What’s ahead for the travel industry? Amadeus and global management consulting firm A.T. Kearney have released a new report outlining four possible scenarios for the shape of the travel industry over the next seven years.
The report, “What if? Imagining the future of the travel industry,” identifies personalization and seamless travel as the key drivers of success in the next five to seven years. The sharing economy, virtual reality and Internet of Things are all improving the traveler experience, Amadeus said, but international political, social and economic developments are disrupting and polarizing the world as we know it, limiting the travel industry’s potential for future prosperity.
According to Amadeus and A.T. Kearney, two key trends will drive future success in the travel industry:
- Personalized travel experiences versus mass market. Technology enables the aggregation of consumer data and the use of Artificial Intelligence to learn about traveler behavior. In addition, it may help to meet individual needs, instead of a more traditional one-size-fits-all approach, the two companies said.
- Seamless travel versus fragmentation. Truly seamless travel will require governmental cooperation and data sharing between businesses: from airports and airlines to destination services such as hotels, restaurants and ground transportation.
Based on these two key trends, Amadeus and A.T. Kearney have identified four future scenarios for the travel industry over the next seven years:
- The Picasso scenario is built on a fragmented world marked by the rise of populism and by heightened security concerns. This has the effect of making more travel destinations off-limits. Even so, most parts of the world enjoy economic growth. Companies invest in innovation to reach more customers through mobile channels, and this interaction enables businesses to provide more sophisticated personalized offers.
- The Dali scenario assumes that both social attitudes and economic prosperity create a more favorable environment towards sharing data. This brings about more relaxed privacy laws and lighter regulation, which allows for greater personalization of travel. Living in the Dali scenario, travel becomes faster, cheaper, and safer. People benefit from less security controls at borders and have real-time information about unexpected events such as flight delays.
- In the Bosch scenario, business costs rise across the industry as companies struggle to comply with a mosaic of different legal, tax, labor and data protection laws. We are confronting a fragmented world based on protectionism and distrust. Facing Bosch’s political environment, travelers seek comfort in trusted brands and book directly with well-known travel providers.
- The Warhol scenario is characterized by seamless and not personalized travel that considers the implications of strong economic growth in Asia, giving rise to a large middle class with more disposable income for travel and leisure. Travelers would rather go for low cost, mass-market travel instead of having personalized options even in a world free of barriers.
“Technology has never held more promise for the travel industry”, said Alex Luzarraga, vice president corporate strategy of Amadeus IT Group, in a written release. “But the status quo is being turned on its head. There is widespread mistrust and populism. Things we used to take for granted, such as the right to travel across Europe without passports, for example, may be less likely in the future. It is important to evaluate and understand, in partnership with A.T. Kearney, those issues that will continue to confront and disrupt the industry in the coming five to seven years, so we can as an industry be better prepared to deal with those issues, and also stimulate economic growth and success as a result.”