NEWS TRAVEL WEEKLY BUSINESS
TRAVOLUTION INNOVATION REPORT 2016
Innovation Report 2016: Surge in software investment spearheads dr SaaS fuels technology
UK travel sector spending on technology saw a spectacular 12% leap in 2015 as travel agencies and tour operators ramped up their investment in software.
The key finding in this year’s
Travolution Innovation Report, which analyses government data on IT spend in travel, came as a surprise after just 5% growth was predicted last year. However, observers say the
Travel Weekly sister publication Travolution has published the Travolution Innovation Report 2016, its fifth such report analysing IT and telecom spend in the UK travel industry. The analysis was produced by Kew Associates for Travolution. The report covers five
travel industry sectors – travel agents, tour operators, hotels, air transport and water transport – and expenditure in five technology categories: hardware, software, computer services, telecom services, and IT and telecom staff. The data allows us to analyse spend across five company-size bands in terms employee numbers, providing a benchmark study in terms of overall expenditure as well as spend per employee. This year’s report was jointly sponsored by Criteo and Intent Media and supported by Travel Technology Europe, the trade show at which it was officially launched this week.
To download your copy, go to
travolution.com
sudden spike is explained by the rapidly growing influence of new Service as a Software (SaaS) technologies, particularly those associated with mobile. The rise meant travel’s spending growth on IT last year outstripped the UK average threefold, taking overall spending to £1.3 billion, or 1.17% of total UK technology expenditure by businesses. Software expenditure growth
in travel was almost 50% in 2015, whereas among all UK businesses there was no increase. This was down to mid- to
large-sized agencies and operators, according to the data, and a continuation of a trend of increased software spend in travel first seen in aviation in 2013. While all five travel sub-sectors
analysed saw IT spending rise in 2015 and are forecast to rise again in 2016, spending on hardware last year saw a decline of 21%. US-based travel technology consultant Norm Rose picked out four key factors, including mobile, OTA competition, distribution changes and the need to update legacy systems. He said: “Growth from the two
largest global OTAs – Expedia and Priceline – is causing the traditional players to spend more on technology to remain competitive. And with mobile now
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travelweekly.co.uk 25 February 2016 32%
BY TRAVEL SECTOR
SPEND IT 33% 19%
Tour operators Passenger water transport Passenger air transport Hotels Travel agents
The dramatic spike in travel software spend £100 million
£80 million
Travel agents (1000+ employees)
£60 million
Tour operators (100-999 employees)
12% 4%
Air transport (1000+ employees)
Travel agents (100-999 employees)
£40 million
£20 million
£0k 2011 2012 2013 2014 2015
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