The travel industry is changing at a very fast pace: the combination of mobile devices, big data and artificial intelligence is bound to transform the whole market. A new world is developing, driven by consumer expectations, and it is affecting the travel distribution. Travel distribution is indeed facing a new wave of disruption that will significantly impact industry players and their business models: let’s have a look at the disruption trends in the travel industry for 2017:
1. The 3 areas of travel evolution
Many studies, such as “State of Travel 2016” by Skift (2016), “Travel distribution. The end of the world as we know it? “, LSE Consulting, (2016 ), “Global Report”, Amadeus (2016), Venture Investment Trends in Travel 2017, Skift (2016) predict that the travel marketplace will evolve in three main areas:
Success will depend on a deeper understanding of consumer expectations and the use of innovation to transform the travel experience – and multimodal seems to be a key factor for such a need. The direction is to deliver a seamless door-to-door travel experience which, once achieved, will deliver true value to travelers and companies. In short, smoother and quicker transportation via intermodal connectivity is expected to be a reality by 2017/18, especially throughout Europe.
2. New technology for travel operators
Indeed, the way we think about the business of travel has deeply changed and, as the online world is one of the main disruptors in this industry, many travel companies are evolving into technology companies. Transport operators and consumers are driving this change through new technologies to bring multimodal offers to travelers. One example is the generation of such multimodal travel platforms, like Waynaut, which provide to operators, and eventually to final users, different travel options with all the different transport means available.
3. New alliances
The increasing use of technology will drive mergers and acquisitions in the industry. In fact, expansion, consolidation, adaptation are all part of a natural sequence of events in business life cycles, especially in a fast-paced environment. For example, airlines purchasing airlines, mega-hotel companies absorbing large and small hotel chains, car rental companies buying each other out, and online booking companies subsuming smaller related businesses. Let’s think of Ctrip, which has acquired Skyscanner a few weeks ago: the intention of the Chinese giant is to have access to the global market, as well as to give Skyscanner the opportunity to access the huge Chinese sector.
4. Rosy times for start-ups
Looking at broader trends in the travel industry, we can see that startups are the ones receiving most attention from the investors. Just think that total worldwide travel start-up investment in Q3 2016 has been estimated by venture capital research firm CB Insights to reach $3 billion – and these figures exclude Uber, that has raised $15 billion in equity and debt, following an injection of cash from Saudi Arabia’s Public Investment Fund. Also, there has been plenty of small acquisition activity among travel startups in 2016: 71 travel companies have been acquired, including both young and more established players, ranging from online booking companies, searching and planning platforms, to on-demand travel and recommendation sites, airlines, OTAs and so on.
5. The rise of B2C…
Another trend for 2017 is the rising of B2C multimodal booking sites. Examples in this sense are GoEuro and Rome2rio, which are both trying to capture the European multimodal market share. GoEuro, that has recently announced a funding round of over $50M (bringing their total raised capital to $145M), already enables some bookings directly on its website, while Rome2rio lets customers search their air, bus, rail and car rental options and refers users to partner sites to complete the booking, but has just launched as well some possibilities of direct booking, for example tickets for all UK Rail operators.
6. …and the evolution of B2B services
Not only are disruption and multimodal evolving in the B2C world, but they are conquering the B2B world too. Waynaut, thanks to the recent investment by the VC fund P101, is now working in this segment in order to provide services and products to companies, such as GDS, OTAs, meta-searchers, rail and airline services, travel agencies, and so on. More specifically, we are working on the launch of a One-click booking tool, in order to enable OTAs and TMCs end customers book different tickets and transport means in just one single click.