Co-authored by Sumit Sadhukhan
Some 3.8 billion people traveled by air in 2016, and those numbers are on the rise. Not only are more people taking to the skies, but the nature of travel also is changing. Leisure travel no longer will be exclusively for the privileged few. Millions of middle class and millennial travelers also will seek world-class travel experiences. In addition, trends such as ride-sharing, alternative lodging and smartphone use are reshaping how people interact with and spend money in the Travel and Hospitality (T&H) industry.
The supply side of travel, too, is undergoing a change due to an astonishing influx of funding into the travel-startup ecosystem. In the last 18 months alone, funding for travel startups has nearly matched the funding they received over the course of the prior 11 years.
For a traditional enterprise in the T&H industry, these disruptions pose three major challenges:
- Acquiring new guests and passengers while the industry’s customer base experiences large-scale demographic changes
- Retaining existing guests and passengers in the face of greater competition
- Sustainably differentiating to compete against disruptive entrants and travel startups.
The good news is companies today have plenty of levers they can pull to address these challenges, and these levers are becoming more and more powerful with new technology. The difficulty for T&H enterprises is discerning the right technology mix – including Internet of Things (IoT) solutions and analytics.
Read our recent ISG white paper Connecting Customer to the Travel and Hospitality Industry, in which we explore how T&H companies can exploit IoT solutions to meet the challenges they are facing today and seek new opportunities to connect with customers.
About the author
Sumit Sadhukhan is a proven leader in strategic consulting and advisory services with more than 15 years of experience. As a consulting manager with ISG’s Engineering Services practice, Sumit helps companies seize the opportunities of IoT. Prior to joining ISG, he held senior strategy consulting and engagement management positions at IBM, Tech Mahindra and Wipro Technologies.