The industry has been at the forefront of digital disruption, changing the way we travel in recent years. However, our research suggests it should brace itself for another wave of digitally fuelled transformation.
A series of industry, customer and technology trends are converging to redefine operating and business models in Aviation, Travel and Tourism. New entrants – especially digital natives such as online travel aggregators (OTAs), meta-search engines and travel service platforms – are shaking up the value chain.
The Aviation, Travel and Tourism ecosystem
Source: World Economic Forum / Accenture analysis
Growing demand for travel, particularly in emerging markets, represents a significant opportunity for these new entrants, as they challenge incumbent businesses to rapidly adapt their own strategies to capture growth. Travel providers are seeking stronger interactions with customers, while drastically changing operations, in pursuit of better insights around customer preferences and operational performance.
Connected devices and artificial intelligence (AI) will provide ample opportunities to make those operations more effective, and enable collaboration and asset-sharing between enterprises. Technology will also have an impact on the industry workforce, with employees empowered by real-time information and decision-making support from AI to focus on their core strengths.
Digital themes
These trends look set to propel the industry into a period of accelerated digitalization. Four themes have been identified that will take centre stage in shaping Aviation, Travel and Tourism over the next decade:
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Living travel experience Travellers will experience seamless journeys tailored to their habits and preferences. Companies along the journey will optimize customer experience by collecting and exchanging data, and continuously generating insights. In time, travel will become frictionless, blending seamlessly with other everyday activities. |
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Enabling the travel ecosystem Ecosystem roles are blurring as stakeholders throughout the customer journey vie to own the customer relationship. Digital platforms that enable ecosystem alliances will continue to emerge, as asset and information sharing become increasingly important from a B2B perspective. |
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Digital enterprise Digital technologies that revolutionize manufacturing, optimize the real-time use of assets and eventually augment the industry workforce will transform operations. Innovations such as 3D printing, AI, the Internet of Things (IoT), virtual reality (VR) and digital platforms will enable flexible working and changes to core operational processes. |
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Safety and security As identity management becomes increasingly digital, a collaborative effort towards boosting cybersecurity and protecting the privacy of traveller data will be crucial to maintaining customer trust and public safety. Digital technologies (e.g. biometrics such as facial recognition, IoT, crowd analytics and video monitoring via AI) will be used to create a ubiquitously secure environment. |
Calculating the value of digital transformation
Our value-at-stake analysis aims to assess the value unlocked by digital transformation initiatives within the four themes across the entire ecosystem.
Over the next decade (2016 to 2025), digitalization in Aviation, Travel and Tourism is expected to:
- Create up to $305 billion of value for the industry through increased profitability.
- Migrate $100 billion of value from traditional players to new competitors.
- Generate benefits valued at $700 billion for customers and wider society through reduced environmental footprint, improved safety and security, and cost and time savings for consumers.
- Result in a net displacement of current jobs in the industry, which is expected to be partially offset by the creation of next-generation skilled jobs inside and outside the travel ecosystem.
Aviation, Travel and Tourism: value at stake for industry and society (2016-2025, by digital theme)
Source: World Economic Forum / Accenture analysis
Digitalization should have a positive environmental impact, contributing to a more sustainable industry footprint through innovations in manufacturing, smart assets and efficient resource use. For customers, the personal impact is expected to be significant as travel becomes a seamless, frictionless, higher-quality experience.
Case study: end-to-end propositions
End-to-end propositions are starting to overhaul traditional methods of booking elements of a journey separately. Fully integrated and personalized travel experiences can be booked more quickly and easily. It could even be possible to create a push model for booking travel, where you are sent a proposition before you even start searching for airfares or accommodation, based on events in your calendar and your past travel preferences. All operational tasks would be handled in a smart machine-learning environment, with feedback loops continuously improving the service.
The greatest societal impact may be the effect of digital transformation on the travel workforce, which could represent as many as one in every 11 jobs worldwide by 2025.¹ Intelligent automation will change the nature of some travel jobs and eradicate others altogether. However, digitally enabled growth will also generate new employment opportunities that could outpace the automation of existing roles, especially as strong growth is forecast for the industry. Platforms also enable ‘liquid’, flexible workforce models, which will redefine the employer-employee relationship and present new challenges for regulating the workforce. A concerted effort across industry, government, educational institutions and civil society will be required to mitigate any negative impacts.
Key questions
As the digitalization of Aviation, Travel and Tourism accelerates, stakeholders within the industry will need to consider important questions about the future evolution of the travel ecosystem, including:
- How can the travel ecosystem incentivize customers to share personal data in exchange for tangible benefits, such as a hyper-personalized travel experience, while ensuring that a consumer’s right to privacy is protected?
- Is there a model for forging global collaboration and facilitating the sharing of company assets to unleash the full potential of digital transformation, while also preserving a company’s relevance in the battle for consumer mindshare?
- How will the operating models of travel organizations change in a smart and connected world where the lines between online and offline are blurring, and physical assets are becoming digital? How will this change the behaviour of individuals?
- To what degree can personal data be securely and ethically used, and made interoperable across public and private stakeholders, to boost safety and security?
Key points to consider
Maximizing the value of digitalization in Aviation, Travel and Tourism will require concerted action from industry leaders, regulators and policy-makers. A series of actions for ecosystem participants looking to make digital transformation a success have been identified:
- Transform legacy systems into agile interoperable platforms to enable plug-and-play interactions between partners in the ecosystem.
- Support the transition of the workforce by reskilling current employees through training, and empower educational institutions to design curricula that prepare the next generation for the digital economy.
- Develop a multistakeholder approach – involving private, public and civil-society organizations – to deliver regulatory frameworks that define the appropriate uses of data.
Related reading
Footnote:
1 World Travel and Tourism Council, Economic Impact Analysis, 2016.