We are in the era where the travel industry is rapidly digitizing the business operation and innovating business model, and customers are increasingly using digital technologies to plan their travel. The travel companies to gain the advantage over others are constantly evolving their digital offerings. It is observed that travel companies innovate to gain competitive advantage.
In today’s world, the travel industry is one of the prime revenue contributors. The industry, in the last three decades, has gone through a series of digital innovations. The industry has witnessed – rise of digital-native companies, such as Airbnb and Uber, and the rise of digitally transformed traditional travel companies. The traditional travel companies have reimaged businesses and adopt digital solutions, processes, and technologies to remain relevant and competitive. The travel industry is at the forefront of digital innovation and continues to transform in every aspect of its operations, which reflects in the market size of digital transformation initiatives. The World Economic Forum’s Digital Transformation Initiative (DTI), suggests that digitization processes in the travel, tourism, and aviation sectors will be worth up to $305 billion between 2016 and 2025. The report estimates that digital transformation will generate benefits valued at $700 billion for both the customers and society.[1] The report also suggests that digital transformation initiatives are also expected to migrate $100 billion of value from traditional companies to their new digital-native competitors.
It is believed that for travel companies it can be challenging to meet the tourists needs and provide innovative and creative services; however, digitalisation and technological development provide significant opportunities to be competitive in the global market as well as to be able to reach markets it was not possible before.[2] It will only be apt to say that the travel industries to keep up with the changing customer demands, expectations and preferences are embracing the journey of digital transformation. The industry leaders understand that the digital transformation journey is not a one-day activity. In fact, it is the sum-total of multiple digital initiatives backed by technologies such as the Internet of Things, location-based services, artificial intelligence, augmented and virtual reality, blockchain technology and many others. It will be apt to say that one of the key digital innovations of the last three decades in the travel industry is online travel booking platforms, such as Expedia, Yatra, makemytrip, Booking.com and others.
Digital technologies transforming travel industry in last three decades.
Phase 1. 1990-2000
- Electronic cash registers
- Financial software
- Mobile phones
- Intranet
- Internet banking
- Office software
- Video conferencing
- Websites Destination (city) cards
Phase 2. 2000-2010
- Smart phones
- Computer graphics software
- Property management systems
- Computerised ticketing systems
- Computerised stock control systems
- Online booking systems
- Customer reservation systems
- Email marketing
- Customer relationship systems
- Augmented reality
Phase 3. 2010 onwards
- Virtual reality
- Mobile Apps
- Cloud computing and online data storage
- Wearable technologies
- Social media
- Google analytics
- Review websites
- Collaborative online environments
- Web 2.0
- Chatbots and instant advice
- Peer production, e.g. platform collaborative economy; commons collaborative economy
Adapted from: Xiang, Z. & Fesenmaier, D. (2017) Big data analytics, tourism design and smart tourism. Cham: Springer[3]
Digital transformation in the travel industry is led by a variety of companies, including both traditional travel companies and new digital-native startups. On one hand, Airbnb is a digital-native Startup that has disrupted the traditional hotel industry by offering a platform for people to rent out their homes and other accommodations to travelers. On the other hand, a traditional airline company KLM has embraced digital technologies to improve the customer experience, such as by offering mobile check-in and boarding, and by providing virtual assistants to help customers plan and book their trips.
Many companies in the travel industry across the globe are now using digital tools and data to improve their operations and provide better experiences to customers and offer personalized experiences. Some of the digital native companies, such as Airbnb and Uber – have changed the way we travel. They have improved people’s lives in different ways as well as in the traveling process. The extensive use of digital technologies such as mobile apps, online booking platforms, and virtual reality can help travel companies to provide a more personalized and seamless experience to their customers.
[1] Digital Transformation Initiative – Maximizing the Return on Digital Investments; World Economic Forum; May 2018
[2] Digital Transformation In Tourism: Opportunities and Challenges; Inita Kindzule-Millere, Sandija Zeverte-Rivza ; Latvia University of Life Sciences and Technologies;
[3] Digital Business And Entrepreneurship – Digital Transformation In The Tourism Sector; Emre Dirlik University of Salford; October 2020
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