What drives TravelTech
In 2023, the TravelTech industry can already boast that it can seamlessly organize
One of the leading players in TravelTech - OTAs(Online Travel Agencies), or online travel agencies. By 2026, 74% of bookings will be made through these players. Examples of OTAs: Booking.com, TripAdvisor, Airbnb. As people rely on seamlessness and online shopping, OTAs have become an entry point to other players such as hotels.
OTAs and other industry players have beenbrings artificial intelligence closer together. More and more companies are investing in this technology because it helps reduce costs and increase sales of travel products. In addition, AI is also involved in the creation of chatbots that communicate with consumers.
Here are a few more technologies and product types that are digitizing and advancing the industry.
Biometric technologies.Recognition of fingerprints, faces, retina -this is already a reality in modern airports and even some hotels. Hotels were significantly behind in automation and digitalization before the pandemic. In 2018, Marriott International became the first to use facial recognition in the hotel industry. The current lack of resources is forcing other hoteliers to quickly implement new technologies. Nowadays, even middle-segment networks are implementing biometric check-in technology.
At the same time, hotel chains for high segmentssuch as Four Seasons, consider human interaction part of what guests expect from a luxury brand. But this does not mean that you need to completely abandon technology. Four Seasons is experimenting with chats between customers and employees. When a person asks a question, technology redirects him to the person who is most competent in the matter. At the same time, less resources are spent on communication than during live communication. Executives call it EI meets AI - “emotional intelligence meets artificial intelligence.”
Platforms for rental housing and hotels. As cliché as it may seem, the markethousing there is still untapped potential for rental platforms. In the ranking of TravelTech startups from Angel List (an American website for startups, business angels and job seekers who want to work in startups - editor's note), the app for safely finding accommodation for female travelers - Globe Sisters - is in first place. Even Airbnb admitted in its latest annual report that its industry is highly competitive. They directly say that some competitors have better and more diverse communications than they do. Among them are superapps.
Big data.This is far from a new technology for the IT world.But it is still gaining momentum in the travel industry as more useful data becomes available every year. For example, over many years of work, Aviasales has accumulated a database with prices for air tickets. This helped create a price prediction service. As information accumulates, companies will be better able to manage revenue, personalize offers, target marketing, and operate efficiently. In addition, companies are looking for ways to enrich their data, one of them is to expand their coverage.
API.It's not just big data that matters, but also how itare transmitted. Therefore, APIs continue to develop - tools for integrating the service into other products. Since the travel industry is quite segmented, integrations help in gaining a non-competitive advantage. Therefore, integrator companies that provide APIs with third parties, for example, Amadeus, TripAdvisor, Expedia and the like, play an important role. In particular, Amadeus is improving its API so that travel industry participants receive booking data from the industry leader.
Robotics.There are already devices that greet guests orthey bring food to your room, help you check in for flights, and even improve airport security. But there are also custom developments, for example, the Travelmate robot suitcase. Now in Russia such a gadget is offered for sale from 100 thousand rubles and above. If developers manage to reduce the cost of technology, then such a gadget will be in demand. In the meantime, concierge robots and disinfection devices are gaining popularity.
What directions will develop in the near future
KYC (know your customer).The more digital an industry becomes, the moreit is more attractive to scammers and criminals. They pay for tickets and hotels with stolen cards, register with fake documents, falsify vaccination certificates. Therefore, KYC becomes a necessary procedure when registering with travel services. Now it is mainly used in financial products for user identification and verification, but the need for it is growing every year in other markets.
Travel services.In English there is a phrase trip of a lifetime- a lifelong journey. It now best describes the trend in tourism development: to travel always and everywhere. Therefore, products will be developed with excursions in cities, for planning unusual routes in nearby areas, tools for domestic tourism, and so on.
For example, the Onsite service helps planturnkey travel with the help of local experts: buy tickets, make marks on the map. 80days.me offers travel itineraries and tickets to move freely between destinations.
A good example of integrating online and offline is −self-guided tours. The organizer books all excursions and hotels and provides the user with the necessary materials in the application. The tourist only needs to choose the right program. Examples of such tours can be found on TourRadar, one of the leading tour marketplaces.
In addition, there are rootbooks - these are guides from experienced travelers and experts. They, as a rule, simply describe the finished route. An example of rootbooks is the startup Inspirator travel.
Self-guided tours and root books have the potential to create AR projects. But so far, their creators have not taken full advantage of this opportunity.
Virtual travel.Augmented reality enhances the personal experience, andvirtual - helps to travel without leaving home. For example, Oculus has many applications that take you to any part of the world using a VR helmet. And on Amazon you can find tours in which guides conduct a personal tour of the selected location via Zoom. Such technologies make travel easier and more convenient, and also allow you to explore distant places that people cannot visit in person for various reasons.
How are things going with TravelTech in Russia
Now in Russia there are more than 300 companies thatcreate technologies for tourists. Among them are information portals, booking services, online travel agencies, technologies and tools for the company, and even services for VIP tourism. Investors in 2022 were attracted by areas in the field of searching and booking air tickets, as well as searching for original and organized tours. These are the products that will be in demand in the near future and will advance the TravelTech industry in the country.
In Russia, TravelTech actively cooperates withsuperapps - OTAs are integrated into applications such as Tinkoff or Alfa-Bank. However, in the West, for example, Booking has never done anything jointly with Revolut or Bank of America. There, users go to Booking directly.
Even in Russia, the tour market is highly fragmented.On Russian marketplaces of tours, about 40–50% of the organizers are individuals (individual entrepreneurs or self-employed). In the West, almost all players are small companies with up to 10 employees.
In 2022, the task of import substitution was added- this will also develop the Russian TravelTech, as there is a need to create analogues of popular foreign services. Market leaders have left Russia: Booking and Airbnb, and many startups and corporations are now aiming in their place: MTS Travel, Othello from 2GIS, Tutu.ru, OZON. Moreover, unlike Western companies, Russian services use different solutions that differ in individual countries.
To provide quality services, you needhealthy competition. This is the competition we see in the market. Although the market leaders Booking.com and Airbnb have left, the next largest player, Emerging Travel Group (Ostrovok), has begun actively hiring a team to improve its customer experience. Also, other companies from similar and dissimilar areas to Hospitality began to occupy the booking niche.
Reg.ru went the other way and offered hotels to create their own websites and invite guests to book hotels directly. As a result, the market is becoming more and more fragmented, and by the end of the year we may be in for surprises as to who will break out into the lead in terms of the number of attracted guests.
At the end of last year, the tourist flow in the domesticmarket grew by 7% compared to 2021, and the inbound tourist flow to the Russian Federation fell by 95%. In 2023, we should expect a drop in the average check to 45 thousand rubles per person, and for the time being, you should not count on the entry of foreign tourists. According to a 2022 survey, about 70% of Russians have never vacationed abroad, and 30% even outside their native region. This suggests that services for local tourism need to be developed. Each region has something interesting and special - this is what you need to pay attention to.
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