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Written By: Tom Ogg, Co-Founder and Co-Owner – Travel Professional NEWS
Paradigm Shift and Travel Industry 2023
One of the benefits of having been in this business for over 50 years is that I have lived through the evolution of travel distribution’s twists and turns. For the most part, virtually all of the paradigms have been set into motion because of advances in technology. However, it was never obvious when a significant change was in its infancy, as there was only widespread confusion and disruption. Those that recognized and understood the pattern early on generally did quite well, those that were late, did not.
When I first got into the travel industry, travel agents used OAGs (a book of airline schedules and fares) as their computers and would call the “agency desk” at the airline they were booking to confirm the reservation. They would then hand-validate the airline ticket with their agency plate and the airline’s plate (much like how a credit card sale used to take place). The agent would then handwrite the airline ticket, collect the funds and complete the transaction. Vacations were sold with “10% tax and service” added as the travel agent’s commission, but provided pretty much the same service. All in all, travel agents made their living both documenting and settling transactions on behalf of their supplier partners.
All inclusive pricing, satellite communication, the CRS, e-ticketing, direct settlement, inflation, personal computers and short haul, hub and spoke regional carriers and networks all created paradigms in their own right. But, it was the double whammy or the commission caps and cuts along with the evolution of the Web that created the most dramatic paradigm in our industry. Thousands of agents walked away from their brick and mortar storefronts and went home-based.
Web 2.0 brought with it a paradigm that not only affected the travel industry, but the distribution of products and services worldwide. Social Media and consumer review sites have enabled consumers to research an increasing amount of content and have changed the way consumers navigate the purchase of complex leisure travel products and services. Commodity oriented travel transactions matured on the web and promised an evolved sense of becoming a mature channel.
The COVID pandemic introduced even more change to the travel industry. Millions of people who were not especially computer savvy before the pandemic quickly became quite experienced with e-commerce and were shopping online and transacting financial transactions comfortably. Telecommunication became popular overnight and consumers discovered a new digital environment that was enhancing their productivity and social interaction. Artificial Intelligence chatbots became a normal way of communicating.
Folks, I have seen enough change in our industry to know that we are on the cusp of a huge paradigm that will affect all of us. It will affect the way that we do business, the way clients purchase travel and even the very nature of travel distribution itself. While I have no idea how this will manifest itself (and I don’t think many people do at this point) it is obvious that a major evolution is coming. Here are some of the key components of the coming Paradigm Shift and Travel Industry 2023.
Google has revolutionized the way consumers find information. Back when I first got into this business, travel agents were the primary source for information regarding travel. Today, any consumer can find out about a travel event they are considering by accessing the search functionality of the web. And, search is only going to get more definitive, rather than less. In the future, a client wanting a transfer from his hotel in Barcelona to a specific train station in Barcelona will be able to identify what they want using keywords and viola, all the options will be there. Search has already changed the very nature of the way consumers think about information. Where once consumers relied upon travel agents to “search” for results using their knowledge and other resources, today clients can search for themselves.
Anyone with a computer and Internet access can communicate with anyone else on our planet for free. Global communication has changed the way consumers think about travel. Consumers now use teleconferencing by the millions. They accept chatbots and digital virtual assistants. The next generation of chatbots will use Natural Language Processing to process speech and create responses. They will also use Machine Learning algorithms so that the chatbot can increase its knowledge and give better answers.
One of the reasons that travel agents were so successful when I first got into this business was because they were the point of documentation and settlement for the airlines and other suppliers. Airlines paid travel agents’ commissions because they could not service the client themselves. They needed someone to write the ticket (documentation) and collect the money (settlement) on their behalf. The only alternative a consumer had was to go to the airport and stand in line. This was the same for the tour companies, cruise lines and other suppliers who relied on the travel agent for documentation and settlement. Today, suppliers can both document (e-tickets and e-docs) and settle (direct credit card sales) their transactions. With contactless smart credit cards now being widely used, in the near future, I suspect that a consumer will simply need to scan their smart card on their computer screen to process payment.
Niche social media has turned global communication upside down and will continue to evolve into a major communications network upon itself. The power of social media lies in its intrinsic ability to communicate instantly with millions of potential customers. The viral nature of social media ushers in a new stage on which travel will be a hot topic. When AI is integrated into social platforms it will launch new platforms for selling travel.
Virtual reality (VR) is a technology that has revolutionized the way we experience the world. With VR, travelers can experience a destination without leaving their homes. VR enables travelers to take a virtual tour of a hotel, resort, or even a city, allowing them to see what it would be like to be there in person. This technology has been a game-changer for the travel industry, as it helps travelers make more informed decisions when booking their trips.
Chatbots are another technological advancement that has transformed the travel industry. These computer programs use artificial intelligence to interact with travelers and help them plan their trips. Chatbots can provide information about flights, hotels, and rental cars. They can even make reservations on behalf of the traveler. By interacting with chatbots, travelers can get instant answers to their queries, which saves them a lot of time and hassle.
Virtual assistants, such as Siri or Alexa, are becoming increasingly popular in the travel industry. These assistants can help travelers plan their trips by providing recommendations for flights, hotels, and activities. Virtual assistants can also help travelers manage their travel plans, such as checking their flight status or changing their reservations. By using virtual assistants, travelers can get the help they need without having to navigate complex websites or make phone calls.
A consumer searches for “Napili Kai Beach Club VR Review” The consumer is delivered to a VR review of the property.
A Chatbot appears to see if it can answer any questions or help the consumer in any way.
A Virtual Assistant also asks if they can help answer any questions.
The Virtual Assistant asks if they would like to check any dates to stay at the property.
The consumer shares the dates that they are looking for. The Virtual Assistant returns with “Yes these dates are available for studios and one-bedrooms. Which would you like me to quote you on? The consumer shares that they want a 1-bedroom unit. The VA shares that will be $XXX total. We would require an $XX deposit to hold the reservation. Would you like me to confirm it for you?
The consumer says ”Yes”.
“Fine, you are now confirmed for your dates. please hold your credit card up to the screen so that we can scan it, says the VA.
Although the paradigm may seem overwhelming with the advanced technology of social media and artificial intelligence, Travel Professionals still have an opportunity to thrive and grow. It all depends on how your market and how you market yourself. Here are a few factors that give Travel Professionals an advantage in the paradigm:
Paradigm Shift and Travel Industry 2023
Some people prefer the personalized service and human interaction that travel professionals offer. When there is an issue about an inconvenience for instance there is a delayed flight or a lost baggage, a Travel Professional can assist the client right away. You provide reassurance and support throughout the booking process and during the trip of your client. AI platforms may lack the same level of personalized assistance, which gives you the upper hand.
Let’s be real, Travel Professionals are experts in the field of travel. You possess extensive knowledge and experience in the travel industry that can provide valuable insights, suggest destinations, and edit travel plans to your clients’ preferences. Also, most of your suggestions you have experienced already for many years, so you can give tips based on your experience and what can work for your client. AI may offer automated recommendations based on Google but may not provide the same level of personalization and expertise.
Travel can be complicated at times. If your clients have complex travel itineraries involving multiple destinations, layovers, or specific requirements, a Travel Professional’s expertise can be beneficial. You can navigate through intricate details and ensure the trip goes smoothly. AI platforms may not handle complex itineraries as effectively, because they base information from Google and may not be as personalized.
AI platforms provide general knowledge. Travel Professionals, on the other hand, provide personalized assistance, which can be convenient if your client prefers someone else handling the details. Some clients don’t have the time to plan a highly detailed trip to Europe and some people cannot handle a group booking of 40 people to go on a cruise, because it’s too complicated. That’s why they need you as a Travel professional.
Paradigm Shift and Travel Industry 2023
The Travel Industry will keep changing in the next few years. While artificial intelligence and social media may offer convenience and speed, a Travel Professional’s expertise, personalized service, and support is still needed for your clients to have a memorable and hassle-free trip.
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