12 examples of digital transformation in the travel industry

Successful businesses have been adapting to new technologies for decades, but the COVID-19 pandemic propelled digital transformation like we’ve never seen before. For the travel industry, the demand from customers for more efficient and remote tools cannot be ignored. Nowadays, customers expect nearly all of their services digitally, from researching destinations to booking flight tickets and managing every aspect of the entire trip. Travel and tourism industry must keep up in order to thrive.

Thankfully, there are plenty of opportunities to adopt digital solutions and strategies that can satisfy those needs while still growing your profit.

What is digital transformation?

If you are not yet familiar with the term, digital transformation in travel industry is the adoption of new technologies by a company, which leads to changes in how the company operates.

Think of taxi services. Before the growth of the internet the only way to get a cab was to call an operator via phone. Nowadays there’s no need for an operator at all — you can order an Uber with just a few taps on the screen.

Digitalization is happening everywhere in many industries, and the travel and tourism sectors are no exception. According to predictions published on Statista, worldwide spending on digital technologies and services will continue to increase: it has doubled since 2017 and will triple by 2025.

There are multiple reasons for this growth.

• The COVID-19 pandemic. This is a massive contributing factor, rapidly increasing the need for remote services and digital operations.
• Advancements in technology. The rise of cloud computing, big data analytics, and artificial intelligence has made it easier for companies to innovate and improve their services.
• Competitive pressure. As more companies adopt digital technologies, there's a race to stay ahead in offering innovative solutions and enhancing customer experience to retain market share.

Why is digital transformation important for the travel and tourism industry?

The travel industry is no stranded tourist when it comes to digital transformation. However, the pandemic massively accelerated the need for companies to evolve their tech capabilities at light speed. Within the travel sector, one of the hardest-hit areas, it quickly became clear — digitize or get left behind.

During lockdowns, our collective appetite for on-demand convenience skyrocketed as we managed everything from food to work to healthcare remotely. Travel companies watched as people grew accustomed to booking appointments, paying bills, and accessing services from their devices with just a few taps.

In our post-pandemic reality, customer expectations for seamless digital journeys are through the roof. In today's on-demand economy, modern travelers not only want but simply expect the ability to research destinations, compare options, book travel, and handle documentation from the comfort of their couch. Digital native companies catering to these demands gain a competitive advantage over competitors who are still relying on clunky legacy processes.

But it's about more than just pleasing customers. Introducing new digital solutions can make your work easier — any travel company will benefit from automating manual and laborious business processes.

12 examples of digital transformation in the travel and tourism sector

Mobile apps

Mobile apps should be a top priority if you want to meet modern travelers where they are — on their smartphones. In fact, according to Booking.com, 80% of travelers use a mobile app when researching a trip, and 50% of accommodation searches and bookings are made on mobile devices.

What is the true power of your app? It elevates the entire tourism cycle from start to finish. Keep clients looped in with push notifications while letting them breeze through check-ins using biometrics and digital wallets. Streamline the customer journey from destination research and booking to in-location exploration.

In the mobile era, a standout app is your key to fostering unwavering loyalty and creating raving brand ambassadors.

Personalization

In today’s world, travelers demand more than just a trip; they want experiences crafted just for them. By diving into data like booking habits, preferences, activity on social media platforms, and real-time location, travel agencies and tour operators can gain insights into individual traveler behavior and patterns, uncovering what they want.

Armed with this knowledge, creating personalized travel plans, stays, deals, and one-of-a-kind experiences has never been simpler. And it doesn’t stop with planning — think bespoke tours, on-demand concierge, and dining that feels made-to-order.

By embracing this trend of digital tourism, you can stand out from the crowd, winning your customers' minds and hearts and making sure they always come back for more.

Big data

Get deep insights into what customers like, how they behave, and emerging trends. By analyzing large amounts of data gathered from different sources like online bookings, social media, and customer feedback, you can tailor your marketing strategies and recommendations more precisely than ever.

A great example of big data in use is how online travel agencies (OTAs) and metasearch engines provide personalized travel recommendations. These platforms, using advanced analytics tools and machine learning algorithms, engage in extensive data collection to gather and analyze a wealth of information By understanding a traveler's preferences, such as favorite destinations, budget, travel style, and past trips, OTAs can present options that are more likely to be booked.

And your travel company is no different. By leveraging big data, you can offer the right products at the right price — and to the right customers at the right time.

Dynamic pricing

Dynamic pricing has become a key strategy in the travel and tourism industry, not just for hotels and flights but also for tours, activities, and other travel experiences. By using advanced algorithms and analyzing data in real-time, you can change prices based on factors like demand, season, competitor prices, and customer behavior.

For tours and activities, dynamic pricing is especially useful for managing spots available and adapting to changes in the market. For example, a popular guided city tour might change its prices based on the time of day, day of the week, or even the weather. Prices might go up during busy times or when there is a lot of interest and go down during slower times or when the weather is bad to encourage more bookings. Discounts might also be offered at the last minute to fill any remaining spots, ensuring that the tour operates at full capacity.

By using dynamic pricing, you can find the right balance between making the most money and attracting customers who are looking for a good deal. And in the end, this ultimately boosts your profitability and competitiveness.

Artificial intelligence (AI)

Today's consumers demand on-demand service and intuitive digital experiences. This is where AI really shines for travel brands. Offer smart virtual assistants and chatbots that understand the context to deliver personalized support 24/7 — handling booking inquiries, providing recommendations, and troubleshooting issues via instant messaging. But AI's impact goes far beyond just customer service — it can transform your entire operation.

By automating routine tasks, you can cut down on manual mistakes, work more efficiently, and use resources better. For instance, with AI-powered scheduling systems, you can optimize how you allocate your staff based on predictions of demand and when your employees are available. This ensures you have the right personnel ready to meet customer needs while also keeping labor costs down. On the back-end, AI-powered sentiment analysis lets you proactively detect and address service issues before they escalate.

With this approach, you can lead the AI revolution and outpace competitors in no time.

VR and AR

While mobile and AI modernize customer touchpoints, immersive digital technology like virtual reality (VR) and augmented reality (AR) lets you inspire major wanderlust right from the start. With VR, explorers can travel to any destination for first-hand virtual tours of hotels, cruise ships, local attractions, and more. Let them roam 360° to get a natural feel for amenities, room layouts, surrounding scenery, and nearby sights.

Then, deploy AR to infuse the physical travel experience with digital wayfinders, translation tools, and interactive property maps that reveal hidden location details. Simply by pointing their smartphones, customers can immerse themselves in a destination's stories, culture, and mysterious backstories.

Capitalize on VR and AR to ignite curiosity, build excitement, and let travelers truly preview the adventure before arriving.

Faster payments

Your travelers want a smooth and safe payment experience when booking their dream vacations. The worry about online transactions is a thing of the past; now, customers gladly use convenient digital wallets like Apple Pay and Google Pay, which simplify the checkout process. Travelers can easily book their trips with just a few taps on their smartphone, confident that their payment details are protected.

As a Stripe-certified company, we understand the importance of a dependable and efficient payment gateway in the travel industry. By integrating Stripe, we can help you offer various payment options, including popular installment plans. This flexibility makes expensive travel packages more affordable to more people, leading to increased bookings and happier customers.

By making the payment process smoother and focusing on high-level security, you build strong trust with your customers — and this trust leads to more online sales and supports long-term growth

Biometry

Biometry is another emerging technology in the travel and tourism industry, especially in the aviation sector. By using advanced biometric solutions like facial recognition, fingerprint scanning, and iris recognition, airports can make the process of identifying and verifying passengers quicker and more secure.

No more fumbling with passports or boarding passes — these technologies allow for an easier, touch-free experience, reducing wait times, cutting down on errors, and increasing passenger satisfaction. And by integrating biometrics with other digital systems, like baggage tracking and border control, airports can build a smart and connected environment that improves security and efficiency during the entire travel process.

The recent acquisition of Vision-Box by Amadeus, a leading travel technology provider, is also a significant step forward in adopting biometric solutions. By combining Vision-Box's expertise with Amadeus' global reach, the travel industry is poised to witness a new era of secure and efficient travel experiences. From check-in to boarding, unique biometric data becomes a passport to a smoother journey.

Blockchain

Blockchain technology is an emerging game-changer for rebuilding trust around traveler security and data privacy. As a decentralized ledger, blockchain serves up an auditable, fraud-proof record of every booking, payment, itinerary change, and more. You can autonomously execute refunds, credits, or adjustments using pre-programmed smart contracts.

Beyond operations, blockchain enables verified digital ID and shareable documentation storage solutions for customers. Look ahead to seamless biometric check-ins, loyalty program data management, and contactless arrivals — all secured by blockchain's distributed trust model. This unhackable approach eliminates fraud while letting customers take ownership of their personal data.

Be an industry leader by adopting blockchain for unparalleled transparency and remain relevant by meeting customers' increasing demands for data privacy and security.

Cloud adoption

Cloud computing is set to revolutionize tourism, making operations more scalable, flexible, and cost-effective. With this technology, travel companies now have the power to easily store data, manage online bookings, and run their apps without the constraints of traditional IT infrastructure.

By moving to the cloud, you can enjoy secure, centralized control over customer info, bookings, online sales data and other critical info, making everything accessible anytime, anywhere. This means updates in real-time, easy team collaboration, and the freedom to work from anywhere, boosting productivity and supporting remote teams.

Plus, with cloud technology, travel companies can adjust their resources up or down based on demand, saving costs and maintaining optimal performance during peak travel seasons. By adopting the cloud, businesses are setting themselves up for a future of faster, smarter, and more innovative service, keeping them ahead in the digital game.

Internet of Things (IoT)

Don't sleep on the Internet of Things (IoT) either! IoT connects physical spaces to the digital ecosystem, so hotel rooms can self-adjust to customer preferences before they even arrive. Leverage IoT sensor data to automate comfort settings like temperature, lighting, entertainment and more for a hyper-personalized experience.

Another forward-thinking IoT application in the travel industry is digital lock systems. These systems allow guests to unlock their hotel room doors using their smartphones without the need for traditional keycards. This not only provides a convenient experience for guests but also reduces the risks—there is no need to worry about lost or stolen keycards.

On the operational side, IoT monitoring provides a constant data feed on everything from HVAC performance to occupancy levels — alerting you to potential issues before they become costly problems. Effortless in-room conveniences like voice controls and smart home integration let you amaze customers by delivering intuitive, smart tourism experiences.

Smart destinations

Step into the digital era of smart destinations, where technology tailors travel to perfection. Borrowing from the smart city blueprint, a smart destination harnesses cutting-edge tech to uplift the tourist experience, aiming to perfect service quality and skyrocket customer satisfaction.

In these tech-savvy spots, the Internet of Things (IoT) powers everything. This means travelers' journeys are supported by a network of connected devices, from smart transport systems that whisk them away without a hitch to intelligent lighting that guides their path and environmental sensors that ensure the air they breathe is as fresh as the morning dew. Plus, with augmented reality and digital wayfinding, travelers' exploration becomes an interactive saga, with each step unveiling a new chapter of the locale's lore.

You can be a key player in this, knitting together collaborations with local stakeholders to stitch this digital fabric into the tourist experience. By championing smart destinations, you’re not just offering trips; you're giving travelers a seamless blend of digital innovation and sustainability. This isn't just travel; it's an intelligent journey where every element is pushing the boundaries of what it means to explore and enjoy.

Our experience

A few years ago, a travel company founder approached us. Their agency had been using an outdated CRM system for too long and desperately needed a new one.

The old system performed poorly, was difficult to understand, and felt clunky. This caused significant issues for the staff—some managers left the company because the system made it hard for them to do their jobs, and it took newcomers too long to learn how to operate it. The system was also buggy and unreliable.

We began building an entirely new, custom CRM system for the company. We ensured it would be intuitive, easy to use, and responsive. It wasn’t just about the design, but also the functionality—we added new features to store customer documents, calculate agents' commissions, and send reports directly to the accounting department.

This digital transformation was a huge success. The new CRM system allowed the company to process up to 30% more bookings through its team of 150 travel agents, all without hiring additional staff.

Conclusion

Digital transformation is an inevitable part of business growth, including for travel businesses. New digital tools can provide a much better customer experience and make your work more streamlined and efficient, while giving you an edge over traditional travel companies.

We focus on helping travel companies achieve digitally enabled growth and have vast experience in creating products that help businesses thrive in a challenging global market.