Phocuswright 2022: Travel firms must learn to dance to a different tune

Phocuswright 2022: Travel firms must learn to dance to a different tune

Futurist Rohit Talwar told the conference in Arizona this week that companies are exploring new revenue streams and models following the 'massive shock' of the pandemic

Travel firms are exploring new revenue streams as a reaction to the COVID pandemic, futurist Rohit Talwar told this week’s Phocuswright conference in Phoenix Arizona.

The founder and chief executive of Fast Future, said the “massive shock” has seen industry leaders give themselves permission to look at potential new storm clouds on the horizon to ensure they are prepared for the next crisis.

This is seeing firms identify new markets, revenue streams and business models and what decisions have to be made to ensure they are in a position to take advantage of them. 

Talwar said: “The [travel] industry has done a phenomenal job of recovering as well as it has from the pandemic and it’s only natural to be focussing on the here and now.

“But one of the interesting things we are seeing is there are a number of leaders in this industry who in the past may not have wanted to look at storm clouds on the horizon…but who are now saying we do need to give ourselves permission to look at these things because we have just been through a massive shock and we want to look at them in a different way.

“We all know that the future is very uncertain and many of the things that might happen are maybe unthinkable. We learned that during the pandemic. What we learned was that it was unmanageable and we did not have the tools to deal with it. We need to rethink some of our strategies, to think about what is going to happen next.”

Talwar identified three big looming challenges facing travel: climate change; economic vulnerability including inflation and recession, and automation through emerging technology and Artificial Intelligence. 

He warned the current round of layoffs at tech giants like Amazon and Facebook could suppress travel demand as fewer people will be travelling for work and said "hope is not a strategy". 

Travel firms should be opening themselves up to new models and revenues like alternative payments including Buy Now Pay Later, saving schemes and crypto which 350 million people own worldwide and which established payments firms like Mastercard and Stripe are supporting.

Talwar said blockchain and NFTs will see people realising the value of everything they own and use this to trade that value with other people and companies to pay for goods and services.

This can help travel brands reach the 60% to 70% of people who never stay in a hotel or have no access to travel.

“We are working with an airline. Challenge one is what if we have another pandemic or something else that shuts us down, how would we still generate 10% of revenues through other activities leveraging our brand?

“Etihad recently sold 2,000 NFTs for $349 each giving silver star status and access to benefits. Over 50% of people who bought them had never been on a plane before. They are reaching new audiences.”

The Metaverse also offers an opportunity for brands to reach new and younger audiences and create relationships with them which they can monetise. Talwar cited the concert by Ariana Grande in the game Fortnite that attracted an audience of 78 million as an example of this.

“We are seeing a lot of airports make more money from retail than landing fees. If you take that concept into the metaverse all retail brands can create your own presence there.”

Talwar urged firms to develop a mindset shift. He said they can “stay in their lane and will be fine” but they should be considering “radical scenarios” because as with the pandemic “we have just been through one”.

“What if you could start again? What if today was day one? What would you do if you cold start again? Be open to ideas. Everyone says they are open to ideas but what’s your organisation really like when someone comes forward with a radical idea?

“The music is changing very fast and we need to learn new dance steps. You have to get out there, experiment and learn. You can’t learn how to dance by writing a business plan. You have to get out there. You may look ugly for a while, you may kick yourself. But that’s our challenge: to create organisations that are really good dancers.”