The Digital Transformation of the Travel Industry

By Stefanie Goldbrich at bd4travel

A look at how eCommerce has changed the way people book travel—and what the future holds

eCommerce has altered the buying habits of consumers and the selling methods of businesses. Digital transformation moves faster than ever before. To succeed in the 21st century, you need to move at speed and focus on what your customer actually wants, not what you think they (should) want.

By using AI and digital automation to meet the needs of your existing and prospective customers wherever they are on their buying journey, companies of today—and the future—are able to adapt quickly to capture sales and win loyal customers.

Timeline of digital transformation in travel eCommerce

The basics of an eCommerce site seem straightforward: develop a website, advertise it and have payment systems set up. The advent of the internet has seen almost every form of service or product sold via this pervasive electronic medium.

But how have we got from the face-to-face dominance of travel agents to the speed and ease of direct online travel bookings, in what feels like a blink of an eye? Join us for a brief retrospective on the history of eCommerce in travel—it’s a phenomenon over 50 years in the making.

1969: CompuServe, the first major eCommerce company was formed in the USA.
1982: The Boston Computer Exchange was founded, a bulletin board, online-auction marketplace for trading used computers.
1989: The system for what becomes the worldwide web is proposed by Tim Berners-Lee.
1990: WorldWideWeb, the first web browser, launched.
1994: Travelweb.com, the first list of hotels around the world, which soon added direct bookings.
1995: The first airline ticket is sold over the internet. Sold via Internet Travel Network, the ticket was from San Francisco to Las Vegas.
1996: A busy year in the online travel world. Expedia launched as an online travel agency by Microsoft. SABRE, a booking engine previously used by travel agents, launches a B2C online product called Travelocity. Low-cost airline models—based on airlines selling direct to customers online—are introduced including Ryanair and easyJet in Europe, and Southwest in the USA.
1997: Away from travel, a search engine called Google launches.
2000: TripAdvisor launches, initially as a collection of official travel reviews, it soon opens for public contributions.
2001 to 2002: Following the travel disruption and uncertainty following 9/11, a number of online travel businesses launched selling unbooked flight and hotel inventory.
2003: Skyscanner goes live as a flights aggregator. The brand later added hire cars in 2013 and hotels in 2014.
2004: The social revolution begins, with Facebook launching.
2007: The new Apple iPhone makes ‘on the go’ internet access easily accessible. After Apple opens its system for third party developers the following year, companies start to develop, at pace, apps which enable travel booking. A game changer.
2008: AirBedAndBreakfast—later known as Airbnb—launched.
2010: Metasearch is a growing force in online travel. Google Hotel Ads starts offering sponsored hotel prices in Google Maps. It will later be merged with Google Ads.
2011: Google launches Google Flights, a flight booking search with purchases through third-party suppliers.
2014: Google Adwords (later rebranded to Google Ads) dominates travel marketing, with 80% of companies’ marketing spend.
2015: Amazon launches Alexa, a voice-activated virtual assistant.
2016: Google launches Google Trips, a mobile app providing trip planning services.
2017: Virgin Holidays develops the first holiday booking service for Amazon Alexa. ‘Alexa, ask Virgin Holidays…’ were the magic words for your voice to access holiday information.
2019: Google Trips is replaced by Google Travel, including Google Flights and Google Hotel Search.

This list isn’t exhaustive; there’s so many evolutions, revolutions and mergers that it’s impossible to mention all the milestones of travel eCommerce in one place.

What can we learn from the history of travel eCommerce?

The history of eCommerce shows that marketplaces evolve quickly, and that companies that keep moving forward and innovate are able to succeed. Some of today’s big names in travel have been early to market, but they remain relevant today by reinventing themselves, purposefully applying the latest technology and meeting their customers’ needs.

In 2020, 65% of sales revenue in the global travel market were generated online. By 2027, it is predicted the online travel booking industry is tipped to more than double, from 517.8 billion US dollars in 2020 to 983.2 billion US dollars in 2027.

To succeed in an ever-changing market, travel businesses need to react in real-time and pre-empt what your customers want. Compared to in-person and over-the-phone travel agencies, this customer-led focus has been a weakness of digital sales in the early iterations of online travel retail. The era of digitalised customer centricity is already here; are you ready?

Smart automation will help you provide convenient, personalised and effective customer experiences. According to International Data Corporation (IDC), spending on AI will more than double in just four years—from $50.1 billion in 2020 to $110 billion in 2024. IDC’s program vice president, Artificial Intelligence, Ritu Jyoti says: “Companies will adopt AI—not just because they can, but because they must.”

Intelligent technology lets you interpret large amounts of data in milliseconds, triggering automated, personalised interventions. For travel, this data can range from understanding who your customer is—what their needs, interests and intents are—through to the diverse profile of your own products.

With millions of variable data points, matching them manually in real-time—to provide your customer with the ‘perfect’ holiday choices—is impossible. With AI, your digital store is able to identify and react instantly to individual needs. This helps you build customer relationships, leading to increased revenue and customer loyalty.