What will the Travel and Tech Industry Look Like When the Dust Settles?


April 28, 2020

6 min read
Reading Time: 6 minutes

Earlier this month, I had the pleasure of taking part in an Arival Online Roundtable: Reservations Tech in a Post-Covid 19 World, featuring fellow technology experts from Bokun, Travelotopos, Xola and moderated by Arival co-founder and industry veteran, Douglas Quinby.

The process of preparation for this conversation really jogged a few questions—one being, “What will the travel and technology landscape look like when the dust settles and the masks come off ?” 

I’ve touched on a few of these points during the Arival session but have also added a few additional thoughts on the session’s takeaways and outcomes that seem increasingly likely in a post-pandemic reality.

1. Watching for Market Signals to Gauge Travel’s Return

It’s clear that there’s no set date for when the world collectively ‘switches back on’ as the situation is incredibly fluid and dependent on factors like: the possibility of a second wave of outbreak, your sector, geography and even seasonality to name a few.

And with all the forecasts and predictor graphs being circulated, some signals and indicators the Zaui team have been looking at to paint a fuller picture: what our hotel, cruise, airline counterparts are doing and state of their markets, governments’ approach to border reopening, relaxing industry restrictions and travel bans, all helpful in informing how and when we should approach recovery.

🚌Local & regional travel first: When the crisis recedes and lockdown eases—local, intercity travel will be the first to return. It makes sense for travellers to explore economically friendly options in their own backyard, especially when consumer confidence is at a low and travel anxieties are still high. Reluctant travellers may consider local options to test the waters and build the confidence needed before taking the next leap forward. 

Plan for your products and offerings to cater to the domestic market for the first and second phase of recovery with a focus on public health and safety underpinning your entire operation.

✈️International travel to slowly return: When borders reopen and safety and hygiene measures across all travel touchpoints are implemented, business and leisure international travel will make its gradual comeback as it hinges on consumer confidence in air travel.

In a recent economic project released by IATA , the return to air travel is expected to be slow, with the limited opening of international markets to occur in Q3 and Q4 OF 2020.

2. Learnings from COVID-19 will shape supplier operations, service & offerings, payment methods, cancellation policies, insurance and more. 

When the time comes to reopen, the landscape, demand and behaviours will be vastly different. From my conversations, this downtime has prompted suppliers to reassess and reshape their operation, service and offerings for a post-pandemic world.

On an operations front: Safety from physical distancing will be the new norm, and will have a tremendous impact on how you structure your experiences. This could possibly mean minimizing your capacity to ensure guests, guides and drivers are all safely distanced. As a result, your team will also need to reassess pricing, capacity and revenue management to support this.

Ensuring frequent vehicle and equipment sanitation will be instrumental in rebuilding travel confidence.  Stringent sanitation processes and physical distancing will also have an impact on how your team approaches guest-check in (be ready to accommodate queues and self-check-in procedures) that align with safety measures in this ‘new world order.’

On booking behaviours: Shorter booking windows, period. The reason for this being that most planned trips have already been thrown out the window thanks to COVID-19, and consumers will most likely be unsure of when they’ll be travelling next as there’s still some underlying uncertainty around travel times as well as a matter of finances in an impending recession.

Travellers will move from long, planning windows and make their booking decisions when more information becomes readily available and when travel confidence is restored. If any bookings are to be made at all later this year and in 2021, it’d most likely be last minute for a local/regional experience.

On payments and policies: Collectively the way in which we approach “distancing” and handle payments will also change. With the safety of operators and guests in mind, I anticipate a shift from Cash to Contactless payments & technology adoption to minimize exposure to health and safety risks.

From this experience, simplified and flexible refund, cancellations and rescheduling processes will be table stakes. More than ever, guests are looking for a booking experience they can trust and feel empowered by to help rebuild consumer confidence and reduce frustrations. 

On restech features: Change in consumer behaviour and confidence translates to travellers looking for the ability to manage their own bookings and initiate the refund or postponement process without any hold up from support centres—driving demand for self-service or editable functionalities, and perhaps Conversational AI (Chatbots) which can be helpful in providing timely information and automating requests and processes which would otherwise have been manually burdensome for your team.

The changing landscape will have an impact on how technology companies approach product roadmaps. I can only speak to Zaui’s features that would be key in rebounding, which includes: A NEW ONLINE Booking Engine to help you capture 2021 bookings, Customer Credit Balance, Self Service Features, deeper API integrations and connectivity features for promoting local. 

3. The Tours and Activities Market is Expected to Contract, and We’ll Likely See Further Consolidations

During this period of downtime, many of us have taken this time to focus on our business, revisit products and offerings, and reduce expenses that no longer make sense in a changing landscape. 

With many businesses operating with just their skeleton crew – contractions in this industry have and will inevitably happen, given not everyone will have the liquidity and staying power to weather this storm out. However, there will be a handful of players that do, emerging much stronger.

So what can we expect with the market coming out of all this? We anticipate another wave of consolidation in the tours and activities industry during the rebound, much like what’s expected to happen in the hotels and airline sector as observed from the last recession.

4. Connectivity Will Continue to Play a Role in Recovery

Connectivity is an initiative I continue to champion, and it’d be interesting to see the industry increase its connected distribution supply chain for in-destination activities as suppliers will be focused on selling more safe experiences.

When travel returns, a big piece of that recovery conversation will be centred around connectivity and distribution features which will allow travellers to find new experiences, and for suppliers to expand their reach via online travel agencies and connected platforms. 

Suppliers are also able to sell more by way of bundling and cross-selling activities in the local marketplace with the help of channels and automated management.

With that said and from the consumer lens- the end-to-end experience will also have a role to play as travellers may opt for a more direct experience following the events of COVID-19. 

5. Virtualization is here to stay, signalling opportunities for emerging new markets

Lockdown has had a significant impact on how and WHERE we work, attend school, receive medical care, engage in experiences- you name it. Virtualization will undeniably have a lasting impact.

In the Arival Roundtable lightning round, I briefly touched on how virtualization is here to stay  and I want to further break down how this can potentially work for tours and activities in the short, medium and long term:

Short term: Fad or not—I’ve seen a growing number of operators experiment with virtual experiences in the past few months. Some may be using this to pass time or generate some revenue until physical travel makes its comeback. But it’s also important to note that NOT everyone can add virtual experiences to their list of offerings. 

The takeaway from here is that there are aspects of virtualization to take away and adopt in our post-pandemic services, products and even marketing.

Medium-long term: Whether you choose to go all-in and continue on with virtual experience investment or not,  there is an opportunity to utilize this video content as a marketing tool. By repurposing clips of your virtual tours, you’re able to use this as teaser content and material to promote future travel.

Niche market segments: With technology platforms ironing out their kinks to deliver virtual events and tours during this period of change, it paves the way for niche market segments to take off. 

Mobility-challenged travellers come to mind, a population that can greatly benefit from virtual tourism without leaving the comforts of their home. This ‘event’ has opened up doors and brings accessibility to this segment of aspiring travellers.

Lastly, to wrap it all up—a current of change had already been well underway—COVID 19 doesn’t get credited for this.

Even in recent years, we’ve all seen change occurring on both a micro and macro scale, apparent in our changing values and views on race and gender, community, acceptance, work-life balance, climate and sustainability to name a few examples. 

This pandemic does get credit for highlighting some pre-existing gaps and vulnerabilities in our systems, our government and across sectors and verticals. As part of an effective response and recovery process, I hope our community can unite and adopt a more thoughtful, responsible approach as we contribute towards shaping the future of travel.

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