, companies can predict what consumers will buy based on personal buying patterns, and shopping for accommodations is no different. Imagine a booking experience that automatically recommends a specific hotel property based on your previous booking patterns from your past solo trips. We’re only scratching the surface of what we can do to deliver more personalized experiences, and faster than ever before.
The Outlandishly Bold Bets
Hitting the Road
While the staycation at one time was a silent competitor for lodging suppliers, recent data from Vrbo shows travelers in cities across the United States are increasingly booking vacation rentals in their own backyard, meaning they are leaving, just not going far.
Infrastructure spending combined with road improvements and automobile technologies is making driving more comfortable and efficient. We can expect that with better roads and people becoming more mindful of their carbon footprints and aware of when they need to travel by air, we may see the return of the road trip, allowing people to live and travel more flexibly and spontaneously.
Redefining the Airport Experience
It’s the age of the swing traveler – people who prioritize better fares and airport amenities, like shorter security lines and better dining options, even if it means passing on a (much) shorter drive to the local airport in their town or city. As such, to capture these travelers, airports in the coming years will increasingly reevaluate their offerings – variety of travel routes, parking options, local cuisine, shopping, etc. – ultimately redefining the airport experience.
Purchasing Hyper-Personalized Experiences
As airports become destinations, they’ll also benefit from increasing personalization through amenities, similar to their hotel counterparts. In the next decade, it’s possible that travelers will purchase add-ons via mobile apps based on their preference and pocketbooks, like VIP entry through special security lines, transportation from the curb to the gate, packaged meals provided before boarding, in-flight curated content, in-flight WiFi, and pre-arranged transportation from the airport. Many of these services are available today but need to be purchased separately. Bringing them together on one platform would bring value to both the traveler and the supplier.
Hyper-personalization doesn’t end at the airport. Even though amenities are long-standing perks of the hotel experience, they are also ready for re-invention. Travel profiles will soon contain details to make hotels truly a home away from home, by including things like Netflix login details to have your shows ready to watch upon entry to your hotel room, the temperature that you like your room, or food and beverage options ready when you arrive.
Taking Risks
The growth of the global travel industry, one of the largest industries, is accelerating at a rapid pace, creating huge opportunities for everyone delivering amazing experiences for travelers.
And remember those flying elephants?
Collaboration is the key to making those moments happen, as is a little bit of risk. A collaborative approach remains a top commitment to our travel suppliers, as is putting our own capital on the line for researching, developing and testing technology so they don’t have to. In 2019 we invested over $1.7 billion in technology and content, and while we won’t even begin to speculate what that number will grow to in the future, what we do know is that this makes the years, and decade, ahead a lot less risky for all our travel suppliers, delivering greater opportunities for shared growth.
Abhijit Pal is Head of Research, Travel Partners Group, Expedia Group.
