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Source Amadeus
According to the industry body UN (United Nations) Tourism, travel is thriving and a strong recovery of Asian markets and destinations is expected to underpin a buoyant global tourism market by the end of 2024. The Global Business Travel Association (GBTA) forecasts that spending on corporate travel will also surpass 2019 levels during 2024 and is set to increase by a further 29% in the next two years. It is an exciting time to be in travel.
And as the market grows, more sophisticated technology is available than ever before to help our industry to continually improve the experience of travel. But we know that it is not one size fits all. Different travel providers are focused in different areas at different speeds, so it is important for us to listen carefully to our industry and be in lockstep with what they need from us.
That is what inspired the Travel Technology Investment Trends industry-wide research. Through the study, we gathered the opinions of over 1,200 technology leaders from travel companies in eight different sectors, in 10 important markets.
The study captures the aspirations, pressures, and strategies of 450 Online Travel Agents (OTAs), Leisure Travel Agents (LTAs) and Business Travel Agents (BTAs) internationally and charts what they have front of mind when they think about technology in 2024. I wanted to share with you some of the highlights.
Investment and top technologies
In the study we learned that two thirds of agents across the world are planning concerted investment in technology over the next year and plan to increase their tech investments by around 13% in the coming 12 months which is significant.
Over the next year all agents combined indicated that data analytics, artificial intelligence (AI), and digital payments will be the most important technology priorities for their businesses. However, this shifts slightly when we broaden the horizon to five years, where we heard from agents that Generative AI (Gen AI) and the Metaverse will also take center stage as top priorities.
As an industry, we have been working hard on NDC (New Distribution Capability) and are proud that it is an area where progress is accelerating. There is no doubt that it has the potential to be a game changer for agencies of all types in the coming years, and, we are starting to see traction. 40% of leisure agents cite gaining NDC capabilities as one of their top priorities over the next 12 months. Despite inevitable teething challenges that usually accompany a new way of doing things, we can see that NDC volumes have increased by a factor of five compared to 2022 and the industry is starting to experience the benefits of this more evolved way of selling travel.
Online Travel agents focus on search and creating a comprehensive one-stop-shop
In a world where consumers can access anything they want online, the value of an OTA (Online Travel Agency) comes when they knit well-priced trips together quickly and effectively, suggesting options beyond what people are able to imagine themselves. For OTAs competition is strong and loyalty is hard to achieve. They told us that they recognize that their competitive edge will be delivered by delivering access to the best content through contextualized and intuitive search. For this reason, they are prioritizing user experience and innovation over margin improvements and 72% of OTAs are investing in enhanced search as of today with a further 22% planning to do so soon.
Alongside this, 35% of OTAs are keen to provide a creative one-stop-shop to better serve travelers. Travelers today expect to be able to search and compare options in one place. This means that LCC (Low-Cost Carrier), NDC, and EDIFACT content must be easily available alongside each other. OTAs recognize this challenge with API connectivity as a top focus for half of all OTAs over the next 12 months.
Leisure agents turn to robotics to streamline the way they work
Leisure agents have endured the most of many of the challenges of the last few years, experiencing staff shortages, alongside huge fluctuations in demand, but they have adapted to the challenges to emerge stronger and leaner than ever before. Still there is progress that can be made with the clever use of technology, so it is no surprise that over half of leisure agents told us they are turning to robotics to streamline manual processes and automate where possible to free up agent time so that they are able to deliver better services for their customers.
Trust of the traveler is key for the small and medium sized leisure travel agencies. Enhancing the customer experience is a top priority as is increasing their ability to personalize their offers by accessing unique NDC fares, and creating bespoke itineraries that meet and exceed traveler expectations. Smart retailing and the ability to differentiate and ‘wow’ their customers is more important than ever. And as they strive to offer creative end-to-end trips for their customers, leisure agents are seeking the best possible access to air, hotel, insurance, mobility and in destination experiences. As ever, well integrated content is king.
Business travel agents prioritize automation and digital payments
As demand for business travel continues to increase, corporate travel agents are focused on offering personalized trips that are simpler for the traveler and more straightforward to administer so that governance and productivity can be improved.
Virtual cards are high on the agenda for BTAs as using a single card to pay for end-to-end services is seen as one of the top areas to unlock productivity by 67% of agents, reducing the need to reconcile individual payments.
Self-service is coming into focus too with around half of the leaders surveyed confirming their agencies do not yet offer full options for their travelers to change an airline ticket themselves, so there is significant potential for this type of technology to help streamline business travel for agents and travelers alike.
Looking forward
With travel booming, many agents are enjoying a sense of renewed momentum but are understandably constantly on the look-out for better ways to serve their customers and run their businesses. Technology can provide many of the answers as innovation continues to push the boundaries on what is possible.
Amadeus is at the center of the travel ecosystem, and we are excited to help travel sellers achieve their goals, address their concerns, and maximize the opportunities ahead. From providing the most extensive content available, to enabling end-to-end smart retailing capabilities to all our customers no matter their size or location, together we are making travel work better.
For more insights on how each sector of the travel seller community is thinking about travel technology, here are links to the full reports:
Elena Avila, Executive Vice President, Travel Distribution, Amadeus. Connect with Elena on LinkedIn.
