Home News Phocuswright analysts share their travel industry predictions for 2024

Phocuswright analysts share their travel industry predictions for 2024

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It’s a new year and Phocuswright analysts are looking ahead – and the coming months could be filled with plenty of advancements and changes, per their predictions.

As a group, the analysts have presented PhocusWire with a wide-ranging selection of thoughts on industry factors including digital streamlining, funding and destination recovery, business travel and softening prices, alongside a myriad of others.

Responses have been condensed and edited for clarity and length.

Gary Bowerman, research analyst for Asia Pacific

  • Destinations in Northeast Asia and Southeast Asia will hope for a much stronger outbound recovery from China in 2024, while simultaneously seeking to diversify their inbound market mix and tap rising travel demand from Indian second-tier cities. The outcome should be a more dynamic, complex and competitive regional travel market in Asia Pacific, with India being a major player as travel suppliers across all segments plan their future growth strategies.

Robert Cole, senior research analyst for lodging and leisure travel

  • Digital identity technology will transform customs and immigration. Countries will move quickly to adopt decentralized digital identity technologies integrating biometrics (facial recognition), ICAO ePassports and self-sovereign identity credentials stored in traveler digital wallets. As a result, travelers will only need their faces and a two-second scan process (no phone or passport required) to enter a country. This technology will eventually expand into airplane boarding, hotel registration, ground transportation, dining, event ticketing and tours activities in the coming years.

Mike Coletta, manager of research innovation

  • Funding to travel companies will recover from an eight-year low in 2023.

  • Digital identity and biometric solutions will roll out across more destinations, airports, cruise lines and other tourism businesses.

  • Cybersecurity concerns will heighten further amid increasingly sophisticated threats.

  • The European Digital Markets Act will begin to affect distribution dynamics.

Coney Dongre, research manager

  • India will emerge as one of the top inbound source markets for many countries. Many countries will adopt strategies like easing entry restrictions, scrapping visa requirements, expedited visa processing etc. to attract Indian tourists.

  • The competition to be the top (hub) airport connecting the east and west will intensify. With many Middle Eastern carriers and countries focusing on tourism and building up non-oil sources of income, Asian carriers like Singapore Airlines eyeing a bigger share of the pie and Indian carriers aiming to expand international routes and overall capacity, the competition will heat up.

  • Virtual reality and metaverse startups/companies may not get a lot of support/investment because a) These technologies saw a spike during COVID, but with the resumption of in-person travel, the demand has not grown much and b) Generative artificial intelligence will grab the lion’s share of investors’ money and companies’ tech investment budget.

  • There will be consolidation in the experiences sector. With consumer demand showing no sign of waning, incumbents like Viator performing well and new companies entering the market, the experiences sector will secure more investment, a significant portion of which will be used for acquisitions.

Charuta Fadnis, senior vice president research and product strategy

  • European markets will see strong inbound leisure demand continue in 2024.

  • Transient business travel will return to pre-pandemic levels.

  • Investments in generative artificial intelligence will gather pace. Online travel agencies and metas will focus on adding and enhancing traveler-facing features and applications. Automation in business operations will pick up speed and simple autonomous agents will start to have an impact on workflows.

Fabián González, market analyst for Spain

  • The luxury travel segment will continue to grow by 7.5% on average globally until 2027, but the Asia-Pacific region is the one with the greatest growth at 10%. Europe, for its part, is the region with the largest market share, with more than a third of the global market.

  • The biggest disruption in years will happen in the air transportation segment. The entry of new operators in private aviation developing new business models will test the loyalty of legacy airlines business customers.

Madeline List, senior analyst

  • There will be more consolidation in the United States short-term rental market. Operators in hot domestic destinations will continue fighting for market share.

  • Customer-first STRs will come out on top. The market will favor those who can keep consistent professional standards, place hospitality at the forefront and run business with a customer-first approach.

  • Shoulder season will be busier than usual as the economy tightens and travelers search for bargains.

  • Continued crowding at tourist hot spots. While travelers say they want to see places off the beaten path, they’re not taking concrete steps to find quieter destinations. Major tourist attractions will keep seeing crowds until there’s enough aggressive industry marketing to encourage travelers to plan trips to places that best suit their interest over the places that are best known.

Bing Liu, director of surveys and analytics

  • As business travel steadily makes a comeback, the demand for bleisure/blended travel will continue rising.

  • Organizations and business travelers are increasingly recognizing their environmental footprint and will actively seek sustainable travel alternatives.

  • Chinese outbound travel will normalize and return to pre-pandemic levels in 2024.

Stan Pawlow, data analyst

  • The United States will adopt airline consumer protections similar to EC 261 [an air passenger rights regulation].

  • The desire to travel will continue to be unabated, and more consumers will take on debt to fund travel – mainly, millennials and Gen X.

Lorraine Silo, senior analyst and founder

  • I think we will see prices soften a bit to encourage more frequent and longer trips, but travel demand will remain robust, even though growth will slow compared with 2023.

  • Travel trends will normalize as cities are strong, and urban trends will also get a boost by the continued rise in business travel (corporate travel being close, but still not up to 2019 levels). Many Fortune 1000 companies will also cite sustainability goals as a reason for cutting back on corporate travel.

  • Small and medium-sized enterprises will continue to be a target for suppliers looking to reel in business travelers to their direct channels. Watch for more airlines and hotels adding platforms geared for small business.

  • The trend toward financial institutions offering travel bookings and incentives through their cards will continue, and there will be battles (and conflicts) among loyalty programs among suppliers, banks and OTAs.

Norm Rose, senior technology and corporate market analyst

  • There will be increased fragmentation of air inventory as airlines push exclusive content through direct channels. New airline global distribution systems agreements will allow content differentiation across channels. As airlines continue to push NDC as their preferred channel, the fragmentation across direct versus different types of indirect channels will accelerate.

  • Increased use of blockchain will offer a shared source of truth. Blockchain is being used in multiple industry sectors including finance, IT and agriculture. The travel industry has been slow to adopt blockchain technology, but the need for a single shared source of truth across suppliers and retailers and the need to reduce payment expenses will stimulate a new round of travel industry blockchain solutions.

  • Hotels bypass the GDS and develop direct API [application programming interface] connectivity to expand attribute-based pricing. Hotels have long been frustrated with the high costs and lack of flexibility of the global  distribution systems. With the advancement of attribute-based pricing, hoteliers will need to have better insight into customer needs to deliver specific rooms and amenities to their guests. Look for more hotel GDS bypass in 2024.

    More predictions!

    Find out what industry leaders are telling us the industry should be watching and working on in 2024.



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