The remarkable growth of smartphone users in the UAE and increased connectivity over the past decade has completely transformed Dubai’s retail landscape.
A recent eMarketer’s study claims that by the end of this year, nearly 73 per cent of the country’s overall population will use mobile phones. As more and more residents become internet savvy, the trend is gradually shifting from traditional buying to online purchases – from books to tickets to services and utilities.
THE CONNECTED TRAVELLER
The broader, more connected ecosystem has driven the emergence and growth of ecommerce across a multitude of business segments. For instance, in the not-so-distant past the travel industry was driven by expensive brochures and offline travel agents. The advent of technology and the convenience of ‘one-click-away purchases’ have opened up different platforms that help travellers better organise their flight bookings and accommodation.
Consumers are now curating their own experiences leveraging knowledge and insights available to them through website, mobile and social media platforms, to make travel plans for the year. Some of the aspects that are driving growth in the segment are tie-ups with hotels and taxi firms to provide a complete travel package and the out-of-the-box solutions offered by new entrants.
Apart from this, innovative technologies including mobile apps that help customers connect with the portal have become key differentiators when selecting a long-term association with travel companies.
THE GATEWAY FOR PAYMENTS
From classic travel aggregators to luxury vacation packages at a discount, the selections available online make it easy to book nearly any trip, any time. According to the Middle East Online Travel Review, commissioned by Amadeus, the UAE’s online gross bookings over the period of five years have increased approximately three-fold as a result of a burgeoning affluent middle-class with an inclination to travel nearly four times a year.
Typically, travellers today can be categorised into three groups based on their values, behaviours and needs.
The ‘Next Generation’ travellers are defined more by attitude than demographics and more by comfort level and interest in technology than age, sex or economic strata.
The second group ‘Active Seniors’ are the ones that still seek the help of a travel agent, relying on face-to-face interactions rather than depending on technology, while the ‘Corporate Citizens’ category count on their companies to plan their travel itinerary, with limited choices of their own.
These three groups are broadly shaping the overall Middle East travel market.
The UAE leads countries in the Middle East for online travel, leaving Saudi Arabia and Qatar way behind. This can be attributed to the UAE being the home market for several big regional carriers such as Air Arabia, flydubai, Emirates and Etihad – combined with the surging population, high internet penetration and a growing mobile phones market. Approximately, 29 per cent of all flight bookings are currently made online, outpacing the 2011 forecasts. This figure is poised to rise to 42 per cent by 2018.
The total hospitality market value in the Middle East is an estimated $19 billion and the online penetration stands at 21.6 per cent, with a growth projection of 32 per cent in the next couple of years. The UAE clearly leads this space, accounting for 44 per cent of the market share, followed by Saudi Arabia at 19 per cent and Qatar at 5 per cent. Other countries account for 32 per cent.
Breaking down the buying medium, by 2018 gross bookings across the UAE from direct supplier websites are expected to account for 51 per cent of all online revenues, mobiles for 17 per cent and OTAs for 32 per cent.
EXPLORING NEW TERRITORIES
To serve a growing generation that may never interact with a human being to make travel plans, traditional travel companies should at least move a portion, of their businesses online, to remain competitive and relevant in an evolving market.
Technology advancement has led to the development of unique booking platforms that streamline travel businesses in today’s fast-moving and interconnected world.
Amadeus, for instance, has launched the new upgraded Amadeus Selling Platform Connect that allows travel agencies to access their customers’ bookings from anywhere in the world, from any device with an internet connection. The platform is simply accessed via a user ID and password, without the installation of any software.
Travel agencies can use the platform to make the booking process error-free, anticipate travellers’ needs, reduce overheads, and deliver professional and comprehensive itineraries within seconds. Online flexibility also opens up a whole gamut of new opportunities to agents in terms of mobility, synchronisation across the network and reduced technical costs.
THE NEXT BIG LEAP
To stay ahead, the big OTAs are following their customers as they switch from smartphones and tablets to wearable devices.
A good way to illustrate the benefits of wearable technology is to consider a hypothetical situation where you get lost at the airport or forget your gate number and boarding time. Now imagine the benefits of having the wearable strip or material deliver timely information straight to your watch.
An alert reminder that reads: ‘Boarding has begun’. The future – and not just for travel - is in micro-moments, not in browsing through pages of data. Having it accessible on your wrist is the way forward.
Focusing on the travel industry, those companies in the actual delivery of a travel experience – airlines, hotel operators, and tour-operators, among others – should quickly initiate pilot programmes to understand the areas in which wearable technology will provide viable operational benefits.
For agents, packagers, resellers and others in the business, wearable technology can offer new benefits and revenue opportunities to create content, measure satisfaction and allow real time reporting or metrics.
Given the ultimate value it brings, it is safe to say that wearable tech is most definitely the future of the travel industry.
• The writer is head of commercial strategy and business management, Amadeus Middle East and North Africa
By Ernesto Sánchez Beaumont