Travel and Hospitality Outlook 2019
Key trends powering growth in a technology-driven industry
A strong economy, rising global consumer purchasing power, and digital innovation have all fueled record growth in the travel and hospitality industry. But there are still several challenges that could throw the industry off course in 2019. What are the biggest trends likely to shape hospitality, airlines, and ground transportation in the year ahead?
Key travel and hospitality industry trends for 2019
Over the past 10 years, the surge of recovery collided with an economic turning point in global emerging markets—fueling a historic burst in travel demand felt by segments across the travel industry.
But growth wasn’t limited to traditional players. It’s also been a remarkable decade for travel tech. Digital innovation helped form a lattice for entirely new segments to not only enter the market—but thrive. Some private accommodation and ride-hailing brands already sit side by side with the titans of travel.
Travel and Hospitality Outlook 2019
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Regardless of “when” or “if” a downturn materializes, hospitality leaders can always benefit from early planning. In the event of softening demand, the pressure will be on for revenue managers to maintain rates as pricing power shifts to the consumer.
Overall, it’s important for hoteliers to plan for the long term. Looking back over the past 30 years of up- and down-cycles proves that downturns are typically short-lived. Hotel owners looking to cut costs will inevitably clash with operators looking to maintain service levels. But those able to weather any potential storm without drastic reductions in service quality and rates will be better positioned for profitability when a bull market returns.
Leaders from most industries often talk at length about the powerful disruptive forces shaping their sectors. But few have felt the impact like ground transportation. And the rise of ride-hailing may just be the very beginning.
As existing ground transportation providers look to expand their multimodal solutions, data integration will be the key challenge. The industry should start preparing for new data processing rules required of integrated transportation platforms. Some may need to completely overhaul their data management processes. The recent launch of a monthly “Netflix-like” ride-hailing subscription service suggests business models in ground transportation are poised to change dramatically over the next few years.
Over the past decade, airline transformation has been enormous. The early success of the first low-cost carriers (LCCs) kicked off an industry-wide chain reaction, as traditional carriers raced to unbundle products and services to expose base fares and compete for budget-minded flyers.
2019 will be an exciting time for carriers to think creatively around revenue management. Technology and techniques are evolving quickly—with some travel suppliers already leveraging new pricing engines to update fares, as quickly as every 15 seconds. But for all its potential, dynamic pricing isn’t a simple plug-and-play solution. For many carriers, reaching this level of sophistication will require a structural change in data management processes and integration with siloed operating functions.
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