Travel apps act as the ultimate one-stop shop for travellers. Many travellers are also demanding innovative and digitally advanced services today, which is pushing the demand for travel apps. According to GlobalData, younger cohorts, especially millennials and Gen Z, will drive the importance of these apps as they become the most significant groups for travel and tourism companies.
Listed below are the key technology trends impacting the travel apps theme, as identified by GlobalData.
Digital-only banks are increasing in popularity, predominantly among millennials because of their strong attachment to smart devices. These banks are 100% cloud-powered and offer their services exclusively through digital platforms, such as mobile apps and the web. While the majority of consumers will still use more traditional companies for banking in their home nation, more travellers are using digital-only banks when travelling abroad.
Digital-only banks offer niche services that are especially useful when travelling abroad, such as real-time spending notifications, the ability to freeze and unfreeze cards instantly, direct in-app customer service, bill splitting options, and savings pots. All these services can be accessed easily through a user’s mobile app which has been linked to their card.
Fintech and travel are becoming increasingly overlapped. For instance, Revolut ventured beyond financial services for the first time in 2021 and began selling hotels, homes, and guest houses. Meanwhile, app-focused superpowers such as Booking Holdings are investing time and resource into fintech. In 2021, Booking.com announced the creation of a new internal fintech business unit to enhance seamless access to the company’s vast travel marketplace for both its customers and partners.
Internet of Things (IoT)
IoT technology embedded in mobile apps has helped companies to offer higher levels of personalisation to their customers. According to GlobalData’s Q1 2021 Consumer Survey, 82% of global respondents stated that they are either ‘somewhat’, ‘often’, or ‘always’ influenced by how well a service is tailored to their needs and personality. This overwhelming percentage shows that personalisation is important for inspiring customer loyalty and ensuring expectations are met.
Major hotel companies looking to stay ahead of the digital curve offer internet-enabled heating, lighting, and television, which customers can turn on and off via the company’s mobile app. The same technology can also be utilised by airlines, with passengers having the option to regulate their seat temperature or personal air conditioning unit through an app.
Companies and destinations can also use IoT to send location-specific information to customers using dedicated mobile apps. In addition, the integration of beacon technology or other sensors into smartphones, allows notifications to be sent to tourists at any point most relevant, such as on walking tours.
Artificial intelligence (AI) and machine learning (ML)
AI, and its subset ML, have become underpinning technologies within app technology. According to GlobalData’s Q3 2021 Emerging Technology Sentiment Analysis Survey, 82% of respondents stated that AI will ‘live up to all of its promises’, or they can ‘see a use for it’. ML algorithms are developed based on previous user interactions, with the technology learning any trends that can then be used to provide personalised and time-efficient recommendations in the future.
Predictive systems used by the many travel companies on their apps help tourists and passengers to book flights, trains, hotels, and private rentals at the optimal price with personal requirements being met. AI and ML can detect price anomalies and then push notifications can be sent to passengers to alert them about price decreases, which helps customers to save money and companies ensure repeat business.
Social media and travel apps
According to GlobalData’s Covid-19 Consumer Survey Tracker, 30% of global respondents stated that they were either ‘spending significantly more’ time on social media than before the pandemic, or were now spending ‘all day, every day on it’. Increased time spent on social media has lasted long beyond the peak of the pandemic, which has meant that many travel and tourism companies have intertwined their own apps with social media platforms to enhance service levels. Social media allows for widescale company contact through direct messaging services, allowing customer queries and complaints to be dealt with on time.
Dutch airline KLM, for instance, offers a 24-hour customer service platform via various social media sites, in ten different languages using AI and voice-activated technology. These services can be accessed through KLM’s mobile app, which is integrated with Facebook Messenger, Twitter, WeChat, WhatsApp, and Google Assistant. As a result, travellers can book tickets or choose a seat or meal on a KLM flight through any of these channels.
According to GlobalData, about 42% of Gen Z and 40% of millennials believed that direct engagement with a brand acted as a key driver, showcasing that building relationships with younger customers on social media is most significant.
Augmented reality (AR) and virtual reality (VR)
AR and VR apps create an array of internal and external benefits for travel and tourism companies. VR is increasingly being used for training purposes. In 2019, Lufthansa introduced VR hubs at its training centres in Frankfurt and Munich. It marked the start of a completely new and immersive form of flight attendant training. This tailor-made solution for the airline meant that it could run several training courses simultaneously without a loss in training quality.
AR technology in travel apps has a wider range of uses and is more accessible for a wider pool of travellers. For example, Google Translate has an AR feature that translates words or sentences when scanned with a smartphone camera. This tool is useful for travellers visiting destinations where their native language is generally unspoken and unknown. Educational attractions such as museums can also create more immersive and memorable experiences for attendees through AR apps.
Big data and travel apps
Big data is a highly important for companies when creating successful travel apps. The more data that is collected, the more personalised a service or product can be. Firstly, big data is needed for AI and ML to be effective. Without extensive data sets, effective algorithms cannot be created which means no personal recommendations can be pushed to customers.
Vacation rental company, Airbnb, uses big data to fine-tune several different aspects of its model. It has improved its search efficiency; as the company increased its customer base, it introduced a data-driven search model. Through the collection of data, a model was built on an estimated probability of booking in a particular location, based on the person that created the search. If a customer is deemed to be price-conscious based on previous data, search results may offer accommodation further away from a city centre where prices may be cheaper.
Big data also helps create loyal hosts for the company. For example, hosts can look at their calendar and see how varying dates should be priced to increase the chances of solid occupancy rates, based on data collected in previous years.
This is an edited extract from the Travel Apps – Thematic Research report produced by GlobalData Thematic Research.