Global industry agenda

Travel providers with the insights to understand the future will be the ones
who shape it.

Rapidly changing customer expectations, ecosystem collaboration and new technologies are defining the travel industry’s future, and straining legacy systems and models. Success in the industry of tomorrow demands market innovation, a sound transformation strategy and differentiated implementation.

Disruptive forces

Powerful global forces outside the control of any one company are compelling rapid change for travelers, organizers and providers.

Digital technologies

Redefining possibilities in the travel industry, digital technologies will compound disruption and have hyper-exponential impact.

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Artificial intelligence

AI icon

Artificial intelligence

  • Serves as the engine for travel personalization
  • Identifies business-critical operational improvements

Mobile icon


Moble icon


  • Becomes the primary interaction channel
  • Empowers front-line staff with insights

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  • Enables travel partners to collaborate automatically
  • Opens the industry to external innovations

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  • Enables travel companies to move beyond legacy
  • Delivers cost-effective innovation quickly

Blockchain icon


Blockchain icon


  • Promises to improve identity management and distribution
  • Enables transformational business model innovations

IoT icon

Internet of Things

IoT icon

Internet of Things

  • Equips physical assets with digital data
  • Optimizes existing operational processes

Emerging consequences

Each manifestation of disruptive forces has the ability to shape a new future, and affect the traveler, the enterprise and the market.

Number 1 graphic

Traveler impacts

Further differentiation
of segment preferences

Further differentiation of segment preferences

  • Travelers express continued frustration with web-based shopping and booking methods
    7 in 10 travelers are frustrated with online booking 13

  • Digitally adept travelers prefer natural language interactions which are enabled by AI
    By 2019, nearly 80% of U.S. travelers who book online will do so via mobile, up
    36% from 2014

  • Older travelers stay loyal to incumbent providers and traditional interaction channels
    41% of baby boomers book travel using a laptop; only 9% book via mobile 15

  • Providers will develop unique processes for all travel touchpoints to cater to
    segment preferences
    “Companies that do not facilitate personalized interactions are more likely to be punished with harsh reviews, lower customer satisfaction and limited customer loyalty” 16

Number 3 graphic

Enterprise impacts

Winners win big as
the complacent fail

Winners win big while others collapse

  • Most incumbents preserve the status quo by growing share, increasing scale and
    cutting costs
    From 2000 to 2013, the 10 largest U.S. airlines undertook 6 major mergers to create
    just 4 large carriers

  • Incumbents who fail to innovate will play catch-up
    The 10 largest U.S. airlines experienced 6 corporate bankruptcies from 2000 to 201321

  • Some providers find success through innovation; innovators enjoy substantially
    higher profits
    Hawaiian Airlines is ahead of industry rivals in incorporating AI and its share price has soared by 6.5 times in the last 5 years 22

  • Well-positioned innovators extend their leadership positions relative to incumbents
    Alaska Airlines leverages a distance-based loyalty program, whereas most of its competitors rely on a revenue-based model23
Number 5 graphic

Market impacts

Emergence of next generation distribution platforms

Emergence of next generation distribution platforms

  • Legacy systems will be a feature on the travel landscape for many years
    "The oligopolistic landscape today in travel leaves the legacy players with no economic incentive to innovate and creates far too-high barriers of entry for start-ups” 27

  • Technology-driven solutions will emerge from investments made by:
    • Independent travel companies
    • New entrants to the travel distribution landscape
    • Collaborations between travel ecosystem partners

    Webjet is building a first-of-a-kind blockchain proof-of-concept solution with Microsoft that has the potential to transform the way the entire travel industry processes and manages online payments for hotel bookings 28

  • Providers that participate in distribution system innovations will learn and profit from
    the efforts
    In 2016, Hilton Worldwide launched its “stop clicking around” marketing campaign,
    and by October, commanded a record 28% of its distribution mix and increased HHonors enrollment by 60%
Number 2 graphic

Increased demand
by travelers to control
their data

Increased demand by travelers to control their data

  • Travelers embrace solutions that make better use of data about their preferences
    and patterns
    47% of surveyed consumers said they’d be willing to share purchasing data via a grocery store loyalty card in exchange for discounts 17

  • Travelers prefer solutions that give greater control over how, when and where data is used
    82% of surveyed consumers said they want moderate control of the data they share with providers 18

  • Travelers are being compensated for the data they provide, which is being used across the partner ecosystem to improve the travel experience
    Kimpton Hotels’ Karma Rewards Program repays guests for tracking their eating,
    drinking and social media habits with the guest’s favorite fixings waiting in their room
    upon check-in
Number 4 graphic

New business models
find nascent success

New business models find nascent success

  • Leveraging new technologies and business models, travel providers experiment with:
    • Expansion of the low-cost model
    • Engagement with travelers on a deeper level
    • Experience-driven traveler sales engagement
    • Meaningful cooperation among ecosystem partners

    Air France is introducing a new airline for millennials, whose lives revolve around digital technology, in September 2017 24

  • Successful innovations improve profit margins
    Marriott expects the merger with Starwood to result in savings of USD 175-185M in 2017 25

  • Incumbents try to replicate successful innovations
    In February 2017, Qantas launched a chatbot concierge to give customers travel inspiration via Facebook, following British Airways, who launched a similar platform in 2016 26

Number 6 graphic

A digital giant enters
the travel market

A digital giant enters the travel market

  • Building on their success in information-driven businesses, new companies enter the market
    Winding Tree is building a blockchain for the travel industry that would make no profit on transactions and distribution on its platform 30

  • Entrants will focus on value chain weaknesses
    Over 250,000 companies use Airbnb for business, compared to 250 companies in 2015 31

  • Entrants will broker deals with incumbent providers to access inventory and distribution rights
    Marriott International and Alibaba group formed a joint venture in August 2017 that will leverage Marriott’s vast portfolio with Alibaba’s digital retail expertise to provide a suite of travel services to more than half a billion Chinese travelers 32

  • Digital giants will leverage existing commerce platforms

Pressing challenges

Acknowledge and act upon industry challenges
in the near term to stay competitive.

Travelers and employees insist
on conversational human-AI supported interactions

Learn more

Travelers and employees insist on conversational human-AI supported interactions

  • Computer interactions will not require the use of keyboards/screens

  • Humans will not be required to understand how computers work

  • AI will be integrated widely into travel decisions and interactions

Exposure to
retail personalization leaves travelers dissatisfied with
the status quo

Learn more

Exposure to retail personalization leaves travelers dissatisfied with the status quo

  • Travel personalization will quickly catch up to leading retailers

  • Travelers who are not offered personalized services and interactions will seek alternatives

  • Effective personalization will become essential

Legacy distribution becomes unsustain-
able, as new models increase flexibility and efficiency

Learn more

Legacy distribution becomes unsustainable, as new models increase flexibility and efficiency

  • New distribution models emerge that overcome the limits of legacy travel distribution

  • Providers that depend on legacy systems will face higher distribution costs

Transformational opportunities

Technology-enabled opportunities to empower your organization to address pressing challenges and compete in the marketplace.

Invest to profit from artificial intelligence
-enabled travel

Learn more

Invest to profit from artificial intelligence-enabled travel

Obtain new sources of data on customers and extract maximum insights from existing data using AI-enabled systems

Invest in, experiment with, and deploy AI across business silos and customer segments to get good at this critical but emerging capability

Differentiate travel experiences and expand ecosystem

Learn more

Differentiate travel experiences and expand the ecosystem

Extracts insights from traveler data to create unique travel experiences for diverse travel segments

Leverage insights across the travel ecosystem, and combine with insights from technologies like IoT, cloud, analytics and mobile to deliver distinctive experiences across every step in the travel journey

Embrace the
travel distribution revolution

Learn more

Embrace the travel distribution revolution

  • Actively support the development, maturation and use of new methods of distribution

  • Eschew status quo solutions and providers in favor of disruptive methods of managing inventory, marketing services and selling to customers

Start here to assess your readiness for
the future

Critical question 1

Customer experiences

  • How are you innovating travel experiences, or simply improving existing products?
  • In what ways is your company finding new ways to interact with and serve travelers?

Critical question 2

Ecosystem strategy

  • What role, if any, is your company playing in the definition of travel distribution 2.0?
  • How are you partnering with companies that help you better understand and serve your customers?

Critical question 3

Technology initiatives

  • How are your systems optimized to gather data and share insights across business silos?
  • What is your plan to prepare your IT organization to support new technologies like blockchain and AI as it copes with the proliferation of new travel processes?

Take action

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