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How focus on digitalisation will be the key to grow tourism industry

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How focus on digitalisation will be the key to grow tourism industry


COVID has a significant impact on the tourism industry. However, with the restart of foreign flights, the tourism industry is anticipating a recovery to pre-covid levels of activity in the next six months, assuming no more disruptions. Meanwhile, technology and digitalisation will propel this industry to the next level of development.

How focus on digitalisation will be the key to grow tourism industry
There is no doubt about the impact COVID had on the tourism industry. But with the resumption of international flights, the tourism industry is expecting pre-covid level business to return in the next six months – hoping there will be no further disruption. Meanwhile, the next growth level for this industry will be driven by technology.
Many waited for COVID to end and tourism to restart. At that time, some businesses (mostly small and medium) either shut shops or went into hibernation mode, whereas some large players decided to prepare for the future.
“When pandemic struck, we came up with a business continuity plan which was tech-enabled,” said Amit Madhan – President & Group Head – Information Technology & eBusiness - Thomas Cook (India) Ltd. & SOTC. “We decided to accelerate the digitisation process at all levels. During the COVID period, many companies went into hibernation, which was not the case with us.” The company forged new ideas and partnerships.
Madhan described the company’s journey during the pandemic as one of a ‘startup’. “We used this time effectively to transform various business verticals that would have taken us ages to transform or may have not been able to change at all. We took that big leap and transformation – whether it is business or technology – and started from scratch. It was more like a start-up getting built.  We will reap its benefit in the coming years,” he added.  Thomas Cook (India) didn’t just strengthen their tech-enabled travel business but introduced initiatives to bolster their forex business in a hybrid model.
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According to Pradeep Shetty, Senior Vice President, Hotel and Restaurant Association of Western India (HRAWI), during the pandemic, the hospitality industry embraced the digitisation process at many levels, even the small and medium conventional businesses. Shetty added technology-enabled processes in this digitised ecosystem will be important going forward.
Shetty fears in the large digitised space, many businesses will fade away. “There is a need for technology companies to come forward and help small businesses to grow using innovative tools (which large businesses have access to) and are available at a reasonable cost.”
As per World Travel & Tourism Council report, COVID-19 accelerated the digital agenda. It stated that it will be important for governments to invest in the digital infrastructure of emerging destinations and remote areas, as well as to enhance digital skills within local communities. It stressed investment should be directed towards the following key areas such as crowd management and the dispersion of tourists; contactless experiences; and urban and rural internet connectivity.  2019 was the best year for India in terms of tourism capital investment since 2013, attracting more than $940m, according to fDi Intelligence and GIS Planning report. It attracted 17 tourism FDI projects in 2019, the same number that it received in 2018.
The Ministry of Tourism is working on setting up a National Digital Tourism Mission. The Ministry of Tourism and MeitY collaboratively explore the possibilities of developing a Unified Tourism Interface, for seamless exchange of information amongst the stakeholders of the tourism ecosystem. Such an interface would enable an open and interoperable network for search, discovery, information exchange and digital transactions.
According to ‘Policy Brief: COVID-19 and Transforming Tourism’ (in 2020) by the United Nations, the recovery of tourism destinations and companies will be fully dependent on their capacity to take advantage of technology to better understand and monitor travellers’ needs and trends, create and market innovative experiences, use digital platforms to enhance the competitiveness and agility of MSMEs to reach customers, provide added-value jobs, and implement effective health protocols. “Artificial intelligence and big data can help manage flows and protect communities and resources.”
Where travel technology is today
Assam-based travel agency Nexplore Travel is technologically-driven since its inception and has an in-house team to manage it,  said its founder Anushila Bharali. She strongly believes that technology is leading the development and growth of tourism. Even during the pandemic, Nexplore Travel domestic tourism grew by around 70 percent from the previous years.
The new-age travel businesses are mostly tech-enabled compared to conventional businesses that are struggling to make the transition. Amit Madhan stressed that in digital transformation the biggest hurdle is the mindset and not investments to support it. “The digital transformation is more of a mindset change. Once you have crossed that milestone of cultural change then you are ready – the rest will follow. It is not just about financial investments but it is about fixing the processes.”
By 2026, the global travel technologies market is expected to reach $12.5 billion – projected to grow at a CAGR of 6.8 percent, according to Global Industry Analysts Inc (GIA). In FY20, the tourism sector in India accounted for 39 million jobs, which was 8.0 percent of the total employment in the country. By 2029, it is expected to account for about 53 million jobs, according to IBEF data.
Curated travel as well as implementing a data-driven transformation have become a lot more critical. Traditional travel agencies will have to deliver such an experience going forward. The tourism and hospitality industry cannot avoid the long-term consequences of automation, machine learning, etc.
Commenting on the use of blockchain in the tourism industry,  Raj Kapoor, chief advisor at aCryptoverse said, "Traditional travel companies can leverage the blockchain technology by offering value-added services to go with traditional service offerings.
He added, "By deploying in house services and utilising the right tools, traditional companies can customise authentic experiences, through blockchain platforms - like Cool Cousin - a blockchain-based platform with its own cryptocurrency, the CUZ token. It even motivates local guides — known as cousins — to make money by providing on-demand city guidance. Cousins can plan the whole trip, from flight booking to a table reservation at a local restaurant."
Kapoor stated blockchain could revolutionise the entire travel industry. "It offers a way for mobility companies to offer end-to-end travel, worldwide. The  travel agency or  the customer can now book one ticket and fly, cruise, ride or drive wherever they are going without thinking about who’s providing the transportation or how and when to pay them."
Blockchain Use In Tourism Industry
German company TUI Group, the largest tourism company, has integrated blockchain into the travel industry. In addition, SITA is investigating the use of single travel tokens’ based on the Single Sign-on (SSON) principle and stored on mobile or wearable devices and authenticated via blockchain to eliminate document checks during customer journeys. Meanwhile, Airbnb is already utilising blockchain technology to secure the sharing of user profiles with third-party service providers. "These and several others are slowly migrating towards blockchain-based platforms. Web 3.0 will only accelerate this process," Kapoor added.
New platforms, like LynKey, are using the technology to assume functions such as listings, payments, and legal documentation (for visa and other permits) through automated ledgers and smart contracts. Dinis Guarda, founder of LynKey, a blockchain-powered prop-tech platform said it facilitates the global travellers to personalise their travel experiences (by allowing them to modify or cancel the trip) with no additional costs. “The users are even saved from getting involved with currency exchange issues (prevalent with the conventional system of travel).”
New entrepreneurs understand the relevance of technology. This is more so given the rising dominance of millennials in the tourism industry – as entrepreneurs and also as customers.
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