The one-fits-all approach has lost its influence on the travel industry. More people, especially Millennials, no longer consider a beach holiday as the ideal way to spend their annual leave. People travel for the experiences that await them on new terrain. Moreover, they increasingly carry out their booking activities online – by themselves thus overall changing their travel habits. This situation has a profound impact on the travel industry and challenges travel agents (TAs) to adapt in order to survive.

While at the turn of this century, arranging a holiday entailed a visit to the local travel agent, digital travel spending will top 704 billion Euro globally by 2020. For travel agents, this signifies a pressing need to address to the ongoing digital transformation. To identify what’s next for travel companies, our Startup Scouting and Innovation Intelligence arm, StartUs Insights, analyzed 1000+ startups in the travel industry. In this breakdown, we will share the eight most impactful innovation areas. Additionally, we provide one startup example for each to highlight cooperation potential.

Conversational Interfaces

Artificial Intelligence (AI) has come a long way in understanding human behavior, particularly in terms of natural language understanding (NLU) and natural language processing (NLP). In conversational interfaces, chatbots experience an extensive hype with good reason. Chatbots allow travelers to directly interact with travel agents in a trusted manner, before and while traveling. Customized communication with passengers enhances customer experience, builds trust and increases retention rates while reducing costs dramatically. The maturing development of conversational interfaces holds the potential for a far more advanced level of bots in the near future, though it is expected they will cooperate with human travel agents instead of fully replacing them.

Net Solutions leverages chatbots to provide a personalized travel experience. The startup’s chatbots can be launched on Messenger, Telegram, and Slack among other services and provide full analytics to better understand customer behavior. The service includes features such as providing customer support, tracking orders, and distributing content.

Conversational Interfaces

Will this innovation area disrupt the industry?

Artificial Intelligence (AI)

For customers, AI simplifies travel decisions, shorten the time of purchase, and enhance personalized offerings throughout the entire travel lifecycle. For travel agents, automating low priority tasks frees up time of the human workforce which then can be used to add further value. Offering accurate travel recommendations such as alternative travel dates, destinations and local sightseeing options based on previous searches or bookings boosts customer loyalty and results in repeated sales.

WayBlazer provides travel intelligence that recommends the most relevant destinations and products for every traveler. The startup uses natural language to search and discover the best destinations, resulting in an 81% improvement in search result quality according to the startup. Moreover, the recommendations are backed by contextual media and also feature reviews.

Artificial Intelligence (AI)

Will this innovation area disrupt the industry?

Augmented Reality (AR) & Virtual Reality (VR)

AR and VR technologies take travel experiences further by demonstrating destinations (“try before you fly”), preserving historical landmarks, and even creating new attractions. Augmented and Virtual Reality equip travel agents with the tools to highlight their unique selling points such as hotels or destinations. By inviting visitors to be a part of the story it becomes the traveler’s story – a journey that boosts engagement, ultimately culminating in a one-of-a-kind travel experience.

Realities is one example of a startup bringing these experiences to life. The startup lets travelers explore a library of interesting places all around the globe in photorealistic quality. Currently available for HTC Vive, the images (“scans”) used are based on photogrammetry and other scanning techniques like LiDAR (Light Detecting and Ranging).

Augmented Reality (AR) & Virtual Reality (VR)

Will this innovation area disrupt the industry?

Mobile Travel

By today, mobile has turned into the latest sales channel for travel agents as travel pairs well with mobile devices, permitting passengers to continue and modify their journey once they have taken off. From cross-device service to personalized & data-driven search results, integration of travel information, as well as AR/VR apps and wearables, travel apps show an advantage in various areas.

Localscope by Cynapse is a single app containing aggregated information from various sources. The startup lets travelers discover places, people and information about them using geo-tagged data from multiple local search engines, social networks, and media sharing services. The app includes badges for ratings, check-ins, likes and can add geo-tagged reminders for any location.

Mobile Travel

Will this innovation area disrupt the industry?

Digital Payment

In Western Europe, digital travel sales will pass 121 billion Euro, opening diverse possibilities for travel agents. The increase in digital payments comes down to three main lines of disruption: P2P payment applications, digital wallets (eWallets), and the rise of cryptocurrencies. While these technologies improve efficiency and convenience, gaining traveler’s trust is still a challenge. When implementing these solutions, traditional and online travel agents need to be aware of these concerns to address them correctly.

WeTravel developed a platform that collects payments securely while also managing (group) bookings efficiently. The startup allows travel agents to create a booking page that collects downloadable traveler information, and, additionally, collects payments as well as refunds.

Digital Payment

Will this innovation area disrupt the industry?

Personalized Travel

We mentioned the importance of personalized experiences earlier in this breakdown, however, this becomes even more apparent taking into consideration that “more than 85% of travel consumers [say] personalization has affected their travel purchase decisions”. Personalizing travel experiences starts with understanding traveler behavior and tailoring travels according to their needs. Similar to airlines, travel agents need to take care to provide their customer’s personalized offers, genuinely created to meet their expectations.

ViaHero does exactly that – the startup offers one-on-one consulting to discuss travel needs before the trip and phone support during the trip. Furthermore, travel arrangements are taken care of in advance and travelers are equipped with a personalized guidebook as well as a tailor-made offline map. To achieve these experiences, ViaHero works with local experts with “on-the-ground knowledge”.

Personalized Travel

Will this innovation area disrupt the industry?

User-Generated Content (UGC)

Given the limitless amount of information available on the Internet today, travelers sometimes are overwhelmed by it. User-generated content, namely blog posts, social media shares, etc., is one way to turn this information into actionable insights. Moreover, UGC is a powerful tool to give potential customers an authentic look at a travel agent’s offerings. Besides contributing as an inspiration for wanderlust and increasing trust, user-generated content is an influential way to get in front of new target audiences.

Streetography is a map-based photo sharing app that enables users to share their images and geo-tag them to the corresponding locations. In turn, travel agents can integrate these “photo maps” on their website or app and create new ways to discover destinations for travelers.

User-Generated Content (UGC)

Will this innovation area disrupt the industry?

Web & App Travel Aggregators

Ready-made itineraries are to become a thing of the past due to rising demand for personalized travel. Web and app-based travel aggregators come in a variety of formats. From the better-known flight, hotel and car aggregators to thematic tours, outdoor activities, luxury traveling and sustainable tourism, travel aggregators offer fully customizable travel experiences. Some aggregators expand their support throughout the entire trip, allowing travelers to change preferences during the trip or even fully planning how to spend their time at the desired destination.

Holidayen is one web-based travel aggregator that has found its niche. The startup focuses on sightseeing tours, attraction tickets, and activities. With more than 100.000 booking options the meta-search engine provides travelers with an extensive overview of several destinations. Additionally, the platform allows users to save and revisit their activities at any time.

Web & App Travel Aggregators

Will this innovation area disrupt the industry?

As demonstrated, transforming travel habits and an increased desire for personalization not only pose threats but also immense opportunities for travel agents and companies. Together with the eight most dominant innovation areas, travel communities, beacons, wearables, blockchain technology, and biometric data will further enhance the customer experience in planning leisure as well as bleisure trips. Despite many emerging technologies in the sector, the travel and tourism industry has not reached its peak yet, with 320 million international trips annually that are expected to be made by youth travelers in 2020. This is an enormous chance for travel agents looking to gain a competitive advantage. Companies that act now, seize these opportunities and partner with disruptive startups will emerge as industry leaders. StartUs Insights facilitates this process by cutting through the noise and providing actionable intelligence on startup driven innovation and technologies.

 

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To create this Breakdown on Startup Driven Innovation, we’ve collaborated with the community.
Special thanks to Maxime Besnier from Very Local Trip, David Beasley from Virtual Reality Hotels, Hmayak Tigranyan from Tripplanera, Andri Heiðar Kristinsson from Travelade, Ameya Ithaka from Ithaka Travel, Enrique Felgueres, Dominique Callimanopulos, Lief Larson.


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Author Susi Wallner|Design Luca Nagy|Executive Editor Susi Wallner|Copy Editor David Prasser, Iryna Bursuk|Web Development Reza Rastgoo