How digital transformation can set the travel industry up for success

Few indus­tries have suf­fered more at the hands of Covid-19 than inter­na­tion­al trav­el, which ground to a halt in ear­ly 2020 as bor­ders closed and mil­lions of peo­ple were ordered to stay at home. Last year saw the sharpest annu­al decline in air traf­fic on record: pas­sen­ger demand was down 65.9% on 2019’s total, accord­ing to the Inter­na­tion­al Air Trans­port Asso­ci­a­tion. The UN World Tourism Orga­ni­za­tion esti­mates that the eco­nom­ic impact on the indus­try in 2020 alone was $1tn (£710bn) – a loss that put about 120 mil­lion jobs at risk.

Even as economies have start­ed to reopen in recent months, trav­el remains one of the last sec­tors to ben­e­fit from the eas­ing of restric­tions. Ear­ly in June 2021, oper­a­tors were dis­mayed when the UK gov­ern­ment down­grad­ed Por­tu­gal to its so-called amber list at short notice (mean­ing that peo­ple return­ing from the coun­try would need to quar­an­tine at home for 10 days). The move forced thou­sands of British tourists who’d booked hol­i­days in Por­tu­gal while it was on the green list to cut short their trips before the restric­tions kicked in. 

Although the trav­el indus­try might have sus­tained the biggest blow, it may be bet­ter equipped than most to recov­er from it. While busi­ness­es in sev­er­al sec­tors have been oblig­ed to spend mil­lions of pounds on con­vert­ing them­selves quick­ly into ecom­merce oper­a­tions, at least trav­el hasn’t had that prob­lem. The indus­try was under­go­ing its own dig­i­tal trans­for­ma­tion for sev­er­al years before the pan­dem­ic.   

Swapping bricks and mortar for online booking tools

For proof of its trans­for­ma­tion, con­sid­er the decline of the high-street trav­el agent. Accord­ing to a sur­vey con­duct­ed in 2019 by online trav­el agency Kayak, 47% of British adults hadn’t set foot inside a trav­el agency for a decade. One-fifth of respon­dents had nev­er used one at all – a fig­ure that grew to one-third for under-35s. Instead, trav­ellers have hun­dreds of online book­ing tools (OBTs) at their dis­pos­al. 

Enabling con­sumers to arrange trans­port, accom­mo­da­tion and activ­i­ties for them­selves, often all in a one-stop shop, OBTs have devel­oped to deliv­er greater con­ve­nience and choice at a low­er cost. As a result, they’ve almost erad­i­cat­ed bricks-and-mor­tar trav­el agen­cies. Three-quar­ters of Brits booked their most recent trip online. 

“The great shift to dig­i­tal that occurred over the past decade has trans­formed the com­pet­i­tive land­scape in trav­el, leisure and hos­pi­tal­i­ty,” says Tim Davis, MD of Pace Dimen­sions, a man­age­ment con­sul­tan­cy spe­cial­is­ing in those sec­tors. 

This trans­for­ma­tion has since extend­ed far beyond book­ing and pay­ment, he adds. Almost all big air­lines now offer a mobile check-in ser­vice, for instance, while many hotel chains have adopt­ed key­less entry sys­tems. Davis also points to the growth of loy­al­ty schemes, which have in most cas­es been com­bined with mobile apps to give users access to enhanced ser­vices. 

Sin­ga­pore Chan­gi Air­port has auto­mat­ed so many process­es for users that it is “well on the way to mak­ing the passenger’s jour­ney from check-in to board­ing fric­tion­less”, observes Gary Bow­er­man, direc­tor of research firm Check-in Asia.

“This has been dri­ven by two fac­tors,” he says. “First, using tech­nol­o­gy elim­i­nates human error and improves the cus­tomer expe­ri­ence. Sec­ond, it enhances the airport’s han­dling capac­i­ty, which will help it to man­age the sig­nif­i­cant antic­i­pat­ed growth in pas­sen­ger num­bers. Oth­er Asian air­ports and pri­ma­ry glob­al hubs, such as Hamad Inter­na­tion­al in Doha and Dubai Inter­na­tion­al, have also been tak­ing this path.”

New­er play­ers in par­tic­u­lar are using the con­ve­nience that dig­i­tal tech can offer as a sell­ing point. At Edin­burgh hotel House of Gods, which opened in 2019, guests can use the ubiq­ui­tous What­sApp mobile mes­sag­ing ser­vice to book their accom­mo­da­tion, check in and out, order room ser­vice and sub­mit queries to its staff. 

“Using What­sApp makes every­thing as sim­ple as pos­si­ble,” explains the hotel’s gen­er­al man­ag­er, Ian Stokes. “Our typ­i­cal guests are heavy users of tech­nol­o­gy, so we can com­mu­ni­cate with them in a way that they respond to pos­i­tive­ly.” 

Dig­i­tal check-ins and key­less entry sys­tems are part of the tech offer­ing at apart-hotel com­pa­ny Son­der. Its vice-pres­i­dent for EMEA, Harsh Mehta, says: “These are essen­tial hall­marks of a desir­able stay as a result of the pan­dem­ic, where sep­a­ra­tion has become syn­ony­mous with health and safe­ty.”

Using digital transformation to aid the post-pandemic recovery

The trav­el sector’s ear­ly adop­tion of dig­i­tal tech means that it’s rel­a­tive­ly well placed to pro­vide the type of con­tact­less, social­ly dis­tanced expe­ri­ence that many trav­ellers will require, says Mar­tin Alcock, direc­tor of Trav­el Trade Con­sul­tan­cy.   

“Tech­nol­o­gy has a key role to play in get­ting peo­ple trav­el­ling again,” he says. “When it comes to pro­vid­ing reas­sur­ance, through aspects such as dig­i­tal vac­cine pass­ports; pas­sen­ger loca­tor forms; a con­tact­less air­port expe­ri­ence; and reg­u­lar noti­fi­ca­tions and updates, tech will be vital in enabling hotels and resorts to deliv­er ser­vices in a legal­ly com­pli­ant way.”

Decius Val­mor­bi­da, pres­i­dent of trav­el at Amadeus, a provider of tech­nol­o­gy to the trav­el sec­tor, agrees. He believes that dig­i­tal tech will not only aid the industry’s recov­ery; it will also pro­vide “an oppor­tu­ni­ty to rebuild a bet­ter indus­try”. 

One of the key lessons the indus­try can offer sec­tors that have been slow­er to adopt dig­i­tal tech, but will need to step up their efforts if they’re to meet demand after the pan­dem­ic, is the impor­tance of col­lab­o­ra­tion. Val­mor­bi­da cites dig­i­tal ID sys­tems as one exam­ple of where even rival play­ers in the trav­el indus­try have recog­nised the ben­e­fits of work­ing togeth­er. 

“The abil­i­ty to auto­mat­i­cal­ly iden­ti­fy indi­vid­u­als using their bio­met­ric data at each stage of the trip means that trav­ellers can check in at their hotel or hire a car, say, with­out the help of agents,” he says. “Hav­ing realised its inter­con­nect­ed nature many years ago, the indus­try has embarked on a ‘col­lab­o­ra­tive dig­i­tal trans­for­ma­tion’, where com­pa­nies that com­pete with each anoth­er also coop­er­ate to improve the infra­struc­ture on which they all rely.”

It’s the kind of col­lab­o­ra­tion that could sig­nif­i­cant­ly accel­er­ate their col­lec­tive recov­ery from the tri­als and tribu­la­tions they have all suf­fered over the past 18 months.