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Top Digital Transformation Trends Influencing Tourism Industry

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Govind Talluri

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Digital transformation is changing the way we lead our lives and they are impacting our society & businesses in every possible way. In order to stay relevant in a dynamic market environment – businesses must thrive to comply with digital transformation.

The tourism sector is one of the largest industries in the world and it is possibly the first one to adopt new technologies at scale especially by enabling travel booking online. As we are moving towards the fourth industrial revolution – Industry 4.0, a new era in which existing technologies combine with new emerging innovations such as IoT, AI, VR, 5G and Robotics to increase efficiency and productivity. These new technologies are bound to replace the traditional way of business operations with the digital environment.

Being an early ICT adaptor, the Tourism industry must innovate to tap into these new emerging technological trends and provide new business growth opportunities for the industry. It is only that way, the tourism industry will be able to ensure competitiveness, growth and sustainable industrial growth. On that note, it is worthwhile to look at the top digital transformation trends – and how we collectively can adapt to those trends in order to ensure that the new trends will provide benefits to everyone. Following are some of the digital transformation trends that are worth considering for the tourism industry:

The Mobile Revolution – Digital Everywhere:

As per the stats published by We Are Social & HootSuite – Canada’s mobile connection penetration is at 101.8% with over 96.5% of the total country population having internet connectivity. Canadians are spending more than 6 hours and 45 minutes every single day on the internet – that is one of the highest rates of penetration for a country across the world.

At such high penetration levels, tourism must look at new ways to tap into this massive digital ecosystem and businesses that fail to adapt their businesses to this growing trend will miss out on new business opportunities resulting in huge losses. The need for mobility, technology expertise, and accessibility is driving travel businesses to seek out new ways to grow the tourism market.

This can be done by offering mobile applications and other digital solutions that will help the tourism businesses to take the customers from the point of generating interest to the point of conversion and beyond. Personalised mobile solutions will help tourism businesses to stay connected with their ideal customers and stay relevant in the ever changing dynamic market environment.

Some possible examples for the mobile and digital solutions include the following:

  1. Hotel Booking & Reservation App: Using this app, travellers can search for availability at the city of their choice and make bookings. An individual tour operator or hotel can build their own app for their target customers.
  2. Local Top Attractions App: With this app, travellers can find information about the top attractions or places to visit right at their fingertips and will help in creating new business opportunities for local tourism businesses.
  3. App for Local Transit Directions: Anytime, we visit a new place – we always look for ways to find directions. This app can be used to provide transit directions for travelers in an intuitive way.
  4. App for Planning a Trip: This app can be used by travellers to plan for their upcoming trip. By enabling travel enthusiasts easy to follow tips to plan their trips – will make their journey more enjoyable.
  5. App for Travel Community: This app can be used by travellers to connec and network with other travellers – ask any questions they have. This app can help bridge the gap between the operators and tourists.

Artificial Intelligence (AI)

Artificial Intelligence is an emerging digital transformation trend that is going to take centre stage in making businesses function more efficiently in a seamless manner. According to a report published on Forbes, AI can contribute over $15 trillion dollars to the global economy by 2030 through optimization of “personalised, automated and interactive” features such as chatbots.

Artificial intelligence (AI) will be a key component in the future of the tourism industry. According to us, AI is no longer fiction and it can help the tourism industry to improve decision making, optimise business processes and gain from customer satisfaction. Artificial Intelligence (AI) can simulate human-like intelligence in a way that is devoid of any human error and it will be available 24/7.

Some of the key advantages of using AI in the tourism industry are as followed:

  • Human Like Intelligence
  • Market Segmentation & Customer Insight
  • Data Visualisation, Analytics & Forecasting
  • 24/7 availability
  • System Driven – Devoid of Human Error
  • Time & Cost Saving
  • Multi-tasking

Artificial Intelligence (AI) has a great potential to contribute to the next level growth in the tourism industry by making tools and solutions available across a broad spectrum of business operations (McKinsey report on AI frontier). On that note, it is important that tourism businesses take initiatives to leverage the growing AI trends and emerge successful.

Some key examples of use of AI in Tourism Industry:

  1. AI Assistants for Travel Booking: With AI, Tourism industry will be able to implement automated human like intelligent processes – which can help facilitating travel bookings easier for the travellers – when they are ready to book.
  2. Leveraging power of Data with AI: AI can help tourism companies to get a closer insight in to their customers, their likes / dislikes, preferences and spending trends. AI can help tourism companies to make intelligent decisions in a timely and effective manner.
  3. Sentiment Analysis with AI: AI is now capable to analyze customer sentiment trends on digital platforms in real time. With AI, tourism companies will be able to analyze trends in real time and take corrective measures and deliver a better customer experience.

IoT (Internet of Things)

The Internet of Things (IoT) is an emerging new digital transformation that is bound to impact the tourism industry in a big way. The Internet of Things (IoT) refers to any device or machine that is connected to the internet and can be controlled remotely by an individual or centralised system through an application, software or hardware. In simple words, these connected devices are able to communicate with each other and exchange data over secure networks without human intervention.

As per the report published by Statista on IoT device penetration, by 2025 over 30 billion devices will be installed with IoT capabilities. With more devices getting connected the amount of data that is going to be generated will also increase exponentially – giving more insight into the customer behaviour.

Some key advantages of IoT in Tourism Industry include:

  • Personalised Guest Experience with AI
  • Predictive Repair and Maintenance
  • Automated & Interactive Room Service
  • Automated Customer Agent (e.g., Alexa in Hotel Rooms)
  • IoT Digital Agent – Mobile App

As we progress into the next decade, the technological advancement and innovation in the IoT space makes it necessary for the tourism industry which deals with vast amounts of customer data to engage the right tools that help them take advantage of this emerging trend by creating new business models and providing better customer experience.

Data Democratisation

Data Democratization is about making the data more accessible in the tourism industry among the key stakeholders with limited technical ability. Data Democratization is a fast-emerging digital transformation trend helping tourism companies to make better business decisions at a faster pace. Which will in turn translate into better customer experience by opening new business opportunities.

We are in an information age, where businesses are now having access to vast amounts of data points actively collecting data at multiple levels of their business operations. Data democratisation will transform the way tourism companies operate and it has the potential to achieve new heights of growth for the businesses.

This trend is more evident in the case of tourism businesses and until recently this vast amount of data was only kept in the hands of few analysts – who have the skills and tools to understand and interpret the data for the senior management.

Data democratisation is the future of managing big data and realising its true value. Tourism businesses and their teams should be armed with the right tools to make good use of the data that is captured. Businesses with such capabilities are going to succeed in the long run and they have the knowledge necessary to make smart decisions and provide better customer experiences.

Some key benefits of use of Data Democratization in Tourism Industry:

  1. Customer Insights: As new technologies such as IOT, AI and VR are fast emerging – access to many more data points is a reality – by enabling the key stakeholders with better data insights will help them take more better customer centric decisions, improve customer experience and improve overall business performance.
  2. Business Growth with Better Decisions: Data Democratization will help key stakeholders have a better understanding of the customer needs and keep up with the dynamic market trends.
  3. Empowered Team: Data Democratization is about making data more accessible to the team – thereby the team will feel more empowered while handling business operations. By democratizing the data access – teams will be able to timely business decisions improving overall performance.

Augmented Reality / Virtual Reality

New emerging digital transformation trends such as Augmented Reality / Virtual Reality are going to change the way the tourism industry is going to operate their businesses. These immersive technologies are capable of bringing travel destinations much closer to guests by offering a preview of the experience they can expect at their favourite travel destination. Travel and tourism companies across the world are now investing in these emerging AR/VR technologies to help the customers make their buying decisions at the booking stage.

Key Challenges for AR/VR in Tourism:

The tourism industry is one of the prominent industries – which was badly impacted by the global COVID-19 pandemic. According to a UN report, tourist arrivals were down 87% in January 2021 compared to January 2020. This is the same story for tourism businesses in Canada and the tourism industry was not ready for such an unprecedented development and it has put them under more pressure to plan for alternatives.

Some of the promising areas – where we could see the use of AR/VR are as followed:

  • Immersive Virtual Experience
  • Travel Booking
  • Virtual Facility Navigation
  • Personalised Experience & Hospitality

Although, tourism industry is getting back to normal with bookings touching earlier levels – it is now looking more imminent for tourism companies to offer stay at home virtual travel experiences for people – who are yet to make up their minds to travel again. On that note, we are going to see more and more tourism companies embrace emerging new technologies such as AR/VR to enhance chances of converting more tourist bookings by improving customer experiences at the booking stage.

Some key examples of use of VR/AR in Tourism Industry:

  1. Immersive Virtual Reality Videos: Virtual Reality is a fast emerging trend for tourism businesses to create immersive virtual video experiences for tourists giving them a closer look of the facilities at the convenience of their homes during the pre-booking stage. Through VR videos, tourism businesses will be able to entice their customers leading to better business conversions.
  2. Augmented Reality Apps: Augmented reality can enhance the tourist experience by providing information about a historic location or landmark. Tourists can use the AR apps to point their phones at their favourite spots to get information in real time.
  3. Augmented Reality and the Metaverse (Virtual Digital World): Augmented Reality will enable interactive elements across the tourism industry in hotels, restaurants, historic spots among others. AR can power social interactions in the 3D metaverse virtual digital worlds.

Final Thoughts

In the midst of an increasingly digital & innovation age, the tourism industry is being transformed. There are many unmet needs and opportunities waiting to be explored that can be best solved using digital solutions. Digital technology is changing the travel industry. In order to stay competitive and relevant in an era of widespread connectivity, tourism and hospitality businesses need to dramatically increase their digital technological capabilities.

Through this article, Team MightyIQ tried to articulate different Digital Transformation Trends in Tourism and explored the current status and future prospects for digital transformation trends in the tourism industry. If you are a tourism business or a tourism operator – please do reach out to us – to discuss more about digital transformation – and how innovative technological solutions will be able to power the next phase of your business growth. Let us know – what digital business challenges you trying to solve? We are happy to help!