In the report titled, What if? Imagining the Future of the Travel Industry, four scenarios shed light on the conditions under which these trends may come about.
Four possible futures for the global travel industry
Source: Amadeus and A.T. Kearney analysis
The first of the four scenarios, named 'Picasso' reflects the artist's fragmented nature, which at the same time is highly personalised. It is a world in which global economic prosperity drives growth in personalised travel offers. And yet, growing nationalism and security concerns disrupt it and the travel industry develops in a localised way.
In this scenario, the world would be very much like the one we live in today. It is marked by the rise of populism in Europe and the US and by heightened security concerns, which makes more travel destinations off-limits. It is a fragmented world, where the European Union begins to break up, while a protectionist US administration institutes an 'America First' policy. Even so, most parts of the world continue to enjoy economic growth.
According to Amadeus the trend towards personalisation will "disrupt the value chain within the travel industry". This disruption begins with sharing economy platforms, which changes the way travellers shop, book and experience a destination. According to the organisation, two sectors of the travel industry appear at risk in this scenario:
- Travel agencies: These may lose business if destination service providers begin to offer a broader range of competing services;
- Airlines: The air travel industry is "at risk of becoming a commodity - a means for getting from A to B - rather, as has been the case up to now, the first step in planning a journey".
According to Amadeus, faced with this threat, "airlines may try to become online retailers themselves". The intent is to become the "Amazon of travel", offering a range of branded products and services to compensate for falling yields on the sale of flights.
Qantas has already begun planning for this future, announcing it aims to be its largest distribution source and compete with the likes of Amazon in Australia, by owning the customer. Qantas Group CEO Alan Joyce believes the carrier's digital and data analytical capabilities are what set it apart and what will ensure its success in the future. Mr Joyce says, "big data and digitisation is what can disrupt the airlines and if you're not heavily invested in that and have the culture to take advantage of it, you can get disrupted quite quickly."
We recently caught up with Mr Joyce to discuss exactly this:
Amadeus director of corporate strategy Rafael Hernández believes the sharing economy "opens a different dynamic for travellers", introducing them to "more local people" and making business travellers "more integrated into their destination".
Mr Hernández commented that it is "what you do on arrival that matters, so the importance and relevance of destination content will increase" and that if destination content becomes an essential ingredient of the travel experience, then providers who control the "final mile" of travel will capture the greatest value in the travel chain. These include businesses such as online platforms that suggest restaurants and shows and the best tours. Amadeus expects destination service providers will look to attract more businesses onto their platforms to provide a broader menu of personalised offers to their clients.
Read the full report on the Amadeus blog here.