Travelution

Let me start off by stating the obvious - the travel industry will be a US $11 trillion dollar industry and over 30% of world population will be traveling internationally. These are numbers extracted from the Pacific Asia Travel Association (PATA)’s database. By 2027, you will see over 1.9 billion number of international travelers. Travel and hospitality will be an even larger contribution to any economies. The impact of this will be further compounded as middle class will be the biggest part of this industry growth and most of the middle-class population will be in Asia, the growth engine of the world.

What most travelers see as the first transaction is the transaction between them and the immediate service providers such as airlines, hotels, trains, restaurants etc. But what is not visible is that these service providers have their own service providers that they engage as well. For instance, hoteliers engage with companies such as Priceline and airlines work with Amadeus. To sum it up, the growth in travel and hospitality serves as a growth catalyst for the rest of the industries such as property, food, healthcare and more. This is what I call an industry convergence.

Arguably, travel and hospitality sector is one of the earliest industries for technology application. What we have seen thus far is an evolution in the travel space and that is deeply linked to how companies are behaving to survive. This is TRAVELUTION. It all started in the 80’s when the manual handling of ticketing and booking became overwhelming and people needed to rely on a more scalable method. So here comes the computer reservation system, also known as Global Distribution System (GDS). The key players that are still around after decades are companies such as Sabre and Amadeus. That was the first integration between traditional mediums and the internet. This was the era where content was being successfully digitized for the first time.

In the next decade, it was the age of the OTAs. Companies like Expedia, began building their inventory through partnerships with airlines and hotel. The 90’s was really about pushing for more digitization and you start to see the convergence of different type of inventory. For example, Travelocity and Expedia are platforms where you can book your flight and accommodation without having to switch websites. 2000 onwards, as travellers become more sophisticated, consumers start to look at differentiated content. Tripadvisor focuses on reviews; from destination reviews to now basically any sort of reviews. You see fare aggregators like Kayak, comparison sites like Skyscanner, all having their own unique use cases. And of course, people eventually got bored of staying in 5 star hotels and decided to move into someone else’s house – Airbnb.

Finally, getting to where we are right now, the decade that we are most familiar with. I call this the era of UX, user experience. Travel has become an essential part of our life. Just as how we are always looking for good food, we are always looking for better travel experience. When Indonesia opened up, Traveloka took the opportunity to provide for the emerging middle-income Indonesians. These are people who were looking for an adventure and experience that they can’t get locally or not through a tour group. This is why startups like Triip from was started to provide for travelers who want to travel like a local, and who wants to find the happiest way to travel. Startups started focusing on the different segments of a trip. Most of the travel companies in the market caters for the pre-trip experience, meaning they help you get prepared for your travel. There are also startups that focus on recording your post travel experience, this is where reviews come in. But there is also an emerging group of startups that are looking to help you navigate around when you are traveling.

So what’s next? Would it be a company that is based on artificial intelligence? Or, a travel experience relying on augmented reality tools or simply just a travel app that provides instant access to a team of real human travel experts who will take care of your every travel need like Lola? Short answer – we don’t know. But two main conclusion we can derive from the travelution:

1. Industries will converge as tourism is bringing more industries together and interlinked

2. Technology will continue to be the most important factor of growth for travel and hospitality businesses.