At the GBTA conference in Chicago, GBTA and CWT, with the support of Rockport Analytics, released the travel trends forecast for 2019 and beyond. The travel trends forecast analysed both macroeconomic trends and pricing trends emerging in air, hotel and ground while also looking at the development of future technology in 2019 and beyond.
The travel trends forecast highlighted that most global economies are trending in an upwards direction with a predicted growth of 3.4% for 2019. The APAC region is expanding the most with a forecasted growth of 5.6%. US corporate tax cuts are encouraging economic growth while uncertainty over Brexit creates a drag in consumer spending and business investment for Europe.
Global trade has finally recovered to a pre-2008 state. As less restriction on trade is a key driver for more travel there should be improved rates across the board. In 2019, changes in pricing are predicted to slow down with a price hike of only 3.2% for air compared to the 6% predicted for 2018. Simultaneously, hotel prices will rise only by 5.1% and ground prices by 0.5%.
Top five travel technology trends
In the technology world, the pace of innovation marches on. The data we use will become more nuanced, complex and deliver more value to corporates. AI will enable personalisation like never before as both corporations and suppliers seek to understand the drivers behind traveller booking.
1. Data examines both the cost and value of travel
Data is still the number one currency. The more quality data each company has, the higher the chance they will have to drive both performance and revenue. This is true for both buyers and suppliers in every business endeavour, including business travel.
In corporate travel, data still remains critical, yet most travel managers are starting to use data for a different kind of equation. Instead of looking at it purely from a cost point of view, corporates are starting to quantify the revenue that travel brings. Once the value of the travel programme is quantified and proven, investments in traveller well-being and happiness will become more and more attractive to senior stakeholders.
All this starts with better data. The travel trends forecast highlighted that companies are starting to link travel spend data with CRM data so we can, at the very least, link travel to the amount of sales deals closed. As this is only one benefit of business travel, there is even greater room for improvement. Travelling to a different office location can help boost both company productivity and profits. Examining revenue figures from finance and linking this to trip identification numbers is a way to broaden the lens we have always used to examine traveller activity.
2. AI opens up new possibilities for personalisation
Big data has given us the ability to understand our travellers more than ever before. While Amazon has been perfecting their algorithms to understand each consumer they have, business travel is starting to understand the benefits of applying these same algorithms to business travellers. This will automate the way promotional content is structured in booking tools based on the travellers’ previous behaviour. The algorithm will be able to predict traveller preferences and use these to deliver custom options for each traveller.
This model will decrease off-channel booking as business travel apps match what travellers are used to on the consumer side. The algorithm also takes into account both travel policy and preferred suppliers – making the programme easier to manage.
Will it lead to a reduction in programme cost? As buyers have little control of the algorithms pushing the content through to travellers, we are still waiting to see what will happen. Buyers can get one step ahead by using their data to measure the effect of this change.
3. Blockchain and cryptocurrencies will challenge the existing travel ecosystem
The travel industry has been “dabbling” in cryptocurrencies for some time now. A handful of airlines and TMCs, like Egencia, have started selling tickets in Bitcoins. Right now, however, many view cryptocurrencies as just one more, albeit much more unpredictable, currency to manage.
The number one benefit that cryptocurrencies hold is their potential for transparent data reporting. Cryptocurrencies leave a secure, decentralised, digital trace of each transaction. Traveller data can be tracked more securely with more advanced tracking on cross-border payments, baggage tracking and passenger identification.
The travel trends forecast highlighted that, in the near future cryptocurrencies will allow us to have full and secure visibility of the entirety of each trip. The only snag is that, just like NDC called for more innovation and an upgrade of infrastructure, so will Blockchain technology – and on a much greater scale. We predict that a complete overhaul of the existing system may happen in the next five years.
4. 5G mobile networks create smarter devices
5G, in essence, will mean higher data rates, minimal delays before data transfers and lower power consumption. In the next few years, movies downloaded in seconds plus driverless cars will become the new normal.
For business travel, the speed of data transfer will cause significant change. Data can be transferred in real time for virtual payments. Faster speed on mobile will mean that virtual reality content will be used on booking platforms, allowing travellers to explore the aircraft or hotel room virtually before making a booking. The growth of IoT devices and 5G will mean that data will become much bigger and reporting will ultimately improve for smarter travel management. Smarter luggage management, for example, can be achieved by transmitting a signal from an IoT device inside the luggage that calls the traveller an Uber as the luggage appears on the carousel. The travel experience will, as a whole, become much more seamless and more flexible than before.
5. Startups continue to shake up the playing field
Startups are the key to pushing any industry forward, including business travel. Artificial intelligence and big data continue to push the envelope – predicticting what will happen in the future so all industry players can improve their services and deliver them faster.
In the hotel industry, Criton helps level the playing field by providing a content management system to smaller hotel chains. They can offer services like loyalty programmes and online check in. Conichi allows users to bypass the line at reception with mobile check in and check out and includes an expense integration service.
For airports and airlines, Crowdvision is a computer vision company that uses cameras and machine learning to analyse crowds and checkpoints at airports. It detects patterns in operations and helps operators improve their service. Unicoaero is a central end-to-end baggage management platform. With a long-term vision of delivering baggage direct to hotels, Unicoaero already has 48 airlines signed up at 40 airports.
For travel managers, FLYR uses air industry data and past prices and price fluctuations to predict the price of airfare and seat availability. This helps buyers find the optimal time to book for the cheapest price. Geosure uses big data and crowdsourcing together with statistical modelling to deliver a complete and customised risk assessment drilled down to the street level of any neighbourhood in the world.
All this new innovation and technological developments tell us one thing: devices are becoming smarter and generating more data than ever before. Both suppliers and travel programmes that start using this data to their advantage will have the tools they need to provide better fitting services and an improved travel programme. If you have not found a way to integrate this data easily, now is the right time to get your data strategy in place.
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