Is AI more than just a buzz?
With worldwide digital travel sales expected to reach $817.54 billion by 2020, there are clear trends driving that growth and the UAE is no exception. Data science is one of the most promising technology fields that is changing the way many people travel.
Acceleration of payment technology to ease e-commerce growth
We are seeing the convergence of two industries booming at the same time here in the GCC - credit cards and e-commerce. Credit card applications grew 65 per cent year over year in Q1 2017, whilst we see a comparative growth in a nascent ecommerce sector, which still accounts for only 2 per cent of retail in the UAE vs 15 per cent in more developed markets. That being said, the GCC eCommerce industry is expected to massively outperform the high street by growing at 30 per cent CAGR vs 4 per cent for traditional retail in the run up to 2020.
It can only be good news for the travel industry to see more advanced and future proof online payment technologies reaching our shores, such as the introduction of Apple Pay. In a travel market still experiencing a lower than average online share of bookings, more ease of use, security and confidence in spending online can only help accelerate the inevitable march towards online travel sales.
Rise of robots
It seems that today you can’t open a marketing industry magazine or attend a travel conference without being bombarded by buzzwords like machine learning and artificial intelligence, and in most cases the use of these words doesn’t go far beyond the buzz. However, for the GCC, this is accelerated by the incredible initiative ‘One Million Arab Coders’ which received 500,000 applications in the first week alone!
The travel sector simply can’t afford to be slow to adopt the opportunities that ML and AI can bring. If done right, it can transform everything from customer service, revenue management and dynamic pricing, load forecasting, market analytics, UX and marketing optimisation. So far, we’ve only touched the surface of AI and early adopters may well find that it provides capabilities which save costs, accelerate growth and distance their competitors.
Time to capitalise on an optimistic year ahead!
The IMF is predicting the UAE’s economy to grow 3.4 per cent in 2018 compared to 1.7 per cent during this year. In 2018, MENAP (Middle East, North Africa, Afghanistan and Pakistan) growth is expected to increase to 3.5 per cent. This indicates a healthy margin of increased economic activity that will find its way into our sector.
Looking ahead, we need to ensure that we are taking full advantage of this increased activity in our region and not being left behind. Be ready for fluctuation – how can you leverage predictive analytics to ensure you’re best placed for increases and decreases in traffic by source market? Be it China, Russia or the UK, are you optimised in price, product and marketing to be as effective at the right time and in the right place? 2018 is going to see travel brands continuing to improve and perfect the personalisation of engagements with consumers.
If the stars all align in 2018, our industry could see a consumer who is better enabled and more comfortable shopping online for high value items, a market which is getting back to growth and presenting more opportunities to scale revenue and a travel business model which is better powered and optimised by bleeding edge technology across marketing, service and operations. So roll on 2018!