When the industry talks about travel evolution, the discussion frequently turns to disruption.
As a simple definition, disruption is any development that upgrades or replaces an outdated product or service or overturns traditional business models.
NB: This is an analysis by Scott Alvis, chief marketing officer for Amadeus in North America.
In the past few years the travel industry has experienced its fair share of disruption.
Traveler autonomy has increased and preferences have evolved, while technologies have advanced and new companies and models have dramatically changed the way we think about and conduct the business of travel.
So what is the industry’s view when it comes to disruption?
Amadeus partnered with Tnooz to take the pulse of the industry on this topic.
A survey conducted in July 2014, with approximately 800 Tnooz readers responding, revealed that the industry considers disruption the "new normal" (37.4%) and many think it "should happen more" (27.4%).
And although most felt it will be more of an evolution (73.3%) than a revolution, disruption is clearly poised to continue to shape the future of travel – geographically, economically, socially and technologically.
Almost half (45.6%) of the respondents tagged Asia-Pacific as the region to watch for disruption over the next decade, with North America coming in next (27.6%).
Countries such as China are growing exponentially in terms of business and consumerism which typically fosters new product and business approaches.
And North America is a frequent leader in innovation and entrepreneurship which are also key ingredients for disruption.
Together these regions made up a majority of responses (73.2%) where disruption was prominently predicted.
When it came to industry segments that might be ripe for disruption, respondents identified online travel and metasearch companies (29.8%) followed by destination services and activities (21.8%).
One of the biggest disruptors in the travel industry, the online sector continues to morph with many emerging players like GetGoing, Routehappy, OptionsAway, and others.
And interestingly, destination services may be the next segment for change.
Priceline’s purchase of OpenTable for online restaurant reservations and TripAdvisor’s acquisition of tour and activities website Viator, for example, might be early indicators of potential future disruption as sizeable online players seek to expand their scope into other travel services.
Personalization (59.1%) and mobile (49%) ranked high when respondents were asked what areas will experience the most disruption.
Allowing travelers to personalize their services, increase relevance with location, and access this from their mobile devices is already spurring a revolution in new services such as Uber and Hotel Tonight.
Travel companies that get it right will be rewarded with customer satisfaction and loyalty. So disruption will likely have a prominent influence in these two key areas.
More than a third of respondents (35.2%) agreed that the traveler – and their behaviors and preferences -- will be at the epicenter of disruption.
The emergence of new players (25.1%) seeking to address traveler needs in unique and relevant ways will also play a significant role in shaking up the status quo.
What technologies might spark the most disruption?
Two hot areas came to the forefront.
Interestingly, multimodal integration (36.7%) came out on top.
The tipping point to disruption in multimodal integration may be near due to the recent advancements -- most notably between air and rail travel -- made over the past few years.
The industry is getting closer to delivering a seamless door-to-door travel experience which, once achieved, will deliver true value to travelers and travel companies alike.
Although emerging on the radar of travel and other industries, the Internet of Things (IoT) (26%) appears to be top of mind among survey respondents.
The IoT represents a major milestone in Internet advancement and holds the potential to "connect the world" in new and different ways.
According to Gartner there will be nearly 26 billion devices on the Internet of Things by 2020. Based on this sheer volume and the ability to offer advanced interconnection and communication among devices, systems and services, the Internet of Things will likely bring disruption.
Regardless of where, why and how, what is clear is that disruption is destined to shape the future of travel.
Therefore, it is critical for travel companies to anticipate, address and take advantage of disruption.
Having a history of business success is admirable, but having a future focused on business innovation, customer relevance and business sustainability will be crucial.
Tnooz view:
Being able to check the pulse of the travel industry can often throw up some surprising results but also support existing ideas.
Our survey with Amadeus reaffirmed what many (and we) believe: large parts of the industry are ripe for disruption, whether the protagonists involved in the status quo are aware of it or not.
Interestingly, one in five respondents consider the travel industry to be "far behind" other sectors.
Whilst this is true in some respects, perhaps it is also worth considering why this is the case and why, for example, large numbers of "people not from these parts" (or outsiders) have not taken a look at the travel sector and decided to try and disrupt it.
Despite the regulatory headaches, businesses such as Airbnb should (should!) ensure the hospitality sector remains on its toes (this is a good thing) and sharpen its own customer experience and introduce the same technology and online functionality that fans of the sharing economy rave over.
Perhaps the biggest eyebrow-raiser in the survey was the integration of multi-modal technology as a disruptive force in the industry.
Given North America is far behind (for obvious, logistical reasons) its European and Asian counterparts when it comes to rail networks, perhaps the result of that element of the survey illustrates a wider desire to tie up ALL forms of transportation into a tidier package, covering rail operators, ground transportation such as car-shares and car hire, as well as aviation.
At the heart of the survey is the realisation that it is undoubtedly the traveller (whether they be leisure or business) which is likely to drive most of the changes in the travel industry.
And perhaps that is the perennial problem in the industry, and why it is perceived to be lacking behind other verticals - it reacts to trends by its users, generally speaking, rather than taking a proactive approach.
NB: This is an analysis by Scott Alvis, chief marketing officer for Amadeus in North America. It appears here as part of Tnooz’s sponsored content initiative.