The 2024 guide to travel innovation and tech

The most significant innovation trends in travel technology and distribution for 2024 and beyond

This is a preview of the Phocuswright report
Travel Innovation and Technology Trends 2024

By Phocuswright Research

Introduction

By Mike Coletta, Manager of Research and Innovation

“Uncertainty” may be the one word that best captures the continued disruption we’ve experienced over the past few years, from the pandemic to extreme weather events, inflation, high interest rates and geopolitical tensions. In unsettled times, a deeper understanding of important trends becomes all the more critical. While uncertainty in the world may be increasing, it’s clear that several things in travel are certain:

Travel demand is resilient, having shown that it can and will bounce back from even the direst circumstances.
More than ever, travel businesses that don’t embrace emerging technologies are on a path toward obsolescence.

If 2023 was the year that generative artificial intelligence (AI) grabbed all the headlines, 2024 will be the year that companies start operationalizing it. AI has transformed from something esoteric into something nearly everyone has heard of, and every company needs to embrace. And while generative AI may have seemed like the only tech story of late, there are plenty of other developments in travel and technology that will influence how travel businesses operate in the coming years.

Each year, Phocuswright's expert analysts identify the technology and innovation trends that will significantly influence travel distribution and the wider industry in the coming year and beyond. In 2024, of course we’re giving generative AI the attention it deserves. But we’re also bubbling up underappreciated technologies, preparing for a future of digital identities and currencies, and keeping the focus on sustainability.

Coming soon: Individual reports on each of the six trends featured in this overview. Check phocuswright.com for updates.

This year’s World Economic Forum conference in Davos, Switzerland convened under the theme of “Rebuilding Trust”, citing the need to address “increasing division and uncertainty that continue to destabilize the world.” While this theme may refer primarily to the political and macroeconomic environment, trust is a crucial theme of ever-increasing importance in travel. Consider these questions:

Should travel companies trust generative AI to help inform their business decisions?
Can generative AI companies and platforms be trusted with proprietary business data?
With rapid advances in digital currency, can travel businesses trust that their financial and payment solutions will continue to be secure, efficient and reliable?
Do travelers trust the recommendations that generative AI gives them?
Are travelers willing to hand over their personally identifiable information in exchange for trip personalization?
Given that what’s good for the environment is not always good for business, can travelers trust the industry to do the right thing when it comes to sustainability?
Do travelers trust the authenticity of the reviews and other content that suppliers and intermediaries feature on their websites?

Travel can be a powerful force for good, and we can all do our part to rebuild trust where needed, whether between companies and customers, between nations, or between humans and computers. Generative AI has its share of problems that engender a lack of trust, from bias to hallucinations and copyright infringement. Indeed, all nascent technologies struggle with trust-related issues as they make the journey from marginal to mainstream. Keeping abreast of the latest innovations is the bedrock upon which we can understand how to effectively leverage new technologies while establishing and enhancing trust within our ecosystems.

The full report features brief introductions to the six Travel Innovation and Technology Trends that Phocuswright will cover in detail in 2024:

At a Crossroads: Underappreciated Tech in Travel
Who Owns the Customer Profile? How About the Customer?!
How Cutting Emissions Cuts Into Corporate Travel
From Buzzword to Bottom Line: Keeping Pace With Gen AI in Travel
Autonomous Agents in Travel Are Coming
Get Ready to Accept the Digital Euro, Rupee and Yuan

And stay tuned for individual reports on each of the six trends featured in this preview.

Get the full report Travel Innovation and Technology Trends 2024

At a Crossroads: Underappreciated Tech in Travel

By Markus Schreyer, Chairman, META Foundation

Travel is at a tipping point, balancing traditional ways of doing business with an exciting future of emerging technologies. The industry, while not a stranger to technological investment, lags other sectors in adopting and integrating new advancements. According to a McKinsey analysis of Phocuswright and Pitchbook data, in the past 15 years, only about 1% of startup funding across industries has flowed into travel and tourism.

The main limiting factors to technology adoption stem from concerns about the costs of integrating new tech, fear of wasting time on fads, and not wanting to compromise on travel’s essential human touch.

AI aside, the relative lack of funding points to an underappreciation of new technology in travel, which leads to underutilization in the industry, and ultimately to an underwhelming traveler experience.

The full report covers:

How travel companies can utilize its accumulated customer data effectively for cutting-edge, personalized campaigns
The main limiting factors to technology adoption
Balancing tech implementations with genuine human touch
How the latest consumer wearables presents a massive opportunity for the travel sector to close the tech gap

Who Owns the Customer Profile? How About the Customer?!

By Norm Rose, Senior Technology and Corporate Market Analyst

The very nature of digital identity is changing. Momentum is building to decouple identity from individual vendor-driven profiles by embracing a self-sovereign digital identity (SSI) that is owned and controlled by the individual. This shift would enable travelers to share information as needed with travel vendors while protecting their privacy. While SSI was introduced in 2016 and has gained some momentum over the last few years, it is hardly a universal trend that all have embraced. But the concept is starting to take hold. In the meantime, biometrics are becoming the standard for identifying passengers along the travel journey. How will these two trends work in tandem to remove friction from the travel process?

Digital identity could play a crucial role in generating more meaningful, personalized quotes from vendors. It also may present an opportunity for forward-thinking businesses to capture market share from competitors.

The full report covers:

Transforming current silos of customer profiles into a more universal view of the traveler
How digital identity generates more meaningful, personalized quotes from vendors
The accelerating pace of AI on digital identity
Various case studies revealing insights

How Cutting Emissions Cuts Into Corporate Travel

By Lorraine Sileo, Senior Analyst and Founder, Phocuswright Research

It's hard to predict the exact impact of sustainability actions on corporate travel, but it’s in the billions of dollars if nearly half of companies plan to cut back. Most business trips are driven by sales targets and competitive factors, but sustainability weighs heavily on decision-making as well. Considering pledges from the world’s largest enterprises, what’s good for the environment might not be so good for travel businesses.

By understanding how large corporations plan to achieve sustainability targets, we can better predict corporate travel’s recovery.

Coming soon: Individual reports on each of the six trends featured in this overview. Check phocuswright.com for updates.

The full report covers:

Several reasons for the slower pace of recovery
Science-based Targets initiative (SBTi) and Scope 3 emissions
Leading methods to achieve targets

From Buzzword to Bottom Line: Keeping Pace With Gen AI in Travel

By Cathy Schetzina Walsh, Senior Research Analyst
and Mike Coletta, Manager of Research and Innovation

Generative AI dominated travel industry conversation in 2023, promising to revolutionize the way we plan, book and experience travel. Across both leisure and corporate travel, the race is on to implement generative AI in everything from consumer interfaces to backend operations. As the industry moves beyond the initial hype, 2024 will be all about leveraging what has been learned so far to focus on the most beneficial use cases – and avoid wasting resources on those without a clear ROI.

Travel companies in 2024 are expected to accelerate investment in generative AI applications. But separating the winning use cases from the losers will be an ongoing process of trial and error.

The full report covers:

Separating the winning use cases from the losers
Backend applications, advertising and SEO and interface evolution
Results-based approaches

Autonomous Agents in Travel Are Coming

By Norm Rose, Senior Technology and Corporate Market Analyst

Generative AI is more than simply a technology to build a better chatbot. It increasingly enables the autonomous creation of complex types of content in text, audio and even video format. It has already impacted the travel industry significantly since the launch of ChatGPT in late 2022, from itinerary planning to customer service to the optimization of copy and much more. But how will it affect the industry in the long term?

The concept of autonomous agents has the promise of truly automating the travel planning and booking process, but what will that interface look like?

The full report covers:

How generative AI can be used to conceive, prioritize and complete tasks
What an interface looks like
The companies best positioned to create autonomous agents
Legal and regulatory concerns about the large language models (LLMs)

Get Ready to Accept the Digital Euro, Rupee and Yuan

By Norm Rose, Senior Technology and Corporate Market Analyst

Many in the travel industry have dismissed cryptocurrency as a passing fad due to the numerous high-profile failures of exchanges and stablecoins, as well as pending governmental regulation designed to limit cryptocurrency growth. As an ancillary result, something that may be going unnoticed by some in the industry is the fact that central banks around the world have begun issuing digital currencies. These Central Bank Digital Currencies (CBDCs) have many characteristics similar to cryptocurrencies, but they are promoted and controlled by existing central banks rather than by companies or decentralized organizations.

The stated goals of CBDCs are to increase privacy, transferability, convenience, accessibility and security, but the centralized control of CBDCs has sparked major concerns about these same issues.

The full report covers:

What is needed for suppliers and retailers to accept CBDCs as a form of payment
The different stages of CBDC development and execution
The stated goals of CBDCs
Legal and regulatory concerns about the large language models (LLMs)

Get the full report Travel Innovation and Technology Trends 2024

Coming soon: Individual reports on each of the six trends featured in this overview. Check phocuswright.com for updates.

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