Looking back at the trends that defined travel in 2023, one thing is clear: this year, our industry embraced tech and innovation as never before. From transformative innovations to more widespread adoption of already available tools, the growth of travel technology can’t be overlooked.
Not only did artificial intelligence (AI) disrupt the travel space for both businesses and travelers, but new technologies such as local payment methods emerged, opening up new revenue channels and facilitating an entirely new way of booking and paying for travel.
As we enter a new era of travel, we’re taking a look back at the technologies and innovations that disrupted and enhanced the industry this year, to help travel businesses decide which are the essential technologies to implement for a successful 2024.
Social e-commerce
While social media has long been used as a powerful tool to support marketing, brand building, and engaging with travelers, a quiet but significant shift has been observed across the travel industry this year - and it’s set to expand in 2024. The role of social media influencers and e-commerce tools - which facilitate travel bookings from within social media apps - are emerging as a powerful means to drive bookings.
Phocuswright’s Under the Influence research report revealed that more than half of leisure travelers use social media to support their travel decisions. While the most popular type of account across all age groups to follow are those of family and friends, 30% of 18-34-year-olds use celebrity or social influencers’ social media accounts for travel inspiration - a figure that hasn’t gone unnoticed in the travel industry.
This has led to a growth in travel technology that supports influencers in guiding travelers from the inspiration phase of booking a trip, to converting and making a booking. One means of achieving this is to integrate direct booking tools within social media apps themselves.
While experts such as Stuart Greif of Forbes Travel Guide acknowledge that the industry hasn’t yet reached the point where travelers can book and then manage their entire trip through a social platform, it’s a vision that will likely come more into focus in 2024. By facilitating in-app purchases, e-commerce is a technology for travel companies that contributes to the idea of an all-in-one booking and payment experience - or the ‘connected trip’ that travel’s biggest brands are striving for.
Local payment methods
Consumers from multiple industries have grown accustomed to the flexibility and efficiency granted by the ability to pay online using their preferred local method, and those same consumers think no differently when booking travel.
The ‘abandoned cart’ problem may be traditionally thought of as an issue for online retailers selling consumer goods, but it’s been shown that many travelers will simply not complete their booking if their preferred local payment method isn’t available. As such, the travel industry is sitting up and taking note, ushering in a new era of travel payments: local payment methods.
Local payment methods simply refer to payment options that are specific to a particular country or region, reflecting the unique preferences and financial systems of each region or market. These methods are commonly used by the local population to make purchases and may include popular payment options like bank transfers, mobile wallets, and local credit or debit cards. In the United States, for example, common local payment methods include ACH and mobile payment apps like Apple Pay and Google Pay. While in Europe, Sofort is widely used in Germany and iDeal is the most popular choice in the Netherlands.
For businesses, presenting travelers with their familiar and trusted payment method reduces the risk of cart abandonment which leads to an improved conversion rate, overall boosting a business’s bottom line. Additionally, integrating local payment methods provides a competitive advantage, reduces the risk of fraud, and ensures that businesses adhere to local regulations. For travelers, paying via their preferred local option reduces friction in the payment journey, enhancing their experience with travel businesses, and saves money by eliminating foreign exchange (FX) fees.
For businesses looking for a booking and payment software that not only provides travelers with a personalized experience but improves their bottom line, local payment methods are a travel technology to seek out in 2024.
Automation
While automation is certainly not a new technology, the expansion of artificial intelligence (AI) has helped democratize how easily automation can be implemented as a travel technology. Thanks to the power of AI, the availability and cost of automating processes are no longer prohibitive.
Where travel businesses may have previously been put off automating their processes due to a lack of coding knowledge or funds, this year, the technology is being embraced. Third-party apps such as Zapier have paved the way for businesses to set up simple automations to improve workflow and efficiency, and more automation features are being integrated into booking and payment software platforms.
According to Flora Zhang, Trip.com’s Global Head of User Experience, “AI-powered automation is streamlining processes, improving response times, and providing frictionless interactions across touchpoints.” But where previously, knowledge of coding was required to set up such complex automation processes, businesses now simply have to choose the right booking and payment software, and more often than not, the most transformative automations are already built in.
WeTravel’s 2024 Travel Trends Report revealed that 30% of travel businesses already automate their customer-facing experience, while another 34% automate some back-end processes. While the remainder of businesses stated that they don’t want to integrate automation into their operations, in 2024, the expansion of automation technologies will likely mean that every travel business will automate some of their processes whether they make the conscious choice to, or not.
Just like AI, automation is a key travel technology that allows businesses to maximize efficiency by streamlining time-consuming, repetitive tasks, freeing up time for customer interactions, and establishing supplier relationships - the elements of running a travel business that truly do require a human touch.
Generative Artificial Intelligence (AI)
Much of the noise created in 2023 by artificial intelligence (AI) such as ChatGPT has been focused on the traveler's experience. From destination inspiration to crafting itineraries and providing real-time travel information (such as flight prices), AI-powered travel ‘assistants’ have shown travelers a new way to search for and book travel.
But how is AI changing the industry for businesses? While headlines may have been dominated this year by the trip-planning tools created by industry giants such as Booking.com, the advantage that generative AI has given many tour operators has been to boost their digital marketing and customer support. From creating content such as videos, blog articles, and social media posts to crafting entire brand campaigns, as a travel technology, generative AI has already revolutionized how businesses build their brand, engage with travelers, and optimize resources.
However, the true strength of AI and its ability to revolutionize the travel industry lies in its ability to super-power personalization at a mass scale. With personalization remaining steadfast as one of 2024’s most important travel consumer trends, all travel businesses should be looking for ways to enhance their travelers’ journey through a greater level of personalization.
Through its ability to analyze huge amounts of traveler data, generative AI-powered tools can reveal what will resonate with a business’s target market, and subsequently create a tailored digital marketing strategy - from content creation through to distribution - in reflection of this data.
While thought leaders stress the importance of businesses understanding their specific market to choose the right AI tools to support their operations, some experts predict that AI will soon be integrated into every tool of a business’s operations regardless of whether they’ve chosen it or not. Microsoft’s Global Director of Travel and Hospitality Shane O’Flaherty predicts that in 2024, rather than chat interfaces such as ChatGPT dominating the market, travel booking and payment platforms will integrate AI-supported features into their own operations, providing a seamless AI-powered service to all of the businesses who use them.
Mobile-first Optimization
The number one tech of this year in our eyes wasn’t a disruptive innovation, but rather the shift of travel towards being a mobile-first industry. Not only are certain regions such as Latin America and Africa now characterized as mobile-first or mobile-only markets, but travelers across the globe have grown to expect a mobile-optimized booking, payment, and trip management experience.
This has in part been facilitated by the growth in smartphone accessibility as well as expanding data networks in previously remote or offline regions. But as with other transformational travel technologies that we’ve already seen such as local payment options, the shift towards mobile-first in the travel industry has also been driven by consumer behavior in other industries.
Travelers are seeking the same seamless experience when purchasing travel as they do for any consumer goods - and they’ve grown accustomed to making online transactions from their mobiles. And as local and online payment options such as PayPal and Apple Pay are largely mobile-first tools, this trend isn’t set to slow down in 2024.
More travelers than ever before are using their mobiles to book, pay, and manage their entire trip experience, but for travel businesses too, the potential growth offered by mobile-first optimization is huge.
As a technology for travel companies, mobile-first encompasses everything from how businesses pay their on-the-ground suppliers and tour guides to their ability to manage bookings in real time. For businesses operating in remote regions, in particular, the capability to take payments, transfer funds, and communicate with travelers from mobile devices offers enormous growth potential. In 2024, travel businesses should prioritize booking and payment software that supports mobile-first optimization at every level of operations, and on both customer-facing and back-end channels.
When looking back at the shifts that have taken place across the industry in 2023, many have been facilitated by an embracing of technology previously unseen in travel. Next year, this trend is unlikely to slow down, with travel businesses now more aware than ever before of the benefits of adopting technology to support their operations, improve their bottom line, and enhance their travelers’ experiences.
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