The travel and tourism sector is estimated to be worth a huge $8.8 trillion every year, according to the World Travel and Tourism Council.
Along with established players, the industry has an incredibly vibrant startup scene full of companies looking to disrupt the status quo and capture a slice of the travel industry pie.
The investment capital is there, as we know, with Phocuswright’s latest State of Travel Startups report revealing $5.8 billion was invested in travel startups in 2018.
So, I want to home in on three key areas where there are still plenty of opportunities for startup innovation and look at some of the exciting things that are already happening in those segments.
These areas are:
- Personalisation – a major focus for travel brands going into 2020.
- Tailored technology to cater for the world’s expanding active senior and special needs segments.
- Improving the traveler experience from end-to-end.
Personalisation offers plenty more scope for innovation
Increasingly, travelers consider, like or value personalized offers. They want to be able to tailor their experience and there are many startups helping create this customisable future full of choice.
The key to creating a personalized experience is to understand the preference of the traveler explicitly or implicitly.
It is now more important than ever that the industry caters specifically to active seniors, who are often less tech-savvy than younger generations but have the time and the pocket to pursue unique experiences in new destinations.
Some travel industry players segment their audiences according to a survey that they have filled in or based on their previous browsing and purchase history, which can take a significant amount of work.
This is where technology simplifies the process, facilitating the matching of experiences to the right audience.
This process relies on data, so the more accurate and wide-reaching the dataset, the more intuitive the algorithm and the stronger the chance of producing a relevant match.
For destination choice and planning, we’re seeing some exciting startups developing tools to help travelers decide where to go and what to do when they get there.
For example, there are apps that rate the popularity of locations, including maps and public transport information to help the visitor plan ahead. This, combined with crowd-sourced recommendations of others, helps travelers make the most of their trip.
At the booking stage, innovators are creating machine-learning systems that can create airline offers simultaneously, from seats through to ancillaries and offers.
Ahead of arrival, travelers can now plan their movements at their destination, and even purchase tickets and passes, saving them the hassle when they arrive at their destination.
There are huge opportunities for startups and innovators developing personalisation solutions, as travel companies are looking to increase their offering to customers.
Travel technology for travelers with special needs
The world’s population is ageing - it is estimated by the United Nations that by 2050 one in six people in the world will be over the age of 65.
What’s more, in 2018, people aged 65 or above outnumbered children under five years of age globally for the first time.
Therefore, it is now more important than ever that the travel technology industry caters specifically to active seniors, who are often less tech-savvy than younger generations but have the time and the pocket to pursue unique experiences in new destinations.
There is a great deal of room for startups to expand into this area and offer tailored tech solutions for people with special needs.
How can we help them to find the travel that they really want? We foresee a rise in startups focused on technology that will enhance the travel experience for those with special needs.
That could be something as simple as being able to interact with an online travel agent (OTA) via voice, being able to source and book appropriately equipped accommodation, finding accessible restaurants or medical resources.
The end-to-end seamless experience
Every traveler wants a smooth, seamless and enjoyable experience. The traveler’s end-to-end experience presents many opportunities to develop solutions at every stage.
Flights booked? Check. Hotel booked? Check. Experiences at destination? Check. What about your visa?
Innovators like Sherpa based in Toronto, Canada, have developed technology that empowers travelers to navigate the e-visa process, and understand and conform with the customs requirements of their destination country.
Do you have access to the prevailing payment method of your destination? FlyMoney based in Israel (check its pitch and interview at The Phocuswright Conference 2019) is working behind the scene to make sure that travelers have the right e-Wallet for the country they’re visiting.
Airports are deploying technology that enables them to optimize the passenger experience by providing real-time intelligence through automated computer vision technology. Innovators are helping create a frictionless journey.
We are seeing significant efforts around disruption management, including early pilots on AI deployment to enhance overall operational efficiencies - from check-in and bag drop, through security, crew management, ground staff and include the forecasting of weather.
What's next?
The world of travel technology may seem like a saturated landscape for startups at first glance, however there are still numerous gaps and opportunities for new and improved travel solutions.
Most travelers are still seeking the ultimate, streamlined, end-to-end travel experience that is tailored as closely as possible to them. Any budding startups or entrepreneurs with a great idea have an amazing opportunity to establish themselves in the industry.
We are also going to see blockchain, AI and machine learning play an increasingly important role in travel technology going forward.
We’re traveling smarter than ever before thanks to startup innovation, which continues to shape the travel industry for the better.