If you've followed my Inc.com column, you know I work with both big companies and start-ups around the world. My research, consulting and speaking give me a glimpse into the fledgling trends and upstarts that will one day become tomorrow's business behemoths.
As part of a new series of articles I'm writing called Everything Transformed, I'm focusing on the widespread disruption of just about every industry on the planet. I'm doing this by connecting into my network at Plug and Play, Silicon Valley's largest venture capital firm and startup accelerator.
Plug and Play matches up large corporations with start-ups in an "innovation ecosystem" that results in partnership opportunities, joint-ventures, investments and acquisitions all focused on creating the next big thing. Each month I'm tapping into the industry expertise and experience of one of Plug and Play's 15 industry verticals to highlight the disruptive trends, technologies and companies shaping the future.
It's no wonder Plug and Play created a vertical focused on travel and hospitality. Travel and hospitality accounts for 10% of employment worldwide, and it is estimated that the sector contributed $8 Trillion to the global economy in 2017. The "travel-tech" sector has attracted over $19B+ since 2008. It is a large, fast-growing industry tied directly to global consumption growth, and with populations and incomes increasing, the demand for travel products and services will only get bigger.
According to Amir Amidi, Founder of the Travel and Hospitality Center of Innovation at Plug and Play, the industry has seen disruption by players seeking to increase revenue, lower costs and increase loyalty throughout the traveler's journey. "The big opportunity is how, through the entire travel journey, corporates and startups work together to develop a personalized experience." Amidi also says that "the future of travel involves seamless traveler experiences enabled by various legacy and new technology platforms. I believe the most cost and capital efficient path to true innovation is strategic collaboration between the leading travel industry suppliers/service providers and startups that are solving real world problems."
So what are the big bang disrupters on the horizon? Some of these start-ups are fast becoming the next big thing:
- TripActions: TripActions is a corporate travel management company which recently raised $154 million in VC funding at a $1 billion valuation.
- Hopper: Hopper is a mobile-only travel app which uses AI to analyze billions of prices daily to predict how prices will change and tells you whether to buy or wait. It recently raised $100 million in funding and is valued at $780 million.
- Lumo: Lumo helps everyone from individual travellers to large organizations predict flight delays hours, days and weeks ahead of time to deal with the costs and headaches associated with delays and missed flights.
- Klook: Klook is Asia's largest in-destination travel services booking platform. It has raised a total of $296.5M in funding over 5 rounds.
- Away: Away is a travel accessories brand selling high-end smart luggage direct to consumers for a low price. It recently raised $50 million to drive growth.
- Go Moment: Go Moment has become the world's largest artificial intelligence hotel concierge provider with technology powered by IBM Watson.
According to Lio Chen, Managing Director of Plug and Play Travel, "with the exception of a few home runs, travel startups have not received much attention from traditional VC investors due to lackluster returns." Chris Hemmeter, Managing Director of Thayer Ventures, a venture capital firm focused on travel technology, sees that changing: "Travel suppliers are embracing innovation and experimentation like never before and are becoming increasingly fixated on the entire guest journey." Established travel and hospitality companies are getting into the innovation act by partnering with disruptive upstarts before they get "Airbnbed" again.
JetBlue's subsidiary, JetBlue Technology Ventures (JTV), recently invested in and currently works with the omni-channel communication platform Gladly. Gladly gathers all travel information about an individual no matter if it comes from email, text, etc., allowing customer service agents to instantly know exactly what the customer is calling about, whether it's because they've had a flight cancellation or are responding to a text they've received. "Gladly makes you a person rather than a number," says Bonny Simi, President of JTV. "We started with a proof of concept and we did an investment and now we're doing a full-scale implementation."
Within the enormous travel and hospitality industry, opportunities for technology innovation and investment are vast. The greatest growth and competitive advantage - for startups and corporate innovators alike - will come from leveraging technology to:
- Create new products and services
- Enhance the end-to-end traveler experience
- Streamline operations
- Innovate business models
So what technologies should we watch? Here are a few:
- Blockchain: The travel and hospitality sector is notoriously segmented so blockchain will allow for seamless payments & customer service across different travel suppliers
- Natural Language Processing (NLP): NLP underlies chatbots and voice recognition and will support real-time recommendations as travelers shop for everything from airfares to experiences, online or even through Amazon's Alexa
- Augmented Reality (AR): AR functionality will superimpose data onto smartphone screens to indicate nearby points of interest like dining and attractions as tourists navigate, enhancing the traveler experience.
- Predictive Analytics & Machine Learning: Intelligent computing will help proactively give travelers what they want through recommendations, proactive customer service, assisting avoiding travel disruptions, and more.
At the end of the day, travel and hospitality companies all want similar things: increase revenue, reduce costs, boost operational efficiency, enhance the customer experience and build loyalty. Plug and Play's recent research on the disruptive forces shaping the travel and hospitality sector outlines all these emerging trends (and others) in more detail.