The travel industry is in the midst of a transformative period that has already had a measurable impact on the market overall.
Consumers are still unleashing their post-pandemic hunger for travel, with at least 43% of travelers saying they are willing to go all out regarding future travel costs. Additionally, remote work has now given workers a newfound sense of freedom, allowing them to be more spontaneous and adventurous than before.
On top of these changes in traveler behaviors, the industry is seeing corporate monoliths become more flexible, agile and open to integrating new tech trends. Here are three revolutionary tech trends that will permanently disrupt the travel industry.
1. ChatGPT and generative AI
When OpenAI launched its generative AI chatbot ChatGPT, it rocked the world. Grand View Research reports that the current global generative AI market size is over $8 billion and is slated to grow at a CAGR of 34.6% through 2030. This tech can change every industry, including travel, and market estimates show that generative AI is here to stay.
We already see that it can generate custom travel itineraries based on preferences like location, length of stay and desired entertainment (e.g., a focus on museums, music, food, etc.). It is also perfect for generating travel website content and developing detailed how-to guides.
Chatbots will be increasingly used to offer intelligent, 24/7 customer support, and with the help of generative AI, the customer journey will be greatly improved, making the whole support flow much more user-friendly.
Travel companies have already started to implement the technology. Corporate travel agency Navan (previously TripActions) integrated ChatGPT into its chatbot Ava to offer a better, more intuitive user experience through conversational trip booking.
One can only imagine the future possibilities for this technology: Big tech companies will strive to improve and optimize their business models with generative AI, and startups will likely leverage AI tech to build newer, better products for both B2C and B2B clients.
2. Travel-focused fintech
Banking giants like Citi, JPMorgan Chase and Capital One are already deeply enmeshed in the travel industry.
For example, in 2022, JPMorgan Chase acquired Frosch, a luxury and corporate travel agency. This immediately followed its purchase of the travel and loyalty company CX Loyalty Group the year before. As a result, JPMorgan Chase now has complete control over the customer experience as a full-service travel agency.
Travel app Hopper has also jumped on this fintech trend by partnering with Capital One. Currently, 30% of Hopper’s global revenues – roughly $1.3 billion – come from this fintech-focused strategy, and customers benefit through features like price freezes, surprise booking deals and no-hassle cancellation policies.
The “buy now, pay later” (BNPL) trend also opens new partnership doors for fintech and travel. Expedia has partnered with the leading BNPL app Afterpay to help make travel costs more manageable for customers. Other BNPL names like Klarna, Affirm and Uplift have partnered with travel brands to bring travel fintech to more consumers.
The booming interest in travel coupled with economic uncertainty makes this area ripe for innovations that will completely change how travelers think about financing their trips and associated travel costs.
3. “Bleisure”-adapted traveltech
The blended trip combining business and leisure, also called “bleisure”, has become extremely popular for travelers who want to get the most out of their travel experiences.
This new breed of traveler needs maximum flexibility, which opens up a whole new market for travel companies. Consumers now want plane tickets with open dates, reasonable flight cancellation costs and capabilities and the option to reschedule trips as needed.
Additionally, travelers are now looking for extended stay rentals with more comfort: extra space, full kitchens and laundry are important new amenities. With this trend emerging, Marriott launched an extended-stay product called Apartments by Marriott Bonvoy. Apartment-style rentals are now the accommodation of choice for many travelers, which will inevitably lead to technological changes to keep up with the times.
There will likely be numerous traveltech company software upgrades that feature adaptations to facilitate a better experience for bleisure travelers.
Travelers are changing, and the industry must change with themÂ
We are in an era that has seen unprecedented changes in both the global travel market and consumer behaviors. Customers have become better informed, more demanding and increasingly segmented, which means that how, when and why they travel is vastly different than it was even a decade ago.
On a global scale, the travel market is integrating changes at a previously unheard-of speed. The rapid shift in business models is highly unusual for such a conservative industry, and now it’s forcing even the most prominent names like Marriott to become more agile and tech-savvy.
These tech trends are all great for customers, who are the ultimate beneficiaries of this tectonic shift. As new trends emerge and become integrated into the travel industry, customers get more choice and value than ever before.
