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2023, A year in review for travel industry

Sunday, December 31, 2023 Favorite

In 2023, the travel industry navigated a tumultuous yet transformative path. Gradual recovery post-pandemic saw increased travel, though sporadic COVID variants caused setbacks. Sustainable travel surged, tech-driven experiences boomed, and destinations adapted to evolving norms, fostering resilience and innovation amid ongoing global uncertainties.

Sustainable Aviation Fuel , a new alternative

The sharp rise in Sustainable Aviation Fuel (SAF) marks a pivotal leap in aviation technology , addressing environmental concerns. As demand intensifies, advancements in production methods and partnerships accelerate, offering a greener alternative to traditional jet fuels. S ustainable Aviation Fuel (SAF) reduces carbon emissions , mitigating aviation’s environmental impact. Industry-wide commitments drive innovation, pushing for widespread adoption and investment in sustainable practices. This surge in Sustainable Aviation Fuel (SAF) propels aviation toward a more eco-conscious future, fostering a pivotal shift towards carbon-neutral flight operations, aligning with global sustainability goals while revolutionizing aviation technology.

Cruise tourism revival in 2023

After a turbulent hiatus in pandemic years, c ruise tourism emerges revitalized in the travel industry this year. Stringent safety measures, vaccination mandates, and innovative health protocols have restored traveler confidence. Enhanced sanitation practices and adaptable itineraries promise secure and flexible voyages . The industry’s resilience fosters a renaissance, with renewed enthusiasm for oceanic adventures. Cruise lines ‘ commitment to guest safety redefines the travel experience, emphasizing well-being without compromising the allure of exploration. As passengers eagerly return to the seas, the revival of cruise tourism signals a hopeful resurgence, blending comfort, adventure, and a renewed appreciation for the magic of maritime travel post-pandemic .

Wildfire affecting travel, tourism and hospitality industry

Wildfires have cast a somber shadow over the travel, tourism, and hospitality industry, wreaking havoc on destinations globally. These disasters disrupt travel patterns, deter tourists, and inflict significant economic blows. Popular tourist spots face closures or limited access due to safety concerns, leading to cancellations and revenue loss for hotels, tour operators, and local businesses.

The environmental impact also alters landscapes , affecting scenic beauty and natural attractions crucial to tourism. Air quality concerns from smoke hinder travel plans , causing flight delays or rerouting, further impacting visitor numbers.

Communities reliant on tourism suffer, facing unemployment and financial strain. Rebuilding infrastructure and rejuvenating affected areas pose challenges, delaying the revival of once-thriving travel hubs.

Yet, amidst adversity, solidarity emerges. Travelers and industry players contribute to relief efforts , aiding affected regions in their recovery. Collaborative initiatives and sustainable practices gain momentum, emphasizing the need to protect these vulnerable areas while ensuring the continuity and resilience of the travel and hospitality sector.

Volcanoes in Indonesia and Iceland deepens tourism of these regions

Volcanoes in Indonesia and Iceland stand as awe-inspiring natural wonders, paradoxically both powerful and captivating, significantly deepening tourism in these regions. Indonesia boasts over 130 active volcanoes , including iconic sites like Mount Bromo and Mount Merapi. These volcanic landscapes offer thrilling trekking experiences and breathtaking vistas, drawing adventurers seeking adrenaline and nature enthusiasts fascinated by geological marvels.

Similarly, Iceland’s volcanic terrain, with gems like Eyjafjallajökull and Hekla, fuels tourism, attracting visitors eager to witness raw, untamed beauty. Volcanic hot springs like the Blue Lagoon embody relaxation amid dramatic landscapes, making it a magnet for travelers seeking rejuvenation.

The mystique surrounding volcanic activity, though potentially disruptive, paradoxically amplifies tourism interest. It sparks curiosity and draws explorers fascinated by the dynamic forces shaping Earth. Adventure seekers and scientists alike flock to these regions, turning adversity into an opportunity for discovery and adventure, bolstering tourism, and fostering a deeper appreciation for the volatile yet enchanting volcanic landscapes of Indonesia and Iceland.

Russia- Ukraine War and Israel-Hamas War effects tourism in Middle East and Central Asia

The Russia-Ukraine conflict and the Israel-Hamas clashes have reverberated across the Middle East and Central Asia, significantly impacting tourism in the region. In the wake of the Russia-Ukraine conflict, uncertainty and geopolitical tensions have dissuaded travelers from exploring destinations like Crimea and Eastern Ukraine . Concerns about safety, travel advisories, and geopolitical instability have led to a decline in tourist arrivals, affecting local economies reliant on tourism.

Likewise, the Israel-Hamas conflict has disrupted tourism in the Middle East. The intermittent flare-ups and security concerns have deterred visitors from areas like Gaza and Southern Israel. The conflict’s visibility in global media has created perceptions of instability, impacting tourism across the region. Travelers often opt for safer destinations, steering away from areas marked by conflict or political unrest.

These conflicts not only impede tourism directly in the affected regions but also cast a shadow of uncertainty over neighboring countries, impacting the broader tourism industry in Central Asia and the Middle East. Restoring confidence in safety and stability remains pivotal for revitalizing tourism, promoting peace, and fostering economic recovery across these geographically interconnected regions.

Visa-free Travel ascends tourism graph Visa-free travel heralds a transformative era for the travel industry, igniting a surge in global tourism. Removing visa requirements streamlines travel logistics , encouraging spontaneity and ease of exploration. This accessibility fosters a boon for destinations, unlocking their potential to attract a broader spectrum of tourists, from casual travelers to business professionals, and boosting their economies.

Visa-free access promotes cultural exchange, fostering a deeper understanding between nations. It sparks curiosity, encouraging travelers to venture beyond their comfort zones and experience diverse cultures firsthand. As barriers diminish, tourism flourishes, leading to increased visitor numbers, hotel bookings, and local spending, benefiting various sectors within the industry.

This liberation from bureaucratic hurdles not only enriches travelers’ experiences but also enhances a destination’s global appeal. It fosters reciprocity and goodwill between nations, creating a positive ripple effect that transcends borders. Visa-free travel stands as a catalyst for the travel industry’s growth , fostering inclusivity and driving economic prosperity while nurturing a more interconnected world.

OceanGate accident affects travel in underwater exploration The OceanGate accident has sent ripples through underwater exploration , impacting travel and research in deep-sea ventures. Safety concerns following the incident have led to reassessments of expedition protocols and equipment standards. This setback has temporarily slowed the momentum of deep-sea exploration, causing delays in planned missions and affecting the confidence of potential travelers and investors in underwater ventures. Despite this, the incident has sparked a renewed emphasis on safety measures, prompting the industry to recalibrate and prioritize stringent safety protocols, aiming to regain trust and resume underwater exploration with enhanced precautions.

Introduction of long haul airlines The introduction of long-haul airlines marks a pivotal stride in aviation, revolutionizing travel by connecting distant corners of the globe. These carriers offer extended flight routes , bridging continents and making once-remote destinations accessible. Their arrival introduces competitive pricing, diverse amenities, and innovative services, enhancing passenger experiences on lengthy journeys. The expansion of long-haul networks not only fuels tourism but also facilitates trade and cultural exchange. By catering to global wanderlust with efficiency and comfort, these airlines redefine air travel, fostering a more interconnected world and catering to the evolving demands of modern travelers seeking far-flung adventures.

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January 12, 2023

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Tony Capuano CEO, Marriott International, Inc.

Chip Rogers President & CEO, American Hotel & Lodging Association (AHLA)

As COVID-19 restrictions have continued to ease, the travel and hospitality industries have seen a resurgence in customers. Companies like Marriott have seen percentage increases in revenue and rate, even topping pre-pandemic levels.

During the U.S. Chamber of Commerce’s 2023 State of American Business event, Chip Rogers, President and CEO of the American Hotel and Lodging Association , and Tony Capuano, CEO of Marriott International, Inc. , sat down for a fireside chat. Read on for their insights on the post-COVID state of the travel industry, a shifting customer base, and the outlook for 2023 and beyond.

2022 Demonstrated the Power and Resilience of Travel

After declines amid the pandemic, 2022 brought about a positive recovery for the travel industry.

“[2022] reminded us of the power and resilience of travel,” said Capuano. “If you look at the forward bookings through the holiday season, [you’ll see] really strong and compelling numbers … so we’re really encouraged.”

“The only caveat I would give you about that optimism is, as you know, the booking windows are much shorter than we’ve seen them in a pre-pandemic world,” he added. “So those trends can change more quickly than we’re accustomed to."

The ‘Regular’ Customer Segments Are Shifting

At the start of pandemic recovery, industry leaders believed leisure travel would lead travel recovery, with business travel closely behind and group travel at a distant third, according to Capuano. While some of those predictions have held, others have shifted.

“Leisure [travel] continues to be exceedingly strong, and group [travel] has surprised to the upside,” he explained. “Business travel is perhaps the tortoise in this ‘Tortoise and the Hare,’ slow-and-steady recovery.”

However, Capuano noted customer segments are becoming less and less strictly defined.

“[There’s] this trend we've seen emerge over the pandemic of blended trip purpose … [where] more and more folks are combining leisure and business travel,” he said. “If this has staying power, I think it’s absolutely a game changer, as we get back to normal business travel and hopefully maintain that leisure travel.”

To accommodate this shifting demand, Marriott has focused on expanding offerings to accommodate both the business and leisure sides of travelers’ trips.

“[We’ve had] a very big focus on [expanding bandwidth], so that if [we’ve] got 300 rooms full of guests on Zoom calls simultaneously, we’ve got the bandwidth to cover it,” Capuano added. “[We’re also] being more thoughtful about fitness, leisure, and food and beverage offerings — and having the flexibility to pivot those offerings as somebody sheds their business suit on Thursday and changes into shorts and flip flops for the weekend.”

2023 Offers Hope for Continued Growth in the Travel and Hospitality Sectors

As the travel and hospitality sectors continue to grow and shift in the post-pandemic era, Capuano shared reasons for optimism in 2023.

“Number one, it's our people,” he emphasized. “When you see their passion, their enthusiasm, their resilience, their creativity, and just how joyful they are to have their hotels full again … it's hard not to be filled with optimism.”

“If you look at how far the industry has come over the last few years,” Capuano continued, “any lingering doubts folks may have had about the resilience of travel — and about the passion that the general public has to explore cities and countries — it's hard not to be excited about the future of our industry.”

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The latest travel data.

MONTHLY INSIGHTS March 04, 2024

U.S. Travel has temporarily paused our monthly data newsletter, however, the latest travel data is still available via the U.S. Travel Insights Dashboard . This dashboard is updated each month (member login required).

The U.S. Travel Insights Dashboard , developed in collaboration with Tourism Economics, is supported by more than 20 data sources. The dashboard is the most comprehensive and centralized source for high-frequency intelligence on the U.S. travel industry, tracking industry performance, travel volumes and predictive indicators of recovery including air and lodging forecasts, DMO website traffic, convention and group trends, travel spending and losses, traveler sentiment, among others to measure the health of the industry.

Key Highlights January 2024:

• Travel appetite started the year on a softer note, but overall growth continued. Air passenger growth remained positive, up 6% versus the prior year but lower than the double-digit growth seen through 2023. Foreign visits remained strong, up 24% YoY.
• Hotel room demand continued a trend of slight contraction falling 1% versus the prior year, while short-term rental demand grew 1%, a lower rate than 2023.
• A particular bright spot was that group room demand within the top 25 markets displayed solid growth of 9% relative to the prior year.
• The outlook for the economy remains fairly optimistic due to the strength of the labor market, looser financial conditions and healthy household and nonfinancial corporate balance sheets. This has filtered through to slightly higher consumer sentiment in February.
• Sentiment is also growing for upcoming leisure travel in 2024. The share of travelers reporting having travel plans within the next six months increased to 93% in January from 92% in December, according to Longwoods International’s monthly survey.
• Travel price inflation (TPI) fell slightly in January as a result of falling transportation prices. Sticky services inflation should see relief from decelerating wage growth. However, upside risks stem from rising healthcare costs, supply chain disruptions and slowing labor supply. Source: U.S. Travel Association and Tourism Economics

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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.

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• 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.

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The Biggest Travel Trends of 2024, According to Expedia Group's President

Can you guess the one major travel trend from 2023 that's sticking around?

Courtesy of Expedia

With the new year just around the corner, travel planning for 2024 is in full swing. Online travel booking behemoth Expedia recently unveiled its 2024 travel trends report , combining a vast trove of first-party data with a global consumer survey of 20,000 travelers. Think of it as a peek into what will define the travel landscape in the year ahead. 

“What’s happening in culture often shapes consumer behavior, and we’ve definitely seen that in travel,” said Jon Gieselman, president of Expedia Brands, in an interview with Travel + Leisure . There’s a wide array of intriguing intel, from how travelers are looking for recommendations (hello, ChatGPT) to the destination “dupes” jet-setters are choosing so they can avoid overcrowded destinations.

Generative AI

While generative AI tools like ChatGPT took the spotlight in 2023, according to Gieselman, only a small fraction of travelers — 6 percent in total — used it to plan their trips. However, in 2024, Expedia predicts more widespread adoption; half of those surveyed are interested in using generative AI to plan their next getaway. 

The technology’s ability to simplify the planning and booking process — though often with unintended side effects — is driving its use. Nearly 40 percent of travelers say they would use generative AI to help find the perfect stay. 

Destination “Dupes” and "Set-jetting"

AI may (or may not) prove helpful for trip planning, but how will travelers narrow down where to go? The Expedia-commissioned study explored the “dupe” trend that has taken over TikTok by applying it to 2024 travel destinations. “These cities made the list because they all experienced a noticeable uptick in searches on the Expedia app over the past year, so it’s clear that they’re emerging as great alternatives,” Gieselman says. 

In many cases, these “dupes” are affordable alternatives to places that are historically more expensive. At the top of the list was Taipei, Taiwan , with a 2,786 percent increase in flight searches for 2024; Expedia says the city is a dupe for Seoul. Other notable dupes include Pattaya, Thailand (dupe for Bangkok); Paros, Greece (dupe for Santorini); Curacao in the Caribbean (dupe for St. Martin); and Perth, Australia (dupe for Sydney). 

There’s one 2024 trend that’s a sure bet — and a holdover from 2023. “Set-jetting” will continue to be in vogue for the new year. More than half of the travelers surveyed say they’ve researched or booked a trip to a destination after seeing it in a television show or movie. 

Giselman and company dug closer into specific programming that is influencing this trend. For instance, following the release of Wednesday on Netflix, Expedia saw a 150 percent increase in travel searches for Romania. There was a 200 percent increase in searches to Paris after Emily in Paris debuted its most recent season. 

A longtime favorite, White Lotus, is filming its third season in Thailand and Expedia expects a surge in travel to the Southeast Asian country. After all, the first two seasons of the series drove a 300 percent increase in demand to Hawaii and Sicily.

Sober Travel and More

Once on the ground, Expedia expects travelers to fully embrace “dry tripping,” going beyond the traditional Dry January or Sober October to have low- or no-alcohol getaways year-round. The travel industry has responded accordingly, stocking minibars with zero-proof options and offering mocktail-making experiences. 

Giselman says that it’s Gen Z travelers who are driving the dry tripping trend. “Sober-curious lifestyles are becoming more commonplace, and many Gen Zers are practicing alcohol-free lifestyles," he notes.

Wynn Las Vegas , a T+L reader favorite in Sin City , offers a “Drinking Well” zero-proof cocktail program developed by a master mixologist featuring reishi mushrooms, ashwagandha, and maca. Meanwhile, The Merrion , a T+L reader favorite hotel in Dublin , distills its own nonalcoholic gin. Expedia says more than 40 percent of travelers are likely to book a detox trip in the next year, with half of respondents saying they would be interested in staying at hotels that offer easily accessible alcohol-free beverage options.

The complete travel trends report, with several other key tenets , comes on the heels of Expedia Group’s recent launch of One Key , a single unifying travel rewards program across Expedia , Hotels.com , and Vrbo . 

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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

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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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More From Forbes

Airline industry expected to soar with record summer travel.

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travel bags and passport flight travel traveller

The airline industry is gearing up for what could be a record-breaking summer travel season, if forecasts turn out to be correct. Despite challenges such as the Boeing 737 MAX 9 grounding and aircraft delivery delays, airlines are reporting strong demand and growth, particularly in international markets. For investors, this could be a unique opportunity to gain exposure to a sector that’s poised for takeoff.

Not every carrier has reported results for the March quarter yet, but what I’ve seen has been encouraging. Delta Air Lines reported record quarterly revenue and expects continued strong momentum, targeting earnings of $6 to $7 per share and free cash flow of $3 to $4 billion for the full year. United Airlines, despite a pre-tax loss that’s largely attributed to the MAX 9 grounding, saw a $92 million improvement over the same quarter last year.

“Demand continued to be strong, and we see a record spring and summer travel season with our 11 highest sales says in our history all occurring this calendar year,” Delta CEO Ed Bastian said during the company’s earnings call.

Passenger Figures Off To A Record Start

The big takeaway is that the U.S. economy and air travel remain healthy, with airlines experiencing record numbers of travelers. Checkpoint volumes provided by the Transportation Security Administration (TSA) are off to a record start in 2024, with carriers in the U.S. handling an average of 2.26 million passengers each day, a 5.6% increase over the same period in 2019.

Air passenger volumes exceeded pre-pandemic levels in the first quarter

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This bodes well for the industry, as higher passenger volumes translate to increased revenue and potentially better margins.

International Travel Boom Despite Supply Constraints

International travel is driving the recovery, with U.S.-international air travel rising 15% year-over-year in the first three months of 2024, according to Airlines for America (A4A). This trend is also reflected in the latest data from Airports Council International (ACI), which shows that while domestic airport markets grew over 20% in 2023, international markets drove the recovery with a 36.5% growth rate.

The airline industry is not without its challenges. The global airline industry is facing a summer squeeze as travel demand is expected to surpass pre-pandemic levels while aircraft deliveries drop sharply due to production problems at Boeing and Airbus. Airlines are spending billions on repairs to keep flying older, less fuel-efficient jets and paying a premium to secure aircraft from lessors. This has led to increased costs and could potentially impact margins in the short term.

Why Airline Stocks Could Soar In The Coming Years

Nevertheless, I believe the long-term outlook for the airline industry remains positive. The shift toward hybrid work has created a new segment of travelers who have the time and money to spend on air travel. This trend, coupled with the pent-up demand for leisure travel, should help support the industry’s growth in the coming years.

Additionally, airlines have prioritized debt reduction, which should help improve their balance sheets and credit ratings over time. At the end of 2023, the domestic industry reported a collective $143 billion in debt, an approximately 15% decrease from 2021 levels.

U.S. airlines have prioritized debt reduction

As we head into the summer travel season, I believe now may be the time for investors to consider adding exposure to this sector. With a long-term outlook and a diversified approach, investors can potentially benefit from the industry’s recovery and growth in the coming years.

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Top Travel Industry Trends (2024-2027)

You may also like:

• Key Transportation Industry Trends
• Startups Revitalizing Travel
• Important Restaurant Industry Trends

The travel and tourism industry is growing at an annual rate of 4.41% .

By 2026, the projected market value will be just under $1 billion.

Here are seven trends driving the future of the travel space.

1. Travelers go it alone

One website reports that 25% of all American millennials plan to travel by themselves each year.

Statistics show that the number of people traveling solo increased by 42% even before the pandemic.

According to Travel Market Report , Intrepid Travel is a small-group travel company that plans trips for 75,000 people per year.

Data shows that more than 50% of the travelers booking with them are going alone.

Overseas Adventure Travel, another small-group travel company, has seen such a boom in solo travel that they’ve upped the number of single spaces they have available in 2021, a 76% increase over 2019.

Solo travelers are big on social media too.

2. Travelers crave local experiences

The "experience economy" is huge in the travel industry.

But fewer and fewer people may be settling for commonplace vacation activities in the coming years.

Instead, “consumers [will] pursue authentic experiences , distancing themselves from mainstream tourism providers and venturing into pastimes that feel more meaningful”.

Data insights company AirSage marks this as an emerging trend because “people no longer want boring and conventional travel experiences as much as they used to. Instead, they would rather pay for vacations that are once-in-a-lifetime opportunities”.

Airbnb is betting on this trend.

Their website has offered the opportunity for consumers to book “experiences” since 2016.

But they also added online experiences in 2020 for people who are seeking to connect with locals without leaving their homes.

Other companies are banking their entire business model on this trend.

Withlocals offers “personalized traveling” — the opportunity for travelers to book private tours and activities with locals around the world.

Camping (and glamping) trips have also become a popular way for people to travel while experiencing the local culture and staying safe amidst the pandemic.

Outdoorsy has been called the “Airbnb of RV rentals”.

And their sales exploded to $1 billion in 2020. That’s 400% growth since 2019.

Under Canvas runs seven glamping camps in wilderness locations across the United States aimed at exploring the local landscape and inspiring human connections.

The company reported a “surge" in demand in 2020 and had "strong" advanced bookings during 2021.

3. Travel tech adoption accelerates

As with nearly all businesses, technology is presenting the travel industry with seemingly endless opportunities.

The pandemic has only increased the speed of tech adoption in the travel industry.

A McKinsey survey showed that, because of COVID-19, “companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years".

One example: room service robots.

Two Chinese hotel giants invested in ExcelLand, a manufacturer that already had 3,000 robots in operation.

BTG Homeinnes is looking at these robots as a way to control costs and safeguard guests.

Hotels, airlines, booking sites, and others are using chatbots like never before.

Travelers can chat with providers during every stage of their journey.

And, they won’t (always) feel like they’re talking to a robot. Advances in AI have made this type of communication hassle-free.

United Airlines has launched an “ Agent on Demand ” service that allows travelers at the airport to video chat with a customer service representative simply by scanning a QR code.

More and more airlines and airports are deploying facial recognition technology.

Corporations and government entities tout this technology as a boon for travel safety.

But many privacy advocates have put a halt to this emerging trend. They warn that this type of surveillance could easily turn dystopian.

With all of this new tech, companies are also continuing to capitalize on an older piece of technology — the smartphone.

Stats show that travelers who book tours and activities on their phone spend 50% more than those who book elsewhere.

4. Consumers blend business and leisure travel

The latest statistics say there are nearly 5 million digital nomads in America.

The concept of being location-independent, traveling and working remotely, has become even more popular since the start of the pandemic.

The hospitality industry is starting to cater specifically to digital nomads.

Aruba is opening its beaches up to travelers who’d like to work remotely, calling the marketing campaign “ One Happy Workation ”.

Visitors can stay for up to 90 days. And do not need any governmental documentation.

Barbados and the Cayman Islands will also let you work remotely from paradise for an extended period of time.

Booking.com reports that the "workation" trend is going strong.

More than 50% of travelers say they would extend their business trip to enjoy personal time at their destination.

In 2020, hotels began catering to locals who needed a quiet place to work.

The Hamilton Hotel in Washington, DC, is just one example. It’s WFH-Work From Hamilton program offers rooms on a 6:00 am to 7:00 pm schedule.

5. The travel industry gets serious about sustainability

Recent data shows that more than half of US travelers believe there aren’t enough options when it comes to sustainable travel .

A poll conducted on behalf of Exodus Travels went even deeper into consumers’ attitudes .

• 91% of travelers see the importance of taking ethical trips
• 56% believe in buying souvenirs from local merchants
• 44% want to support local businesses at their destination

Sustainable travel involves minimizing impact on the local cultural environment.

And also taking an eco-friendly approach to the physical environment.

Nearly 70% of travelers say they are more likely to book accommodations if they know the property is planet-friendly.

Many in the travel industry have recently made commitments to preserving the environment.

For example, India-based ITC Hotels Group has LEED certified each of its hotels.

As of 2023, hotels in the state of California will no longer be allowed to provide single-use toiletries in plastic bottles to their guests.

Marriott International has made a pledge to remove these types of plastics from all their hotels, too. But the pandemic has put a temporary stop to that plan.

A recent report from Skift made this summary statement regarding sustainable travel in the future:

“[It’s a] less flashy way of viewing and traveling the world . . . with an emphasis on safety, sustainability, and profound experiences while getting from point A to B without wrecking the climate and local quality of life in the process”.

6. Electric Air Travel Goes Mainstream

Speaking of sustainability, it looks like flying Teslas are finally here.

And they have the potential to make a big impact on at least three large industries:

The aircraft manufacturing industry, with over $200 billion in annual revenue between the top 3 manufacturers alone (Boeing, Airbus and Lockheed).

Commercial airlines, with $838 billion in annual revenue (pre-COVID).

And the ride-hailing and taxi industry, which was valued at $219.68 billion in 2022.

Electric vehicles are cheaper to run , less expensive to maintain , and better for the environment than vehicles powered by conventional fossil fuels.

That’s just as true for aircraft as it is for cars.

When it comes to electric aircraft, there are two main types: fixed-wing airplanes and eVTOLs.

Fixed-wing electric airplanes are just what they sound like. There aren’t any 747-sized electric airliners yet, but smaller commuter planes are in production.

Eviation is leading the charge. This startup produces a 620-mile range, 9-seat commuter plane called the Alice.

According to the company, flying the Alice is dramatically cheaper than a regular internal-combustion powered airplane.

For a 100-mile flight, conventional fuel for a similar-sized Cessna would cost about $400. In Eviation’s electric Alice, it would only be about $10 .

Eviation recently merged with Clermont Aerospace after a $108.5 million valuation.

At the same time, AeroTEC and MagniX are teaming up to retro-fit existing airplanes with electric motors - with similar improvements to efficiency.

There are also electric-hybrid airplanes in development.

For example, the Project 804 by United Technologies.

As well as the Aero by Zunum, a startup backed by Boeing and JetBlue.

And the E-Fan X by Airbus and Rolls-Royce. This project was shut down in April 2021, but only after achieving its three main initial research goals (according to Airbus).

That covers fixed-wing electrics.

The other major kind of electric aircraft is the eVTOL.

eVTOL stands for “electric vertical take-off and landing”.

Non-electric VTOL examples include anything from helicopters to drones and Harrier Jump Jets.

eVTOLs tend to be smaller than their non-electric cousins, and designed for shorter flights across cities.

Some look like passenger-carrying quadcopter drones. While others have a fixed-wing component like regular airplanes.

Search interest in eVTOLs has been exploding lately as startups and major aircraft manufacturers demonstrate new eVTOL models.

In July 2020, Airbus conducted the first public flight of its autonomous 4-seat CityAirbus multicopter eVTOL. The CityAirbus has a projected range of about 60 miles (or 15 minutes).

Airbus also has Vahana , in development by its Silicon Valley innovation arm, Acubed .

For its part, Boeing’s Aurora Flight Sciences has been developing solutions for an air-taxi service in partnership with Uber. Including an autonomous electric passenger air vehicle.

Separately, Boeing is also reportedly partnering with Porsche to develop another eVTOL.

And Tokyo-based “flying car” manufacturer SkyDrive raised a series B of 3.9 billion yen (about $37 million) and conducted its first public manned demonstration of the SkyDrive SD-03.

The SD-03 is the world’s smallest eVTOL, requiring only as much space on the ground as 2 parked cars.

That small footprint is one of the main advantages eVTOLs have over traditional fossil-fuel powered VTOLs like helicopters.

eVTOLs like the ones mentioned above use multiple smaller electric motors with rotors spread out across the aircraft. Whereas a typical helicopter uses one main internal-combustion engine with two huge rotors stacked above. (Plus a smaller one in the tail.)

eVTOLs’ multi-motor design is called a “distributed electric propulsion” (DEP) system.

DEP systems have numerous advantages. They make piloting easier, reduce the footprint required for take-off and landing, and increase safety through redundancy (if one motor fails, there may be 7 more still running).

They also reduce noise emissions, as the rotors don’t have to spin as fast.

Noise and vibrations within the cabin are lower as well.

Thanks to these advantages, dozens of eVTOL manufacturers are currently vying to capture a share of the nascent “urban air mobility” market: eVTOLs used to fly over traffic.

Germany, Holland, Belgium, France, Mexico, and Brazil have all been experimenting with urban air mobility initiatives.

But with all those benefits, why hasn’t electric air travel caught on before?

Two words: energy density.

In other words, the amount of stored energy in one pound of “fuel” — whether gas, diesel, kerosene or batteries.

Currently, conventional fossil fuels have more energy density than batteries. That’s why electric cars are generally heavier than their gas-powered counterparts. They have to be, in order to store enough power.

For aircraft, this added weight poses an obvious problem.

But it’s a problem we’re getting closer to solving.

Tesla CEO Elon Musk has said that an energy density of 400 Wh/kg (watt-hours per kilogram) is the crossover point for lithium-ion batteries to beat kerosene jet fuel. Once battery technology reaches that level, the sky’s the limit for electric aircraft.

Today, the energy density of industry-leading Tesla batteries is currently about 260 Wh/kg. (Up from 124 Wh/kg in 2007.)

So when might we get to 400 Wh/kg?

Very soon, according to Musk.

(Though he has also said that Tesla has no near-term plans to make electric aircraft.)

That’s it for the top seven trends driving the travel and tourism industry forward into 2024 and beyond.

Through these trends, we can see a dynamic relationship between the travel industry and consumers.

It’s a push-and-pull that’s sure to continue in 2025 and companies that can adapt quickly to the changing wants and needs of travelers are the best suited for future success.

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Meet the 2024 Skift IDEA Awards Judges

Adam Stacey , Skift

April 25th, 2024 at 9:30 AM EDT

Hand-picked by the Skift team, the 2024 Skift IDEA Awards judging panel includes travel industry veterans, innovators, and global leaders.

Adam Stacey

With submissions for the 2024 Skift IDEA Awards well underway, we are excited to introduce the first cohort of industry experts that will bring their unique perspectives and experiences to support us in selecting the 2024 Award winners. 

The Skift IDEA Awards have undergone a full transformation for 2024, with a new brand identity, new submission process and some exciting new initiatives that we are working on behind the scenes (more to come on that!).

As part of this transformation, we are thrilled to welcome a fresh and diverse group of experts to the fold. We’re confident that as judges, they will help us identify the most groundbreaking and inspiring ideas that are set to redefine the future of travel. 

Without further ado, let us introduce you to some of the industry leaders who will be reviewing this year’s submissions:

Aditi Mohapatra

Vice President, Global Social Impact & Sustainability

Expedia Group

Vice President Global Design Strategies

Marriott International

Chief Commercial Officer

Cara Whitehill

Vice President

Thayer Ventures

Damien Perrot

Global Chief Design, Technical Services and Innovation Officer

Accor Premium, Midscale & Economy brands

Harsha L’Acqua

Founder and CEO

Saira Hospitality

Inge Huijbrechts

Global Senior Vice President Sustainability, Security and Corporate Communications

Radisson Hotel Group

Shannon Guihan

Chief Sustainability Officer

The Travel Corporation (TTC)

Staci Mellman

Chief Marketing Officer

Zina Bencheikh

Managing Director, EMEA

Intrepid Travel

With more judges to be announced soon, we invite all innovators within the travel industry to submit their ideas for consideration, as the 2024 Skift IDEA Awards look to be more exciting and inspiring than ever before.

Haven’t started your submission yet? Start today and celebrate your achievements.

Please note: The Skift Meetings Awards are also back, celebrating the business event industry’s most respected and innovative suppliers for a second year. Interested in finding out more? Head to the website today.

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Hospitality industry looks strong for 2023 – despite recession fears

EY Americas Real Estate, Hospitality & Construction Consulting Leader

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Despite economic headwinds stoking fears of a 2023 recession, the hospitality industry still defies expectations and posts strong numbers..

• Travel demand, while currently robust, may be impacted if companies need to cut costs in the face of a worsening economic outlook.
• The industry should continue to focus on efficiencies at the hotel and corporate levels, prioritizing customer experience, analytics and automation.
• Transaction activity is likely to be slower; due diligence is critical so teams are prepared when the right deal comes along.

T here is one cautionary note that is always important to keep in mind when evaluating the hospitality industry. Market performance of hospitality has exceeded other industries such as technology and retail, with the gap widening in the second half of the year.¹ Add the fact that revenue per available room (RevPAR) has exceeded GDP growth during the current economic cycle, and 2023 should be a good year for the hospitality sector (see graphic).

• As per a CBRE study, during the 2009 recession, 10.2% of the properties that experienced a decline in RevPAR saw their rooms revenue drop by more than 30%. On average, these properties also suffered a 35.3% drop in total revenue, but the decline in Gross operating profit averaged 57.0%.
• As per a CBRE study, in 2001, properties that experienced a decline in RevPAR, only 2% saw RevPAR fall by more than 30%. On average, these properties suffered a 35.3% drop in total revenue which resulted in a 54.2% decline in Gross operating profit.
• The impact of Covid-19 ended the nine-year trend of profit growth and positive RevPAR for U.S. hotels since 2010, with a significant upwards spike of RevPAR starting in 2020.

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“Historically there has been a strong correlation between GDP growth and RevPAR,” said Umar Riaz, EY Americas Hospitality Sector Leader, in a recent interview with HOTELS Magazine. “But it’s my opinion that given the current dynamics of the travel industry, even if there is a mild recession in the next six months or so, the travel industry will still perform strongly.”

The post-pandemic urge to travel remains strong, which should drive continued growth in 2023. In the US, RevPAR was up 8.1% in 2022 from 2019, and Europe was up 6.1% for the same period. Asia, driven primarily by China, was the weak spot with a 31.2% RevPAR decline from 2019 to 2022. The industry’s average daily rate (ADR), which measures the average rental revenue earned by an occupied room per day, was up 13.6% last year in the US and 18.5% in Europe, when compared with 2019 figures.²

Business travel is also poised for recovery as companies ramp up their travel budgets. Trade shows and conferences are selling out, reflecting the pent-up demand that persists across all industries to get out of the office. Another factor in the industry’s resurgence is the growing work-from-home (WFH) segment of the workforce. In some cases, those employees build their travel plans around both business and leisure. Bleisure travel, where business travelers add on a day or budget extra time in their work trip for sightseeing or some other type of leisure activity, is a growing trend. The result of these market developments is more revenue and continued economic recovery for the hospitality sector.

Reasons for optimism in hospitality sector

The EY organization projects that the global economic picture is mixed heading into 2023, depending on the region, but the long-simmering slowdown will likely turn into a global recession. In the US, the economy is visibly cooling because of persistent inflation, rising borrowing costs, deteriorating private sector morale and rapidly slowing global economic activity. Elevated inflation and a lingering energy crisis will lead to a moderate recession in the Eurozone. In China, the economic outlook remains uncertain, with growth constrained by the recently lifted zero-COVID-19 policy, a lingering property sector downturn and weakening global trade activity.

However, several factors contribute to optimism for the hospitality sector in 2023:

• Leisure demand, group business travel poised to remain strong: Consumer surveys show that most people are planning at least one leisure trip over the next six months. Rising inflation might mean that consumers will make different choices when they travel, but demand still remains strong. As for group business travel, key statistics, such as a convention center booking increase of 13% in 2023 relative to 2022, point to a strong year for group travel.³ According to a survey conducted by American Express, 65% of respondents expect their spend on meetings and events to increase in 2023.⁴
• Business travel recovery: According to a recent survey by Morgan Stanley of global corporate travel managers, travel budgets are likely to be 98% of 2019 levels, with nearly half the respondents expecting an increase of budgets relative to 2019.⁵
• China’s re-opening: Before the pandemic, China was the world’s largest outbound travel market, with Chinese travelers taking 154 million trips and spending $255 billion.⁶ With the lifting of COVID-19 travel restrictions, Chinese travelers will begin to travel again in 2023. While there are still significant airline capacity constraints, there will be a measurable impact on both the domestic and international hospitality industries.
• The rise of the digital nomad:  According to a recent EY survey of companies , 87% said that COVID-19 has had a profound effect on the workplace, with 72% saying that they now have a hybrid remote/office approach and 75% saying that they anticipate no central office in the foreseeable future. As these workplace trends take hold and people become untethered to their offices, these digital nomads will become even more mobile and will work from places where they want to travel.
• Infrastructure Investment and Jobs Act: Spending associated with the Infrastructure Investment and Jobs Act (IIJA) that was passed in the US in 2022 should lead to additional spending on hotels.

Deals market could see a slowdown

One aspect of the hospitality sector that isn’t expected to be so strong in 2023 is the transaction market. 

With the Fed continuing to raise interest rates in an attempt to drive down inflation, the cost of borrowing money will continue to go up. As a result, transaction activity is likely to be slow in 2023. Deals will still get done, and there will be opportunities to create value and drive growth through M&A activity in the hospitality sector. Transaction due diligence will be even more critical to identifying the right transaction, given the market circumstances. In some cases, 2023 will be a good time to focus on organic growth. But teams still need to monitor what’s happening in the industry and be prepared should the right deal come along.

Boomerang workers?

During the pandemic, the hospitality industry lost much of its workforce as travel restrictions forced hotels to make severe staffing cuts. The industry’s unemployment rate leapt from 5.7% in February 2020 to 39.3% in April 2020, according to the U.S. Bureau of Labor Statistics (BLS).⁷ Many of these workers took jobs in the technology sector, which desperately needed to fill positions to keep up with sudden demand created by lifestyle changes that came about due to the pandemic.

Three years later, the world is adjusting again. While tech companies shed jobs in response to the state of the economy in 2023, the hospitality industry is now ready to hire in response to the expected increase in travel. One of the sectors that had the biggest job growth in December 2022 was travel and leisure. Hotels that have struggled to provide the same level of service and amenities they did prior to the pandemic may be able to fill some of these positions and get closer to full strength.

Bottom line: 2023 should be a good year for the travel and hospitality industry.

The hospitality industry has much to look forward to in 2023 as travel demand continues to grow faster than expected over the last few years. Consumer research reveals that leisure and group business travel remains strong and new workplace trends allow people to travel more as they can work from anywhere. While the transaction market slows down, there is still opportunity to find a good deal while still focusing on organic growth.

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Transportation | Spirit Airlines shows improvements, but still…

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Subscriber only, transportation | spirit airlines shows improvements, but still finishes last in travel industry customer satisfaction study.

Discount carriers Spirit Airlines and Frontier Airlines, once destined to be merger partners, both upped their games in terms of serving their customers, but remained on the bottom of an annual customer satisfaction survey for 2023-24, a national research firm has announced.

Although it registered more improvement points than any airline, South Florida-based Spirit finished last in the annual American Customer Satisfaction Index Travel Study conducted by CFI Group of Ann Arbor, Mich. The study, released Tuesday, assessed the performance of not only the nation’s bigger airlines, but also of hotels, car rental firms, rideshare operators and online travel services.

Overall, all of the industry segments serving travelers showed improvements in the eyes of customers, many of whom are still eager to hit the road despite rising prices and inflation.

For the survey, travelers graded the airlines on multiple service metrics, including baggage handling, boarding process, call centers, cleanliness of airplane cabins and lavatories, food quality (both paid and complimentary). loyalty programs, mobile apps, overhead storage, seat comfort and staff performances at airport gates and ticket counters.

The percentage of people surveyed who said they complained declined year-over-year, with 26% of the business travel respondents saying they filed a complaint in 2024 versus 48% in 2023. Of the leisure travelers surveyed, only 13% said they complained versus 17% last year.

“Airline customer satisfaction has climbed to new heights, reaching scores not seen even before the pandemic disrupted travel,”  Forrest Morgeson, associate professor of marketing at Michigan State University and director of research emeritus at the ACSI, said in a statement. “Carriers have bounced back strongly, showing that innovations and service improvements implemented during the last two years have resonated with customers.”

The index was founded at the University of Michigan’s Ross School of Business in partnership with other organizations including CFI, which now conducts the survey. It is no longer affiliated with the university.

Alaska Airlines, which had a door plug blow out of one its planes during a flight over the Pacific Northwest in January, topped the survey for the second straight year, followed by American Airlines.

Discounters register improvements

Among the discount airlines, Allegiant, Frontier and Spirit made the biggest gains in the survey “as they crank up their value propositions,” the organization said in its statement.

Asked for more detail, a CFI spokeswoman said the three airlines “showed improved scores this year on flight experience metrics such as check-in/boarding, in-flight service, travel planning, and staff.”

“Now that the legacy carriers have added so many fees related to seat selection and baggage, customers may perceive a greater value proposition from budget airlines,” she said.

Despite the improvements shown by the discounters, “only Allegiant avoids sitting at the low end of the industry, finishing in third place,” the statement said.

Allegiant, which is based in Las Vegas, was followed in descending order by Southwest Airlines, Delta Air Lines, JetBlue Airways, United Airlines, unidentified carriers in an “All Other” category, then Denver-based Frontier and South Florida-based Spirit.

Spirit, which is moving into a new headquarters complex in Dania Beach, did not immediately respond to an emailed request for comment.

The airline is emerging from a protracted turbulent period highlighted by two failed merger deals and a manufacturers’ engine recall that has left 20 of its 200-plus jetliners grounded.

At a formal opening of its headquarters last week, Ted Christie, the CEO and president, told the South Florida Sun Sentinel the company is eager to start communicating what it wants to do for its customers.

‘We’ve been listening to what our guests have been telling us over the years. We’ve been listening to what the markets have been saying,” he said. “And we haven’t had an opportunity yet to tell our story and to energize what’s going to happen next, and we’re going to take that opportunity.”

Christie didn’t elaborate. But before the breakout of the COVID-19 pandemic, the airline did undertake initiatives to show it wanted better relations with its customers. The airline upgraded its fleet, installed seating with more legroom, and upgraded technology to increase flight schedule reliability.

More recently, the airline has landed in the upper quadrant of the U.S. Department of Transportation’s monthly on-time performance scorecards. For example, the company ranked fourth at 72.5% in January of this year in overall percentage of reported flights arriving on time, according to department data.

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The promise of travel in the age of AI

Every generation has its own “golden age” of travel, often defined by the widespread adoption of new technology—from the jet engine of the 1950s that drastically reduced travel times to the dot-com period of the 1990s that allowed customers to build their dream itineraries online. Today, a new era of digitally enabled travel is upon us. Advances in artificial intelligence (AI), including generative AI (gen AI), and machine learning (ML) are equipping the industry to reimagine what it means to plan, book, and experience travel. This surge of innovation sets the stage for travel companies to rethink how they interact with customers, develop products and services, and manage operations.

Advances in technology have also transformed consumers’ expectations. Since 2013, time spent on digital devices has grown by 70 percent, and this trend only accelerated during the COVID-19 pandemic as online interactions increasingly replaced in-person contact. 1 Based on data from U.S. Census Bureau and Statista. See State of travel 2023 , Skift Research, July 21, 2023. However, traditional travel is unique in that it is an inherently human-centric experience. The industry, therefore, has an opportunity—perhaps even a duty—to define what travel will look like in the digital age.

Most travel companies aim to provide exceptional service and deliver the perfect trip. But, instead of ease, excitement, and delight, travel operators too often fall short of meeting baseline expectations of timing and quality. In fact, nearly 80 percent of American travelers experienced at least one travel-related problem in the first half of 2023. 2 Lane Gillespie, “Survey: 77% of travelers plagued by travel problems amid booming season; more than half saw higher prices,” Bankrate, July 10, 2023.

In the 2021 report, Rebooting customer experience to bring back the magic of travel , McKinsey and Skift Research found that leisure travelers were eager to get back to the sky, water, and road—so much so, that they were often willing to overlook customer-service issues and inconveniences. Customer satisfaction ratings at the time were high, even in a period of intense disruption when negative sentiment was on the rise. 3 Rebooting customer experience to bring back the magic of travel , a joint report from McKinsey and Skift Research, September 2021.

Today, that window of acceptance may have passed. Customer expectations are rising, and tolerance is wearing thin. Despite this, people still aspire to travel and, according to McKinsey’s ConsumerWise  Sentiment Survey, nearly a third of consumers intend to “splurge” on travel expenses in the next three months. 4 McKinsey ConsumerWise Global Sentiment Survey, August 2023, n=4,000. Through both established and new technologies, companies have the opportunity to keep the aspiration to travel alive by closing the persistent gap between the promise and reality of travel.

While larger companies may have more resources to develop in-house capabilities, a robust ecosystem of service providers makes new technologies accessible to companies of all sizes. According to McKinsey Digital estimates, companies that holistically address digital and analytics opportunities throughout their organizations have the potential to see a 15 to 25 percent earnings improvement.

A new report , The promise of travel in the age of AI , produced by McKinsey and Skift Research offers use cases and success stories that detail how technologies are being used, drawing from interviews with executives at 17 companies across five types of travel business. It explores how companies apply advanced data science to better understand and serve customers, delves into how digital and analytics tools can improve products and services, and examines how new technologies augment workforce capabilities and unlock operational capacity. This article highlights some key findings.

Know your customers like you know your friends

Over the past two decades, the variety and volume of customer data that travel companies can capture has increased dramatically; new tools and technologies such as AI-powered assistants are only accelerating this trend. However, this data is often difficult to process and does not always paint a full picture of the customer. Companies may turn to third-party sources to complete their understanding—combining and distilling commercial, operational, financial, and behavioral inputs. Robust marketing technologies can then help distinguish the “signal” from the “noise” in the data to better predict customer behavior.

Having gained a clear and comprehensive understanding, companies can create customer segments to guide how they interact with and serve different customers. Depending on the data available and the analytics capabilities at hand, segmentation can range from grouping customers into segments based on a single macro characteristic (e.g., business versus leisure) to individual “segments of one,” known as hyper-segmentation.

Drilling down to segments of one can enable hyper-personalization, which is broadly defined as the ability to uniquely tailor touchpoints to an individual customer’s needs, preferences, and behaviors. At its core, hyper-personalization is not only about increasing conversion rates, but about providing the customer with an end-to-end experience adapted to their specific context. Considering the level of personalization that is becoming the norm in many aspects of daily life, companies are adopting an ongoing test-and-learn approach to ensure their offers and actions resonate with customers’ rising expectations.

Hyper-personalization can also help companies rebuild trust if operations have gone wrong. Personalized communication reassures customers that they are at the forefront of the company’s mind and instills confidence that a thoughtful recovery plan is in place. For example, companies may share real-time status updates in moments of disruption and provide tailored solutions, or even proactive compensation, to ensure customers feel individually taken care of.

Design your products to surprise and delight

Recent advances are pushing the boundaries of what technology can accomplish. Nothing illustrates this better than the meteoric rise of AI platforms like ChatGPT which garnered one million users in only five days. 5 Steve Mollman, “ChatGPT gained 1 million users in under a week. Here’s why the AI chatbot is primed to disrupt search as we know it,” Yahoo News, December 9, 2022. While this pace of adoption may feel unsettling, it provides an impetus for companies to reimagine their product design and delivery using AI and digitization.

Historically, capabilities such as language, creativity, and aesthetic judgment—once considered uniquely human—could not be scaled through technology. AI, particularly gen AI, offers a new way to augment and scale these capabilities with the potential for enormous benefits: according to McKinsey research , generative AI has the potential to unlock between $2 trillion and $4 trillion in annual value across industries. 6 The economic potential of generative AI: The next productivity frontier , McKinsey, June 14, 2023. In the travel context, gen AI could take the form of a digital assistant that interacts with customers throughout the journey. It can provide personalized trip itineraries during discovery and booking, offer tailored recommendations based on preferences and real-time constraints during the trip, and help resolve unexpected disruptions.

However, AI is only part of the answer. Established digital technology also helps companies deliver on commitments made to customers. Many of these digital assets and tools rely on common systems and capabilities, making them widely attainable—freeing up staff to provide better face-to-face services and build relationships through the human touch. Several such applications can boost guest satisfaction and reduce points of friction in hotels, including guest apps, digital check-ins, digital room keys, and in-room tech. The magnitude of these individual tools is amplified when seamlessly integrated together, making it easier for customers to use digital applications throughout their hotel stay.

Empower your workforce to follow through on promises made

An engaged and productive workforce enables the delivery of experiences and products that satisfy customers. However, the travel industry faces structural labor hurdles and high turnover which makes attracting, training, and retaining top talent challenging. Fortunately, the industry can enhance and scale the capacity of its existing workforce by equipping the frontline with the right tools at the right time. This can free up employees to focus on the things they enjoy most and that make the travel industry tick: quality personal interactions with customers, in essence, the human touch.

Two promising opportunities to improve workforce and operational performance through technology stand out across the travel industry: augmenting frontline capacity and upskilling talent.

In the travel industry today, complex decisions still rely on human expertise and outdated technology such as greenscreen or rudimentary interfaces. This leads to a best-guess approach, the risk of negative outcomes, and a steep learning curve. Travel companies are developing new tools  for the frontline to process complex inputs and help guide “day-of” decision making. For example, advanced simulation models such as digital twins allow companies to conduct rapid “what-if” analyses and provide real-time guidance to the frontline.

According to McKinsey research , new technology, including gen AI, is also shortening training times for new hires while rapidly upskilling the existing workforce. For instance, virtual and augmented reality are used to simulate real-life scenarios to prepare frontline employees to hit the ground running, and gen-AI-enabled "teaching assistants” provide personalized coaching based on individual performance. 7 “ The organization of the future: Enabled by gen AI, driven by people ,” McKinsey, September 19, 2023.

Travel is ripe for innovation

Checklist for the age of ai.

Some travel companies are already successfully deploying digital technology, AI, and ML to reshape how they interact with customers, develop and deliver products and services, and manage people and operations. They’ve taken the following actions—are you on track?

General considerations

• created a digital wish list—as if the company had infinite time and resources
• prioritized wish list based on potential short- and long-term benefits as well as the company’s strategic vision and available resources
• assessed the skills and talent necessary to execute against the prioritized wish list
• built the right team and identified roadmap to fill remaining gaps
• inventoried existing internal customer data
• determined which data variables drive customer behavior and predict customer buying decisions
• identified relevant third-party data and integrated with internal data to build a complete customer picture
• considered using a robust MarTech stack to continuously learn and evolve with customers
• defined a dynamic segmentation and personalization approach based on customer personas
• adopted test-and-learn mindset to continually implement and refine
• mapped the end-to-end customer journey and identified pain points
• used analytics to determine which pain points impact customers the most
• considered new technology (like AI) to enhance and reimagine the customer journey
• brainstormed improvements to current digital offerings that would minimize pain points (such as more timely communication)
• built a product roadmap based on timing and importance of features
• diagnosed top day-to-day employee pain points
• determined if digital tools can resolve top pain points (for example, automate repetitive tasks)
• provided workforce with real-time visibility into critical areas of daily operations
• used simulation models to plan for multiple future-state scenarios
• built decision-making tools (such as digital twins) to choose optimal solutions for complex problems
• defined opportunities to improve training (using tools such as simulation training, VR, AR) and provide feedback (using smart-AI tool)

We believe this is a moment of optimism for the industry. Between reclaiming its historical share of GDP, benefiting from the ongoing corporate travel recovery, and catering to consumer demand for unique experiences, the stage is set for travel’s accelerated growth. Looking ahead, travel is forecasted to grow at an average of 5.8 percent a year through 2032—more than double the expected growth rate of the overall economy (at 2.7 percent a year). 8 “Travel & Tourism sector expected to create nearly 126 million new jobs within the next decade,” World Travel & Tourism Council, April 21, 2023.

This does not mean that travel companies can simply sit back and reap the benefits. Existing and new technologies provide an avenue for companies to capture their share of the industry’s anticipated growth by resetting how they interact with customers, deliver products and services, and empower their workforce. Fortunately, there are a growing number of ways—build, buy, or partner—to help companies get started. The only wrong move is no move.

Susann Almasi is an associate partner in McKinsey’s Carolinas office, Alex Cosmas is a partner in the New York office, Sam Cowan is a consultant in the Minneapolis office, and Ben Ellencweig is a senior partner in the Stamford office.

The authors wish to thank Skift’s Pranavi Agarwal, Seth Borko, and Wouter Geerts as well as McKinsey’s Marisa Ancona, Danielle Bozarth, Vik Krishnan, Nina Lind, Elena Patel, Alessandra Powell, Jules Seeley, and Nirva Vassa, for their contributions to this article.

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What is Labour’s plan for rail travel and will it make tickets cheaper?

Party wants to fully nationalise train network within five years of coming to power, in ‘biggest rail reform for a generation’

Labour has made one of its most radical proposals yet in the run-up to an election campaign: to fully nationalise the train network within five years of coming to power.

The party has pledged to guarantee the cheapest fares as part of “the biggest reform of our railways for a generation”, bringing all passenger rail into national ownership under the Great British Railways (GBR) body.

So, how difficult would the plan be to enact and what does it mean for passengers?

How would Labour’s plan for Great British Railways change the way the trains are run?

The headline change is nationalisation: the ambition that all passenger train operations, at least, should return to public ownership. But the wider aim is that control of trains and tracks – “wheels and steel”, as some put it – is brought back under one unified structure, at arm’s length from the government.

The actual railway infrastructure is already managed by the state-owned Network Rail, since the disastrous tenure of Railtrack in the early days of privatisation, and train operations in Scotland, Wales and a large chunk of England are in public ownership. So a fully renationalised railway (bar the rolling stock and freight) is not as big a step as it may once have sounded – and arguably the pragmatic extension of the plans drawn up by the Conservatives in 2021, to end the fragmentation and waste in the system.

How long will the changes take?

Labour said it would get the ball rolling on day one. Given the years it has taken for the Conservatives’ GBR plans to crystallise into a draft bill that has scant chance of passing before an election, supporters of the changes would be forgiven for not holding their breath for legislation. But some of the spadework has been done by the GBR transition team, and Labour will be hoping for a more stable tenancy in Downing Street to see the policy through. It is, it stresses, a long-term plan.

As far as nationalisation of the train operators goes, most of the contracts of remaining operators will expire naturally within the next term, while the government can exercise break clauses in others, such as Avanti West Coast and Cross Country.

What would the trains look like?

Eventually, they would all be GBR-branded trains rather than the individual liveries and logos of different operators. Labour hopes that this will make things simpler for passengers, avoiding confusion over ticketing, as well as cutting costs.

Would it make train travel cheaper?

Possibly, but not for a while yet. Labour says it wants to make the railway more affordable but has definitively avoided any pledges to cut or even freeze the overall level of fares.

However, it believes that its plans will eventually save £2.2bn a year by avoiding the duplication and bureaucracy brought on by the current system, where the Department for Transport tightly controls and specifies contracts for the private firms, and reams of staff are employed in back-end roles. That could give ministers some scope to use more of the billions in annual taxpayer subsidy to bring fares down long-term.

What about this best-price guarantee?

Make that an “ambition”, according to the policy document . It’s testament to the complexity, or occasional absurdity, of UK rail fares that even after years of industry focus on improving the system, renationalising looks an easier promise than telling a passenger they’ve paid the right amount.

Things can be improved, Labour says, as contactless tap-in and tap-out payments extend through more and more of the country, opening up the possibility of a Transport for London-style system, where fares are streamlined and automatically capped or refunded.

The shadow transport secretary, Louise Haigh, pointedly chose the headquarters of Trainline in central London to launch her plans on Thursday, paying tribute to the travel app firm’s “relentless focus on passengers [and] improving their experience”. Trainline shares fell 10%, even though Labour says it has no plans to replace the private firm with a single state retailer.

But given that the app’s business depends on people paying extra to cut through the railway’s confusing fares, fragmentation and lack of a decent central ticketing site, Trainline shareholder nerves might be taken as a vote of confidence that GBR will improve the industry’s own offering.

How else might passengers benefit?

Labour says it would leave the running of the railway to the experts – but the transport secretary would set strategy and take on the role of passenger-in-chief, and the industry would not be “marking its own homework”.

The plan aims to strengthen the voice of passengers by rolling together the various bodies currently meant to be standing up for them – the watchdog Transport Focus and the little-known Rail Ombudsman, as well as a few divisions of the Office of Rail and Road.

What will happen to the private operators?

Their representatives at Rail Partners warn that it will be “messy” and the railway will lose their expertise. But the people actually running train operators, right up to the managing directors, have typically stayed in post with a different coloured badge when the owning groups moved on, and passengers at say, Southeastern or LNER may not feel life is very different. Firms once regarded as pillars of privatised rail such as Stagecoach, National Express (now Mobico) and Virgin have long exited UK rail already, pursuing business elsewhere.

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Tributes paid to Frank Field, former Labour minister, who has died aged 81

Lisa Nandy urges support for UN relief agency for Palestinians

Nearly 1m UK pensioners living in deprivation, official figures show

Angela Rayner handling house sale controversy ‘in right way’, says Yvette Cooper

Bambos Charalambous readmitted to Labour party after investigation

Wes Streeting defends Labour plan to use private sector to cut NHS backlog

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