Posts Tagged ‘ Hotel ’

Where will the travel industry be in 20 years?

Since I wrote my virtual travel book, I’ve been asked many times where I see the travel industry in 20 years. Though detailed predictions that far in the future are difficult to make, I do go into quite a bit of detail in the book.

And, it’s too much for a blog, or even a series of blogs. So, here, I’ll focus on the major transport aspects of travel, i.e., airlines, rental cars, and public ground transport. I’ll go into hotels, as well as architecture and construction in my next blog.

As virtual travel takes hold, I believe that in 20 years, the available market for traditional passenger travel by airlines, rental cars, and public ground transportation will be smaller, possibly significantly smaller, despite continuing population growth.

• There will be a clearly discernable and possibly significant reduction in the number of airline passengers.
• Airlines savvy enough to adapt will increase “non-human passengers”(i.e., freight) to take up some, though certainly not all of the slack.
• There will be a reduction in the number of flights, airlift capacity, number of employees and other aspects of their operations.
• Airline revenues will be down, and profitability will almost certainly continue to elude them all.
• This will have a domino effect on the aircraft manufacturing industry.
• Fewer departing passengers will mean fewer arriving passenger to rent cars. Local car rentals will not make up the deficit.
• As with the airlines, rental car companies will have reduced the size of their fleets, number of employees and other aspects of their operations.
• Rental Car company revenues and profits will be down, although profitability might continue to a point as they downsize.
• This will have a domino effect on the automobile industry.
• Local mass transit will have seen a ridership reduction
• The same will be true for taxis, buses, and other forms of ground transportation
• Public Ground Transportation revenue and profits, or contribution to profits will also be down.

Finally, and alarmingly for these industries, the trend will continue downward from the 20-year mark.

In the book, I think I make a logical case for these basic predictions.  Although all of you are certainly free to disagree. Check it out if you are a doubter, or if you’d like to get more rationale.  And please, let me know what you think!

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My experience at Marriott – the seeds of my Virtual Travel conviction

The seeds of my conviction that virtual travel will become a reality within many of our lifetimes came from my time as Chief Technology Officer at Marriott International, Inc.

I feel it will start with business travel, simply because it will be easier to completely satisfy business travel requirements virtually. The reasons for business travel relate to lots of different roles, such as sales, marketing, training, collaboration, joint decision-making, knowledge transfer, and many others. Travel associated with these roles, unlike leisure travel, can be effectively performed if just 2 of the 5 senses are effectively stimulated by the virtual business meeting offering: sound and vision. If the virtual experience gets these 2 things right, with such fidelity that the participants in these meetings feel they have not compromised anything by avoiding physical travel, then it would make little sense for them to actually take the trip.

Technology that is frequently referenced as TelePresence (a term coined by Cisco Systems) is pretty much delivering this kind of experience today. Let’s call it virtual business collaboration technology. Multiple companies, including but not limited to Cisco and Hewlett Packard provide it. It is not some futuristic vision that has not yet been achieved. It is here now, and it is a stellar experience.

As CTO of Marriott, I felt that our company needed to embrace this technology, because it would eventually replace the need for in-person collaborative business meetings. Within the hotel industry, Marriott was on the cutting edge by creating a few public access virtual business meeting studios in selected hotels over five years ago, and have increased the number since.

In recent years, the technology has also penetrated more densely into public access building, such as hotels and airports. Concurrently, businesses have been installing virtual business collaboration technology and using to dramatically curtail physical travel. These companies and their employees are getting used to it, and they like it.

Because of their investment in this technology, they will continue to use it even as the economy recovers. So, it is unlikely that small, interactive business meetings in hotels and conference centers will come back to levels the travel industry enjoyed before the downturn. These companies will have to adjust. And when virtual leisure travel hits within the next 20-30 years, small adjustments to the travel industry business model will no longer be a survival option.