Business Travel 2020: The Trends & Tech that will Shape the Future of our Industry
By 2020 the millennials (those born between the first half of the 80s and the first half of the 90s, AKA Generation Y) will have inherited the world. Well, the workplace anyway. Thing is, they’re pretty much yesterday’s news already.
That’s because, by 2020, Generation Z (those born from the mid 90’s onwards) will be worth US$200 billion dollars to the travel & tourism industry . Gen Z has never known a world without social media. They use hashtags to describe feelings and objects. Smartphones are a fundamental need, as is immediate and top-speed WiFi, all the time.
This is the generation that will shape business travel in the next decade. According to new research , these demographic changes will also segment tomorrow’s travelers into six tribes. In business travel, these new stereotypes will include "obligation-meeters" whose travel choices are restricted by the need to meet pre-set objective. Their needs and behaviors are shaped by their need to be in a certain place at a certain time. Inevitably, segmentation of this type is hotly debated. After all, in today’s workplace a 48-year-old executive with Google probably has more in common with a 24-year-old app developer from Tel Aviv than a 24-year-old insurance salesman from the Midwest.
With worldwide business travel spend set to reach $1.4 trillion by 2020, another trend gathering momentum is bleisure – combining business and leisure trips. In the U.S., length of stay for a business versus bleisure traveler has already trebled from two nights to six-plus. 43% of business trips in the U.S. are now bleisure, whilst 70% of business travelers who add on a leisure stay travel at least every 2 to 3 months .
The drive to make managed travel programs more personalized will also continue well into the next decade, fueled by the possibilities afforded by the Internet of Things (IoT). The is the network that connects devices, vehicles, home appliances, and other electronic items with the software and connectivity that joins them all up.
Even though it’s unclear when a more-connected future will become mainstream reality, major travel players are building their brands using digital, aiming to make the right offer at the right time to the right customer. Ultimately the Internet of Things will make total personalization of travel products and services possible. But even now airlines’ revenue management strategies are giving way to optimizing individual customer interactions by designing and pricing products around individual customers.
Mobile has transformed the way we search, book and pay for travel. 39% of hotel and 22% of air bookings now come from smartphones whilst the up-coming up-grade to 5G is predicted to improve connectivity 1,000-fold and cover 90% of the U.S. within 4 years. It’s tough not to see mobile grabbing an even higher chare of travel distribution by 2020.
5G also makes driverless cars a realistic reality. ‘Smart’ cars allow journeys to be completely autonomous, enabling employers to recover productivity lost to commuting and delays.
Further revolutionary change will be courtesy of Artificial Intelligence (AI), Virtual reality (VR) and machine learning (i.e. predictive analytics). Together these technologies will contribute $15.7 trillion to the global economy by 2030 , of which 55% will be due to increased productivity. Travel suppliers will use AI and VR to discover travelers’ tastes, monitor their movements during travel and get them to pay for additional products. VR will enable personalization on an un-precedented scale. A hotel room will automatically adjust to guests’ tastes and moods . Variations on Apple’s iPhone X facial recognition feature are already being tested at airports, as is biometric-enabled self-boarding.
By 2025 the workplace will be very different. It seems inconceivable that the labor market won’t change too, as companies fuse specialist human expertise with basic, low value-added tasks becoming automated. As automation increases, the balance between tasks you perform yourself and those that are done for you. Thanks to Alexa and Siri, the highly-personalized, Amazon-style service will be at the traveler’s fingertips sooner rather than later.
Blockchain hit the headlines in 2017, but by 2020 Blockchain technology will have diversified beyond crypto-currencies and into areas such as travel security. The inherent security protocols within Blockchain could help enable secure and seamless cross-border travel, essential to meet ever-rising demand that passed four billion air passengers in 2017.
As a new decade beckons, more and more of the travel booking process will either be automated or part-automated, with product choices anticipated and tailored to business travelers’ personal needs. However, customer expectations will demand interactions based on empathy.
Customers may be moving towards self-service options. Forrester data also shows that two-fifths of U.S. online adults already prefer to use digital customer service rather than speak with a live person on the phone. However, self-service works best when both parties win, so an improved customer experience will still be essential. To meet those expectations, technology is the key.
2020 may only be two years away but the pace of change in and outside of travel is getting faster and faster. Two years ago, drones were acclaimed as the best new gizmo on the market. Today, they are everywhere. Right now we’re talking about AI, VR and the impact they will have. The reality is that both technologies are already changing the way we live, work and relax. With the rise of Generation Z, by 2020 these technologies will have reached the mainstream – and we’ll all be wondering what the fuss was all about.
Sources:
http://twissen.com/travellers/generation-z-impacts-on-families-travel-ch...
https://amadeus.com/documents/en/retail-travel-agencies/research-report/...
https://www.traveldailynews.com/post/attracting-the-high-value-bleisure-...
https://www.eyefortravel.com/revenue-and-data-management/planet-total-of...
2018 Digital Benchmark Report (Serviced Apartment News/TIN)
https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artific...
http://www.scmp.com/lifestyle/travel-leisure/article/2130306/how-ai-and-...