{"id":60218,"date":"2023-09-04T14:25:46","date_gmt":"2023-09-04T12:25:46","guid":{"rendered":"https:\/\/intellias.com\/?post_type=blog&p=60218"},"modified":"2024-08-12T03:48:23","modified_gmt":"2024-08-12T01:48:23","slug":"digital-transformation-in-the-travel-industry","status":"publish","type":"blog","link":"https:\/\/intellias.com\/digital-transformation-in-the-travel-industry\/","title":{"rendered":"Digital Transformation in the Travel Industry: Insights & Trends"},"content":{"rendered":"

You may remember a recent holiday season when a major air carrier had to cancel thousands of flights. Unfortunately, it couldn\u2019t blame the inclement weather covering much of the US. As the storm receded and other airlines were back to business, this carrier\u2019s passengers were still stuck. But why? If you guessed it has something to do with (a lack of) digital transformation, you\u2019re on the right track.<\/p>\n

Digital transformation in the travel industry has been taking place over the last decade, but this airline was holding out. The president of its pilots’ association shared<\/a>, \u201cIt’s a function\u2026of infrastructure and IT, but it’s also processes. We’re still using not only IT from the ’90s, but also processes when our airline was a tenth of the size. And it’s really just not scaled for an operation that we have today.\u201d<\/p>\n

This quote sums up what digital transformation is: updating people\u2019s skills, streamlining processes, and digitizing technology to help your organization scale on demand.<\/p>\n

This was an extreme case, but even the travel companies that have started digital transformation efforts still have work to do. A 2023 AWS and Skift survey<\/a> found that despite 95% of travel executives responding that digital transformation is \u201cvery important\u201d or \u201csomewhat important\u201d to their business’s overall strategy and success, their top priority is still the maintenance and upkeep of legacy systems.<\/p>\n

Read on to learn about trends in digital transformation in travel and tourism and how you can get started.<\/p>\n

What is digital transformation in the travel and tourism sectors?<\/h2>\n

Digital transformation is the integration of digital technologies such as cloud platforms<\/a>, mobile, artificial intelligence (AI)<\/a> and machine learning (ML) into all aspects<\/a> of a business. The goal of digitalization in the travel industry is to future-proof the organization, which means fundamentally changing how it operates and delivers value to customers. Accordingly, it also heavily impacts people and processes, which requires an organization-wide culture change.<\/p>\n

Travel companies can become more responsive and adapt to sudden market shifts and stiff competition through automation, real-time data, and agile, streamlined processes. Through these same digital transformation mainstays, marketing teams can create frictionless, omnichannel, and hyper-personalized customer journeys that enhance customer experiences. The result? Digitally enabled growth in the travel and tourism industry.<\/p>\n

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Travel Technology Solutions & Services<\/p>\n

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The impact of digitalization in the travel industry<\/h2>\n

Digital technologies have revolutionized the tourism cycle, from the online travel agencies travelers use to book their adventures to the social media platforms where they share their reviews and holiday pictures.<\/p>\n

In addition to increasing customer convenience, digital technology can also translate into more business opportunities. For example, New Distribution Capability (NDC) provides a better shopping experience for customers and maximizes profits at the same time by letting airlines make more dynamic, personalized offers while they optimize pricing and inventory in real time.<\/p>\n

Six digitalization trends in travel and tourism<\/h2>\n

\"Digital<\/p>\n

Transformation today is an ongoing process. Digital technologies constantly evolve and staying competitive means staying on top of the latest digitalization trends. Even digital-first businesses that started with cloud-based information<\/a> and communication technology must adapt quickly and keep up as new trends emerge.<\/p>\n

It\u2019s important to keep in mind that a move to the cloud<\/a> (the first step in digital transformation) is essential for taking advantage of these trends.<\/p>\n

Cloud adoption<\/h3>\n

Cloud infrastructure is the foundation of digital transformation. Moving most or all systems and workloads to the cloud gives organizations the flexibility, scalability, and operational efficiencies they\u2019ll need for growth in the next decade and beyond. And companies that want to use artificial intelligence and other future technologies also need the computing power the cloud brings.<\/p>\n

Though the travel industry has started its journey to the cloud<\/a>, cloud adoption remains a trend. A recent Accenture survey of travel executives found that only 30%<\/a> of companies have implemented cloud at scale. David Linthicum, Deloitte\u2019s chief cloud strategy officer, says<\/a>, \u201cIn many instances, [travel companies] are playing catch-up\u2026They are not spending as much money as their relative peers in other industries. And they need to; there is much to be automated. They need those systems to drive better customer experiences.\u201d<\/p>\n

Machine learning & AI<\/h3>\n

Artificial intelligence uses<\/a> computers to imitate human thinking and problem-solving and has already significantly impacted the travel industry. From customer service to flight security, AI<\/a> is quickly becoming integral to how passengers get from point A to point B.<\/p>\n

AI chatbots<\/a> like Sofia from TAP Portugal Airlines and Julie from Amtrak provide quick and efficient customer service. They can answer common questions and help with reservation issues 24×7 without any wait time for customers.<\/p>\n

Hotels are also beginning to use artificial intelligence, using data collected about travelers through loyalty programs and the like to create personalized recommendations that match each customer\u2019s preferences. For example, AI can suggest restaurants based on the guest’s preferred cuisine, recommend activities based on local weather conditions, or even remember details like favorite pillows.<\/p>\n

And no talk of AI would be complete without a mention of the newly ubiquitous generative AI<\/a>. Expedia is already set to incorporate it into its platform<\/a>. Interestingly, despite always offering its services online, Expedia is not a digital native company in that they weren\u2019t built on cloud infrastructure from the start. However, it began its multi-phase digital transformation initiative started in 2017 with moving workloads to AWS.
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Read also: Machine Learning for Hospitality<\/a><\/p>\n <\/div> \n <\/div><\/p>\n

Internet of Things (IoT)<\/h3>\n

The Internet of Things<\/a> (IoT) is transforming the travel industry by connecting vehicles, transportation hubs, hotels<\/a>, cruise ships and more to the internet and each other. Travel companies can monitor and track assets in real time by integrating sensors and connectivity into planes, trains, automobiles, lodging, and luggage. Examples of IoT in action include:<\/p>\n