BackHow virtual tours will personalize vacations
Tech will bring destinations closer to the traveller, help them experience it before making a bookingThe virtual tour replicates not just the sights, but also the sounds and smells one might experience
PremiumImagine you are sipping coffee at a cafe during your break, and your smartphone pings to remind you that the holidays are around the corner—it’s time to plan a getaway. A touch reveals a list of likely locations prepared by your personal digital advisor (aka your smartphone) based on your preferences, past travels, and your recent searches. You shortlist a few and the search engine prompts you to take a virtual tour after generating a QR (quick response) code to be scanned at any kiosk to take a virtual tour of the destination attractions and connect with your wearable devices. You conference with your friend and tour a scenic location together online.
The virtual tour replicates not just the sights, but also the sounds and smells one might experience. The final location is decided and you pick flights, hotels, and excursions using virtual/augmented tours. You link your biometric data to be used at the time of customs, hotels and airline check-in. Finally use your crypto account to make payment partly using points, coins and cash, shared between you and your friend. Voila, it’s done! And it’s time to head back to office.
You just visited three continents, explored four or five cities together, all during a coffee break. That was fast, efficient, exciting, and immersive, wasn’t it?
This traveller of the future will be much more tech-savvy, driven by experiences and a focus on value-for-money, and will interact differently with the world. Research has shown that millennials and Generation Z, who comprise about 60% of the global population, are more likely to pick a travel destination and stays based on their social media feed than relying on a paid advertisement.
The emergence and acceptance of the sharing economy, with companies like Airbnb, OyoRooms and BlaBlaCar, has struck a chord with enterprising and cost-conscious travellers. It has also created completely new dynamics on the supply side by helping monetization of personal assets and bringing unorganized budget hotels or lodges in the mainstream.
SEAMLESS EXPERIENCES
The journey of a traveller from search to discovery to booking to experience has been transformed to attend to his or her need of a seamless experience, adventure, personalization, instant gratification, and reliance on peer-to-peer feedback.
These travellers are growing. According to a report by World Tourism Organization, it is estimated that by 2030, people will take 1.8 billion international trips. In 2017, India generated about 24 million outbound trips , both business and leisure, which is going to increase significantly going forward. While this is the change we will witness in future, the disruptions are already underway.
Augmented reality is being used currently for language translation by pointing smartphone cameras at words, navigation, and routing. An example is the interactive metro maps for the New York subway.
Virtual reality is bringing destinations and accommodation closer to the traveller, allowing travellers to explore destinations that he or she can select and experience before making the booking. Some of these firms go as far as to use wind machines and olfactory stimulants to replicate not just the sights but also the smells and sounds.
Internet of Things (IoT) is impacting the discovery and booking process—in the form of voice-enabled hotel search in Alexa through Kayak and reservation via booking.com, keyless digital entry in hotels, baggage tracking and notification, and seamless integration of your own devices with the inter-connected devices in hotel rooms.
Artificial intelligence-driven engines are learning more about consumer behaviour—the more the AI engine knows about you, the better recommendation it will be able to provide along with customized emotional or economic benefits from the providers. Mobility startup Mobacar, for instance, uses machine learning to predict the mode of transport and type of vehicle a traveller may want and pushes only relevant offers, while travel assistant Mezi uses natural language processing to provide a personalized experience to business travellers who usually are short of time.
Biometrics can help simplify the journey and may replace the identity documents, maybe even passports, through fingerprint, facial or iris recognition at customs, hotels and airline check-ins.
Robotics is being used in automating monotonous tasks. Customer service robots already exist at Munich, Bologna and Geneva airports. Social robot and digital concierge ‘FRAnny’, deployed at Frankfurt Airport, answers questions about the gate for airline departures, can direct passengers to specific restaurants and help them access the airport’s free Wi-Fi. In Sasebo, Japan, a hotel is run almost entirely by robots enabling check-in at reception and luggage transfer to rooms.
Blockchain is also seen as a future disruptor of the entire travel value chain through increased disintermediation and democratization. It has the potential to remove intermediaries and balance the bargaining power in the hands of online travel agencies (OTAs), and inventory owners. For instance, Winding Tree is a decentralized travel distribution platform for inventory tracking and Travala is a travel booking marketplace that ledgerizes and decentralizes the hotel industry, allowing users to add rooms backed by smart contracts.
These new age technologies will also have implications related to customer data, usage, storage and accessibility and are bound to give rise to data and privacy regulations.
THE NEW AGE CUSTOMER
While the customer is evolving and being pampered by the choices provided by these new age intermediaries between customer and hotel, the rise of other inventory providers like online travel aggregators, metasearch agencies and digital tour guides will also ensure that the business model on the supply side shifts. Today hotels and other inventory owners have less bargaining power at the hands of large online travel agencies (OTAs) but are coping as the cost of customer acquisition has reduced. But they are constantly grappling with the question of how much commission they should give away to the online travel aggregators.
On the other hand, the hotel and airline loyalty programmes, which were a big driver of stickiness, are no longer a key criterion for customers. If they are getting a good deal on a platform, their loyalties shift. Old tour operators and travel agents are becoming irrelevant.
The future of the travel and hospitality sector will also be an era of alliances, where today’s disruptors get disrupted, making way for a new and sustainable ecosystem.
The current complex travel ecosystem will consolidate and equalize power of demand and supply. Technology will redefine the role of ecosystem players in the value chain and visionary companies will try to gain direct access to either customers or inventory. There is potential for the direct foray of technology giants and social media players into the travel ecosystem as they have access to customers which may disrupt the online travel aggregators. Alliances are expected to eventually pave way for a viable ecosystem. The boundaries are blurring and partnerships are emerging.
For example, Marriott has partnered with Alibaba’s OTA Fliggy to access Chinese tourists, while Amazon has partnered with Kayak for voice-based bookings through Alexa. Collaborations such as Airbnb’s latest investment in Oyo Rooms will also change the way the industry grows.
Technology players like Google are making the local intermediary roles relevant again with its Google Trips, a personalized tour guide app connecting local tour operators to travellers. Travellers are bound to gain the maximum value for the money spent and will be spoilt for choice as they will be at the heart of innovation. Today, smartphones are acting as personal digital assistants and in the future, they will emerge as personal digital ‘advisors’. On the provider side, a minimum viable ecosystem of travel and hospitality players is likely to emerge, with direct access to either inventory or customer.
Rajat Mahajan and Parminder Saluja are partner and manager, respectively, at Deloitte India.
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