The travel industry is being heavily disrupted – The rise of the sharing economy, changing demographic expectations, big data, political turmoil, AI, and currency shifts are just a few of the many forces that are putting pressure on the industry. Here are some changes we can expect in 2018.
Travel growth expected: According to the Global Business Travel Association report, expected business travel spending is to grow by 6.1 percent in 2018, up from the expected 5.1 percent in 2017 and this optimism in the business travel industry is driven by accelerating global trade, despite echoes of the recession, in recent memory. Growth in manufacturing and in emerging markets is also major factors. There will be an increase in travel costs, with airfares expected to rise by 3.5 percent and hotel prices 3.7 percent.
The sharing economy completes its transition to business mainstream: In 2014, small business owners chose taxis over Uber by a factor of 3 to 1, but by late 2017 that number has flipped, with small businesses choosing Uber over taxis by 3 to 1.
Airbnb may also be approaching saturation. In 2014, small business owners chose hotels over Airbnb by a factor of 16 to 1. By late 2017, that lead is down to 6 to 1.
Clearly, there is some resistance to embracing the sharing economy when it comes to sleeping arrangements, but even those going the hotel route are likely to see changes in a more casual direction. This is part of a larger trend towards the “consumerization” of business, which is likely to become increasingly important for business travel, especially for businesses hoping to hold top talent in recruitment, negotiation, and other travel-heavy positions.
Self-driven cars begin to play a real part: Uber surprised everybody in August of 2016 by launching a fleet of self-driving cars in Pittsburgh. While humans in the driver seat monitored the cars, it was much sooner than anybody thought a major company would be going commercial with self-driving cars, in any capacity.
The gravity of how quickly this shift could take place hit home in late November, with the announcement of a deal that would put 24,000 Volvo self-driving cars in Uber’s fleet. The cars will begin to hit the streets in 2019, but the fact that this major deal was brokered should have important implications for the direction of the business travel over the next year.
AI hits the industry in a big way: While the influence of self-driving cars is more likely to be on the horizon in 2018 than on the front doorstep, the broader world of AI will likely be making a big impact. According to an IBM report, more than a third of travel industry leaders will have four or more cognitive projects underway in 2018, and 41 percent plan to launch a cognitive project. Most of the investment is currently going towards chat bots to assist with customer service, whether in the form of messaging or call centre service.
IBM’s report found that the most cognitive-ready businesses in the industry considered personalization of the traveller experience one of the most important points to focus on. The report stated that an unnamed global airline was investing in a Siri-like AI that would communicate with travellers in natural language to put together a personalized travel plan. That personalization would be bolstered by analysis of interactions with other travellers and large data sets about preferences.
Meanwhile, Quantas Airways is already using self-service tech to cut check-in times by 90 percent, the Watson Virtual Assistant is improving call centre performance, Hipmunk has rolled out an app you can talk to like a person, and Amadeus is building custom offers for people based off of their social media profiles (with permission, it should be noted).