The future of travel

The modern traveller is resilient. Pandemic lockdowns led to a surge in travel demand as ‘revenge tourists’ clamoured on planes, trains and automobiles to once again explore the world. This bounce back in our industry has been anything but smooth, however, as uncertainty and complexity across the world have provided every reason for these travel headwinds to be stopped in their tracks. Today’s traveller has to contend with the ever-changing instability of our current geopolitical environment, along with the ongoing scrutiny from the global science community pushing suppliers to adjust core business processes in real time.

On the demand side, the modern traveller’s wallet continues to shrink as governments increase interest and taxation rates to combat inflationary pressure and unprecedented levels of public debt. On the supply side, energy prices are near all-time highs and carriers are still facing staffing shortages, pushing the cost of travel nominally higher than historic norms. In spite of all this, the modern, resilient traveller persists, and our industry has a more important role to play than ever before.

While today’s travellers may be persistent, they are equally demanding, and the battle for their time, attention and wallet is now taking place on a digital battleground. Technology, like the other trends listed above, has become a source for perpetual change in our modern world, and the response to these trends will set the stage for how companies survive and thrive in the future. We outline some of the key trends that will influence market dynamics in the years to come, and how you can best respond to them to stay ahead of the curve.

Enhanced digital marketplaces

The first wave of e-commerce has been well established for many years, as most companies have built out their online presence to attract new customers and convert sales for their products and services. We are now in the midst of a new wave of digital consumerism, one that requires companies to devote more resources towards creating new self-service capabilities for their prospects and customers.

From a technology standpoint, the maturity of machine learning and artificial intelligence has created an opportunity for companies to build customer-facing solutions around these new innovations. Machine learning is now the driving force behind modern claims automation, and the winning solutions empower companies to transform complicated processes into sophisticated logical models that can be rapidly executed and iterated with little to no human intervention.

Looking at customer support and customer interaction, generative artificial intelligence (AI) has emerged as a powerful addition to existing chatbot solutions. Advances in foundation model capabilities and the growth of the ‘fine-tuning’ industry have created a more context-specific, and therefore more customerfriendly, way to integrate this technology into your current online support framework.

Connectivity across the value chain

One of the hallmarks of today’s consumer is not only their demand for a self-service digital environment, but for that environment to operate seamlessly throughout their entire customer journey. Modern consumers lack the patience of past generations, and with the reduced switching costs inherent in the e-commerce environment, the stakes are high for companies to better integrate with their partners to minimise value chain friction, and ultimately to ensure a higher degree of customer retention.

Companies need to seek out technology solutions with open application programming interface (API) frameworks that are easily compatible with other products and services. Vendors and software providers are publishing increasingly specialised solutions, so it is becoming increasingly normal for companies to employ numerous different applications across their technology stack.

Similarly, solutions that are easy to integrate with mean companies can better interact with their own partners, sharing necessary data and insights regarding their joint customer interaction. Solutions that can be easily integrated with others through accessible APIs allow companies to create a more seamless customer journey.

Two of the emerging product concepts that are redefining the insurance value chain are parametric products and embedded insurance schemes. Parametric insurance products are defined benefits that react to real-time events, rules or conditions, and they depend on shared data across multiple parties to work effectively. When done right, parametric products have the potential to redefine the customer experience, but they need companies to be able to work seamlessly with one another to make that happen.

Embedded insurance products are schemes that are built into other existing customer journeys. Within the travel market, this has traditionally been done through flight booking sites; however, with customers transacting more through online and mobile channels, and with the travel industry becoming increasingly diverse, companies need to ensure that when opportunities arise to create new channel partnerships, their technology will allow them to scale their products and services easily and effectively to these new partners.

Adapting to a modern workforce

The consumer market is not the only space where digital transformation has created new paradigms. The modern workforce has changed drastically over the past five years, and companies need to stay ahead of employment trends to attract and retain the best talent. Once thought to be a temporary phenomenon, work from home (WFH) and work from anywhere (WFA) policies now appear to be an important retention tool in today’s labour market. Companies need to embrace digital workspaces that enable their staff to work without physical or geographic restrictions. There are drawbacks to this new corporate norm – companies are experiencing increased staff turnover and a more alienated and isolated workforce. 

When building your new digital workspaces, look for products and processes that support rapid onboarding and training of new staff, provide tools to foster online communication, and keep your remote staff connected with their peers.

As more and more work moves online, cybersecurity becomes an increasingly relevant priority. Companies need to work with their senior technology leaders to ensure the products and services they work with are regulatorily compliant, and that processes and governance are in place to mitigate and respond to cyber threats.

Managing the unpredictable

If the past five years have taught us anything, it is that the world changes quickly and these changes are often unpredictable. Data is one of the most critical resources in the modern era, and data integrity can mean the difference between proactively anticipating trends and reactively responding to an already changed market. Companies need to seek out solutions that provide them with the right data and insights to make educated decisions, and low-code or no-code solutions that allow them to publish and iterate solutions with minimal time-to-market.

The modern traveller is resilient, and the last five years have proven that the travel industry is too. By embracing these new technologies, resilience can be built and bestowed into our organisations to ensure that regardless of what challenges the future holds, we continue to support the global community to keep exploring the world.