Technology - the Subservient to Tourism Industry Embracing Travel Technology
The global travel and tourism sector has seen new entrants and new product mix, as the industry looks to expand, while leisure travel continues to be one of the highest in the list of a typical consumer’s discretionary spending. Travel industry has been following a template for selling travel products to consumers and there has hardly been any change to the way people search and book. Exploration and creation of travel reservations on the customer side, management of inventory on the supplier side, distribution of inventory and management of reservation on the distribution side has been progressively getting more efficient with the domination of connected technology in the travel industry. The ease of management and ease of discovery of products has led to the emergence of new categories of tourism.
Technology- The fuel for tourism sector
Travel, Tourism and Hospitality industry is in a phase of saturation at this time with several players in the market. Even incumbents in the industry have to develop their niche to sustain longer. Unlike most other industries, the tourism industry is highly dependent on several other players like hospitality, transportation, food, finance, health, local and central/federal governments, local and national security, and many more. Undoubtedly, technology has been the driving force that has helped bind these diverse players together. Artificial Intelligence has been driving differentiated user experiences on several travel websites by providing inspirational searches, contextual image processing, virtual reality content, and driving personalization and recommendation engine. On the supply and distribution side, the collective data across all of their networks and channels can answer numerous questions and provide insights into customer travel patterns, which can be very powerful. However, the propriety, ownership and nature of the data is highly fragmented. Today, the distribution networks and suppliers have access to Big Data that they own and control. They can only answer questions and analyze patterns for data that flow through their own or partner systems. Technologies of future, including public block-chain networks, will evolve to create a global network and global access to data.
Concerns around security and regulations in the tourism sector
Environment of uncertainty due to unforeseen disruption, Visa issues, terrorism and natural calamities challenge the entire travel industry. However, the human desire to travel and explore places will remain perpetual. Therefore, the travel industry will learn, evolve and survive the challenges. Rules and regulations in tourism sector keep changing and evolving as well. Every country has consumer laws in place to protect their citizens. As a business, long term sustenance is directly proportional to the satisfaction of customers with the service provided. Therefore, sticking to the regulations and taking care of customers are the top two priorities of a business. Travel and tourism industry has to comply with various regulations like tax codes, mandatory language and translation requirements for websites and points of sale, Visa compliance for tourists, data and privacy compliance for customers, accessibility, security and payment compliance etc. If regulations are adhered to, then revenues will surpass the recurring compliance cost. It will help keep customers happy, thus keeping a check on the lawsuits. Technology has been, and will be playing a critical role in achieving compliance.
Travel insurance, an industry that has been in coexistence with travel and tourism, has thrived in this environment of uncertainty. Customers are becoming increasingly aware of the fact that they might want to cancel or shorten their trip in the event of an unforeseen disruption, and they do not mind paying a few extra dollars to get their trip insured.
Tourism is, and has been, one of the leading revenue generator for most countries and states/provinces. Local tourism is another booming sector, which has seen significant prominence in the current times due to uncertainties with international travel and tourism. This has a potential for becoming a very big category and a niche offering for several travel agencies. With technology driving the industry, the ease of management and ease of discovery of products has led to the emergence of new categories of tourism for many countries in the last decade. At the same time, previously existing and popular categories of tourism have seen strengthening in product portfolio. Tourism industry’s readiness to market and react to market disruptions will be highly dependent on how well they embrace travel technology now and in the future.