Is the travel industry ready for its technology “leapfrog” moment?

First-time
hotelier Ryan Killeen launched The Annex in Canada at the end of 2018.

Business
was going well for the boutique hotel located in a leafy neighborhood in
downtown Toronto. Then the pandemic arrived.

With
his debut, Killeen, who previously worked at Sonder and Airbnb, planned
to carve out a space under the “tech-enabled hospitality” banner. He was
focused on a cashless property, digital selfies and touchless check-in, with a concierge-ambassador on site.

As it did for many other hotels, COVID
transformed The Annex experience, making it even more digitally-focused. It impacted countless other industries, too. According to a 2020 McKinsey Global Survey
of Executives, the pandemic accelerated the “digitization of customer and
supply-chain interactions, and internal operations” by three to four years.

“In
just a few months’ time, the COVID-19 crisis has brought about years of change
in the way companies in all sectors and regions do business,” the report
stated.

Skipping a beat

Now
new players entering travel and tourism are looking to benefit from technology
platforms borne out of this digital acceleration and platforms that have been
further enhanced by recent developments in artificial intelligence.

“I think we’ve seen a period of time from COVID to now where we’ve seen more change than we did in probably the last 40 years,” Killeen said.

Is
the travel industry now looking at its own “leapfrog” moment?

In
technology terms, leapfrogging relates to when a nation bypasses traditional
stages of development to jump directly to the latest technologies. A notable
example is mobile payments in Africa, as the continent skipped landline
telephony and leapfrogged to mobile. The leap catalyzed rapid impacts beyond
telecommunications, including mobile commerce and banking. That in turn created
jobs, growth,
transparency of markets and pricing.

Within
an industry as vast and fragmented as tourism, any leapfrogging will depend on
the sector. It’s also important to consider the extent to which travel is built
on what many would consider legacy infrastructure.

But
The Annex’s story is an increasingly familiar one. Several tech-driven
accommodation operators, including Bob W, Landing, Numa Group and Kasa (whose CEO Roman
Pedan said “we stand at a watershed moment in the
evolution of the hospitality industry) are scaling rapidly. Smaller
players are also making their debuts, putting technology to the test.

In search of seamless integration

On a
bigger scale, Saudi Arabia’s “newest” heritage destination is experimenting
with new technology to make a splash on the world stage. The Royal Commission
for Alula, set up to transform the desert region into a global tourism
destination, kicked off “Forever Revitalizing,” its
inaugural global brand campaign, in February.

Melanie
de Souza, executive director of destination marketing for Alula, likened her marketing
role
as being “given a blank slate to set up my own marketing team and to inherit
the building of the brand of a very special destination.”

The
commission has adopted a suite of digital experience platforms, including Adobe
Experience, Adobe Campaign and Sprinklr.

“From
the start, we recognized that we had to adopt a new, integrated approach that
would deliver a scalable campaign capable of creating a powerful first
impression,” de Souza said.

“These platforms, newly available in the Kingdom,
have yielded tangible benefits: personalized end-to-end customer experiences;
improved marketing ROI; data-driven visitor engagement; and a digital
experience reflecting AlUla’s unique offerings.”

She
added the campaign marked the first time the technologies had been weaved
together in such a way, marking a milestone in destination marketing for the
region. As well as marketing, the commission is working with a range of
technology partners across infrastructure, data, and visitor experience.

Alula is also
taking a holistic approach to AI through a new long-term
partnership with AI consultancy Artefact.
It also has an agency partner, Deloitte Digital, to help it stay ahead of the
trends and best practices.

“For
us, having a clean slate and starting our digital and technology investments
from the ground up has presented a unique opportunity — to build robust digital
infrastructure and simultaneously shape a visitor experience that can be
enhanced through our technology investments,” de Souza said.

In
the corporate travel space, pandemic startups such as Spotnana are also looking
at things with fresh eyes. “The whole premise is not built on a legacy tech
stack,” said co-founder and CEO Sarosh Waghmar at the time of its
launch.

Meanwhile airlines such as PLAY believe they have a competitive advantage building from the
ground up, as they have fewer legacy technology issues to deal with.

Dealing with debt

However,
one of the biggest barriers to starting fresh, regardless of the sector, is
that the travel industry is laden with “technology debt” as it strives to
modernize itself.

There’s
a lot of it lying around, according to Timothy O’Neil-Dunne, principal at
T2Impact.

“With incremental change, there are lots of problems that need to be
resolved,” he said. “One of the things that happens is there’s tech debt.
People always talk about tech debt. Nobody ever does anything about it. So it
just continues to grow.”

This
issue was mooted by Travelperk CEO and co-founder Avi Meir on LinkedIn recently. “There’s a big
opportunity to eat the lunch of 20+ year old companies. Their technical debt is
your opportunity,” said Meir, who recently spoke at Phocuswright Europe 2024.

However,
O’Neil-Dunne concedes that smart travel organizations are using software to
differentiate themselves, using new technology to overlay older
infrastructures. There’s a lot of emphasis on API connectivity, open software
and systems that can talk to each other.

“That
capability is a lot better today than it’s been for a long time, because you
now have better tools,” he said. 

Max
Starkov, a hospitality and travel technology consultant, agreed. “Oracle
Hospitality Integration Platform has 3,000 integrations, which was unthinkable
even a few years back,” he said. But he points out there is an ever-present
“real estate mentality” when it comes to hotel innovation, because banks
consider hotels in the same manner as they treat other commercial real estate
properties, like office buildings.

“They
have hotels. They have shopping plazas, and so forth. And they say, what
technology? You have elevators. What else do you need?” he said. 

As a
result, some sectors will inevitably remain more ripe for change than others,
in particular those without long-term infrastructures. O’Neil-Dunne refers to
the tours and activities sector as “open season” with the likes of Octo seeking
to create a new framework and consistency to encourage
the next wave of innovation.

“Here
we are, nearly 30 years after Viator. And has anybody got more than 1% of the
marketplace of tours and activities? I would say no,” he said.

As
for The Annex, Killeen believes his hotel has served as a blueprint and
playground to “discover what works and doesn’t work.” In October he revealed
plans to expand, with his next property under contract in Palm Springs,
California.