amatic upturn in technology spend, reports Lee Hayhurst COMMENT spending spike


Total travel IT spend per category v total IT spend for all UK industries


Travel IT spend £400 million £350 million £300 million £30 billion £250 million £200 million £150 million £100 million £15 billion £50 million £0


Hardware Software Computer services


Telecom services


£10 billion


IT & Telecom staff


2014 2015 2016 Total travel IT


FORECAST spend by company size £800 million £700 million £600 million £500 million £400 million £300 million £200 million £100 million 0 1-9 10-49 50-99 100-999 1000+ £25 billion £20 billion


mainstream, travel companies must, as a minimum, ensure their website is built using responsive design and many need to invest in app development as well. “With traditional distribution under pressure, as illustrated by Lufthansa’s €16 GDS [global distribution system] fee, agents and operators need to invest in systems that include direct booking sources,” Rose added. “And tour operators need to update their platforms as many are based on old technology.” Ian Richardson, chief executive


of technology consultancy ICE ICT, agreed, saying mobile and outdated legacy systems were the key drivers of change. “For the last 10 years the travel industry has spent its efforts concentrating on the pre-booking process,” he said. “With the advent of mobile smartphones and apps, and the customer always online, there has been a shift to interacting with the customer throughout the booking lifecycle. “Another consideration could


be that a lot of companies have probably limited investment in technology since the crash in 2008. “The jump in the last year could be because the need for investment has become critical or unavoidable due to platforms becoming unsupported without further investment.”


All UK industries IT spend £40 billion


504,000 THE NUMBER OF £35 billion


PEOPLE EMPLOYED IN THE UK TRAVEL SECTOR IN 2015


Shift to software solutions could be the final piece in the jigsaw


This year’s Travolution Innovation Report may mark 2016 as being a sea change year in the industry. Many of the earlier Travolution reports indicated that our industry was focused on automation rather than innovation. Our industry’s legacy- intensive systems, combined with the fact that travel is essentially a service sector with product sector margins, focused travel companies on simply automating multi-vendor people-intensive processes, often based on decades-old proprietary platforms. This year’s results look decidedly different. The


big growth in software-related spend, combined, critically, with an increase in spend on IT staff, indicates something fundamental. The software spend indicates a growth in


support for mobile, and mobile-enabled platforms, and this in turn indicates an emphasis on the whole-travel lifecycle, as opposed to just the booking and pre-trip phases. The growth in software spend also indicates


a move away from the proprietary-systems past, towards flexible open platforms. The 10% growth in IT staff spend is similarly significant, as it indicates that growth in spend on software and IT services is not coming at the expense of staff. With all the talk of driverless cars, and avatars


replacing travel consultants, it is easy to envisage a future where software replaces people. The CIA famously conducts an aptitude task


for applicants, involving having to complete a jigsaw of a complex IT or process diagram in under a minute. However, lateral-thinking applicants turn the jigsaw pieces over, where they discover a picture of a person’s face that can be slotted together with ease. There is a


metaphor here: it is the people behind the technology that make the technology come together.


SIMON FERGUSON


vice-president and managing director, northern Europe, Travelport


25 February 2016 travelweekly.co.uk 69


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