When most people pack their bags for that long-awaited holiday this summer, they’ll be thinking about a lot of things. Like how long it’s been since they’ve seen the countryside from 35,000 feet in the air. Or how they can’t wait to dip their toes in the ocean again. I’ll be thinking about those things too. But I’ll also be thinking about technology’s role in travel’s reemergence.
A brave new world for travel
Despite all the heartening signs of travel’s reemergence that we’ve seen in recent weeks, the pandemic is not over. And even when it is, we know that there won’t be a magic moment when everything goes back to normal. Global air passenger traffic isn’t expected to hit pre-pandemic levels for another three years. What’s more, companies are strapped for cash, jobs have been cut and traveler sentiment has changed.
It’s a whole new landscape.
As travel companies navigate this uncharted territory, I challenge them to forget about “how things are done.” Especially when it comes to technology’s role in supporting touchless, seamless, and secure travel experiences.
There’s never been a better time for travel to do things differently—or do different things. This is key to finding the silver lining of this dark time—the opportunity in the obstacles. While no industry was hit like travel was, pandemic success stories from other industries are instructive for travel’s recovery.
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Leaders, laggards and leapfroggers
This is especially true when it comes to technology adoption. According to our new research, “Leaders” (top 10% of the sample) in technology adoption from across multiple industries were growing 2x the rate of “Laggards” (bottom 25% of the sample) prior to the crisis. During the crisis, Leaders doubled down on technology investments, compressing years of digital transformation into months out of necessity. These moves paid off. Leaders extended their advantage—growing at 5x the rate of Laggards.
A third group of companies emerged during the pandemic. “Leapfroggers” watched what worked for the Leaders and made it work for them. They migrated and modernized their IT landscape through cloud, scaled new technologies. and flipped IT budget allocation toward innovation. Now Leapfroggers are growing 4x faster than Laggards and closing the revenue growth gap with Leaders. This progress is impressive in itself, and even more so considering that it occurred during a global pandemic.
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“Leaders” in technology adoption were growing 2x the rate of “Laggards”
Now “Leapfroggers” are growing 4x faster than “Laggards” and closing the revenue gap with “Leaders”
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Leaping outside of the lines
The reality is that most travel companies lag behind in terms of recovery from the pandemic compared to other industries. This is hardly surprising considering the demand freefall that hit every travel segment in 2020. Even so, travel companies can learn a lot from pandemic Leapfroggers. The way I see it, Leapfroggers are an art-of-the-possible study in what can happen when you use the best of others’ successes to model your own path back to growth.
In this spirit, I think travel companies should take a hard look at how other industries used technology to their advantage during the pandemic. Not every strategy in other industry playbooks applies, but some could position travel companies as tomorrow’s Leapfroggers. Here are a few examples:
- Public service organizations sped up digital transformation. Government organizations, which are notoriously siloed and strapped for resources, had to stand up digital service delivery models fast to meet their mission while keeping employees and citizens safe.
The leap for Travel? Rapid digital transformation at scale is possible despite budgetary restrictions and legacy systems.
- Consumer packaged goods giants got closer to consumers. Shopping habits changed profoundly during the pandemic. Some of the largest players doubled down on using data to devise new direct-to-consumer strategies.
The leap for Travel? Old business models may not always align with new travelers, but unlocking data provides the line of sight into what travelers need now.
- Retailers made the shopping experience easy for customers. To drive loyalty and preference, it was key for retailers to have inventory—and a seamless journey to purchase.
The leap for Travel? As companies compete for leisure travelers’ mindshare and wallet share, they need the infrastructure and data insights for pricing construction, purchasing ease, hyper personalization and pricing incentives.
- Banks doubled down on digital—and the human touch. While banks have evolved digital banking practices for years, the pandemic created a new sense of urgency around their efforts. The leap for Travel? Lean into digital experiences during every phase of the travel journey, but not without preserving the human touch—which will always be central to travel and hospitality.
- The energy sector is embracing bold reinvention. Like travel, energy companies were hit very hard by the pandemic. This crisis has been a wake-up call for the industry, and many companies are using this moment to invest in greener solutions, including greener technologies. The leap for Travel? If ever there was a time to make bold moves, the time is now.
Building something even better
For all of us who are passionate about the travel industry, it’s wonderful to see brighter days ahead. I know that travel companies have the will—and the way—to make the travel experience even better than it was before the world shut down.
Technology investments are the means to the end here. But so is shedding some long held beliefs and strategies, taking different risks, and seizing the value of cross-industry insights. Because travel is taking off again. As it does, doubling down on technology isn’t a luxury anymore. It’s an imperative for leapfrogging to success in the post-pandemic world.
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