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Leapfrogging Into the Future: The Travel Industry’s Tech-Driven Transformation – Image Credit Unsplash+
- The COVID-19 pandemic has significantly accelerated the digitalization of customer and supply-chain interactions in the travel and hotel industry.
- The use of advanced technology platforms and artificial intelligence is shaping the future of the industry, with new and existing players adopting these tools to enhance their services and offerings.
In the wake of the COVID-19 pandemic, the travel and hotel industry has experienced a significant shift towards a more digital-focused approach. This change was spearheaded by innovative entrepreneurs like Ryan Killeen, who launched The Annex, a boutique hotel in Toronto, Canada, in 2018.
With his background in tech companies like Sonder and Airbnb, Killeen aimed to create a unique space under the “tech-enabled hospitality” banner. His vision included a cashless property, digital services, and touchless check-in features, all supported by an on-site concierge ambassador. However, the pandemic further accelerated this shift towards a digitally driven model, not just for The Annex but for the industry at large.
A 2020 McKinsey Global Survey of Executives revealed that the pandemic had fast-tracked the “digitization of customer and supply-chain interactions, and internal operations” by three to four years. This acceleration has prompted a wave of change within the industry, with new entrants looking to capitalize on the advancements in technology platforms and artificial intelligence.
The term “leapfrogging” describes a phenomenon in which industries bypass traditional stages of development and adopt the latest technologies. This mechanism has been observed in areas like mobile payments in Africa, where the region bypassed landline telephony and jumped straight to mobile, causing rapid changes beyond telecommunications.
The travel industry seems to be experiencing its “leapfrog” moment, with several tech-driven accommodation operators like Bob W, Landing, Numa Group, and Kasa scaling rapidly. Even smaller players are entering the arena, armed with advanced technology tools.
On a larger scale, destinations like Saudi Arabia’s Alula are leveraging new technology to enhance their global presence. The Royal Commission for Alula has adopted a suite of digital experience platforms to deliver a personalized end-to-end customer experience and improve marketing ROI.
However, this shift towards a tech-centric model is not without its challenges. The industry is rife with “technology debt” as it strives to modernize itself. This refers to the problems that arise due to incremental changes and the inability to resolve them, which leads to the accumulation of unresolved issues. Despite this, savvy travel organizations use software to differentiate themselves and overlay new technology onto older infrastructures.
The travel and hotel industry is indeed experiencing a “leapfrog” moment. Driven by the pandemic’s push towards digitization and the advent of advanced technology, the industry is poised for a seismic shift towards a more tech-centric model. However, the journey is fraught with challenges, and how the industry will navigate this new era remains to be seen.
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