In an age marked by rapid digital transformation and changing consumer expectations, the travel and hospitality industry stands at a crossroads. The traditional playbook is no longer sufficient to meet the demands of an evolving market. To thrive in the future landscape, travel and hospitality firms must embrace innovation, collaboration and sustainability as core pillars of their strategy.
A 2024 survey by HFS Research, in partnership with WNS, involving 315 enterprise leaders across airlines, airports, hotels and online travel agencies, investigates how travel and hospitality firms are re-organizing, keeping the future in mind. Here are some of the pivotal insights from the study:
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Shaking Off Legacy Constraints: The journey toward transformation begins with shedding outdated processes, technologies and mindsets. Modernization is not just an option; it's a necessity for firms looking to remain relevant and competitive. By investing across functional, enterprise and ecosystem modernization horizons, companies can pave the way for meaningful change.
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Embracing Emerging Technologies: While Generative Artificial Intelligence (Gen AI) holds promise for the future, foundational technologies such as cloud transformation remain paramount. These investments serve as building blocks toward modernizing travel and hospitality enterprises, laying the groundwork for future innovation.
More than 50 percent of travel and hospitality firms still invest in cloud transformation.
Source: HFS Research, 2024
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Tapping into Ecosystems for Sustainability: Achieving a sustainable future requires collaboration and strategic partnerships. Regulatory commitments are driving sustainability initiatives, making it essential for firms to leverage expertise from their ecosystem partners to execute their strategies effectively.
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Prioritizing Product and Service Innovation: Adapting to changing customer expectations and digital disruption demands rapid innovation. Travel and hospitality firms must invest in new business models and continuously evolve their offerings to stay ahead of the curve.
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Accelerating Digital Maturity: While progress is evident, there is still significant ground to cover on digitalization. Sales and marketing, procurement and HR functions offer improvement opportunities to achieve full digital maturity.
73 percent of travel and hospitality firms are yet to attain full digital maturity.
Source: HFS Research, 2024
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Balancing Cost Containment and Innovation: Finding the equilibrium between cost efficiency and innovative differentiation is driving digital investments. By striking this balance, firms can focus on ecosystem-driven strategies that deliver long-term value.
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Seeking Strategic Partnerships for Digital Ambition: Travel and hospitality firms recognize the importance of collaborating with strategic partners with domain expertise and consulting prowess to realize their digital ambitions. Whether through 'buy' or 'partner' strategies, collaboration with credible partners is crucial for success in the digital landscape.
40 percent of travel and hospitality enterprises are focused primarily on a ‘partner’ strategy to enhance their digital presence.
Source: HFS Research, 2024
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Meeting Evolving Customer Expectations: The shift toward a customer-centric approach requires breaking down functional silos and delivering personalized experiences. Enabling technologies are vital in driving core modernization efforts while addressing data challenges.
As the travel and hospitality industry evolves, firms must embrace change as an opportunity for growth rather than a barrier to success. By prioritizing innovation, collaboration and sustainability, they can confidently navigate the future landscape and emerge as leaders in a rapidly changing world.
Dive deeper into the challenges, priorities and opportunities facing the travel and hospitality industry in 2024.