Leadership Talk

The new reality of digitalization in the travel industry

The new reality of digitalization in the travel industry

I was fortunate to participate in one of the first in-person travel industry gatherings in Europe since the start of the pandemic in early 2020 at the Aviation Event 2021 in Tenerife. As aviation experts and stakeholders came together on 11 June, there was a sense of both excitement and trepidation. Hidden behind obligatory sanitary masks, face-to-face conversations were taking place again like the good old days - live, in 3D, and in color! Nonetheless, the journey to Tenerife had certainly revealed new encouraging, yet alerting, realities:

  • Flights are operating and airports are filling up, but travel schedules are requiring larger time allocations. Four-hour long minimum connecting times for a journey within Europe are currently not unusual.
  • Airport lounges are open again but be prepared to adjust your expectations about available services - get used to coffee in paper cups! Read my #loungereview produced with Kurt Hofmann during our recent journey to Tenerife.
  • A seamless travel experience requires significant research on varying entry requirements across countries: Covid test appointments, multiple app downloads, electronic registrations‚Ķ And last but not least, printouts - yes indeed, better keep paper copies!

In a nutshell, the ease of travel has not yet been restored. Armed with this experience, my fellow panelists at Aviation Event 2021, Raimonds Gruntins, Director Regional Affairs Europe, IATA; Peter Baumgartner, Chairman of Bluearbre and former CEO Etihad Airways; Jonne Kuyt, Director of Design-driven Innovation at Edenspiekermann; and I debated the topic of digitalization as an enabler for new business models.

The age of digitalization in the travel sector pre-dates the pandemic. As a result, the travel industry has been capitalizing on innovation to make its products and services more attractive to savvy consumers and business partners. So, what has changed now against the backdrop of new realities from the pandemic?

During our panel, we discussed that as the travel industry slowly recovers from the current global crisis, the value of digitalization and its role in enabling the travel sector will fundamentally depend on three success factors:

  1. Digitalization cannot just be about technology. It requires a mindset change in organizations to radically rethink and redefine processes and redevelop structures to break siloes
  2. Digitalization is driven by our customers' expectations and their experiences in other sectors, like retail or entertainment. They expect the same from the travel industry
  3. Digitalization is only effective when integrated across all stakeholder ecosystems to facilitate the entire customer journey. For this, we need standards, such as NDC and One Order, to be implemented and applied consistently.

The pandemic has led to tectonic shifts in the travel industry. Digitalization will continue to be a key enabler for travel companies, helping them react quickly, manage and become more resilient to macro-economic, geopolitical, health, and social dynamics. The need to adopt new technologies and mindsets has dramatically accelerated. Those who wait and watch at the sidelines will risk being swallowed by the cracks in the system.

Author Info 

Marcus Puffer is Vice President & Head of Loyalty Management Solutions at IBS Software. In this role, he is responsible for the loyalty product suite, a next-generation platform carrying out some of the most successful customer engagement programs in travel and transportation. Before his almost 6 years tenure with IBS, Marcus has served as General Manager of topbonus, airberlin's loyalty program and the second-largest frequent flyer program in Germany with more than 3mn members and over 120 partners. 
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