A.T. Kearney formulated four scenarios imagining the future of travel in its ‘What If?’ report. The first two, nicknamed Picasso and Dali, put forth fragmented and integrated worlds. The next scenario is the darkest one they imagined. Dubbed Bosch after the medieval Dutch painter, it takes an unvarnished view of human nature.
In this scenario, nationalism and economic recession breed protectionism and distrust. This stifles innovation and keeps the travel industry fragmented. The following elements, which are taking shape now, show that the Bosch scenario is not so far-fetched:
- Rise of anti-immigrant and anti-EU political movements in Europe
- Uncertain outcome of Brexit negotiations
- Ambitions of a resurgent and nationalist Russia
- President Donald Trump’s ‘America First’ policies
The key to understanding what this means for the travel industry lies in the impact of nationalism and populism on the global economy and on collaboration in the technology industry. Economic stagnation is the likely result of shrinking global commerce, and overall, the travel industry will also shrink. There is also a very real risk that data and technology become the arsenal for new trade wars between governments.
In this “Bosch” environment, there will be little collaboration possible over data sharing; consumer data will be kept within the country it is generated. The pace of innovation will slow in a world in which talent, ideas and funding cannot be shared across borders. Companies will struggle to build and maintain international footprints and there will be few global aggregators. Tech giants and sharing economy start-ups will face a regulatory backlash. Protectionism of domestic markets and heavier regulation will keep travel markets fragmented and in the hands of big domestic players. Fear of terrorism, including cyber-attacks, will make travel more cumbersome and costly.
Under the Bosch scenario tech giants, like Google and Facebook, will likely limit their involvement with the travel industry to their role as an advertising platforms. This will be good news for travel agencies. They will maintain their role in the industry free from the threat of disruption from technology giants. But, their role as intermediaries may decline as travellers seek trusted brands and book directly with well-known airlines and hotels.
To learn more about the Bosch scenario and the others identified, download the report What if? Imagining the future of the travel industry.