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“She’s got a ticket to ride”

NewsFromThePlatform | November 11th, 2015

As The Beatles used to sing a few years ago… and if, back then, the streets were lit up by light poles, today the light comes from smartphones and tablets, where you can look for inspiration, book journeys, hotels, dinners or concerts. You can share pictures, opinions, reviews and emotions: everything you can imagine is just a few clicks away.

According to the Observatory on “Digital Innovation in Tourism” of the School of Management of the Politecnico di Milano, just in Italy, these simple and fast actions are worth € 9,5 billion. In particular, digital tourism takes on the 19% of the Italian travel economy (17% in 2014) and a fifth of Italy’s Internet transit. Although at the moment the strongest segment of online booking is transport (72%), accommodation and travel package booking – directly online or through Online Travel Agencies (OTA) – are growing. Moreover, it has emerged that the so-called digital tourist is more and more frequently looking for mobile services, so much so that nowadays losing your smartphone is much worse than losing your luggage!

Always according to the Politecnico Observatory, by the end of 2015 shopping for travel and tourism will exceed € 51 billion (taking into account Italian people travelling Italy or going abroad and non-Italian people coming to Italy). This means that there will be a growth of 3% compared to 2014, which will be generated both by traditional shopping modalities (+1%, opposed to an essential stability in 2014), and especially by innovative, digital shopping modalities (+11%). If that proves to be true, the weight of e-commerce in the landscape of travel industry is destined to grow.

This confirms what has recently emerged from the conference “Digitale X la crescita” (Digital for Growth), organized by Ernst & Young in Capri: that is, sooner or later every industry is going to benefit from the digital revolution, but the travel industry can no longer do without it. In 1970s Italy had 13 million visitors and was ahead of the United States and France in the world ranking of the most visited countries. Today, it is ranked fifth with just (so to say) 49 million travellers.

How can we climb back to the top? Experts estimate that only digitalization will allow for a complete retrieval of competitiveness and a € 4 billion boost in the travel economy. That is why digital technology is a very powerful driver in the travel industry.

Therefore, the world of digital tourism must be carefully controlled, principally because the digital tourist is looking for increasingly complex services, before, during and after the journey. What is more, we are switching from a consumer to a prosumer dimension, i.e. the consumer is also a producer of content, comments and advice. The prosumer contributes to the creation of increasingly shared and shareable travel experience, so much so that the new frontier of tourism is smart hospitality.

Companies working in this field should embrace the new trends generated by the digital revolution. Consider the disruptive effect of Airbnb: since 2008, travellers who have used Airbnb in Italy are almost 3 million. This is why one of the largest international travel fairs, TTG Incontri, has given plenty of space to the discussion of business models that are supported by the new technologies. These are, for instance, companies specializing in online solutions for tourists, such as travel arrangement or hotel booking, or companies developing platforms to share holiday experiences like photos, videos, etc.

Digital tourism is rapidly evolving. Companies traditionally operating in this field can no longer wait: just consider that the new players are already grappling with extraordinary operations to remain competitive. For example, the British luxury travel website Secret Escapes has bought its German rival Travista, in order to gain a place of excellence in the online booking industry of the most attractive destination for European tourists after Spain (according to the German National Tourist Board). Over the past year, Tripadvisor has acquired several companies, such as IENS, a Dutch platform for restaurant booking, and BestTables, its Spanish equivalent. But that is not all: the economic magnitude of this industry is seducing the big names of the digital world. For example, Google has decided to charge a commission on hotel booking – since many digital tourists start planning their journey on Google. Booking.com, Expedia and other big virtual mediators will have to deal with Google, which will probably soon ask for a fee on flight reservation.