With the rise of Airbnb or couchsurfing, it becomes clear how integrated the sharing economy has become. These platforms have disrupted the hotel and travel industry tremendously. What consequences does this disruption have for the market?
In this video, you are given an overview pf this particular industry. It is an interesting industry to look at in terms of digital development and industry disruption. With the rise of the internet, major changes disrupted the travel industry. Companies started to offer flights, hotels and complete travel agencies online instead of through the previous physical travel agencies. The internet made this industry a newly vulnerable market with low barriers of entry, attractive profitable customers and incumbents with little chance to defend themselves (Granados, Kauffman & King, 2008). Consequently, the online travel market is very large and keeps on growing. In the future, it is likely that new platforms will take the current platform’s place due to more disruptive innovation. Therefore, established companies should keep a serious eye on new trends and technologies, such as Artificial Intelligence, to avoid becoming irrelevant. When we take a look at startups, it is very easy to enter the market for them since the market range is very broad and growing, but it becomes more difficult to penetrate the market for them due to competition with companies with more resources to invest in these new technologies.
Nowadays it is very easy to plan and organize your own holiday, because there is simply more information available. The more traditional travel agencies seem to have slowly become redundant. The way we make our travel plans are obviously changing which can be assigned to several disruptive factors and technologies (Floater & Mackie, 2016). To start off, traveller expectations are changing due to advanced technologies and social media. In the future, the fusion of social media and booking will increase in significance. Metasearch will only further improve this by actually knowing the intent of the keywords used and the contextual meaning (Redondo, 2014). Furthermore, big data & artificial intelligence make it possible and necessary to have real-time data and on-demand services. Lastly, Virtual Reality makes it possible to immerse customers to their wanted destination and robots could be used to give information and translations to customers. We can conclude from this that the world for a more personal experience in travel lies ahead of us.
However, when economies stagnate and security fears arise, these future plans could be substantially more narrow. In this case, it is likely that customers are more hesitant to share personal information with regard to their feelings of unsafety. In addition, countries could become more nationalistic and focused on regulations in order to ensure their safety and economies. Consequently, the travel market would be more fragmented and the offerings would comply with a mass market approach (Amadeus & A.T. Kearney, 2017). A mass market in tourism would mean that customers pay a relatively low price for their holidays through package deals.
Disruptions in other industries could also affect the future of this particular industry. For example, new ways of transport could mean faster ways to reach destinations. Artificial intelligence could lead to software that is able to plan a trip based on your spending pattern, your hobbies and taste, without you having to provide any information. Did you come across other technologies that could lead to the next disruptive innovation in your opinion? What do you think that the future of travel looks like? And how should existing businesses in this industry prepare for the future?
References:
Amadeus & A.T. Kearney (2017). What if? Imagining the Future of the Travel Industry. Retrieved from : http://www.amadeus.com/documents/reports/what-if-imagining-the-future-of-the-travel-industry.pdf
Cameron, M. (2013). A brief overview and evolution of the travel industry. Retrieved from: https://www.cbtravel.com/blog/2013/10/a-brief-overview-and-history-of-the-travel-industry/?doing_wp_cron=1505999648.8360440731048583984375
Floater, G. & Mackie, L. (2016). Travel distribution: The end of the world as we know it?. London School of Economics and Political Science
Granados, N. F., Kauffman, R. J., & King, B. (2008). How has electronic travel distribution been transformed? A test of the theory of newly vulnerable markets. Journal of Management Information Systems, 25(2), 73-96.
Redondo, S. (2014, 22 November). SEO 101: What is Semantic Search and Why Should I Care?. Retrieved from : https://www.searchenginejournal.com/seo-101-semantic-search-care/119760/
