Digitalisation of the Travel Industry: how exactly did tourism go ‘online’ …?
There were times when travel agents were the ‘go-to’ when one wanted to travel abroad. They were the ones who were in possession of all the ‘global’ knowledge. You booked an appointment with them and they did the magic. They swiftly made air travel arrangements, recommended the destination’s best hotels, and suggested sights, attractions, and activities in the location. Simply put, they crafted you the perfect and 100% reliable packaged holiday in a blink of an eye. Unless you wanted to adventurously DIY it by relying on word-of-mouth tips, calling (!) the airline to purchase your ticket, and using outdated travel guides to plan the itinerary. Seems like a distant (or non-existent) memory, huh?
The number of worldwide international tourist arrivals has been steadily growing at, on average, 5% rate year over year. Yet travel agencies are slowly and gradually on the decline. So, what is the cause of this indirect proportion? The answer is, literally, in front of you or, even better, right in your hand. The rise of technology and the consequential immense interconnectedness took the travel industry by storm and hit more than just one spot. Let’s dissect the challenges rapid digitalisation inflicted on travel industry and take them one by one.
Travel agents has become more of a luxury than a necessity in the tourism industry. The rise of travel online review sites, such as TripAdvisor or Yelp, made valuable inside information about the destination more accessible and encouraged travellers to plan their holidays single-handedly. 85% of travellers worldwide now read online reviews before travelling. Further, 62% of tourists think of user-generated content on TripAdvisor as reliable and helpful, citing it as a resource significantly influencing their decision-making and planning prior to, and while being on a vacation — the main advantage being the honesty and recency of the reviews and information.
The convenience of online booking, which allows to make reservations of services in a matter of seconds, has similarly been a prominent trend in the tourism industry. Online booking notes an annual growth of approximately 10%, reaching a total value of $755bn (as of 2019). Now, websites such as booking.com still bring revenue flow to the hotels, and essentially, only omits travel agent in the supply chain, so one might argue this attribute does not transform the travel industry per se.
The true disruptors and game changers in the industry are AirBnB, Couchsurfing, and other a-like platforms. These allow travellers to book strangers’ apartments or rooms, and enjoy the benefits of a low-cost sharing economy, and authentic accommodation experience, rather than the ‘sterile’ hotel one. Current data shows that 11% of Britons use such platforms when securing their accommodation in international destination.
Remember carrying around a stack of brochures, printed travel guides, making sense of maps, and visiting tourist information centres? Well, these are also sinking into obscurity and were promptly replaced by a more compact solution — smartphones. Google Maps now offers a perfect amalgamation of all of the above, takes up a fraction of the space, and has all the necessary (even personalised) information ready in a split of second. Using smartphone for efficient navigation of the destination is a leading activity among tourists. Smartphones are also the gadget tourists make use of the most, while being on a vacation.
Now, one might think that the above evidence suggests the end of tourism industry. Digitalisation has taken over, everyone can call it a day — thank god glorious internet!
Well, not exactly. 1 in 5 UK travellers report that the volume of information on the internet is overwhelming, and planning holidays solely based on personal research is too much of a ‘hassle.’ Moreover, tourism consumers claim that there still exists undeniable demand for travel agents. The key elements for survival in these conditions appear to be: first, offering the expertise online, rather in a traditional brick-and-mortar store. Second, focus on niche and exclusive experiences as these are the tourism market drivers.
‘I remember we would go with my family on holiday, and we had to spend so much time looking for an agency that would supervise us once we reach our holiday destination. Now, I can use my phone on any holidays to move around with one click on Google Maps.’
Tourists surely are becoming increasingly independent, but still crave connectedness and immersive experience throughout their stay. Tourist Information Centres can therefore dodge the ‘Google Maps’ bullet by exploiting the tech and transitioning to digital. Specifically, by sending notifications containing relevant and personalised information via, for example, messaging platforms directly to tourists’ smartphones.
Prompts such as ‘since you are here, you might like visiting…’ based on location of the device has proven to be appreciated by visitors, and beneficial to venues, especially SMEs — if they are mentioned in the push notification.
Lastly, the usage of ‘big data’ and Internet of Things creates improvement routes for service providers in the travel industry. Analytics software is able to make predictions about the number and typologies of tourists with exceptional accuracy, which allows businesses to re-adjust their planning accordingly. If the business is to expect higher volume of visitors, they might be able to plan their stocking or staffing strategy better to offer exceptional service. Further, tourists’ data can be used to derive behavioural analytics in real time as well. This would mean that the destination management organisations could tell which areas are becoming overcrowded, where waiting times are becoming prolonged, or which areas are tourists avoiding. This might also be the key to tackle the wicked problem of overtourism in the future — although it still has a long way to go.
There you have it. Tourists are increasingly becoming independent and capable of making travel arrangements on their own, but expert knowledge still plays crucial part in the holiday realm. Digitalisation bears the potential to approach tourists in a more personalised way and offer them truly unique and immersive experiences in the destination of their choice.
So yes, technology is causing disruptions in the travel industry, but it should be perceived as a renaissance, rather than ‘the final straw.’
