What if nationalism and security concerns disrupt the global travel industry?

shutterstock_697061500Imagine a world in which global economic prosperity drives growth in personalized travel offers. And yet, growing nationalism and security concerns disrupt it and the travel industry develops in a localized way. This is the first of the four scenarios A.T. Kearney formulated for its ‘What If?’ report. Aptly nicknamed ‘Picasso,’ this scenario reflects the artist’s Cubist, fragmented nature, which at the same time is highly personalized.

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.

The trend toward personalization will disrupt the value chain within the travel industry. It begins with sharing economy platforms, which changes the way travelers shop, book and experience a destination.

“The sharing economy opens a different dynamic for travelers – they meet more local people and are more integrated into their destination,” says Rafael Hernández, Director of Corporate Strategy at Amadeus. “It is what you do on arrival that matters, so the importance and relevance of destination content will increase.”

If destination content becomes an essential ingredient of the travel experience, then providers who control the “final mile” of travel, including online platforms that suggest restaurants and shows and the best tours, will capture the greatest value in the travel chain. Destination service providers will look to attract more businesses onto their platforms to provide a broader menu of personalized offers to their clients.

Two sectors of the travel industry appear at risk in this scenario. First, travel agencies may lose business if destination service providers begin to offer a broader range of competing services. Second, airlines are at risk of becoming a commodity – a means for getting from A to B – rather, as has been the case until now, the first step in planning a journey.

Faced with this threat, airlines may try to become online retailers themselves – the goal being to become the “Amazon of travel,” offering a range of branded products and services to compensate for falling yields on the sale of flights. Can this model succeed? And how will it change the nature of competition in the airline industry? To find out more about this scenario and the others identified, download a copy of What if? Imagining the future of the travel industry.

 

Originally published on the Amadeus corporate blog.

0 comments

Leave a Reply

We encourage your comments, questions and suggestions. All comments are moderated and will appear as soon as they are approved by the moderator. Spam, off-topic or offensive comments will not be posted. If you have a comment about a specific customer service problem or account issue, please contact your local Amadeus office.

× Sign up for our newsletter now Subscribe