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If you think we are miles away from multimodal travel solutions, think again!

Paul Pontecorvo, VP Marketing at Waynaut | January 13th, 2016

The business of digital tourism is worth around 10 billion euros, or in other terms, 20% of the entire tourism industry. Transport, with its 72% turnover, has by now earned the role of main protagonist in this scene (data by the Observatory for Digital Innovation in Tourism of the Politecnico di Milano School of Management). Therefore, it will come as no surprise that the challenge of technological innovation is first and foremost met by the industry of digital tourism.

What kind of innovation are we talking about?

The one we have been needing so far. To date, the gap in the marketplace has been bringing all modes of transport together – plane, train, bus and new options such as carpooling and ride sharing –, trading off those modes into optimal itineraries, presenting these new sets of itineraries to the traveller, and finally enabling the traveller to book them on the platforms of the suppliers.

Consider that the number of choices for travel is growing beyond traditional modes and, with this increase in options, choosing an optimal solution is getting more difficult. Multimodal travel is opening up a whole new set of solutions from your starting point to your final destination, according to various criteria: price, time, environmental impact, etc.

What are the megatrends pointing to a growth in multimodal travel?

The first megatrend is the disorganised multiplication of information. The amount of travel fares, schedules and prices published on the Internet from a host of travel modes – be it air, train, bus, or ridesharing – is astonishing. Although this trend has fuelled the growth of multimodal solutions, not all transport companies are uniform in the sophistication of how the data is distributed into the market place. For instance, some providers disseminate the information as non-standardized data feeds or static PDF/HTML files that complicate the incorporation of this data into the algorithms for choosing the optimal solution.

The second megatrend is the diffusion of smartphones and tablets. According to Statista, over one-third of the world’s population is projected to own a smartphone in 2017, up from under 10% in 2011. If you consider Western Europe, this figure is two-thirds of the population in 2017, more than doubling since 2012. In fact, booking on mobile platforms is growing, according to eMarketer: the number of users who booked travel on mobile devices was 25% in April 2014 and is expected to grow to 30% in 2015. Finally, Euromonitor predicts that mobile bookings are expected to account for 25% of the total global online travel sales by 2019. It follows that the need for a mobile travel search and booking platform across multiple modes of travel is now becoming urgent.

The third megatrend fuelling the rise of multimodal solutions is a paradigm shift in travel. This new generation of millennials is far more open to consider “innovative” solutions such as ride sharing and carpooling. The sharing economy concept is becoming second nature to the new generation. Look no further than the growth of Uber and BlaBlaCar and you find disruptive means of travel that must be included in the consideration set. This openness means that the number of combined solutions grows exponentially when advising travellers their optimal solution from starting point to destination.

The not-so-distant future

The future is bright for multimodal travel, as we move closer to the vision that the World Economic Forum/The Boston Consulting Group analysis produced in 2014. That future involves an Integrated, Proactive, Intermodal, Travel Assistant (IPITA). It is a vision where the you have a simple way of getting from your starting point to your final destination through a personalised mobile assistant with real time travel solutions across all means of travel.

Yet that future also comes with some warnings as several entities must heed the call. Transport providers must make their data open and simple; GDS (Global Distribution Systems, i.e. companies that give travel agencies access to the inventory of airline flights – like Sabre, Amadeus and Travelport) are feeling the pressure to diversify outside of their flight heavy focus. Online Travel Agencies, too, must realise this shift is already happening. Have a good journey!