VR and IoT are improving traveler experience: Amadeus report

According to the report, technology enables the aggregation of consumer data and the use of Artificial Intelligence to learn about traveler behavior

Amadeus travel report_1

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A tech savvy humanBOT, Sharmistha is a professional writer

According to a new report by travel technology company Amadeus, the travel industry must be better prepared for economic and political disruption if it is to make the most of future economic growth. The company commissioned management consultant A.T. Kearney to conduct detailed workshops with global technology and travel leaders to inform the paper.

The report states that whilst the sharing economy, virtual reality and the Internet of Things are all improving the traveler experience, international geo-political, social and economic developments are disrupting and polarizing the world, limiting the industry’s potential for future prosperity unless companies act now the report says.

Against this backdrop, A.T. Kearney highlights two key trends that are changing the travel industry landscape, and driving future success:

  • Personalized travel experiences vs. 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.
  • Seamless travel vs. fragmentation: Seamless travel will require governmental co-operation 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 4 future-looking world scenarios that travel companies needs to prepare for today, if they are to maximize future growth and success tomorrow:

  1. 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.
  2. 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.
  3. 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.
  4. 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 dis-posable income for travel and leisure. Travellers would rather go for low cost, mass-market travel instead of having personalized options even in a world free of barriers.

Amadeus travel report

“Technology has never held more promise for the travel industry. 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,” says Alex Luzarraga, Vice President Corporate Strategy, Amadeus IT Group.

“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,” Luzarraga added.

According to Yelena Ageyeva-Furman, Principal, London, A.T. Kearney, the report is based on the perspectives of a broad range of stakeholders from across the travel and technology worlds. It illustrates a broad view of the future, which allows companies to uncover their organisational blind spots. Moreover, he claims that the study tests existing plans against industry outlooks, and helps us understand ‘no regret’ moves and imperatives in company strategy.

Other key finding include:

  • Travel agencies could lose business if destination service providers offer a broader range of competing services.
  • Artificial intelligence has real-life applications, including the ability to predict personal preferences and push suggestions for a holiday or business trip.
  • Global distribution systems will play a role as intelligent platforms that aggregate real-time, price-sensitive data from hundreds of thousands of travel providers and make them directly comparable.
  • Traditional and online travel agencies will lose business as people rely more on digital assistants to organize their travel plans.
  • The role of travel agencies as intermediaries could decline as travelers seek comfort in trusted brands and book directly with well-known airlines and hotels.
  • Sluggish growth in the West diminishes the demand for personalized travel, but it could boost
    the sharing economy, with platforms such as HomeExchange making travel more affordable in
    this more cost-conscious context.
  • The rise of travel in Asia and of Asian travelers going beyond their borders will create the need for greater collaboration between East and West.
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