Is the travel industry keeping up with emerging technology?

There is no doubt that new technology has revolutionized many industries, but the travel industry has not yet fully unlocked its full potential.

Phocuswright's latest travel research report, “At the Crossroads: Travel's Underappreciated Technologies,” sheds light on this critical juncture in travel, and explores many new technologies, including virtual reality (VR/AR), Web3, and the Internet of Things. We discuss why some of the technologies that are attracting attention are used. (IoT) – remains undervalued in the industry. We aim to highlight how these technologies can be leveraged in travel based on specific use cases and examples from outside the industry.

The travel sector has invested heavily in start-ups, with a recent focus on hospitality and business travel companies, but the size and diversity of investments appears to be less extensive than in other industries.

Over the past 15 years, the travel and tourism industry has received about 1% of all industry startup funding, according to a McKinsey analysis of Focuslight and Pitchbook data.

Additionally, travel industry players are rightly pushing for important innovations, especially in aviation and hospitality. However, testing and adoption of new technologies has been slow, primarily due to:

• First, capital investments to deploy and maintain advanced external technologies lead to lower internal adoption rates, especially compared to other sectors where technology is core to growth strategies.
• Second, the complexity of integrating emerging technologies in ways that enhance rather than complicate the travel experience may also hinder widespread adoption.
• Additionally, the industry has traditionally been wary of introducing new technology due to concerns about disrupting the established human touch that is a core element of hospitality and travel.

The last point is important and often stems from how these developments are initially advertised. For example, the Metaverse has been touted as offering consumers the ability to live a virtual second life, and artificial intelligence has been shown to be able to replace many human jobs and expertise.

Why does travel need to catch up? Emerging technologies are essential for the travel industry to adapt and address the evolving consumer demands of global travel. The importance of investing in technology is directly related to the following trends that will shape the future of travel.

• Environmental, social and cultural sustainability remains the cornerstone of modern travel, forcing travel companies to reduce their carbon footprint.
• The desire for a seamless journey has become as important as the destination itself, and travel companies must strengthen their customer relationship systems.
• Demand for highly personalized travel continues to grow, with travelers seeking itineraries and activities that reflect their personal tastes and lifestyles.

Across the board, travelers are becoming increasingly digitally savvy. Gen Z and Alpha consumers are growing up in a world where technology-enabled personalization, convenience, and sustainability are the norm, and their expectations for extraordinary travel experiences are rapidly increasing. Masu. In this environment, it is critical for the travel industry to leverage new technology and identify growth opportunities.

Emerging technologies such as VR/AR, Web3, and IoT have the potential to transform the travel industry, but are underutilized due to high barriers to entry, complexity, and It stems from a combination of concerns about the eradication of the central human element.

Nevertheless, these developments offer unparalleled opportunities for personalization, efficiency, sustainability and enhancement of traveler journeys.

As the industry finds itself at a new crossroads, it's imperative that companies move beyond the hype and carefully integrate the latest technology in a way that complements, rather than replaces, the human touch. .

Thoughtful adoption of these innovations can not only meet evolving consumer demands, but also foster a future where travel is more immersive, sensitive, and conscious of its impact on the world. The path forward requires a strategic balance between integrating technology and preserving the natural experiences that define travel, ensuring the industry remains relevant and resilient in an increasingly digital future. .