On 27-28 September, the Skift Global Forum took place in the Lincoln Centre in New York City, on the site that previously housed tenement buildings that were featured in the film West Side Story. It seems a fitting back-drop to discuss the future of travel, which rests on the question of reinvention vs innovation in a city that never sleeps and embraces change for survival, even in the darkest hours.
Man vs machine
Underpinning all sessions was technology; this is undeniably the future path of the travel industry, which is turning ever more mobile-centric, moving to voice recognition and unstructured search queries, according to Dara Khosrowshahi, CEO of Expedia. He added that current technology platforms are anachronistic and major user interface changes are to come
Artificial intelligence (AI) will shape the future of the industry as chatbots and virtual assistants like Siri, Google Now and Cortana - that are essentially computer software that can interact with humans - and the Internet of Things, where devices and appliances communicate to each-other, will increasingly become part of our daily lives as we move to a 24/7 connected world.
Amazon’s Echo and second generation Echo dot is an interesting example of a voice-operated wireless speaker, using Alexa to play music, control home devices and providing a host of real-time information services via the device. Apps like Uber, Domino’s Pizza and Spotify are already available on Echo. TripAdvisor plans to roll out full access to its 250 million reviews with restaurant reviews already available via Alexa. It is not too far-fetched to imagine travel bookings being made via Echo in future, especially thanks to a low retail price for the device.
With the ever-increasing ability to harness data from disparate sources to understand consumer behaviour and improve targeting, the travel industry is facing a future of personalisation through automation. However, there was a common theme that resonated at the forum about the need to ensure that travel brands’ interactions relish the human interaction that travel provides, with Airbnb’s Head of Global Hospitality and Strategy, Chip Conley, talking about the generosity of spirit that travel creates between guests and hosts.
Conley noted that he thinks that hotels are currently on the wrong path in terms of automation with self-service check-ins and robot butlers. For business travellers, the opportunities for greater automation efficiencies make sense due to the need to drive economies of scale and the higher frequency of business trips. However, leisure travel is less frequent, more ad-hoc and diverse, so the social planning element is critical, with Facebook likely to move further into this space and cause further disruption to the status quo.
There was a warning from Niki Leondakis, CEO of Commune Hotels & Resorts, that the transactional element should not surpass the emotional component of customer service and that the experience must avoid being “pleasantly unhelpful”.
Personalisation and the long tail have long been key benefits of new technological developments. In today’s smartphone age, personalisation is being embraced by all players, including the Travel Corp’s CEO, Brett Tollman, who stated at the forum that mobile helps his company understand travellers’ preferences, such as dietary needs and sleeping preferences, and also helps to provide a seamless service throughout the trip, as well as a more effective emergency service.
Personalisation is also happening in-flight with Air Canada offering flexible dining times and Sabre applying Routehappy.com ratings to ensure the optimal in-flight experience. The Standard Hotel in New York City offers its guests flexible check-in times, while Arne Sorenson talked at the forum about the need to redesign hotel formats to provide suites with living room areas for groups.
The move to on-demand is a trend that has clearly been driven by the sharing economy, and the model is being adopted across the travel spectrum. At the forum, Trip Advisor’s President, Stephen Kafuer, also hinted at providing personal itineraries for users based on their preferences, but some things are as basic as they ever were, and if your brand/product does not accommodate different languages, then that is a fundamental obstacle to growth.
Courageous leaps of faith
The speed of change is hard to predict. Rich Barton, CEO of Zillow Group, founded Expedia within Microsoft. He recounted how they had originally built the Expedia platform to work through voice recognition and that is something that has not yet reached critical mass and will speed up in years to come.
Airbnb’s Conley shared how the company has rolled out an ambitious set of global hospitality standards to a network of disparate hosts to ensure that the guest experience is comparable across over 190 countries.
The in-destination activities market is ripe for the taking. Peek CEO, Ruzwana Bashir, has spent the last few years wiring up this fragmented category and said that only 1% of the USD100 billion market has yet been captured. TripAdvisor’s acquisition of Viator in 2014, a tours and activities booking site, points to the huge interest in this area, and cruise, hotels, airlines, OTAs and tourism boards are all vying for a slice of the pie.
The great thing about in-trip spending is that a higher percentage is likely to stay local, with The Travel Corp’s Tollman stating that 80% of travellers’ in-trip spend remains in the destination, which is critical as the industry shifts up a gear in terms of sustainable tourism development.
Future face of travel
The biggest unknown is which companies will ultimately be in control of the consumer. The most likely suspects, which will shape how we search, book and experience travel, are tech giants like Google, Facebook, Apple, and Amazon and how they partner and play with travel brands like Expedia.
The future clearly belongs to virtual assistants and voice recognition – meet Siri, Alexa, and Cortana, who will be getting to know you even better – as the personalisation trend entrenches.
Where silos will be destroyed, competition will come in left-field. Following the adoption of autonomous vehicles, airlines will compete with the likes of GM, as well as Google and Uber, on routes like San Francisco to Los Angeles.
Luxury will continue to be democratised – Bangkok Airport already offers airport lounge access for all, which seems almost revolutionary, whilst Air Canada has proclaimed that first class is dead and AirFareWatchdog has questioned the longevity of loyalty programmes.
So the future belongs to the individual, their customised experience with a travel brand and its talent, which will be supported by technology in a frictionless way, driven by analytics and plugged into the human soul. Long live the future of travel!