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Top 9 Travel Trends & Innovations in 2024

How are the latest trends in the travel industry reshaping trip planning and enhancing tourist experiences in 2024? Explore our in-depth industry research on the top 9 travel trends based on our analysis of 3500+ companies worldwide. These trends include AI, immersive tourism, IoT, contactless travel & more!

Technological advancements in the travel industry meet the growing demand for personalized experiences, safety, and sustainability. Post the COVID-19 pandemic, emerging travel trends mark a shift towards contactless travel through digital payments, self-check-ins, and more. Additionally, artificial intelligence (AI), the Internet of Things (IoT), and blockchain are automating various hospitality and travel-related operations.

For instance, smart hotels make use of internet-connected devices to remotely control rooms. Further, businesses offer virtual tours by adopting extended reality (XR) technologies like virtual reality (VR) and augmented reality (AR). Travel companies also leverage data analytics to personalize marketing. At the same time, traveler assisting solutions like chatbots and voice technology aid them in booking accommodation and optimizing journeys. These travel trends improve the overall profitability of the tourism industry and enable it to make operations more sustainable and safe.

This article was published in July 2022 and updated in February 2024.

Innovation Map outlines the Top 9 Travel Trends & 18 Promising Startups

For this in-depth research on the Top 9 Trends & Startups, we analyzed a sample of 18 global startups and scaleups. The result of this research is data-driven innovation intelligence that improves strategic decision-making by giving you an overview of emerging technologies & startups in the travel industry. These insights are derived by working with our Big Data & Artificial Intelligence-powered StartUs Insights Discovery Platform , covering 2 500 000+ startups & scaleups globally. As the world’s largest resource for data on emerging companies, the SaaS platform enables you to identify relevant startups, emerging technologies & future industry trends quickly & exhaustively.

In the Innovation Map below, you get an overview of the Top 9 Travel Trends & Innovations that impact travel & tourism companies worldwide. Moreover, the Travel Innovation Map reveals 3 500+ hand-picked startups, all working on emerging technologies that advance their field.

Top 9 Travel Trends

• Artificial Intelligence
• Immersive Tourism
• Internet of Things
• Contactless Travel
• Big Data & Analytics
• Post-Pandemic Tourism
• Tour Premiumization

Click to download

Tree Map reveals the Impact of the Top 9 Travel Trends

Based on the Travel Innovation Map, the Tree Map below illustrates the impact of the Top 9 Travel Industry Trends in 2024. Startups and scaleups are enabling contactless travel using technologies like biometrics, radio-frequency identification (RFID), and near-field communication (NFC). This is due to increasing health and hygiene concerns post the pandemic. The use of AI in tourism ensures hassle-free trip planning while AR and VR allow tourists to virtually visit various locations and excursions. IoT increases visibility into tourism industry operations and allows passengers to track their luggage more efficiently. Further, the demand for personalized and luxurious travel is rising. Several startups enable recreational space travel as well as offer sustainable travel options to passengers.

Global Startup Heat Map covers 3 635 Travel Startups & Scaleups

The Global Startup Heat Map below highlights the global distribution of the 3 635 exemplary startups & scaleups that we analyzed for this research. Created through the StartUs Insights Discovery Platform, the Heat Map reveals that the US, Europe, and India see the most activity.

Below, you get to meet 18 out of these 3 635 promising startups & scaleups as well as the solutions they develop. These 18 startups are hand-picked based on criteria such as founding year, location, funding raised, and more. Depending on your specific needs, your top picks might look entirely different.

Interested in exploring all 3500+ travel startups & scaleups?

Top 9 Travel Trends in 2024

1. artificial intelligence.

Hotels employ intelligent chatbots, powered by AI, to provide quick and personalized responses to traveler inquiries. These chatbots simplify the booking process and gather customer reviews, aiding potential travelers in making informed decisions. Moreover, AI-based robots enhance the customer experience by automating hotel disinfection and delivering room service.

At airports, these robots guide travelers and assist with luggage handling. Facial recognition technology, driven by AI, expedites identity verification at airports, enhancing security and offering a swift alternative to traditional methods. Startups are developing AI-powered trip planning solutions, optimizing journeys, and personalizing travel experiences.

Travel Professor develops a Travel Chatbot

UK-based startup Travel Professor offers an AI-enabled chatbot for travelers. The startup’s chat widget software monitors multiple flight deals and notifies users when their preferences match. It also provides travel destination recommendations and flight price alerts. This allows travelers to book economical flights and have a budget-friendly tourism experience.

Pneuma Travel facilitates Travel Planning

US startup Pneuma Travel develops a voice-assisted digital agent, Sarah , to streamline the process of travel planning. This assistant, powered by AI, excels in arranging flight and accommodation bookings and assists travelers in discovering a variety of activities. Sarah , available round the clock, provides continuous support for all travel-related inquiries.

Moreover, Sarah customizes travel options according to individual preferences and budgetary constraints. The agent further enhances the travel experience by providing insights into local attractions in unfamiliar cities. Importantly, Sarah enables real-time modifications to travel plans, in compliance with specific airline policies, thereby minimizing waiting times for users.

2. Immersive Tourism

Immersive tourism caters to the growing demand for meaningful experiences among travelers, leveraging AR, VR, and mixed reality (MR). VR simulates original locations through a computer-generated environment, allowing tourists to virtually explore destinations. It provides travelers with a comprehensive 360-degree tour of points of interest.

AR enhances the travel experience with interactive elements such as navigation maps and ads. Travel companies employ AR and VR-based gamification to heighten tourist attractions. Moreover, these technologies enable hotels and resorts to present amenities and rooms in an engaging, interactive manner.

VR Travel Expo offers VR-based Travel Plans

US startup VR Travel Expo develops a VR travel application to transform the way people research and book travel. The application enables users to plan their vacations more efficiently. It provides an engaging platform for users to explore and expand their knowledge of the world. Moreover, it employs 3D geospatial technology that creates real-time digital twins of the world. This further enhances the travel planning experience.

AR Tour makes AR Glasses

Italian startup AR Tour offers AR-powered tours. The startup’s AR glasses superimpose reconstructed images of archaeological ruins to show how the site originally was. Its tour informs the tourists about the site’s history and significance via an audio-visual package. Moreover, the startup designs lightweight AR glasses to prevent motion sickness among tourists, improving convenience.

3. Internet of Things

IoT generates ample data that tourism companies leverage to personalize services in their subsequent visits. Hotels use IoT sensors to enable smart rooms that automate room lighting, temperature, and ambiance control, enhancing guest comfort. These sensors adjust appliances in vacant rooms, conserving energy and reducing the building’s carbon footprint.

Startups harness IoT to deliver location-specific information to customers, including real-time luggage tracking via IoT tags, minimizing lost items. Airlines also incorporate IoT-based solutions into seats, monitoring passenger temperature and heart rate for proactive health management.

Altitude enables Smart Hotels

New Zealand-based startup Altitude creates an IoT-based hotel software and hardware to develop smart hotels. The startup makes self-service kiosks to automate reservations, room up-gradation, payments, as well as check-in and check-out. Its hotel management platform further enables contactless engagement with guests. Additionally, Altitude’s mobile keys allow guests to open doors using mobile phones, providing convenience and saving time for travelers.

Smart Tour provides Smart Itineraries

Brazilian startup Smart Tour offers smart itineraries using IoT and quick response (QR) codes. The startup recommends travel routes and destinations based on the user’s preference in real-time. This facilitates a seamless experience for travelers. Besides, the user-generated data enables tourism managers to better understand consumer behavior and indulge in proximity marketing. The startup also offers a contact tracing solution to monitor COVID-19 infected travelers and ensure public safety.

4. Contactless Travel

Travelers benefit from contactless recognition technologies like retina scanning, which replace traditional travel documents, speeding up passenger identification and reducing airport queues. QR codes offered by travel companies allow tourists to access relevant information on their mobile devices, enhancing engagement.

Hotels have introduced contactless self-check-ins, enabling visitors to arrange services before arrival. Additionally, contactless payment modes are available in hotels and restaurants for swift and secure transactions. Moreover, wearable devices are transforming the travel experience by providing real-time notifications and touch-free access to services and information.

Loxe designs Smart Hotel Keys

US-based startup Loxe makes smart mobile keys for hotels. The startup’s smartphone app replaces key cards with contactless mobile keys that allow users to unlock doors using smartphones. It also reduces operational costs incurred in the manufacturing of conventional keys or plastic cards. Moreover, the startup designs a Bluetooth retrofit module that converts normal door locks into mobile-ready door locks. This allows hotel owners to easily convert their existing locks into smart ones without additional expenses while improving guest safety and convenience.

Avendi provides Contactless Payment

Singaporean startup Avendi offers contactless and cashless payments for travelers. The startup allows tourists to accumulate expenses throughout their trip and pay at the end of the journey. Avendi’s app utilizes QR codes to add all the billed expenses and shown through its dashboard. The user settles the tab amount in the preferred currency, preventing the inconvenience of cash withdrawal or credit card payments.

5. Big Data & Analytics

Big data empowers travel companies with customer trends for strategic marketing. Analyzing traveler behavior, they offer tailored recommendations for hotel bookings, cab hires, flight reservations, and ticket purchases.

Predicting future demand is another advantage of big data and analytics, helping hotels and airlines identify peak periods to optimize revenue. Advanced analysis of transactional data aids in detecting cyber fraud, and safeguarding sensitive customer information such as credit card details and biometric data.

CheckandPack creates a Travel Platform

Dutch startup CheckandPack offers a big data travel platform. It runs marketing campaigns to gather traveler data and understand tourism trends. Based on these insights, the platform enables businesses to approach travelers with a customized appeal. It also provides travelers with holiday planning.

3Victors provides Travel Data Analytics

US-based startup 3Victors offers travel data analytics. The startup’s product, PriceEye Suite , proactively monitors the prices of numerous airlines to provide insights into competitor prices. It creates a dashboard to display travelers’ location of interest, allowing travel airlines to better manage their revenue and pricing strategy.

6. Post-Pandemic Tourism

Post-pandemic tourism focuses on safe, sustainable, and flexible travel options, responding to evolving traveler preferences and health guidelines. Enhanced health and safety protocols, including regular sanitization and contactless services, become standard in airlines and hotels, ensuring traveler confidence.

Destinations and operators emphasize outdoor and less crowded experiences, catering to a heightened demand for nature-based and wellness travel. Flexible booking policies and trip insurance gain prominence, offering peace of mind amid uncertainties. Sustainable travel gains traction, with tourists and businesses prioritizing environmental impact and community well-being.

GOPASS Global enables Pre-travel Risk Management

Singaporean startup GOPASS Global provides a travel risk analytics platform against COVID-19. It analyzes the biosecurity risk elements involved in a trip, such as border restrictions, quarantine requirements, airport type, and airline transit points or seating in real-time. This allows travelers to assess risk factors and plan their trips accordingly.

Moreover, the startup creates world maps displaying information regarding COVID-prone areas, testing areas, and vaccine coverage. This provides travelers with a preview of the current situation, allowing them to ensure safety during business and leisure travel.

Workcations enables Work from Anywhere

Indian startup Workcations provides properties at tourist destinations for remote-working individuals. It offers amenities like internet connectivity, food, and a quiet ambiance, allowing tourists to work in a peaceful environment without hindrance. This increases employee productivity, motivation, and retention.

7. Tour Premiumization

Hyper-personalization in travel experiences is on the rise, with tourists eager to immerse themselves in diverse cultures. Luxury travelers enjoy tailored experiences and intuitive services through tour premiumization. Health and wellness packages offered by travel startups help tourists unwind.

These retreats enhance health and offer detoxifying food options. Space tourism is another exciting development, offering leisure or research trips to space. Lastly, travel startups are fostering customer loyalty and building strong relationships through membership or subscription models.

STOKE provides Space Tour

US-based startup STOKE facilitates space travel using everyday-operable rockets. The startup’s rockets are reusable and deliver satellites to any desired orbit. This enables on-demand access to space, paving way for space tours for exploration, recreation, and research. The startup also emphasizes the economical and rapid development of its hardware for feasible spacecraft launches, advancing space tourism.

Origin offers Travel Personalization

Dutch startup Origin provides premium travel personalization to tourists. The startup utilizes machine learning and travel curators to plan creative vacations. It also arranges flights and accommodation for travelers. Further, the startup measures the carbon output of itineraries and offers sustainable tourism options.

8. Ecotourism

Traveling responsibly minimizes tourism’s environmental impact and supports local communities’ well-being. Ecotourists strive to reduce their carbon footprint during their journeys. Startups contribute by developing sustainable transport, ecolodges, and solar-powered resorts.

Airline passengers have the option to offset carbon emissions during flight bookings. Local tourism stimulates small businesses economically and creates job opportunities. It also emphasizes minimum littering, which lowers pollution and the time spent on cleanups.

Jet-Set Offset simplifies Flight Carbon Offset

US-based startup Jet-Set Offset creates a carbon-offsetting platform for air travel. The startup partners with non-profit organizations working against climate change and connects them with travelers. Each time travelers book flight tickets via the startup’s platform, Jet-Set Offset contributes a certain amount per mile for their journey to environmental organizations. This way, the passenger’s journey promotes mileage-based donations to offset carbon emissions.

The Green Stamp facilitates Ethical Wildlife Tour

Dutch startup The Green Stamp provides a platform to book ethical wildlife tours. It curates tours based on the tourists’ inclinations toward certain locations or wildlife. Exploration of these projects allows travelers to indirectly contribute to their cause as these wildlife projects donate to the welfare of local communities and the environment.

9. Blockchain

Blockchain provides the travel industry with operational transparency and security. Traceable payments, particularly for international travel, are a key application, that fosters trust among parties involved in transactions.

Automation and enforcement of agreements in travel insurance and supplier contracts are achieved through smart contracts. This strengthens reliability and cuts administrative costs. Travel firms establish customer loyalty programs where points are exchanged for cryptocurrency. Lastly, blockchain increases data storage security, reducing the risk of information leaks.

Upswing facilitates Guest Profiling

Indian startup Upswing creates AURA , a blockchain-powered platform for guest profiling. It provides a holistic view of guests, their preferences, and purchase patterns. The platform associates a score with each guest and suggests improvements in their service. This facilitates hotels to provide a personalized experience to their guests and, in turn, increase sales.

UIQ Travel develops a Solo Traveling App

US-based startup UIQ Travel develops a blockchain-based app to connect solo travelers. It discovers people with shared interests and suggests tours or attractions. Such hyper-personalized recommendations assist in experience discovery and also increase traveler engagement.

Discover all Travel Trends, Technologies & Startups

Tourism, although severely impacted by the pandemic, now continues to rapidly grow across the globe. Post-pandemic trends indicate an increasing emphasis on hygiene and safety during travel. The industry is witnessing the widespread adoption of disruptive technologies like AI, XR, IoT, and blockchain. The travel industry utilizes big data to understand traveler trends for targeted marketing. The transition to ecotourism is accelerating as businesses integrate zero-emission transit and carbon offset programs to reduce their carbon footprint.

The Travel Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation and startup scouting process. Among others, personalization, decarbonization, and travel safety will transform the sector as we know it today. Identifying new opportunities and emerging technologies to implement into your business goes a long way in gaining a competitive advantage. Get in touch to easily and exhaustively scout startups, technologies & trends that matter to you!

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"People want to travel": 4 sector leaders say that tourism will change and grow

The global travel and tourism industry's post-pandemic recovery is gaining pace as the world’s pent-up desire for travel rekindles. Image:  Unsplash/Anete Lūsiņa

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Shinya katanozaka, gilda perez-alvarado, stephen kaufer.

Listen to the article

• In 2020 alone, the travel and tourism industry lost $4.5 trillion in GDP and 62 million jobs - the road to recovery remains long.
• The World Economic Forum’s latest Travel & Tourism Development Index gives expert insights on how the sector will recover and grow.
• We asked four business leaders in the sector to reflect on the state of its recovery, lessons learned from the pandemic, and the conditions that are critical for the future success of travel and tourism businesses and destinations.

The global travel and tourism sector’s post-pandemic recovery is gaining pace as the world’s pent-up desire for travel rekindles. The difference in international tourist arrivals in January 2021 and a similar period in January 2022 was as much as the growth in all of 2021. However, with $4.5 trillion in GDP and 62 million jobs lost in 2020 alone, the road to recovery remains long.

A few factors will greatly determine how the sector performs. These include travel restrictions, vaccination rates and health security, changing market dynamics and consumer preferences, and the ability of businesses and destinations to adapt. At the same time, the sector will need to prepare for future shocks.

The TTDI benchmarks and measures “the set of factors and policies that enable the sustainable and resilient development of the T&T sector, which in turn contributes to the development of a country”. The TTDI is a direct evolution of the long-running Travel and Tourism Competitiveness Index (TTCI), with the change reflecting the index’s increased coverage of T&T development concepts, including sustainability and resilience impact on T&T growth and is designed to highlight the sector’s role in broader economic and social development as well as the need for T&T stakeholder collaboration to mitigate the impact of the pandemic, bolster the recovery and deal with future challenges and risks. Some of the most notable framework and methodology differences between the TTCI and TTDI include the additions of new pillars, including Non-Leisure Resources, Socioeconomic Resilience and Conditions, and T&T Demand Pressure and Impact. Please see the Technical notes and methodology. section to learn more about the index and the differences between the TTCI and TTDI.

The World Economic Forum's latest Travel & Tourism Development Index highlights many of these aspects, including the opportunity and need to rebuild the travel and tourism sector for the better by making it more inclusive, sustainable, and resilient. This will unleash its potential to drive future economic and social progress.

Within this context, we asked four business leaders in the sector to reflect on the state of its recovery, lessons learned from the pandemic, and the conditions that are critical for the future success of travel and tourism businesses and destinations.

Have you read?

Are you a 'bleisure' traveller, what is a ‘vaccine passport’ and will you need one the next time you travel, a travel boom is looming. but is the industry ready, how to follow davos 2022, “the way we live and work has changed because of the pandemic and the way we travel has changed as well”.

Tony Capuano, CEO, Marriott International

Despite the challenges created by the COVID-19 pandemic, the future looks bright for travel and tourism. Across the globe, people are already getting back on the road. Demand for travel is incredibly resilient and as vaccination rates have risen and restrictions eased, travel has rebounded quickly, often led by leisure.

The way many of us live and work has changed because of the pandemic and the way we travel has changed as well. New categories of travel have emerged. The rise of “bleisure” travel is one example – combining elements of business and leisure travel into a single trip. Newly flexible work arrangements, including the opportunity for many knowledge workers to work remotely, have created opportunities for extended travel, not limited by a Monday to Friday “9 to 5” workweek in the office.

To capitalize on this renewed and growing demand for new travel experiences, industry must join governments and policymakers to ensure that the right conditions are in place to welcome travellers as they prepare to get back on the road again, particularly those who cross international borders. Thus far, much of the recovery has been led by domestic and leisure travel. The incremental recovery of business and international travel, however, will be significant for the broader industry and the millions who make their livelihoods through travel and tourism.

Looking ahead to future challenges to the sector, be they public health conditions, international crises, or climate impacts, global coordination will be the essential component in tackling difficult circumstances head-on. International agreement on common – or at least compatible – standards and decision-making frameworks around global travel is key. Leveraging existing organizations and processes to achieve consensus as challenges emerge will help reduce risk and improve collaboration while keeping borders open.

“The travel and tourism sector will not be able to survive unless it adapts to the virtual market and sustainability conscience travellers”

Shinya Katanozaka, Representative Director, Chairman, ANA Holdings Inc.

At a time when people’s movements are still being restricted by the pandemic, there is a strong, renewed sense that people want to travel and that they want to go places for business and leisure.

In that respect, the biggest change has been in the very concept of “travel.”

A prime example is the rapid expansion of the market for “virtual travel.” This trend has been accelerated not only by advances in digital technologies, but also by the protracted pandemic. The travel and tourism sector will not be able to survive unless it adapts to this new market.

However, this is not as simple as a shift from “real” to “virtual.” Virtual experiences will flow back into a rediscovery of the value of real experiences. And beyond that, to a hunger for real experiences with clearer and more diverse purposes. The hope is that this meeting of virtual and actual will bring balance and synergy the industry.

The pandemic has also seen the emergence of the “sustainability-conscious” traveller, which means that the aviation industry and others are now facing the challenge of adding decarbonization to their value proposition. This trend will force a re-examination of what travel itself should look like and how sustainable practices can be incorporated and communicated. Addressing this challenge will also require stronger collaboration across the entire industry. We believe that this will play an important role in the industry’s revitalization as it recovers from the pandemic.

How is the World Economic Forum promoting sustainable and inclusive mobility systems?

The World Economic Forum’s Platform for Shaping the Future of Mobility works across four industries: aerospace and drones; automotive and new mobility; aviation travel and tourism; and supply chain and transport. It aims to ensure that the future of mobility is safe, clean, and inclusive.

• Through the Clean Skies for Tomorrow Coalition , more than 100 companies are working together to power global aviation with 10% sustainable aviation fuel by 2030.
• In collaboration with UNICEF, the Forum developed a charter with leading shipping, airlines and logistics to support COVAX in delivering more than 1 billion COVID-19 vaccines to vulnerable communities worldwide.
• The Road Freight Zero Project and P4G-Getting to Zero Coalition have led to outcomes demonstrating the rationale, costs and opportunities for accelerating the transition to zero emission freight.
• The Medicine from the Sky initiative is using drones to deliver vaccines and medicine to remote areas in India, completing over 300 successful trials.
• The Forum’s Target True Zero initiative is working to accelerate the deployment and scaling of zero emission aviation, leveraging electric and hydrogen flight technologies.
• In collaboration with the City of Los Angeles, Federal Aviation Administration, and NASA, the Forum developed the Principles of the Urban Sky to help adopt Urban Air Mobility in cities worldwide.
• The Forum led the development of the Space Sustainability Rating to incentivize and promote a more safe and sustainable approach to space mission management and debris mitigation in orbit.
• The Circular Cars Initiative is informing the automotive circularity policy agenda, following the endorsement from European Commission and Zero Emission Vehicle Transition Council countries, and is now invited to support China’s policy roadmap.
• The Moving India network is working with policymakers to advance electric vehicle manufacturing policies, ignite adoption of zero emission road freight vehicles, and finance the transition.
• The Urban Mobility Scorecards initiative – led by the Forum’s Global New Mobility Coalition – is bringing together mobility operators and cities to benchmark the transition to sustainable urban mobility systems.

Contact us for more information on how to get involved.

“The tourism industry must advocate for better protection of small businesses”

Gilda Perez-Alvarado, Global CEO, JLL Hotels & Hospitality

In the next few years, I think sustainability practices will become more prevalent as travellers become both more aware and interested in what countries, destinations and regions are doing in the sustainability space. Both core environmental pieces, such as water and air, and a general approach to sustainability are going to be important.

Additionally, I think conservation becomes more important in terms of how destinations and countries explain what they are doing, as the importance of climate change and natural resources are going to be critical and become top of mind for travellers.

The second part to this is we may see more interest in outdoor events going forward because it creates that sort of natural social distancing, if you will, or that natural safety piece. Doing outdoor activities such as outdoor dining, hiking and festivals may be a more appealing alternative to overcrowded events and spaces.

A lot of lessons were learned over the last few years, but one of the biggest ones was the importance of small business. As an industry, we must protect small business better. We need to have programmes outlined that successfully help small businesses get through challenging times.

Unfortunately, during the pandemic, many small businesses shut down and may never return. Small businesses are important to the travel and tourism sector because they bring uniqueness to destinations. People don’t travel to visit the same places they could visit at home; they prefer unique experiences that are only offered by specific businesses. If you were to remove all the small businesses from a destination, it would be a very different experience.

“Data shows that the majority of travellers want to explore destinations in a more immersive and experiential way”

Steve Kaufer, Co-Founder & CEO, Tripadvisor

We’re on the verge of a travel renaissance. The pandemic might have interrupted the global travel experience, but people are slowly coming out of the bubble. Businesses need to acknowledge the continued desire to feel safe when travelling. A Tripadvisor survey revealed that three-quarters (76%) of travellers will still make destination choices based on low COVID-19 infection rates.

As such, efforts to showcase how businesses care for travellers - be it by deep cleaning their properties or making items like hand sanitizer readily available - need to be ingrained within tourism operations moving forward.

But travel will also evolve in other ways, and as an industry, we need to be prepared to think digitally, and reimagine our use of physical space.

Hotels will become dynamic meeting places for teams to bond in our new hybrid work style. Lodgings near major corporate headquarters will benefit from an influx of bookings from employees convening for longer periods. They will also make way for the “bleisure” traveller who mixes business trips with leisure. Hotels in unique locales will become feasible workspaces. Employers should prepare for their workers to tag on a few extra days to get some rest and relaxation after on-location company gatherings.

Beyond the pandemic, travellers will also want to explore the world differently, see new places and do new things. Our data reveals that the majority want to explore destinations in a more immersive and experiential way, and to feel more connected to the history and culture. While seeing the top of the Empire State building has been a typical excursion for tourists in New York city, visitors will become more drawn to intimate activities like taking a cooking class in Brooklyn with a family of pizza makers who go back generations. This will undoubtedly be a significant area of growth in the travel and tourism industry.

Governments would be smart to plan as well, and to consider an international playbook that helps prepare us for the next public health crisis, inclusive of universal vaccine passports and policies that get us through borders faster.

Understanding these key trends - the ongoing need to feel safe and the growing desire to travel differently - and planning for the next crisis will be essential for governments, destinations, and tourism businesses to succeed in the efforts to keep the world travelling.

Travel, Tourism & Hospitality

Global tourism industry - statistics & facts

What are the leading global tourism destinations, digitalization of the global tourism industry, how important is sustainable tourism, key insights.

Detailed statistics

Total contribution of travel and tourism to GDP worldwide 2019-2033

Number of international tourist arrivals worldwide 1950-2023

Global leisure travel spend 2019-2022

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Leading global travel markets by travel and tourism contribution to GDP 2019-2022

Travel and tourism employment worldwide 2019-2033

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Leading airports for international air passenger traffic in 2022 (in million international passengers)

Market value of selected airlines worldwide 2023

Market value of selected airlines worldwide as of May 2023 (in billion U.S. dollars)

Global passenger rail users forecast 2017-2027

Worldwide number of passenger rail users from 2017 to 2022, with a forecast through 2027 (in billion users)

Daily ridership of bus rapid transit systems worldwide by region 2023

Number of daily passengers using bus rapid transit (BRT) systems as of April 2023, by region

Number of users of car rentals worldwide 2019-2028

Number of users of car rentals worldwide from 2019 to 2028 (in millions)

Number of users in selected countries in the Car Rentals market in 2023

Number of users in selected countries in the Car Rentals market in 2023 (in million)

Carbon footprint of international tourism transport worldwide 2005-2030, by type

Transport-related emissions from international tourist arrivals worldwide in 2005 and 2016, with a forecast for 2030, by mode of transport (in million metric tons of carbon dioxide)

Attractions

• Premium Statistic Leading museums by highest attendance worldwide 2019-2022
• Basic Statistic Most visited amusement and theme parks worldwide 2019-2022
• Basic Statistic Monuments on the UNESCO world heritage list 2023, by type
• Basic Statistic Selected countries with the most Michelin-starred restaurants worldwide 2023

Leading museums by highest attendance worldwide 2019-2022

Most visited museums worldwide from 2019 to 2022 (in millions)

Most visited amusement and theme parks worldwide 2019-2022

Leading amusement and theme parks worldwide from 2019 to 2022, by attendance (in millions)

Monuments on the UNESCO world heritage list 2023, by type

Number of monuments on the UNESCO world heritage list as of September 2023, by type

Selected countries with the most Michelin-starred restaurants worldwide 2023

Number of Michelin-starred restaurants in selected countries and territories worldwide as of July 2023

Online travel market

• Premium Statistic Online travel market size worldwide 2017-2028
• Premium Statistic Estimated desktop vs. mobile revenue of leading OTAs worldwide 2023
• Premium Statistic Number of aggregated downloads of leading online travel agency apps worldwide 2023
• Basic Statistic Market cap of leading online travel companies worldwide 2023
• Premium Statistic Estimated EV/Revenue ratio in the online travel market 2024, by segment
• Premium Statistic Estimated EV/EBITDA ratio in the online travel market 2024, by segment

Online travel market size worldwide 2017-2028

Online travel market size worldwide from 2017 to 2023, with a forecast until 2028 (in billion U.S. dollars)

Estimated desktop vs. mobile revenue of leading OTAs worldwide 2023

Estimated desktop vs. mobile revenue of leading online travel agencies (OTAs) worldwide in 2023 (in billion U.S. dollars)

Number of aggregated downloads of leading online travel agency apps worldwide 2023

Number of aggregated downloads of selected leading online travel agency apps worldwide in 2023 (in millions)

Market cap of leading online travel companies worldwide 2023

Market cap of leading online travel companies worldwide as of September 2023 (in million U.S. dollars)

Estimated EV/Revenue ratio in the online travel market 2024, by segment

Estimated enterprise value to revenue (EV/Revenue) ratio in the online travel market worldwide as of April 2024, by segment

Estimated EV/EBITDA ratio in the online travel market 2024, by segment

Estimated enterprise value to EBITDA (EV/EBITDA) ratio in the online travel market worldwide as of April 2024, by segment

Selected trends

• Premium Statistic Global travelers who believe in the importance of green travel 2023
• Premium Statistic Sustainable initiatives travelers would adopt worldwide 2022, by region
• Premium Statistic Airbnb revenue worldwide 2017-2023
• Premium Statistic Airbnb nights and experiences booked worldwide 2017-2023
• Premium Statistic Technologies global hotels plan to implement in the next three years 2022
• Premium Statistic Hotel technologies global consumers think would improve their future stay 2022

Global travelers who believe in the importance of green travel 2023

Share of travelers that believe sustainable travel is important worldwide in 2023

Sustainable initiatives travelers would adopt worldwide 2022, by region

Main sustainable initiatives travelers are willing to adopt worldwide in 2022, by region

Airbnb revenue worldwide 2017-2023

Revenue of Airbnb worldwide from 2017 to 2023 (in billion U.S. dollars)

Airbnb nights and experiences booked worldwide 2017-2023

Nights and experiences booked with Airbnb from 2017 to 2023 (in millions)

Technologies global hotels plan to implement in the next three years 2022

Technologies hotels are most likely to implement in the next three years worldwide as of 2022

Hotel technologies global consumers think would improve their future stay 2022

Must-have hotel technologies to create a more amazing stay in the future among travelers worldwide as of 2022

• Premium Statistic Travel and tourism revenue worldwide 2019-2028, by segment
• Premium Statistic Distribution of sales channels in the travel and tourism market worldwide 2018-2028
• Premium Statistic Inbound tourism visitor growth worldwide 2020-2025, by region
• Premium Statistic Outbound tourism visitor growth worldwide 2020-2025, by region

Travel and tourism revenue worldwide 2019-2028, by segment

Revenue of the global travel and tourism market from 2019 to 2028, by segment (in billion U.S. dollars)

Distribution of sales channels in the travel and tourism market worldwide 2018-2028

Revenue share of sales channels of the travel and tourism market worldwide from 2018 to 2028

Inbound tourism visitor growth worldwide 2020-2025, by region

Inbound tourism visitor growth worldwide from 2020 to 2022, with a forecast until 2025, by region

Outbound tourism visitor growth worldwide 2020-2025, by region

Outbound tourism visitor growth worldwide from 2020 to 2022, with a forecast until 2025, by region

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A travel boom is looming. But is the industry ready?

If things go well, we might be at the threshold of a new age of travel. Although COVID-19 variants may affect conditions, it seems only a matter of time before travelers in some parts of the world hit the road and take to the skies again, thanks to rising vaccination rates and manageable caseloads. Some countries have begun gingerly relaxing travel restrictions and reopening borders.

As the worst effects of the COVID-19 pandemic ebb, most indicators point to travel coming back—with a vengeance—as people look to reconnect, explore new destinations, or revisit reliable favorites. Many just want to get away from the confines of their homes. A McKinsey survey reveals traveling to be the second-most-desired activity among respondents (in first place: dining out). In the United States, air travel has hit two million daily passengers, closer to the prepandemic level of around 2.5 million than to the low of around 90,000, in April 2020. Hotel reservations and rental-car bookings are surging.

All these trends should taste sweet for the industry, but ill-prepared companies may find themselves facing the wrath of a cohort of leisure-focused vacationers who might already be struggling to keep up with new travel protocols. If the industry doesn’t work to increase capacity now, the ecosystem may buckle under the pressure, forcing travelers to endure long wait times and inflated prices.

This article projects two broad trajectories of how travel will likely bounce back, comparing countries that have near-zero caseloads with those that have more, but manageable, caseloads and higher vaccination rates. In both scenarios, travel companies that don’t prepare themselves for the forthcoming influx of travelers risk missing out on a valuable opportunity to recoup losses incurred during the height of the pandemic. On the flip side, we believe that by focusing on four key areas—building capacity, investing in digital innovation, revisiting commercial approaches, and learning from critical moments—travel companies can seize value as they exceed the needs and demands of their customers.

The tale of two travel recovery paths

Wherever in the world you look, you’ll see people itching to travel. Most high-income earners have not lost their jobs. In the United States, the savings rate  among this demographic is 10 to 20 percent higher now than before the pandemic, and such people are eager to spend their money on travel. Leisure trips are expected to lead the rebound, with corporate travel  trailing behind.

A recent survey of 4,700 respondents from 11 countries around the world, conducted by the International Air Transport Association (IATA), revealed that 57 percent of them expected to be traveling within two months of the pandemic’s containment, and 72 percent will do so as soon as they can meet friends and family. In our China travel survey, we see more and more respondents yearning for leisure trips further afield; 41 percent say they want their next trip to be outside China, the highest level we’ve seen, despite borders remaining sealed.

Yet it’s worth noting that despite the near-universal desire to travel, countries will likely manage their plans to reopen differently. Two main factors come into play here: current COVID-19 caseloads and vaccination rates. People living in countries with limited access to vaccines and uncontainable levels of cases—such as a number of countries in Africa and Southeast Asia—will continue to be bound by tight travel restrictions for some time to come.

Travel will take off in and between countries with manageable caseloads

We can expect a surge in travel in (and between) countries with manageable and moderate COVID-19 caseloads and vaccine access. These regions are willing to accept rising case levels as long as death and hospitalization rates stay low. In many European countries and the United States, a significant portion of the population has been inoculated. Such people feel safe enough to travel both domestically and internationally, especially with the introduction of safety measures such as the EU-issued digital health certificates given to people vaccinated against COVID-19. Despite fluctuating rates of new caseloads in these regions, the efficacy of the vaccine so far (to reduce the spread of the disease and avoid its worst effects) gives many people enough feeling of security to travel.

Countries in Europe that have gotten used to living with manageable caseloads of COVID-19 have begun to welcome visitors without asking them to quarantine: Iceland (March 2021), Cyprus (May 2021), and Malta (June 2021). In addition, Europe is open to vaccinated US travelers. After the US Centers for Disease Control and Prevention (CDC) started approving cruise vessels with conditional sailing certifications to enter the country, a Florida federal court ruled in June 2021 that CDC-issued regulations should serve only as nonbinding guidelines, further reducing restrictions on tourists.

If past instances serve as indicators, we’ll see travel demand soaring once travel restrictions are eased and freedom of mobility returns.

Domestic trips will lead the recovery of travel in near-zero countries

However, a slightly different picture is emerging for countries with near-zero caseloads. Countries in this group include Australia, China, New Zealand, and Singapore. Their governments face a difficult trade-off. They can open up national borders without quarantines—which will almost certainly lead to increased local transmissions of COVID-19 and an increase in new cases, especially in countries with low vaccination rates, such as Australia and New Zealand. Or, they can choose to continue imposing strict restrictions and quarantine measures until the pandemic has truly passed, which would deter all but the most determined of travelers. Unlike places that have adjusted to living with COVID-19, even a moderate increase of cases in countries with caseloads near zero would likely be unacceptable to the public.

That’s not to say there are no travel opportunities in these countries. First, we’ll likely see increased interest in domestic travel, especially for large countries with sizable home markets, such as Australia and China, which have traditionally been net exporters of tourists. With few international destinations open to visit, this group of travelers will likely seek out vacation experiences within their nations’ borders. China  has seen hordes of tourists flood many scenic destinations and tourist sites, especially during peak travel seasons.

Second, even though travel bubbles have had only limited success so far, it may soon be possible for territories with very low COVID-19 caseloads and no local transmissions to open up access to each other. Mainland China, for instance, has been allowing citizens to travel to and from Macau without quarantine requirements. Hong Kong and Singapore have also restarted negotiations on a potential travel bubble between the two cities. The key is establishing common standards and trust in the public-health protocols and testing regimes of the participants in the travel bubble.

Four actions travel players must consider

Despite these promising signs, the tourism industry will likely struggle to capitalize on the imminent spike in travel demand, especially in Europe and the United States. From airlines and car rentals to hotels and airport restaurants, the entire travel supply chain is already showing signs of strain. Wait times at security checkpoints are stretching into hours at some airports, while popular vacation destinations, including Arizona, Florida, and Hawaii, are facing rental-car shortages.

Needless to say, bad news travels fast, and a negative experience can quickly become fodder for a viral video and bad publicity, leading customers to look for alternatives more in their control, including nearby drives and rental properties.

While the process is daunting, clear-sighted travel leaders know that preparing their organizations for a surge of travelers is also an opportunity to redefine their value propositions and make their offerings distinctive. This will not only reinstill confidence in travel but also increase customer loyalty. Leaders and executives would be wise to focus on the following four areas.

1. Bring back capacity

The most pressing imperative for all companies across the travel supply chain is bringing back capacity or, at the very least, ensuring that they’re able to do so. Many contract and temporary workers in the restaurant industry who were laid off during the pandemic have found other employment and are reluctant to go back to their former jobs, resulting in a labor crunch. In the United Kingdom, more than one in ten workers left the hospitality sector last year. In the United States, there was still a shortfall in April of around two million leisure and hospitality jobs—far greater than before the pandemic. Global aviation capacity levels are still well below prepandemic levels as many planes remain in long-term storage and staff remain furloughed. We believe that even though reactivating airline pilots and cabin crews, preparing grounded aircraft for service, and rehiring and training service staff can be pricey, the cost of standing by and doing nothing would be higher.

2. Invest innovatively to improve the entire customer journey

While cash might continue to be in short supply, an area still worth considering for overinvestment is digital operations. Remember that the customer experience is shaped across the entire end-to-end journey, from booking to travel to the return home. Even seasoned travelers will have to adapt to new protocols, such as digital health certificates and safety measures. Travelers now need more, not less, assistance. Furthermore, certain critical journeys and moments—such as a family vacation, an important business trip, or a last-minute emergency—carry a disproportionate weight in consumers’ minds when they plan their next trip. The anticipated volume of traffic during the summer and peak holiday periods will only compound these issues and bring about greater inconvenience in the overall system.

In our work in this sector, we have found that if even one pain point in the customer journey is not satisfactorily resolved, the entire perception of a travel company can be degraded. The industry needs to make sure that processes are smooth for reopening and that adequate assistance is available for travelers to help them adapt to new ways of traveling. It is likely that international trips will need additional documentation for some time. These requirements will vary by country and potentially by transit hub. They may include proof of COVID-19 vaccination (when, as well as which vaccine) and testing requirements (type of test and recency).

As the long wait times at airport checkpoints attest, manually navigating these complexities at the check-in desk is highly inefficient and prone to human error. Some airports are testing camera-powered and AI-based digital technologies to monitor crowd densities and reduce time spent standing in line—which makes the airport experience more bearable for travelers and ensures safe physical distancing. Autonomous robots are also being deployed to maintain hygiene standards; some are equipped with UV-light cleaners to disinfect areas, and others are outfitted with body-temperature sensors to help minimize the risk of virus outbreaks.

3. Reimagine commercial approaches

Travel companies may rethink their commercial approaches. The profiles of airline passengers and hotel guests will be different: more leisure guests, later booking windows, and higher demand for flexible tickets. Historical booking curves are no longer a good indicator of current behavior. Travel companies need to use every source of insight they can to anticipate demand and optimize pricing . Flexible pricing models can also ease customer discomfort with today’s heightened levels of unpredictability. For example, EasyJet now offers a Protection Promise program that gives fliers free changes up to two hours before the flight.

Hotels will need to find new purposes for meeting and conference spaces, which will be slower to fill. Airlines  need to figure out how to fill intercontinental business class, likely with premium leisure promotions. For all travel companies, the boom may be higher in traveler numbers than in profits, as the most lucrative corporate business has been slow to return.

4. Learn from critical moments—and the wider ecosystem

Aside from streamlining processes and personalizing the customer experience, investing in digital analytics can allow companies to identify opportunities to differentiate their services. Companies would also be able to discern emerging trends and hiccups before they turn into nightmares. Industry players, such as online travel agents, may also be a trove of useful insights pertaining to how the external ecosystem is evolving; their experiences may be beneficial for hotels and airlines to explore potential partnerships with them.

The various parts of the travel industry have to work together as a whole to usher in a safe return of travel. Even as individual companies improve their internal operations, they should also keep a close eye on industry-wide developments, watching for collaboration opportunities. The industry and governments will have to reach consensus on safety standards and requirements. The IATA travel pass is a plug-in that could be used on airlines’ mobile apps, for example. Currently being tested by many airlines as a way to ensure passenger health, the app would allow travelers to manage verified certifications for COVID-19 vaccines and test results. Governments, in turn, could consider accepting and embedding the app into the flight check-in workflow.

It’s been a long time coming, but we see several factors aligning that could lead to a short-term travel boom, although not all countries and customer segments will boom at the same time. With continued perseverance, travel companies can ensure that travel is not just back but better.

Vik Krishnan is a partner in McKinsey’s San Francisco office; Darren Rivas is the director of capabilities, Global TLI, in the Atlanta office; and Steve Saxon is a partner in the Shenzhen office.

This article was edited by Jason Li, a senior editor in the Shanghai office.

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What Travel and Tourism Consumers Really Want—and Why

September 25, 2019  By  Jean Lee ,  Lara Koslow ,  Greg McRoskey ,  Pranay Jhunjhunwala , and  Jason Guggenheim

There has never been a better time to be a travel consumer, as new brands and innovative offerings continue to emerge all the time. But there has also never been a tougher time to be a travel executive—especially at incumbent companies. Those new offerings? They come from wave after wave of disruptive new entrants. In today’s environment, the traditional approach to understanding consumers—which focuses primarily on demographics and basic behaviors—no longer delivers the level of insight that companies need. Instead, companies need to understand what the underlying factors that influence a purchase decision are and how that decision can change, depending on a consumer’s context at the time of purchase and on the range of options available. Ultimately, companies will be in a better position to grow if they think less about what they’re trying to sell and more about what customers want to buy.

Over the past several years, companies in a number of other industries—most notably Identifying the Sources of Demand to Fuel Growth —have applied this approach, which we call demand-centric growth (DCG) . Increasingly, travel and tourism companies are using DCG to crack the code of a more dynamic market characterized by greatly expanded consumer choice. The concept has broad implications for new products and brands, loyalty programs, M&A, and other key areas of company strategy. For incumbent travel and tourism companies, it offers a clear way to address a tough market that is changing faster than they can.

Traditional Solutions No Longer Work

By most metrics, the travel industry is thriving overall and continues to grow, but the news is not all good. Supply has exploded, due to growth among incumbent companies and recent entrants that offer a wider set of options—some entirely new to the industry. In the cruise industry, supply will outpace demand within the next several years. In the lodging industry, Air­bnb and other shared-economy entrants have changed the rules of the game by putting private apartments and homes on the market, thereby reducing the demand for hotel rooms.

Established companies in all travel and tourism segments—airlines, cruise lines, and hotels—are struggling to tap into new growth or wrest market share away from competitors. They have tried various strategies, with little success so far. Here are some common examples:

• Choosing Quantity over Quality. Some companies have put near-term growth ahead of all other objectives, to the point where they can’t deliver a consistent experience.
• Overrelying on Unsustainable Advantages. Other companies have attempted to aggressively control supply—as when some airlines hold gate slots at airports in order to limit competition—giving themselves a high share of booking customers not because the customers prefer them but because the customers have no choice. It’s only a matter of time before regulations evolve and supply again increases to meet growing demand.
• Stretching the Brand Too Far. Still other companies try to be all things to all consumers—and end up being nothing to anyone because they lack a clear and differentiated position in the market. Think of a resort that offers guests a party scene but also touts family-friendly vacations. It’s hard to satisfy the full range of consumer preferences, especially conflicting ones. Companies that have tried to do so end up not being able to maintain any clear emotional connections to consumers.
• Joining the Race to the Bottom. It’s tempting to gain share by offering price discounts, but that game is expensive and difficult, and it is rarely sustainable. Price wars usually result in lose-lose outcomes—confusing customers and dissolving any nascent brand loyalty when brands inevitably try to recover by raising prices.

The common flaw in these strategies is that they lack a deep understanding of what consumers want, how their needs may vary from one occasion to another, and where they may look to meet their needs. (See Exhibit 1.) Often, customers have more options than companies think. For example, the Delta Shuttle connecting New York, Boston, Washington, and Chicago competes not just with other airlines but also with Amtrak. Airlines in Asia and Europe compete with high-speed rail lines. Cruise lines compete with each other and also with land-based vacations. A hotel company can no longer afford to focus exclu­sively on other hotels as its competition; it must also consider owner-rented homes as potential rivals. Evidently, the traditional frames of reference in travel and tourism are broken.

Clear Advantages from a New Approach: DCG

To understand how consumers make choices on the basis of their real-world frame of reference, companies need to look at customer behavior in a fundamentally new way. Specifically, they need to understand how demand can fuel growth, either by taking market share from competitors or by unlocking new sources of revenue. DCG establishes this broader considera­tion set by examining choices through the lens of demand versus supply. It takes into account the set of underlying consumer needs that companies may or may not be meeting despite the choices consumers make in response to available supply. In a supply-constrained world, for example, travelers flying from a hub city typically turn to the dominant airline—not because they want to, but because the airline’s more convenient flight schedules and connections effectively force them to. Finally, DCG appreciates that consumers’ needs and interests are not static, and it analyzes the unique circumstances that may drive travelers to make different decisions when planning different trips.

The DCG approach has several qualities that incumbent travel and tourism companies will find advantageous:

• Lasting. Unlike demographic-based marketing, DCG helps companies understand how and why individual consumers make their choices about travel, leading to a far more accurate and enduring picture of the market. At times, it can illuminate factors that even consumers themselves can’t articulate. The result is a much more sustainable approach to growth—one that is built on a simple yet comprehensive view of demand.
• Holistic . DCG looks at demand holistically, considering both existing and prospective customers, and both traditional and disruptive competitors. This encourages companies to devise a forward-looking growth strategy grounded not just in what is, but in what could or should be, shedding light on missed opportunities and potential white spaces in the market. In addition, by replacing a traditional brand-based market perspective with an outside-in approach, DCG provides an objective, customer-centric view of where a company stands relative to its competitors.
• Quantifiable. DCG helps companies quantify the opportunities that potential initiatives present, by assessing latent demand and competitive inten­sity. Only through this lens can com­panies understand their potential share of a consumer’s wallet and begin to shape a winning, customer-centric strategy. (See the sidebar “IHG’s New Hotel Brand Addresses an Unmet Need Among Budget-Conscious Travelers.”) By describing the opportunity in terms of actual numbers, DCG brings science to the art.

IHG’s New Hotel Brand Addresses an Unmet Need Among Budget-Conscious Travelers

IHG, the parent company of such hotel brands as InterContinental Hotels & Resorts, Kimpton Hotels & Restaurants, Crowne Plaza Hotels & Resorts, and Holiday Inn Express, was looking for new growth in a portfolio that was already strong. Management was concerned about being fully saturated in the company’s largest markets. It used demand-centric growth to identify a clear unmet need among hotel customers: a mass offering that provided reliable quality in the form of a great night’s sleep in a clean, well-designed room at a fair price. (Current alternatives in the market were either at a price point higher than consumers desired for this type of travel or very unreliable in terms of quality and consistency.)

IHG repositioned its existing brands and offerings to minimize overlap, and then invested in the new hotel brand, which it called avid hotels. Key features include: rooms designed for sound sleep, featuring a “best in class” mattress and sleep experience; high-quality, complimentary grab-and-go breakfast with 24/7 bean-to-cup coffee; and public spaces with fresh, modern designs. This brand is designed for travelers who want a hotel stay that finally meets their expectations for the type of hospitality they value most—the basics done exceptionally well—at a per-night rate expected to be about $10 to $15 less than IHG’s industry-leading Holiday Inn Express brand.

IHG launched the new avid hotels brand in September 2017, less than a year after the start of brand development—an accelerated pace in the hotel industry. Today, there are over 170 executed licenses with franchisees to build and open hotels across the US, Canada, and Mexico, and IHG recently announced plans to expand to Germany. Credit Suisse described avid hotels as the “most significant addition to IHG’s brand stable in over 25 years” and upgraded the stock to “outperform” as a result.

• Foundational.  Establishing a baseline understanding of demand gives com­panies a north star and a common language to use in aligning the entire organization. It is not just a consumer strategy but a company strategy. After assessing the demand landscape and analyzing sales volume and brand fit, management might decide to launch a new route or a new service offering, acquire a competitor that has a stronger position relative to that target, or shift investment to areas where a brand may be vulnerable to attack. (See Exhibit 2.) Every touch point in the customer journey should reinforce the brand’s positioning. And the company should align every one of its internal aspects and functions—from pricing to sales and marketing to capacity planning to organizational structure—to execute the strategy successfully.

• Transformational. Finally, DCG helps companies assemble portfolios of complementary brands. As a result, they can determine what the right M&A strategy is, whether to launch a new brand, or how to design their loyalty program. (See the sidebar “Alaska Airlines Integrates a Customer-Centric Merger.”) 

Alaska Airlines Integrates a Customer-Centric Merger

After Alaska Airlines’ parent company bought Virgin America in 2016, it faced some key questions about the post­merger organization. Should it keep Virgin’s brand (licensed from Sir Richard Branson’s Virgin Group) or operate under the 85-year-old Alaska Airlines brand? Should it strive to become a nationally relevant brand or stay focused on the West Coast, where Alaska and Virgin America were both well known? And how should it position the brand vis-à-vis the competition? The stakes were high: the $2.6 billion Virgin America acquisition was costly in relation to Alaska Air Group’s market cap of about $10 billion. As a company that has always centered around the customer, Alaska knew that it couldn’t make these decisions in the boardroom alone. Management needed to understand its customers.

The Alaska management team used demand-centric growth to identify several key insights. First, a deep customer analysis showed that Alaska had industry-­leading customer retention and loyalty once customers got to know the brand, whereas Virgin America was stronger in customer acquisition but somewhat less sustainable long-term. (Virgin America did appeal strongly to some customers, but they were a relatively narrow segment overall.) That led Alaska to announce that the Virgin America brand would be phased out over time; the distinctive red and white aircraft would eventually all display Alaska’s smiling Eskimo. In terms of the route network, Alaska had very strong brand affinity among West Coast travelers, and its customers cared deeply about route coverage in those markets. Armed with these insights, the company ran some economic simulations that pointed to a clear answer: focus on the West Coast.

Second, the company looked at the landscape of demand and implemented a new customer strategy centered on the concepts “feel good” and “refreshed”—a differentiating positioning that leverages the strength of both the Alaska Airlines and the Virgin America brands while balancing what existing customers already love with areas for potential innovation.

To activate this strategy, after conducting a robust conjoint analysis with target customers, the company rolled out a campaign with the slogan “Different Works” and reprioritized investments into experiential aspects that airline customers truly care about: feeling good and refreshed. Elements of the campaign included everything from new loyalty policies to bolder entertainment investments to music in airport ticketing and check-in areas. The company also empowered employees to ensure that customer interactions were positive, caring, and true to Alaska’s core.

In 2018 Alaska Airlines—the only legacy US carrier to have avoided bankruptcy throughout its 85-year history—ranked highest in the J.D. Power survey of customer satisfaction among traditional carriers for the 11th consecutive year.

It can also give companies critical guidance on the optimal way to enter a new market. The approach goes beyond assessing the performance of individual brands to show how a portfolio fits together. When brands within a portfolio lack differentiation from one another, parent companies risk confusing customers and cannibalizing sales. (See Exhibit 3.) At the same time, portfolio companies often miss out on clearly identifiable white-space opportunities. Brands compete internally for resources, too, and misaligned incentives often exacerbate disputes. A demand-centric growth approach sets up brands to compete together, rather than against each other.

The travel and tourism industry is ripe for customer-focused innovation—and so far, new entrants are getting there faster. As choices proliferate and consumer behavior becomes more complex, traditional demographic-based marketing will no longer suffice. Incumbent companies can continue to focus on price or supply, and suffer disruption from new entrants, or they can start taking steps to become more customer-centric, starting with developing a better understanding of what truly drives their customers’ decisions. Demand-centric growth provides a foundation for that understanding by clarifying what consumers want at the moment of purchase—and why.

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Understanding the Travel and Tourism Sector: A Business Perspective

The world of business is inextricably linked with the realm of travel and tourism. From corporate travel arrangements to the operation of hospitality giants, this sector plays a pivotal role in the global economy.

The travel and tourism industry is not merely about vacations and leisure; it encompasses a diverse array of activities, services, and businesses that fuel economies, create jobs, and shape the way we explore the world.

In this article, we will embark on a journey to understand the intricacies of the travel and tourism sector from a business standpoint. We will explore its significance in the global economy, delve into the core components of the industry, examine the economic impact, and discuss emerging trends and challenges.

Moreover, we will shed light on the business aspects of travel, highlighting the key players, revenue streams, and marketing strategies that drive success.

But why should business professionals, beyond those directly involved in tourism, care about this sector? The answer lies in the fact that travel and tourism intersect with nearly every industry. Whether you're in finance, technology, healthcare, or any other field, understanding how this sector operates can unlock opportunities for growth, collaboration, and innovation.

So, fasten your seatbelts and prepare for a journey through the multifaceted world of travel and tourism, where business meets exploration and economic growth meets wanderlust.

Travel and Tourism

Travel and tourism refer to the activities, services, and industries associated with people traveling to and staying in places outside their usual place of residence for leisure, business, or other purposes.

The Core Components of Travel and Tourism

At its heart, the travel and tourism sector comprises several key components, each playing a unique role in the industry's ecosystem. Understanding these components is crucial for any business professional aiming to navigate this dynamic sector effectively.

Here are the primary elements:

1. Accommodation: Accommodation providers are the backbone of the tourism industry. They include hotels, resorts, vacation rentals, and even unconventional options like Airbnb. These establishments cater to travelers by offering a place to stay, ranging from budget to luxury.

2. Transportation: Travel relies heavily on transportation. This segment encompasses airlines, cruise lines, railways, car rental services, and public transportation systems. Efficient transportation networks are vital for connecting travelers to their destinations.

3. Food and Beverage: Dining experiences are an integral part of any trip. This category includes restaurants, cafes, food trucks, and bars. Culinary tourism, where travelers explore local cuisine, has become a significant trend within this segment.

4. Travel Agencies: Travel agencies and tour operators serve as intermediaries between travelers and service providers. They help plan itineraries, book accommodations, and arrange transportation, making the travel process more convenient.

5. Attractions and Entertainment: Tourist destinations offer various attractions, from historical sites and museums to theme parks and natural wonders. Entertainment options such as theaters and music venues also contribute to the overall travel experience.

6. Travel Technology: In the digital age, technology has transformed the way people plan and experience travel. Online booking platforms, travel apps, and services like TripAdvisor have reshaped the industry's landscape.

7. Tourism Services: This category includes a range of services such as travel insurance, currency exchange, and visa assistance. These services ensure that travelers are prepared for their journeys and can navigate any unforeseen challenges.

8. Destination Management: Local governments and organizations play a pivotal role in managing and promoting tourist destinations. They invest in infrastructure, marketing, and sustainability efforts to attract visitors.

The Economic Impact of Travel and Tourism

From a business perspective, it's essential to grasp the significant economic impact of the travel and tourism sector. This industry is a global economic powerhouse that generates jobs, fosters investment and drives economic growth.

Here are some key statistics to illustrate the significance of travel and tourism :

• Job Creation: Travel and tourism directly support over 330 million jobs worldwide, accounting for 1 in 10 jobs globally.
• Contribution to GDP: In 2022, the travel and tourism sector contributed 7.6% to global GDP, highlighting its substantial economic footprint.
• Investment Magnet: This sector attracts investments in infrastructure, hotels, transportation, and more, further stimulating economic activity.
• Foreign Exchange Earnings: Tourism often serves as a vital source of foreign exchange earnings for many countries, boosting their balance of payments.
• SME Growth: Small and medium-sized enterprises (SMEs) play a significant role in the sector, benefiting from the opportunities created by tourism-related businesses.

The economic interplay between tourism and other industries is intricate.

For instance, the hospitality sector relies on agriculture for food supplies, airlines depend on the aerospace industry for aircraft and tourist destinations often collaborate with local artisans and businesses to promote cultural experiences.

In the business world, recognizing the economic clout of travel and tourism can open doors for collaboration, investment, and innovation. Many companies, even those seemingly unrelated to tourism, can find ways to tap into this lucrative market.

Emerging Trends and Challenges

The travel and tourism sector is continuously evolving, driven by changing consumer preferences, technological advancements, and global events. Business professionals must stay attuned to these trends and challenges to adapt and thrive in this dynamic industry.

Here are some notable developments:

1. Sustainable Tourism: Travelers increasingly prioritize eco-friendly and sustainable practices. Businesses that adopt green initiatives not only reduce their environmental footprint but also attract environmentally conscious travelers.

2. Digital Transformation: The digitalization of travel services has reshaped how consumers plan and book trips. Online platforms, artificial intelligence, and data analytics are instrumental in personalizing travel experiences.

3. Health and Safety: Recent global health crises have heightened travelers' concerns about safety and hygiene. Businesses must implement robust health and safety measures to regain consumer trust.

4. Shifts in Travel Behavior: The pandemic has brought about changes in travel behavior, with a focus on remote and nature-based destinations. Companies need to adapt their offerings to cater to these evolving preferences.

5. Regulatory Challenges: Navigating complex regulations, including visa requirements and health protocols, can be a challenge for travel businesses. Staying informed and compliant is crucial.

6. Geopolitical Factors: Political instability and international relations can significantly impact the tourism industry. Businesses must be prepared to adapt to changing geopolitical landscapes.

The Business of Travel and Tourism

Understanding how businesses operate within this sector is essential for both industry insiders and entrepreneurs looking to tap into this thriving market.

Role of Businesses in the Travel Sector

Businesses play a pivotal role in shaping the travel and tourism landscape. Whether you're a hotel chain, an airline, a tour operator, or a travel agency, your role is multifaceted, encompassing everything from customer service to marketing and sustainability initiatives.

• Customer-Centric Approach : At the heart of every successful travel and tourism business is a deep commitment to customer satisfaction. Travelers today expect exceptional service and unique experiences. From the moment a traveler starts planning their trip to the time they return home, businesses must focus on providing top-notch services, personalized recommendations, and seamless experiences.
• Innovation and Adaptation : The travel industry is highly competitive and constantly evolving. Successful businesses in this sector are those that innovate and adapt to changing trends. This could mean embracing digital technology, offering eco-friendly options, or creating new and exciting travel packages.

Business Models and Revenue Streams

To thrive in the travel and tourism sector, businesses employ various revenue models tailored to their specific niches. Here are a few common business models:

• Hospitality and Accommodation : Hotels, resorts, and vacation rentals rely on room bookings and additional services such as dining, spa treatments, and event hosting to generate revenue.
• Airlines and Transportation : Airlines make money through ticket sales, baggage fees, in-flight services, and partnerships with other travel-related businesses. Transportation services like taxis, trains, and cruise lines have similar revenue structures.
• Tour Operators and Travel Agencies : These businesses profit from organizing and selling travel packages, tours, and experiences. Commissions, booking fees, and tour sales are primary income sources.
• Online Travel Agencies (OTAs) : OTAs like Expedia and Booking.com aggregate information from various travel service providers and earn commissions on bookings made through their platforms.

Customer Experience and Service Excellence

In the digital age, the travel and tourism sector is driven by customer reviews and recommendations. Travelers share their experiences online, influencing the choices of others. Therefore, providing exceptional customer service is paramount. Here are some strategies to achieve service excellence:

• Personalization : Tailor recommendations and services to individual preferences.
• Seamless Booking and Travel : Make the booking process simple and provide support throughout the journey.
• Feedback and Improvement : Collect customer feedback and use it to enhance services continually.
• Crisis Management : Be prepared to handle unexpected situations, such as flight cancellations or health emergencies, with professionalism and empathy.

Marketing and Promotion Strategies

Effective marketing is essential for attracting travelers to your business. Here are some strategies commonly used in the travel and tourism industry:

• Digital Marketing : Utilize online channels such as social media, search engine optimization (SEO), email marketing, and paid advertising to reach a global audience.
• Content Marketing : Create engaging content, including blog posts, videos, and travel guides, to inspire and inform potential travelers.
• Partnerships : Collaborate with influencers, other businesses, and tourism boards to expand your reach and access new markets.
• Sustainability Promotion : Highlight your commitment to sustainable and responsible travel practices, as eco-conscious travelers seek eco-friendly options.

The business of travel and tourism is a multifaceted realm that demands a relentless focus on customer satisfaction, innovation, and responsible practices.

Success in this sector requires a deep understanding of your niche, a commitment to service excellence, and strategic marketing efforts. As the travel industry continues to evolve, businesses that can adapt and offer unique, memorable experiences will undoubtedly thrive in this exciting and ever-changing market.

Key Players in the Travel and Tourism Industry

As we dive deeper into the business of travel and tourism, it's crucial to recognize the key players that shape this industry. These players, ranging from airlines to accommodation providers and travel agencies, contribute to the diverse ecosystem of travel and tourism.

Understanding their roles and significance is essential for anyone interested in this dynamic sector.

Airlines and Aviation

Airlines are the lifelines of global travel. They provide the means for travelers to reach their destinations quickly and efficiently. Here's an overview of their role in the industry:

• Passenger Transportation : Airlines transport millions of passengers daily, connecting cities and countries across the globe. They generate revenue through ticket sales, baggage fees, and in-flight services.
• Cargo Services : Airlines also play a pivotal role in transporting goods and cargo, contributing significantly to international trade and logistics.
• Global Networks : Major airlines operate extensive global networks, allowing travelers to reach virtually any corner of the world.

Hotel Chains and Accommodation Providers

The hospitality sector, including hotels, resorts, and vacation rentals, is another cornerstone of the travel and tourism industry. Here's how they contribute:

• Lodging : These businesses offer lodging options, from budget-friendly to luxury, catering to diverse traveler preferences.
• Dining and Services : Many hotels provide dining options, spa services, event hosting, and recreational facilities, enhancing the guest experience and generating additional revenue.
• Destination Attraction : Iconic hotels and resorts often become attractions in themselves, drawing travelers to specific destinations.

Tour Operators and Travel Agencies

Tour operators and travel agencies specialize in creating and selling travel packages and experiences. Their roles include:

• Curating Experiences : They design itineraries and packages that offer unique and immersive travel experiences, from adventure tours to cultural excursions.
• Booking and Logistics : These businesses handle the logistics of travel, including accommodations, transportation, and activities, streamlining the process for travelers.
• Expertise : Tour operators and travel agencies provide expert guidance, helping travelers navigate complex travel decisions.

Destination Management Companies

Destination management companies (DMCs) focus on specific regions or destinations. Their roles encompass:

• Local Expertise : DMCs have in-depth knowledge of their respective destinations, enabling them to offer specialized services and experiences.
• Customized Services : They work closely with travel planners and agencies to tailor experiences for groups and individuals.
• Sustainability : DMCs often play a vital role in promoting responsible tourism practices within their destinations.

Online Travel Agencies (OTAs)

Online travel agencies have become a dominant force in the industry, leveraging digital platforms to connect travelers with various travel services. Here's what they do:

• Aggregation : OTAs aggregate information from airlines, hotels, and other travel service providers, offering a wide array of choices to travelers.
• Booking Platforms : They provide convenient booking platforms, allowing travelers to book flights, accommodations, and more in one place.
• Reviews and Recommendations : OTAs often feature user reviews and recommendations, influencing traveler decisions.

Understanding the roles of these key players in the travel and tourism industry is essential for anyone considering entering this sector.

Each player contributes uniquely to the travel experience, from transportation to accommodation and beyond. Successful businesses often collaborate with multiple stakeholders to offer comprehensive and memorable travel experiences to their customers.

Travel and Tourism Post-COVID-19

The travel and tourism industry, like many others, faced unprecedented challenges during the COVID-19 pandemic. Lockdowns, travel restrictions, and health concerns brought international travel to a standstill. However, the industry has displayed remarkable resilience and adaptability.

Let's explore how the sector is recovering and adapting in a post-pandemic world.

Impact of the Pandemic on the Industry

• Travel Restrictions : Stringent travel restrictions, including border closures and quarantine requirements, severely impacted international travel. Airlines faced a sharp decline in passenger numbers.
• Hospitality Struggles : Hotels and accommodation providers experienced a dramatic drop in occupancy rates. Many temporarily closed or adapted to offer quarantine and isolation services.
• Cruise Industry Challenges : Cruise lines faced significant setbacks due to onboard outbreaks. The industry had to reimagine health and safety protocols.
• Shift to Domestic Travel : With international travel restrictions, many travelers turned to domestic and regional destinations, boosting local tourism.
• Digital Transformation : The pandemic accelerated the adoption of digital technologies for contactless bookings, health monitoring, and communication.

Recovery and Adaptation Strategies

The travel and tourism industry is rebounding, thanks to a combination of factors:

• Vaccination Campaigns : Widespread vaccination campaigns have increased traveler confidence, making international travel safer.
• Health and Safety Protocols : Airlines, hotels, and other businesses have implemented robust health and safety measures to reassure travelers.
• Flexible Booking Policies : Many travel companies introduced flexible booking and cancellation policies to accommodate changing travel plans.
• Sustainability Focus : There's a growing emphasis on sustainable and responsible tourism, with businesses integrating eco-friendly practices.
• Digitalization : The industry continues to embrace digital technologies, offering contactless experiences and personalized services.
• Collaboration : Stakeholders across the industry are collaborating to rebuild and promote destinations.

Future Outlook and Resilience

The travel and tourism industry is poised for recovery and growth in the coming years. Here's what the future may hold:

• Pent-Up Demand : Many travelers postponed their plans during the pandemic, leading to pent-up demand for leisure and business travel.
• Sustainable Travel : Sustainable and eco-conscious travel is gaining momentum. Travelers are increasingly choosing destinations and businesses committed to environmental responsibility.
• Tech Integration : Technology will continue to play a significant role, with advancements in AI, mobile apps, and data analytics enhancing the travel experience.
• Health and Safety : Health and safety measures will remain a priority, with businesses maintaining rigorous protocols.
• Remote Work and Travel : Remote work trends may encourage a blend of work and leisure travel, with more extended stays in diverse locations.
• Resilience Planning : The industry is developing resilience plans to better handle future crises and disruptions.

The travel and tourism industry's ability to adapt and innovate in the face of adversity demonstrates its resilience. As it recovers and evolves, it offers promising opportunities for businesses and travelers alike.

The key to success lies in embracing change, prioritizing safety, and delivering exceptional experiences that meet the evolving needs of travelers in a changing world.

Sustainable Tourism and Responsible Business Practices

In a world increasingly concerned about the environment and social responsibility, the travel and tourism industry is under scrutiny to adopt more sustainable and responsible practices.

Let's delve into the importance of sustainable tourism and how businesses can contribute to a greener and more ethical travel sector.

Environmental and Social Responsibility

• Reducing Carbon Footprint : The travel industry is a significant contributor to greenhouse gas emissions. Airlines, for example, are exploring biofuels and more fuel-efficient aircraft to reduce their carbon footprint.
• Preserving Natural Resources : Eco-conscious travelers seek destinations that protect and preserve natural resources. Businesses can contribute by implementing eco-friendly initiatives like energy-efficient facilities and waste reduction programs.
• Conservation Efforts : Supporting local conservation projects and wildlife protection initiatives can be a part of responsible tourism. This can involve financial contributions or active participation.
• Respecting Local Cultures : Responsible tourism respects and celebrates local cultures and traditions. It involves engaging with local communities in a respectful and sustainable manner.
• Community Involvement : Businesses can support the communities they operate in through job creation, fair wages, and community development projects.

Sustainable Tourism Certifications and Initiatives

• Eco-Certifications : Numerous certifications, such as EarthCheck and Green Key , help businesses showcase their commitment to sustainability. These certifications often involve rigorous audits of a company's environmental practices.
• Zero-Waste Initiatives : Some hotels and resorts aim to become zero-waste establishments, recycling and repurposing nearly all their waste.
• Wildlife Conservation : Tour operators and businesses can partner with wildlife conservation organizations to promote ethical wildlife experiences.
• Local Sourcing : Restaurants and hotels can prioritize local sourcing of food and materials, reducing transportation-related carbon emissions.
• Plastic Reduction : Many businesses are eliminating single-use plastics and opting for sustainable alternatives.

Benefits of Responsible Tourism for Businesses

• Competitive Advantage : Travelers increasingly seek sustainable and responsible options. Businesses that embrace these practices gain a competitive edge.
• Cost Savings : Sustainable practices often lead to cost savings through reduced energy and resource consumption.
• Enhanced Reputation : Businesses committed to responsible tourism build a positive reputation and attract like-minded customers.
• Legal Compliance : Adhering to eco-friendly and ethical standards ensures compliance with evolving environmental and social regulations.
• Long-Term Viability : By protecting the environment and supporting local communities, businesses contribute to the long-term viability of their destinations.
• Guest Satisfaction : Eco-conscious travelers appreciate businesses that share their values, leading to higher guest satisfaction and loyalty.

The travel and tourism sector's future hinges on sustainable and responsible practices. Businesses that prioritize environmental and social responsibility not only contribute to a healthier planet but also position themselves for long-term success in an industry undergoing profound changes.

As a business professional, understanding and adopting these practices can be a strategic advantage in a world where ethical considerations increasingly influence consumer choices.

Hostile Takeovers

In a hostile takeover, the acquiring company pursues the target company despite the target's resistance. Hostile takeovers often involve aggressive tactics, such as tender offers directly to shareholders or attempts to replace the target's board of directors.

Case Studies: Successful Businesses in Travel and Tourism

To gain deeper insights into the strategies and approaches that have propelled certain businesses to success in the travel and tourism sector, let's examine a few notable case studies.

These examples showcase how innovation, adaptability, and a customer-centric approach can make a significant impact in this dynamic industry.

Airbnb: Revolutionizing Accommodation

Airbnb, founded in 2008, has transformed the hospitality sector. This online marketplace connects travelers with unique accommodations offered by hosts worldwide. What sets Airbnb apart?

Key Success Factors:

• Platform Model : Airbnb operates as a platform, allowing hosts to list their properties and travelers to book them. This asset-light model means Airbnb doesn't own properties, reducing capital requirements.
• User Reviews : User-generated reviews and ratings build trust among users. Travelers can make informed choices based on the experiences of previous guests.
• Personalization : Airbnb's recommendation engine suggests accommodations based on user preferences, enhancing the customer experience.
• Diverse Offerings : From treehouses to castles, Airbnb offers a wide range of unique accommodations, appealing to travelers seeking authentic experiences.
• Host Community : Airbnb invests in building a strong host community, providing support and resources to hosts.

Cross-Border Mergers and Acquisitions: Global Expansion

Cross-border M&A transactions involve companies from different countries coming together. These deals offer opportunities for global expansion but also present unique challenges.

Booking.com: Data-Driven Booking

Booking.com, founded in 1996, is a global online travel agency. It leverages technology and data to simplify travel booking.

• Vast Inventory : Booking.com offers a wide range of accommodation options, from hotels to vacation rentals. This extensive inventory caters to diverse traveler preferences.
• User Experience : The platform's user-friendly interface and transparent booking process contribute to its popularity.
• Data Analytics : Booking.com uses data analytics to understand traveler behavior, enabling personalized recommendations and pricing strategies.
• Global Reach : With a presence in over 220 countries and territories, Booking.com serves a global audience.
• Instant Confirmation : Providing real-time booking confirmation enhances the customer experience.

Delta Air Lines: Customer-Centric Air Travel

Delta Air Lines, a major U.S. carrier founded in 1924, is known for its customer-centric approach.

• Reliability : Delta prioritizes operational reliability, minimizing flight cancellations and delays.
• Fleet Upgrades : Investing in a modern and efficient fleet enhances the passenger experience and reduces operating costs.
• Customer Service : Delta emphasizes excellent customer service, and its efforts are reflected in high customer satisfaction ratings.
• Global Alliances : Participation in global airline alliances expands route networks and offers travelers more choices.
• Innovation : Delta embraces innovation, introducing features like biometric boarding and in-flight entertainment options.

These case studies highlight the diverse strategies and approaches that have driven success in the travel and tourism sector. From disruptive online marketplaces to data-driven booking platforms and customer-centric airlines, businesses that prioritize innovation, customer experience, and adaptability are well-positioned for growth.

By studying these examples, business professionals can gain valuable insights into the industry's evolving landscape and identify opportunities to innovate and excel in their own travel and tourism endeavors.

Lessons Learned from Industry Leaders

The travel and tourism sector offers a treasure trove of lessons for business professionals across various industries. Let's distill some key takeaways from the successes and innovations of industry leaders:

1. Customer-Centricity Is Paramount

Whether you're running an airline, hotel, or travel agency, prioritizing the customer experience is non-negotiable. Happy and satisfied customers become loyal patrons and brand advocates. Invest in personalized services, efficient booking processes, and responsive customer support.

2. Embrace Technology and Data

Technology is a game-changer in the travel industry. From data analytics that inform pricing strategies to mobile apps that enhance on-the-go experiences, leveraging technology can set your business apart. Be open to adopting new tools and systems that improve efficiency and customer satisfaction.

3. Diversity and Choice Matter

Offering a diverse range of products or services can attract a broader audience. In the travel sector, this means providing various accommodation types, transportation options, and tour packages. Embrace diversity to meet the unique preferences of your customers.

4. Transparency Builds Trust

Transparency in pricing, policies, and terms and conditions builds trust with customers. Hidden fees and ambiguous policies can lead to dissatisfaction. Clear communication and honesty go a long way in establishing credibility.

5. Sustainability Is the Future

Sustainability and responsible tourism are becoming central to the industry's ethos. Travelers are increasingly conscious of their environmental impact. Consider eco-friendly practices and promote responsible tourism. It's not only good for the planet but also a selling point for your business.

6. Innovate or Stagnate

Innovation is the lifeblood of the travel and tourism sector. Whether it's introducing new services, improving efficiency, or enhancing the customer journey, staying ahead requires a commitment to innovation. Monitor industry trends and be open to creative solutions.

7. Globalization Expands Reach

Participating in global networks and alliances can expand your business's reach. Collaborate with international partners to offer customers a wider range of options. Globalization also provides resilience in the face of economic fluctuations.

8. Resilience Is Crucial

The industry has weathered numerous storms, from economic crises to health emergencies. Building resilience into your business plans, such as having contingency measures for crises, is essential. Flexibility and adaptability are key.

9. Community and Culture Matter

Embrace the culture and communities where your business operates. Engage with local communities, respect their traditions, and contribute positively. This fosters goodwill and can lead to meaningful partnerships.

10. Continuous Learning Is a Competitive Advantage

The travel and tourism sector is ever-evolving. Continuous learning and staying informed about industry trends and regulations are essential. Attend conferences, workshops, and industry events to network and gain insights.

Incorporating these lessons into your business strategy can set you on a path to success in the dynamic and rewarding world of travel and tourism. By combining innovation, customer focus, and a commitment to sustainability, you can thrive in an industry that promises new horizons and unforgettable experiences for travelers worldwide.

The travel and tourism sector represents a dynamic and resilient industry with a significant impact on the global economy. As a business professional, understanding the nuances and opportunities within this sector is paramount. In this comprehensive guide, we've explored the multifaceted world of travel and tourism, delving into its significance, components, trends, and challenges.

We've seen how the industry intersects with business, offering a wide array of opportunities for entrepreneurs and established enterprises alike. Whether you're considering venturing into travel-related ventures or seeking to enhance an existing business through tourism, the sector holds immense potential.

Key takeaways from this exploration include:

• The Economic Powerhouse : Travel and tourism contribute significantly to GDP, job creation, and foreign exchange earnings in many countries. This sector's resilience is evident through its ability to rebound from crises.
• Diverse Components : The industry encompasses hospitality, transportation, attractions, travel services, and more, creating a rich tapestry of business opportunities.
• Trends and Challenges : Emerging trends like sustainable tourism and digital transformation offer avenues for innovation. Yet, challenges such as health concerns and environmental responsibility must be addressed.
• The Business of Tourism : Customer-centricity, technology adoption, transparency, and sustainability are vital principles for success in this sector.
• Key Players : Airlines, hotel chains, tour operators, and online travel agencies are among the key players shaping the industry's landscape.
• Post-COVID-19 Era : The pandemic prompted significant shifts in travel behavior. Recovery strategies and adaptability are critical for businesses in the post-COVID-19 world.
• Sustainable Tourism : Responsible practices not only benefit the environment but also appeal to conscious travelers and can drive business success.
• Lessons from Industry Leaders : Customer-centricity, innovation, transparency, and resilience are valuable takeaways from successful travel and tourism businesses.

As the world evolves, so do the travel and tourism opportunities. By staying informed, embracing innovation, and aligning with sustainability, you can position your business for success in an industry that promises both profitability and the chance to create unforgettable experiences for travelers around the globe.

Now, armed with insights from this guide, you're better equipped to navigate the exciting and ever-changing world of travel and tourism, contributing to its growth and shaping its future. Bon voyage!

• United Nations World Tourism Organization (UNWTO). (2022). Tourism Highlights 2022 Edition. Link
• World Travel & Tourism Council (WTTC). (2022). Economic Impact Reports. Link
• International Air Transport Association (IATA). (2022). IATA Economics. Link
• Deloitte. (2022). Travel, Hospitality, and Leisure Reports. Link
• Statista. (2022). Statistics and Market Data on Travel and Tourism. Link
• McKinsey & Company. (2022). Travel, Logistics & Transport Infrastructure. Link
• Booking.com. (2023). Link
• TripAdvisor. (2023). GreenLeaders. Link
• The New York Times. (2023). Travel and Tourism. Link
• National Geographic. (2023). Sustainable Travel. Link
• The World Bank. (2023). Tourism. Link
• World Tourism Organization (2022). Global Code of Ethics for Tourism. Link

Tumisang Bogwasi

2X Award-Winning Entrepreneur | Empowering Brands to Generate Leads, Grow Revenue with Business Strategy and Digital Marketing | Founder, CEO of Fine Group

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Being a travel agent isn't your only career option when looking to change into the travel industry.

There are loads more career paths out there for you to choose! From managing a travel agency to writing about your travel experiences; we've got the 12 most popular travel industry roles (in no particular order), starting with...

1. A Flight Attendant

Also know as cabin crew, stewards, air hosts or cabin attendants. Employed by airlines as part of the aircrew to ensure the safety and comfort of passengers onboard commercial flights.

2. Airport Check-In Officer

Airlines employ check-in officers to assist passengers. They organise the boarding pass, check baggage and select or confirm the seating on the aircraft.

3. Wholesale Consultant

A wholesale consultant is the middle man between travel agents and wholesale providers, like Infinity Holidays. When a customer enters a retail store, they may ask the travel agent for a unique holiday package that does not exist. A wholesale consultant is then responsible for creating this unique holiday package and sending it back to the travel agent, who then shares it with the client and books it in!

4. Cruise Consultant

A cruise consultant is known to be a specialist when it comes to cruising. They help book dream cruising holidays for the everyday cruise travel-lover.

5. Ticketing Agent

A Ticketing Agent is someone with high attention to detail. They are responsible for manually issuing tickets and making ticket reservations between airlines and travel agencies.  

6. Training

Trainers in the travel industry have a wealth of previous industry experience —  they need to know the ins-and-outs of all aspects of the travel industry before they can teach the ins-and-outs!

7. Recruitment

Working in recruitment within the travel industry means that you are a specialist in recruiting candidates for roles within the industry; like some of these! The selection criteria will be different to other industries.

8. Travel Agent

A travel agent, or what we call a travel consultant, assists clients by making travel arrangements for business or holiday purposes. Read this blog to see what a day in the life of a travel agent entails...

9. Team Leaders

Head up a team of travel agents in a Team Leader role for a travel agency. A Team Leader is required to drive the performance and ensure their employees are meeting their KPIs for business success. Without Team Leaders, travel agencies would not be as successful!

10. Tour Guide

A tour guide is a clients best friend. They help make their travel dreams a reality by exploring iconic landmarks, telling the history of different destinations and introducing them to new cultures.

11. Travel Writer

A career as a travel writer is exactly as you see it; you travel and you write. Write about the places you have visited and the experiences you have had while travelling and publish your work on blogs or sell your pieces to different publications.

12. Travel Blogger 

Similar to a travel writer, a travel blogger travels and writes, but only publishes their work on blogs. 

So now you've seen the 12 most popular travel career options! Which one will you choose?

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Horizontal and vertical integration: Made easy

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Horizontal and vertical integration are important concepts in all businesses, including those operating in the tourism industry.

An important management strategy, horizontal and vertical integration allows companies to be more competitive in the marketplace. But how does this actually work?

In this article I will teach you what horizontal and vertical integration is, discussing the advantages and disadvantages of both. I will also explain why such integration has happened/is happening and I will give you some examples of horizontal and vertical integration.

What is horizontal integration?

Advantages of horizontal integration, disadvantages of horizontal integration, horizontal integration in tourism examples, what is vertical integration, advantages of vertical integration, disadvantages of vertical integration, vertical integration in tourism examples, why has horizontal and vertical integration happened, horizontal and vertical integration: to conclude, further reading.

Horizontal integration is a competitive strategy that companies use. It refers to the acquisition of business activities that are at the same level of the chain of distribution in similar or different industries.

To put it simply, horizontal integration is when a related business merges with another business operating in the same level of the production chain. For example, a ski-based tour operator may merge with a tour operator which specialises in summer sun holidays.

These are different organisations, which operate at the same level.

There are many reasons that a company in the tourism industry may choose to integrate horizontally, such as:

• When the industry is growing
• When merges allows better value for money to be achieved
• When competitors lack expertise
• When the company can manage the operations of the bigger organisation efficiently, after the integration

Horizontal integration can be advantageous because it can enable economies of scale to be achieved (i.e. they can get better value for money). The bigger, horizontally integrated company can often achieve a higher production than the companies merged, at a lower cost.

Mergers help to provide organisations with increased power in the marketplace, whilst enabling the organisation with the opportunity to capture new markets. The company becomes larger, has a bigger marketshare and has less competition.

Horizontal integration can also allow organisations to penetrate new markets in different geographical areas. This is particularly relevant in travel and tourism , where operations occur around the globe.

Whilst there are benefits of horizontal integration, however, there are also disadvantages.

Organisations often encounter problems when they grow. Allowances need to be put in place for restructures and recruitment of new staff where appropriate.

There are also legal implication when merging companies. These differ in different countries. It is important that the organisation looks into any legal requirements that will be expected of them.

The decision whether to adopt vertical or horizontal integration has a long-term effect on the business strategy of a company and therefore the decision to do so must not be taken lightly.

Travelopia is a great example of a tourism organisation with lots of horizontal integration.

Travelopia is the world’s largest collection of specialist travel brands. This means that the organisation can offer a variety of products, which are at the same level in chain of distribution. So, whilst Aus Travel and American Holidays may be totally different companies, they are both at the same level (tour operators) under the Travelopia umbrella.

Another good example of horizontal integration in travel and tourism is the Virgin Group.

The Virgin Group have owned many different companies throughout the years and some have been more successful than others.

A good example of horizontal integration within Virgin Atlantic is their airlines based in different parts of the world. Virgin Atlantic is based in the UK, Virgin Australia is based in Australia and Virgin America (which ceased to continue after 2018) was based in the USA. All of these companies are/were at the same level of the distribution chain, but are/were different companies.

You can learn more about the Virgin brand here .

Vertical integration is the opposite of horizontal integration.

Vertical integration is a competitive strategy identified when a company takes over one or more other companies that are at different levels in the chain of distribution.

Many companies choose to opt for integration to allow for total control of all aspects of their business. This may include the manufacturing of their products right through to sales, for example.

There are several benefits of vertical integration in travel and tourism.

By maintaining control of the supply chain, organisations have greater control. They can regulate and manage all aspects.

For example, Tui holidays puts together their holidays via their tour operations and then sells them via their travel agents. They then put tourists on aircraft that are owned by TUI and tourists are greeted in their destination by TUI representatives- this demonstrates a smooth and consistent process throughout, where all aspects are owned and managed by TUI.

Vertical integration allows more scope for the highs and lows of business and enables the organisation to diversify their income. If one part of the business isn’t doing so well, there is the hope that the other areas of the business can compensate for this or to help absorb the loss. Likewise, if one area is doing particularly well, the money made from this can be invested in any areas of the business that require investment.

Vertical integration can also increase barriers for new entrants and help to reduce competition.

There are also some downsides of vertical integration.

Less competition means that prices may rise for consumers and that standards may drop.

The organisation may also have less flexibility as they must maintain a level of production in order to continue operations.

It can also be difficult for an organisation to be good at everything. Sometimes an organisation can do one thing particularly well, but then other areas may not have the same high standards (i.e. they may be great at making delicious sandwiches but not so great at offering customer service at the dining table).

Read also: – International tourism: What, where and why – Components of tourism: Structure of the tourism industry – The history of tourism – The Importance of tourism | Understanding the tourism industry – What is ABTA and how does it work?

TUI is one of the biggest travel companies in the world. Since the collapse of Thomas Cook, TUI has a monopoly of tour operator operations within the United Kingdom and other parts of the world.

You can learn more about the organisation TUI and its different branches here .

Within the umbrella organisation, TUI owns many different companies. Some are at the same level (horizontal integration) and other are at different levels (vertical integration).

As I described earlier, TUI has many companies that are at different levels of the chain of distribution. This includes their tour operations, travel agents, airline and in-destination services.

Disney is another organisation that has a history of both horizontal and vertical integration. You can learn all about this in the video below.

Horizontal and vertical integration has happened throughout all sorts of business around the world, including travel and tourism.

One reason for this is because the suppliers who work with companies or the distributors who work with the end product are unreliable. Therefore some organisations see it as easier to simply do these things themselves.

Money is also an important factor. Working with outside companies can often be more costly than doing it yourself. Suppliers and distributors may have big profit margins and this is money than can be saved of organisations take over these operations themselves.

Some companies simply have enough resource for horizontal and vertical integration to occur so… why not?

And lastly, when a specific industry grows considerably, as the travel industry did for many years prior to COVID-19, then there is more scope for organisations to expand through horizontal and vertical integration.

As you can see, horizontal and vertical integration is a competition strategy often used in business. Whether a company seeks to merge with other companies at the same (horizontal) level or at different (vertical) levels, there are many advantages both to the consumer and to the organisation itself. There are, however, also some disadvantages that need to be managed also.

If you’re studying travel and tourism then I highly recommend the following texts to support your learning:

• An Introduction to Tourism : a comprehensive and authoritative introduction to all facets of tourism including: the history of tourism; factors influencing the tourism industry; tourism in developing countries; sustainable tourism; forecasting future trends.
• The Business of Tourism Management : an introduction to key aspects of tourism, and to the practice of managing a tourism business.
• Tourism Management: An Introduction : gives its reader a strong understanding of the dimensions of tourism, the industries of which it is comprised, the issues that affect its success, and the management of its impact on destination economies, environments and communities.

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Sustainable Tourism Practices and Destinations: Examples from Around the World

Sustainable Tourism Practices: Sustainable tourism is a growing trend in the travel industry that focuses on minimizing the environmental and social impact of tourism while providing economic benefits to local communities. From eco-friendly accommodations to responsible travel practices, there are many ways that tourism can be made more sustainable. Around the world, destinations and businesses are implementing sustainable tourismthat support conservation, reduce carbon emissions, and promote local cultural heritage. These efforts not only benefit the planet, but also provide a unique and authentic travel experience for visitors. In this context, we will explore some of the sustainable tourism and destinations from around the world that are leading the way in promoting responsible and ethical tourism.

Here are 40 examples of sustainable tourism and destinations from around the world:

• The Galapagos Islands, Ecuador – A protected wildlife sanctuary that limits visitor numbers to prevent environmental damage and promote sustainable tourism.
• Costa Rica – A country that has made a strong commitment to sustainable tourism, with a focus on eco-tourism, community-based tourism, and conservation efforts.
• Bhutan – A country that measures its economic success through a Gross National Happiness index, which includes the protection of the environment and cultural heritage.
• Norway – A country that is known for its sustainable tourism, including eco-friendly transportation, green energy, and sustainable tourism certification programs.
• The Netherlands – A country that is promoting sustainable tourism through initiatives such as green hotels, bike-friendly cities, and nature conservation programs.
• New Zealand – A country that has a strong focus on sustainable tourism, including eco-tourism, conservation efforts, and responsible travel practices.
• The Amazon Rainforest, Brazil – A region that has adopted sustainable tourism to promote conservation and support local communities.
• The Great Barrier Reef, Australia – A protected marine park that promotes sustainable tourism, such as reducing carbon emissions and protecting the natural environment.
• Kenya – A country that has implemented sustainable tourism, including wildlife conservation, community-based tourism, and eco-friendly lodges.
• Iceland – A country that is promoting sustainable tourism through eco-friendly transportation, renewable energy, and eco-certification programs.
• South Africa – A country that is known for its conservation efforts, including wildlife protection and community-based tourism.
• The Azores, Portugal – A group of islands that is promoting sustainable tourism through eco-tourism, whale watching, and nature conservation programs.
• The Serengeti, Tanzania – A protected wildlife sanctuary that promotes responsible tourism practices, such as reducing carbon emissions and supporting local communities.
• The Cook Islands, Pacific Ocean – A group of islands that is committed to sustainable tourism, including protecting the environment and supporting local communities.
• Thailand – A country that has implemented sustainable practices, including community-based tourism, wildlife conservation, and responsible travel.
• The Faroe Islands, Denmark – A group of islands that is promoting sustainable tourism through eco-friendly transportation, sustainable seafood, and nature conservation programs.
• The Lake District, England – A protected national park that promotes sustainable tourism, such as reducing carbon emissions and supporting local communities.
• The Annapurna Region, Nepal – A region that is promoting sustainable tourism through community-based tourism, conservation efforts, and responsible trekking practices.
• The Maasai Mara, Kenya – A protected wildlife reserve that promotes sustainable practices, such as reducing carbon emissions and supporting local communities.
• The Blue Mountains, Australia – A protected national park that promotes sustainable tourism practices, such as reducing carbon emissions and supporting local communities.
• Guna Yala, Panama – A protected indigenous territory that promotes sustainable tourism, such as supporting traditional livelihoods and preserving cultural heritage.
• The Isle of Eigg, Scotland – An island that is promoting sustainable tourism through renewable energy, eco-friendly accommodations, and community-based tourism initiatives.
• The San Blas Islands, Panama – A group of islands that is promoting sustainable tourism through eco-tourism, community-based tourism, and responsible travel practices.
• The Burren, Ireland – A protected national park that promotes sustainable practices, such as reducing carbon emissions and supporting local communities.
• The Bay of Fundy, Canada – A protected marine park that promotes sustainable tourism practices, such as reducing carbon emissions and supporting local communities.
• The Lofoten Islands, Norway – An archipelago that is promoting sustainable tourism through eco-friendly transportation, responsible fishing, and community-based tourism initiatives.
• The Tongariro National Park, New Zealand – A protected national park that promotes sustainable tourism, such as reducing carbon emissions and supporting local communities.
• The Danube Delta, Romania – A protected wetland that promotes sustainable tourism practices, such as eco-tourism and responsible travel practices.
• The Douro Valley, Portugal – A region that is promoting sustainable tourism through eco-tourism, responsible wine tourism, and community-based tourism initiatives.
• The Lake Titicaca, Peru/Bolivia – A protected lake that promotes sustainable tourism, such as preserving cultural heritage and supporting traditional livelihoods.
• The Everglades, United States – A protected wetland that promotes sustainable tourism, such as reducing carbon emissions and supporting local communities.
• The Cinque Terre, Italy – A protected coastal area that promotes sustainable tourism practices, such as reducing carbon emissions and supporting local communities.
• The Mekong Delta, Vietnam – A region that is promoting sustainable tourism through eco-tourism, responsible travel practices, and community-based tourism initiatives.
• The Lake District, Chile – A protected national park that promotes sustainable tourism practices, such as reducing carbon emissions and supporting local communities.
• The Sinharaja Forest Reserve , Sri Lanka – A protected rainforest that promotes sustainable tourism, such as eco-tourism and responsible travel practices.
• The Jasper National Park, Canada – A protected national park that promotes sustainable tourism practices, such as reducing carbon emissions and supporting local communities.
• The Arctic, various countries – A region that is promoting sustainable tourism through eco-tourism, responsible travel practices, and nature conservation programs.
• The Torres del Paine National Park, Chile – A protected national park that promotes sustainable tourism, such as reducing carbon emissions and supporting local communities.
• The Sagarmatha National Park, Nepal – A protected national park that promotes sustainable tourism practices, such as eco-tourism and responsible trekking practices.
• The Monteverde Cloud Forest Reserve, Costa Rica – A protected cloud forest that promotes sustainable tourism practices, such as eco-tourism and nature conservation programs.

These are just a few more examples of the many destinations and businesses around the world that are adopting sustainable tourism. With a growing focus on responsible and ethical tourism, sustainable tourism is becoming an increasingly important industry worldwide.

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Frequently Asked Questions About Sustainable Tourism Practices

What is sustainable tourism?

Sustainable tourism is a form of tourism that focuses on minimizing the environmental and social impact of travel while providing economic benefits to local communities.

What are some sustainable tourism practices?

Some sustainable tourism practices include supporting conservation efforts, reducing carbon emissions, promoting local cultural heritage, and supporting local communities through community-based tourism initiatives.

Why is sustainable tourism important?

Sustainable tourism is important because it helps to preserve natural and cultural resources, provides economic benefits to local communities, and promotes responsible and ethical travel practices.

How can travelers practice sustainable tourism?

Travelers can practice sustainable tourism by supporting eco-friendly accommodations, engaging in responsible travel practices, supporting local communities, and minimizing their carbon footprint.

What are some examples of sustainable tourism destinations?

Some examples of sustainable tourism destinations include national parks, protected areas, eco-tourism lodges, and community-based tourism initiatives.

How can tourism businesses implement sustainable tourism practices?

Tourism businesses can implement sustainable practices by reducing their carbon emissions, supporting local communities, promoting conservation efforts, and adopting eco-friendly practices.

What is community-based tourism?

Community-based tourism is a form of tourism that involves local communities in the tourism industry, providing economic benefits while preserving local culture and traditions.

What is responsible tourism?

Responsible tourism is a form of tourism that focuses on minimizing the environmental and social impact of travel while providing economic benefits to local communities and promoting cultural awareness.

What is the difference between sustainable tourism and ecotourism?

Sustainable tourism is a broader concept that encompasses all forms of tourism that are socially, economically, and environmentally responsible, while ecotourism is a specific form of tourism that focuses on nature-based experiences that support conservation efforts.

How does sustainable tourism benefit local communities?

Sustainable tourism benefits local communities by providing economic benefits through job creation and supporting local businesses, while also preserving cultural heritage and traditions.

How can tourists ensure they are practicing sustainable tourism?

Tourists can ensure they are practicing sustainable tourism by choosing eco-friendly accommodations, engaging in responsible travel practices, supporting local communities, and minimizing their carbon footprint.

What role do governments play in promoting sustainable tourism?

Governments play an important role in promoting sustainable tourism by establishing policies and regulations that support conservation efforts, promoting sustainable practices, and providing funding for sustainable tourism initiatives.

What are some challenges to implementing sustainable tourism practices?

Some challenges to implementing sustainable tourism practices include the high cost of implementing eco-friendly practices, lack of awareness among tourists, and limited resources in developing countries.

What is the role of tourism businesses in promoting sustainable tourism?

Tourism businesses play a critical role in promoting sustainable tourism by adopting eco-friendly practices, supporting conservation efforts, and engaging with local communities to ensure their economic benefits are sustainable.

What is the impact of sustainable tourism on the environment?

Sustainable tourism aims to minimize the impact of tourism on the environment by reducing carbon emissions, supporting conservation efforts, and promoting eco-friendly practices. This can have a positive impact on the environment by preserving natural resources and reducing pollution.

What is the role of tourists in promoting sustainable tourism?

Tourists have a crucial role to play in promoting sustainable tourism by supporting eco-friendly accommodations, engaging in responsible travel practices, supporting local communities, and minimizing their carbon footprint.

What is the role of local communities in sustainable tourism?

Local communities play a vital role in sustainable tourism by providing unique cultural experiences, supporting conservation efforts, and benefitting from the economic opportunities that tourism can bring. Sustainable tourism initiatives often involve working with local communities to ensure their voices are heard and their needs are met.

How can sustainable tourism help preserve cultural heritage?

Sustainable tourism can help preserve cultural heritage by supporting local cultural practices and traditions, promoting cultural awareness, and providing economic benefits to local communities. In doing so, it helps to maintain and celebrate cultural diversity and promote the value of cultural heritage.

What is the impact of sustainable tourism on the economy?

Sustainable tourism can have a positive impact on the economy by providing job opportunities, supporting local businesses, and promoting economic growth in tourism-dependent communities. It can also encourage investment in infrastructure and services, leading to long-term economic benefits.

What is the role of education in promoting sustainable tourism?

Education plays a critical role in promoting sustainable tourism by raising awareness among tourists, tourism businesses, and local communities. It can help to promote best practices, encourage responsible travel behavior, and foster a culture of sustainability.

How can technology be used to promote sustainable tourism?

Technology can be used to promote sustainable tourism by supporting digital platforms that provide information and resources for sustainable travel, reducing the need for paper-based materials and promoting more efficient and eco-friendly travel methods.

What is the role of sustainable tourism in climate change mitigation?

Sustainable tourism can contribute to climate change mitigation by promoting low-carbon travel options, reducing carbon emissions, and supporting conservation efforts that help to mitigate the impact of climate change on natural resources.

How can sustainable tourism be measured?

Sustainable tourism can be measured using a range of indicators, such as carbon emissions, waste reduction, water conservation, and economic impact. There are also several certification programs and sustainability standards that can be used to assess the sustainability of tourism businesses and destinations.

How can travelers support sustainable tourism initiatives?

Travelers can support sustainable tourism initiatives by choosing eco-friendly accommodations, engaging in responsible travel practices, supporting local communities, and minimizing their carbon footprint. They can also seek out sustainable tourism certification programs and support businesses that are committed to sustainable tourism practices.

• Carbon emissions
• community-based tourism
• conservation
• Cultural Heritage
• Eco-friendly travel
• ethical tourism
• Local Communities
• Responsible Tourism

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How United Airlines uses AI to make flying the friendly skies a bit easier

From chatbots to pilot announcements, ai is starting to gain traction.

When you board a United Airlines plane, the gate agents, flight attendants and others involved in making sure your plane leaves on time are in a chatroom coordinating a lot of the work that you, as a passenger, will hopefully never notice. Is there still space for carry-on bags? Did the caterer bring the missing orange juice? Is there a way to seat a family together?

When a flight is delayed, a message with an explanation will arrive by text and in the United app. Most of the time, that message is generated by AI. Meanwhile, in offices around the world, dispatchers are looking at this real-time data to ensure that the crew can still legally fly the plane without running afoul of FAA regulations. And only a few weeks ago, United turned on its AI customer service chatbot.

Jason Birnbaum, who became United’s CIO in 2022, manages a team of over 1,500 employees and about 2,000 contractors who are responsible for all of the tech that makes this happen.

“What I love about our business is also what you hate about the business,” he told me in a recent interview. “I was at GE for many years in the appliance business; we could go down for a day, I don’t think anyone would notice. They’d be: ‘All right, the dishwashers aren’t rolling off the line.’ But it wasn’t newsworthy. Now if something happens, even for 15 minutes, not only is it all over social media but the news trucks head out to the airport.”

Before joining United, Birnbaum spent 16 years at GE, moving up the ladder from technology manager to becoming the CIO of GE Consumer and Industrial, based in Budapest. In 2009, he became the CI of GE Healthcare Global Supply Chain. He joined United in 2015 as its SVP of Digital Technology, where he was responsible for launching projects like ConnectionSaver, one of United’s first AI/ML-based services that will proactively hold flights when fliers have tight connections (and that saved me from spending 12 hours at SFO last week).

I wanted to talk to Birnbaum about how he — and other CIOs at global enterprises — are thinking about the use of AI. That’s one area of innovation the airline is looking at. But before we could talk about AI, United is also still in the process of moving services into the cloud. If there’s one trend in cloud computing right now, it’s that everybody is trying to optimize their cloud infrastructure and spend less.

United Continental Airlines YR202 3490 (CAL) 737-800 BSI interior.  Image Credits:  United

“I’m starting to see these companies and startups that are, ‘How do you optimize your cloud, and how do you manage your cloud?’ There’s a lot of people focused on questions like, ‘You’ve got a lot of data, can I store it better for you?’ Or, ‘You’ve got a lot of new applications; can I help you monitor them better?’ Because all the tools you used to have don’t work anymore,” he said. Maybe the age of digital transformation is over, he said, and we’re now in the age of cloud optimization.

United itself has bet heavily on the cloud, specifically AWS as its preferred cloud provider . Unsurprisingly, United, too, is looking at how the company can optimize its cloud usage, from both a cost and reliability perspective. Like for so many companies that are going through this process, that also means looking at developer productivity and adding automation and DevOps practices into the mix. “We’re there. We have an established presence [in the cloud], but now we’re kind of in the market to try to continue to optimize as well,” Birnbaum said.

But that also comes back to reliability. Like all airlines, United still operates a lot of legacy systems — and they still work. “Frankly, we are extra careful as we move through this journey, to make sure we don’t disrupt the operation or create self-inflicted wounds,” he said.

United has already moved and turned off a lot of legacy systems, and that process is ongoing. Later this year, for example, the company will turn off a large Unisys-based system. But Birnbaum also thinks that United will continue to have on-prem systems. “I just want to be in the best places for the applications and for the user experience,” he said, whether that’s for performance, privacy or security reasons.

The one thing the company is not trying to build, though, is some kind of overarching United Platform that will run all of its systems. But there’s too much complexity in the day-to-day airline operations to do that, Birnbaum said. Some platforms manage reservations, ticketing and bag tracking, for example, while others handle crew assignments.

A worker in the United Airlines Station Operation Center at Newark Liberty International Airport in Newark, New Jersey. Image Credits:  Angus Mordant/Bloomberg via Getty Images

When something goes wrong, those systems have to work together and in near real time. That’s also why United is betting on one cloud provider. “I don’t imagine we’ll have one platform,” Birnbaum said. “I think we’re going to get really good at connecting things and getting applications to talk to each other.”

In practice, that means that today it’s possible for the team to see when the caterer got off the plane and who has checked in for the flight, for example. And the ground teams and flight attendant crews can see all of that through their internal chat app, too.

Every flight has an AI story

While all of this work is still going on, United is also looking at how it can best leverage AI.

One story I regularly hear about AI/ML in large enterprises is that ChatGPT didn’t necessarily change how the technologists thought about it, but that it suddenly became a boardroom discussion. That also holds true for United.

“We had a pretty mature AI practice,” Birnbaum said when I asked him when he realized that generative AI was something the team had to pay attention to. “We built a lot of capabilities to manage models, to do tuning and all that. So the good news for us was that we had already made a pretty big investment in this capability. What changed [when ChatGPT arrived] was not that we had to take it seriously. It was who was asking about it: When the CEO and the board suddenly are saying: ‘Hey, I need to know more about this.'”

United is quite bullish on AI, Birnbaum said. “I think the travel industry has so many different examples of where AI can be used both for the customer and for the employees.” One of those is United’s “Every flight has a story.”

Not that long ago, it was rather typical to get a notification when a flight was delayed, but no further information about it. Maybe the incoming flight was delayed. Maybe there was a maintenance issue. A few years ago, United started using agents to write short notices that explained the delay and sent those out through its app and as text messages. Now, pulling in data from its chat app and other sources, the vast majority of these messages are written by AI.

Similarly, United is looking at also using generative AI to summarize flight information for its operations teams, so they can get a quick overview of what’s happening.

A United Airlines flight information board. Image Credits: Jim Vondruska/Getty Images

Just a few weeks ago, United fully moved its chat system on United.com to an AI agent, too. In my own tests, that system still felt quite limited, but it’s only a start, Birnbaum said.

Famously, Air Canada once used an AI bot that sometimes gave wrong answers , but Birnbaum said he wasn’t too worried about that. From a technical perspective, the bot draws upon United’s knowledge base, which should keep hallucinations under control. “But to me [the Air Canada incident] wasn’t a technology failure, that was a customer service failure because — and I won’t comment too much — but I would say that, today, our human agents give wrong answers, too. We just have to deal with that and move on. I think we’re very prepared for that situation,” Birnbaum said.

Later this year, United also plans to launch a tool that is currently called “Get Me Close.” Often, when there’s a delay, customers are willing to change their plans to switch to a nearby airport. I once had United switch me to a flight to Amsterdam when my flight to Berlin got canceled (not that close, but close enough to get a train and still moderate a keynote session the next morning).

“While our mobile tools are great — and they are excellent — when people go talk to humans, the interactions are usually more about building optionality. Meaning you’re going to say, ‘Well, your flight’s delayed’ and then someone might say, ‘Well could you get me to Philadelphia instead of New York? Could you get me close? We believe that interaction is a great use case for AI.”

AI for pilots?

After creating the system that automatically writes the delay “stories” in the app, Birnbaum’s team is now thinking about where it can use the same generative AI technology. One area: those short briefings pilots usually give before takeoff.

“A pilot actually came up to me and said, ‘One of the things that some pilots are great at is getting on that speaker and saying, “Hey, welcome, everybody going to Las Vegas, blah blah.”’ And he said, ‘Some pilots are introverted; could you have an AI engine that helps me generate an announcement on the plane about where I’m going so that I could give a really good announcement about what’s happening?’ And I thought that was a great use case.”

As it turns out, one of the main drivers of customer satisfaction for airlines is actually pilot interaction. A few years ago, United started focusing on its Net Promotor score and asked pilots to make announcements about delays while standing at the front of the cabin, for example. It makes sense for the airline to look at how it can improve upon such a crucial interaction — while hopefully still allowing for pilots to go off-script, too.

Another area where generative AI may help pilots is in summarizing complex technical documents. But as Birnbaum rightly noted, everything that involves the pilot flying the plane is heavily structured and regulated, so it’ll be a while before the airline will launch anything there.