Travel's tipping point
If you thought 2024 was a ground-breaking year for travel, you ain鈥檛 seen nothing yet. As we enter 2025, tectonic plates are shifting in the retailing space. There鈥檚 a tug-of-war happening with distribution, new business models paying serious dividends, while more and more disruptors are eyeing travel for their next move. And the robots are still coming, as AI鈥檚 true potential in travel becomes clearer.
All indicators signify that travel is at a tipping point. A watershed moment, where change spreads like never before. Other industries 鈥� like banking, fashion, and entertainment 鈥� have already experienced this, and can offer learnings on digital disruption. By taking this outside-in approach, and looking to the world鈥檚 best retailers, we can help travel stay on par with what consumers today really expect.
乐播传媒 asked 2,100+ consumers globally about the changes they鈥檙e witnessing in other industries. New things they like (and don鈥檛 like), what they want to see more of, and what makes a great retailing experience. After all, the same people who buy travel also buy other things, right? Therefore, they expect a similar service. We think travel is at a tipping point. And we鈥檝e used this research to create five predictions that will shape big change in the months to come.
乐播传媒 asked
consumers globally about the changes they鈥檙e witnessing in other industries.
1.
You鈥檝e heard of greenwashing. Now meet 鈥渃onsumer washing鈥� 鈥� a.k.a. companies doing things they pretend are in the consumer鈥檚 interest, but really, it鈥檚 about profit.
For example, LinkedIn wants you to keep your job title up to date 鈥榝or recruiters鈥�. Nothing to do with advertising data, wink-wink nudge-nudge. Apple claims its brand-specific (and expensive) Lightning Port™️ charger , yet the now-standard USB-C alternative is twice as fast, indicating that its more than consumer interests. BMW tried and failed to present heated seats as an 鈥榓dditional service鈥� 鈥� but customers balked at the idea of being charged extra for hardware that already exists. They had to put the brakes on that idea . And in travel, hotels often claim that encouraging customers to reuse their towels is solely for environmental reasons. But it鈥檚 also a great way for the hotel to cut down on servicing costs.
As more and more examples emerge, consumers are getting wise to this. We asked consumers how travel fares against other industries in this respect. People believe airlines, hotels, and travel companies partake in consumer washing via misleading prices (44%). And only credit card company offers were considered more misleading (45%).
Results from the survey
Travel is at a tipping point where radical transparency and a focus on consumer lifetime value is the only way forward.
This is the only long-term, commercially sustainable business model. Just look at retailers elsewhere. IKEA doesn鈥檛 hide the fact that you have to buy baskets separately for its much-loved Billy bookcase. Hasbro will tell you loud and clear: batteries not included. And we all know: guac is extra.
Low-cost carriers (LCCs) often make headlines for hidden charges. But the truth is, LCCs actually make this information readily available 鈥� possibly even more so than traditional carriers 鈥� because they provide prompts and warnings at many stages of the booking and throughout the journey. Some LCCs even go as far as aligning their controversial, hard line on fees . Caveat emptor, let the booker beware, and all that.
And while LCCs typically have a fairly simple set of costs, traditional carriers, on the other hand, have a lot less consistency when it comes to things like luggage allowances 鈥� 鈥渋s that transatlantic or regional international?鈥�, or change fees 鈥� 鈥渄epends on that ticket type, could be $25 or $400鈥�.
But it鈥檚 not just airlines coming under fire. Hidden resort fees are another big bug bear for travelers 鈥� so much so that the US House of Representatives is now .
There鈥檚 a huge opportunity for travel agencies to solve problems here. As trusted advisors, only they are positioned to offer the transparency people so badly need. Agencies with data enrichment tools that plug in to tech stacks can simplify offers and fees for everyone. And offer that radical transparency consumers need. Modern retailing isn鈥檛 sweeping clauses and caveats under the carpet. It鈥檚 about being honest with buyers 鈥� and knowing that honesty engenders loyalty. For travel, here鈥檚 what that could look like in practice.
Instead of
鈥淧enalties鈥� as a source of revenue. Bundles that hide charges, resort fees, cleaning fees
Pages of jargon-filled terms and conditions, available in English only
Sifting through pages of irrelevant offers
Only seeing one brand (DTC selling)
Slow, unsatisfactory customer service
You get
The price you see is what you actually pay
Clear purchase conditions and change policies up front
A curated list of relevant offers that suit your needs
Access to a range of clear, easy-to-compare options
Fast, customer-centric solutions
2.
While some companies are busy playing the consumer-washing game, others are winning hearts and minds by giving people what they really want 鈥� an easy life. Studies show our brains are drawn to things that make sense and lose interest in things that don鈥檛. Many modern retailers know this and use it to stand out in an increasingly complex world.
Like Venmo, Monzo, and Revolut, who have completely shaken things up in the financial services space. They won a chunk of market share by being faster, easier, and 鈥� let鈥檚 face it 鈥� more fun to use. Their appeal isn鈥檛 just about instantly transferring money, you can also get an AI-powered loan in minutes, trade stock, or buy cryptocurrency.
feel the new players have made managing personal finances easier compared to five years ago
of consumers feel that fintech apps have reduced the complexity of managing finances
Almost one in three people in the US now use Venmo. And, according to a , its rising popularity with big business is because they believe ‘legacy banks’ are too slow. The banks, for their part, seem to be taking a 鈥榠f you can鈥檛 beat 鈥榚m, join 鈥榚m鈥� approach by overhauling their own apps. But their efforts in countries like the and have completely failed so far.
You could say that travel today is in a similar place today as banking was five/ten years ago. Fintech has got its act together, and is way simpler today than it was five years ago. Travel seems to be headed in a different direction. As we learned in 乐播传媒鈥檚 2024 research, people are finding travel retailing more complicated, confusing, and frustrating than ever.
of travelers think travel is more complex now than it was ten years ago
Travel can take two lessons from all this.
1. Culture and mindset
Banks took 鈥榙igital transformation鈥� to mean transferring a bunch of century-old processes into app format. Disruptors did not. Instead, they ripped up the rule book and took a customer-centric view on what needed to change. They went for the jugular on little inconveniences that really make or break a user experience. Like making onboarding easier by drip-feeding regulatory requirements. They鈥檙e mobile-first and always on. And everything about their UX is modern and joyful 鈥� they even let you use GIFs and emojis. The result? Their digital experience isn鈥檛 just a fancy bank. It鈥檚 a totally reimagined way to bank.
2. Ruthless efficiency
With a new tech stack, fintech apps can automate more and are faster than legacy banks. They offer customers more data and insights. And, as their user base grows, they ensure service doesn鈥檛 suffer by using cloud-native, micro-services architecture to scale rapidly. This API-led approach allows for parallel development and deployment of different features, accelerates new launches, and enables seamless integration with other financial services. It also allows them to expand reach, .
Travel is gearing up for its fintech moment. Currently, the distribution ecosystem is complex. Air content is available via EDIFACT or API. The APIs are NDC or non-NDC. NDC implementations are inconsistent. And, over the next ten years, more changes will come. New content types. New data sets. New operating systems. You get the picture.
When that moment comes, who will be the banks and who will be the Venmos? This will be determined by your choice of tech stack. If you鈥檙e not up to speed with APIs, have no cloud-based micro-services, and not engaging with NDC you鈥檒l be left behind. You鈥檒l be the bank 鈥� not the trusted modern retailer.
Travel is gearing up for its fintech moment.
3.
In late 2024, Apple TV to be distributed as an add-on subscription on Amazon Prime. Why would two huge competitors come together to bundle their products this way? One reason is economics. Apple has spent on original content, only to get a meagre 0.2% of the US audience. More people watch Netflix in a single day than stream Apple TV Plus in an entire month. The other big reason is .
We鈥檝e reached a tipping point where there are now far too many streaming services to choose from. What鈥檚 that got to do with travel? Well, just like the streaming sector, travel too is experiencing an explosion of new content options and places to consume them. This is happening as a result of NDC, and airlines (understandably) wanting to attract more direct customers. And having more choice is great. But there鈥檚 a fine line where choice becomes choice overload.
From our findings, we can see that consumers struggle with choice overload and option paralysis in two ways. One 鈥� they find it difficult to choose a brand from the many available options. Staying with the example of streaming services, here鈥檚 how they feel about the number of providers right now.
say there are too many streaming services
would prefer to subscribe to one service that bundles everything
And two 鈥� when they do decide, they鈥檙e overwhelmed by the number of options available from their chosen provider. This creates a negative customer experience. And it also explains why people are now willing to pay more for curated content.
say the volume of content on streaming channels is overwhelming
would pay more for a service that has content curated
The best way to build loyalty is by meeting people wherever they choose to shop. That鈥檚 why, just like Apple and Amazon Prime, big travel companies are making compromises on distribution to help consumers find and consume their content in places not possible before. Even the most unlikely low-cost carriers are changing tack and to OTAs and TMCs. Meanwhile, some of the world鈥檚 largest traditional carriers are back to a more balanced, multi-channel strategy. Why? Because they now know first-hand that relying solely on a direct-to-consumer strategy doesn鈥檛 work.
In this age of excess, consumers crave a trusted partner to help them choose. It鈥檚 one thing to now have to select between a dozen or so streaming platforms. But 400+ airlines, with millions of dynamic offers? Travel has no choice but to adapt.
Sign up to get regular insights straight to your inbox.
4.
And speaking of subscription鈥t seems like almost every industry has embraced this business model. From beer to bikes to books, our research found that almost eight in ten adults now use some sort of subscription service. They cite time-saving, money-saving, and convenience as their main draws.
Travelers are increasingly turning to subscriptions too. With over 6.5 million Prime customers, eDreams ODIGEO is now one of the world鈥檚 largest subscription programs in any industry. Last year, subscribers grew by nearly 1.5 million and it aims to hit , with the model now being the company’s largest contributor of revenues and margins.
Subscription programs are also highly appealing to investors. They offer a steady stream of recurring revenue, tend to outperform traditional business models during economic downturns, and significantly boost customer lifetime value.
We dug a bit deeper into what consumers think of the concept, and the first thing that emerged was that not many people actually know it鈥檚 a thing.
of respondents didn鈥檛 know travel subscription models exist
That鈥檚 partly because, until now, travel brands have largely focused on loyalty programs to retain customers. But the findings show that people who travel as little as three times a year would be open to the idea.
eDreams ODIGEO鈥檚 subscription program aims to hit
subscribers in 2025
58% of people who travel just three times a year would consider signing up.
Gen Z were more likely to consider signing up to a travel subscription program than any other age group.
35% of travelers would consider signing up for a travel subscription program in future.
OTAs could have the edge when it comes to subscription models over airline loyalty programs in the leisure space. Consumers tend to look more favorably on OTA loyalty schemes versus supplier direct schemes run by airlines. And our findings show people are willing to pay more for complex subscription plans as long as they deliver exclusive benefits, early access to deals, and reduced prices by signing up.
I prefer online booking platform loyalty programs over airline loyalty programs
Plus, if you鈥檙e an OTA, you鈥檒l know all about the increasing customer acquisition costs imposed by Google and ad tech companies. The performance marketing hamster-wheel just seems to get bigger and bigger, and the question remains as to whether the ad spend buys long-term loyalty.
All this means we may see more OTA entrants into the travel subscription space in 2025. But wait, didn鈥檛 we just say that people don鈥檛 like having too many options to choose from? Won鈥檛 a ton more subscription services just confuse them even more?
Look at it from this angle. So far only one brand has seen the tipping point coming and acted fast to capture almost 6 million subscribers. But there are still billions more travelers. While streaming services all offer more or less the same types of content, there are still plenty of niches for travel to tap into 鈥� from , all the while focusing on curation as a way to add value. The data shows, more and more people are open to the idea of a travel subscription service. So, there鈥檚 limited opportunity for more agencies to get in on the action.
Sign up to get regular insights straight to your inbox.
5.
The past decade has seen a fair few technological 鈥榞amechangers鈥�. And then, along came the year of AI in 2024. The sudden emergence of ChatGPT ushered in the customary explosion of media and investment interest. Every conference panel session celebrated it. LinkedIn lit up with the possibilities. And we were surrounded by hundreds of 鈥淎I experts鈥� whose jumping ship from blockchain, virtual holidays and web3 we politely ignored. Except this time around, it鈥檚 not just hype. AI is the real deal.
So how do consumers feel about it? From our findings, we can see sentiment has broadly shifted from skepticism to trust and inquisitiveness 鈥� and there鈥檚 a lot of early adopters out there.
It鈥檚 also encouraging to see that consumers trust travel brands to use AI responsibly 鈥� more so than most other sectors.
of people trust travel to use AI responsibly
of frequent travelers trust travel to use AI responsibly
So far, a lot of the buzz has been about consumer-facing itineraries or using AI for customer support. While OTAs have invested heavily in using new generative AI for these purposes, the results were a little hit or miss last year. But hey, even Google .
There are signs we are moving quickly towards a major shift, however. We expect three major moves to be transformational in AI this year.
1. Big data analysis helps spot new opportunities for travel
Where Gen-AI really excels is in saving time and analyzing complex data, fast. If you鈥檙e a hotel opening in a new region, or an airline trying to improve capacity planning, there are now comprehensive, AI-powered reporting tools that collate, interpret, and forecast travel behavior across hundreds of airlines and thousands of hotels.
乐播传媒 is in beta phase of our Gen-AI data tool that does just that. Want to know the average number of PAX for LHR to Dubai in September based on historical data over the last five years in a report accompanied by some charts? Easy. Two sentences inputted into the large language model, and you鈥檙e done.
2. Google鈥檚 dominance in travel could start to falter
Open AI鈥檚 has arrived, and the world now has access to a new type of search. One that feels more like a two-way, organically evolving conversation than a frustrating, lonely trawl through Google. The notion of searching manually and clicking on high ranking, SEO-optimized webpages will seem silly by comparison in years to come.
Just as Apple was late to the streaming party, Google was late to the AI game with offering in the form of Gemini. But that鈥檚 not the only issue. Chat GPT Search has a relationship with Microsoft that goes deeper than money and computational power 鈥� it uses Bing鈥檚 indexing tools and crawlers. So, we can expect more referral results, chat tools, and more travel companies getting to grips with Bing Webmaster Tools.
The notion of searching manually
Desktop & Mobile Web Visits – sep 2024, Worldwide (Source: )
And last, but by no means least鈥�
3. AI-powered content curation helps solve NDC challenges
NDC and the explosion of content choice has been a big challenge for travel agencies in recent years. To solve for this, last year, 乐播传媒 launched our AI powered , which has been eagerly received by the agency community. Looking ahead to the rest of 2025, this provides a solution for managing NDC and multi-source content, and it will continue to alleviate some of the challenges that customers are experiencing around content choice and the explosion of offers.
Looking from the outside in, it鈥檚 clear that travel鈥檚 tipping point is just around the corner. Years of complex tech, short-sighted distribution decisions, and computer-says-no attitudes means the industry is now ripe for disruption.
But don鈥檛 take that as a bad thing. There鈥檚 also a HUGE opportunity up for grabs. The biggest piece of the pie will go to those who can see around corners, innovate early, and nail modern retailing. The way to do it is by learning from innovators and the laggards elsewhere, and figuring out what people really need most.
Amid all this change, one thing remains constant. And that is: the value that travel agencies can provide for customers seeking to navigate the choice and complexity on this high-stakes purchase.
At 乐播传媒, we strongly believe that travel agencies are best placed to offer an overall retailing solution for travel. Only they can help customers manage multi-brand shopping, presenting the best options in one convenient place. That way, consumers know they鈥檙e getting the best deal that truly puts their interests first, without spending hours shopping around or getting bogged down in comparing prices.
We think 2025 could be the year that travel agencies really get their moment to shine. As the tipping point inches closer, the question is: are you ready?
Want more insights like this? Sign up to our regular email.