Digital transformation in the tourism sector

The digital transformation has had a profound impact, completely changing the way we live. This change spread to the business world, favoring a true boom in the digital revolution in all sectors of the industry, but today we are going to focus on the tourism sector, which has redefined the performance of companies under a markedly technological concept.

<<< Digital revolution: Automation and integrations, are they necessary? >>>

In the last two decades, the tourism sector has gained notable importance in improving its processes thanks to digitalization, a fact that the most traditional companies viewed with a mixture of skepticism and envy, upon understanding their shortcomings in technological matters.

In this way, the digital transformation in the tourism sector allows travel agencies to maintain undisclosed information that customers cannot get anywhere else unless they visit the agency's office.

Long ago, people would spend an hour reserving a ticket in a very long queue with paper confirmation. Also, with these manual processes, passengers lose approximately 90 minutes at airline check-in.

The digital transformation in the tourism sector causes a total disruption in the way people adopt information and services. Therefore, the rise of travel software development and the Internet has eliminated the geographic challenge, allowing companies to approach their customers through a screen.

Let's take a look at the big picture of the tourism sector, which is deeply emerging in digital transformation.

Digitization footprint in the tourism sector.

One of the most significant results of the digital transformation process refers to offering more affordable services with a focus on convenience and accessibility.

The rise of online reservations.

Target customers of the entire travel industry market are focused on Gen Z and Millennials, who are willing to spend more on the travel experience. These groups of customers take advantage of the Internet in every activity of life in which they establish the digital presence as the central criterion to qualify a company.

In practice, travelers today prefer travel portals to explore places or plan a vacation. The average number of online travel reservations reported around 150 million requests per year, only in North America, while the Latin American tourism market is also growing.

In the year before the pandemic, the total value of online bookings reached $755 billion, enjoying a growth rate of about 10% per year. As a result, travel companies primarily invest in staying ahead of the online marketplace.

Although tourism stopped due to the pandemic, in most countries of the world, online reservations did not stop many months in advance to wait for the end of the health crisis to embark on a new trip to make up for the time lost.

In addition, online reservations dominate companies in the tourism sector, since more than 90% of customers - if not all - search online for their vacations. In addition to comparing costs, travelers also consider reviews and experiences shared by others online.

Also, booking in advance refers to a favorable way for travelers to reduce risks. Reports show that approximately 80% of people book their trip at least a month before their departure.

Sharing economy: the new king in the travel business.

The fundamental value of the tourism sector aims to create a connection between people and location. The birth of the collaborative economy has made online reservations even cheaper. Travelers today benefit from the diversity of accommodation reservations around the world with more customization options.

By 2025, the total size of the sharing economy is expected to be worth approximately $335 billion, which companies project to increase in value twenty-fold in a decade.

Important digital travel trends.

Undoubtedly, the rapid technological changes induce incalculable trends, which vary continuously due to each category. We list here four of the most important ones that massively affect the industry.

1. The empire of mobile applications.

Cell phone dominance forces travel businesses to rely on mobile app development for growth. It is not surprising that around 35% of users book accommodation through a mobile device.

The mobile tourism application has now become an essential tool on every traveler's smartphone. Likewise, if travel agencies today do not want to present themselves in other mobile applications, they will invest in the development of personalized tourist applications so as not to be left behind.

However, the challenge of registering as providers of other travel applications is the exchange of data between online platforms. You may lose control of the management of the relationship with your customers since it belongs to the owner of the application.

In return, you save time and money to adopt a digital route to connect with your target customers.

In case you decide to develop your custom mobile app for better controllability, it will take you at least three months or more to finish it. Digital transformation in the tourism sector can be costly for several players, but it is worth it.

2. Cognitive computing in the real world.

IoT technology, data, and machine learning made cognitive computing out of science fiction. The travel and tourism system might suggest which specific options suit you even before you know it.

The main mechanism is based on historical data, previous searches, and your complete profile. Therefore, the system could automatically reduce the options for your entire travel package without its auto-manipulation.

Cognitive computing has been built on machine learning technology. It offers self-learning features that work with data analysis, voice recognition, and behavior recognition, which simulate the human brain.

However, the significant challenges of these digital transformation trends relate to the limitations of IT expertise. The system requires a highly qualified travel software development company and requires a large amount of investment.

3. Omnichannel model in the tourism sector.

The travel and tourism industry cannot end with a single supplier, but with the collaboration between a long list of parties. From the moment of planning, a typical customer spends considerable time exploring various digital channels in search of the expected information.

They have an incentive to fully consider other experiences and are also willing to share their encounter. As a result, the omnichannel sales model gives companies greater potential to present themselves on customer screens.

Although traditional travel companies may be outdated, this adds more trust to the brand. Customers tend to choose companies with clear and transparent business details. Combining online and offline activities remains to be a powerful strategy.

Since the core value of the tourism industry is in providing travel experiences, passengers need support throughout their journey. The omnichannel model in post-sales communication would attract the attention of customers and make them return to your business.

So, what customers expect from the tourism sector is to have the answer always available; that is to say that whenever they need it, you should be ready to help.

Specifically, you must take control of all possible communication channels, including messaging apps, chatbots, dedicated software development teams, social media, booking platforms, email, etc.

In all of them, voice assistants receive more attention, since approximately 70% of online requests are currently made by voice.

4. Personalization in the customer experience.

Since the tourism and hospitality market witnessed a large number of players, customers tend to be more demanding about the practices they explore. The current and future trends that travelers are concerned about are the frontier of personalization and tailor-made travel packages.

The main duties of successful tourism and hospitality companies account for the design and delivery of their services with a high level of customization based on each unique preference.

<<< Pharma 4.0: How technology is revolutionizing the pharmaceutical sector >>>

The question is, how can we do that? In the past, personalized travel services emerged as an impossible concept since the world lacks resources and technology.

The presence of big data and artificial intelligence provides companies with a powerful weapon to interact with their customers. A survey conducted by Google stated that 36% of travelers are willing to pay more for personalized packages or unique experiences.

In conclusion, the digital transformation in the tourism sector is achieving a very wide scope and you can implement it right now in your company, ensuring greater access to the market in this industry. The tourism sector, too, sees the impact more than any other area, since it does not offer a physical product, but an experience, which is increasingly influenced by the digital lifestyle.