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t to stop innovating even if there is a downturn. Lee Hayhurst reports


‘Cut IT spend and you risk playing catch-up’


Growth in spend on technology   trve firms et expectations last year but budgets are forecast to be cut back in 2019.


The latest annual analysis of Office for National Statistics data


by Travel Weekly sister publication Travolution found spending on technology by travel firms grew by 5 last year to £1.79 billion  one percentage point more than the 2018 report had predicted. For 2019, growth in IT spending


is forecast to be flat, in contrast to 6 growth across all UK industries, down from 9 last year. The slowing trend for IT spend


in travel comes as the sector faces continued uncertainty due to the economic outloo and concerns about the impact of reit. ut industry eperts warned


that firms that cut bac on investment in innovation and digital transformation could be left behind by competitors which continued to invest. Travel technology consultant


Ian ichardson, chief eecutive of TheIway, said If travel companies pull the plug on investment and innovation completely and mae it through the downturn, they will be two to three years behind when things pic up. ompanies need to be more data-driven and more digitalised. If they suddenly stop in their tracs and do not eep moving forward, they could be setting themselves up for a fall. It’s a uestion of reprioritisation while still moving towards some ind of long-term digital vision. laire Osborne, Travelport’s solutions sales director for northern urope, said for firms


5%


IT spend grew year on year to £1.79bn in 2018


to continue to be innovative in a softening maret they would need to focus on finding ways to increase automation. I would be looing at ways to


grow my business without having to invest in high-cost areas such as people, and using technology to mae the people I have more productive and efficient, she said. It’s not necessarily about


replacing people, because that can be very difficult. It’s about investing in technologies, systems or services that mae people more productive. Ian eonard, I head of sales,


travel and transport, agreed, saying the tech giant describes this approach as augmented intelligence, or using technology to enhance human abilities. ou have got to mae your


staff who engage with customers more efficient and able to service customers better, rather than service the business. It’s all about changing the consumer eperience. hris oe, ccorHotels’ sales,


distribution and loyalty vice- president, said to succeed in a tough maret, firms must eep on top of changing customer epectations. nd he said if there is a


downturn this year, he epected to see more innovation, not less, as well as some consolidation.


I thin bac to the last


recession when it got harder, oe said. re you giving the customer the right product It’s pointless forcing a product they don’t want down their throats. nd it’s about user eperience 


how to mae booing your product easier and simpler and under- standing your customer better. Their behaviour is not necessarily going to be determined by what they’ve done historically.


euirements change. Use data


analytics to understand customer behaviour. The holiday is no longer seen


as a luury. For travel companies today, it’s all about capturing people’s imaginations at the right time with the right product at the right price point. Fleibility and speed to maret


are ey. eople who respond uicest to changes in the maret will benefit the most.


Travolution Innovation Report 2019


The annual Travolution Innovation Report takes Office for National Statistics data and looks at investment in five travel sectors: travel agencies, tour operators, hotels, air passenger transport and water passenger transport. The data also allows


analysis of five categories of IT spend: hardware, software, computer services, telecom services, and IT and telecoms staff, and of firms in five different-sized categories based on the number of employees. Travel agencies and the


largest firms in travel – those with 1,000-plus employees – are the biggest annual spenders on technology in the sector, accounting for 37% and 55% of the total respectively. The IT category on which


travel firms spend the most is computer services – consultancy, training,


outsourcing and software and hardware support – accounting for 36% of the total. In contrast, all UK firms spent the most on IT and telecoms staff (38%). This year’s Travolution


Innovation Report includes contributions from Atcore on the emergence of voice search; contact-centre technology specialist Babble on using cloud technology for marginal gains; and leading UK online travel agent On the Beach on the importance of investing in talent. The report was officially launched on Wednesday at this year’s Travel Technology Europe trade show at which 6,000 travel technology buyers were due to visit Olympia in London for the two-day event. › Download the report at: travolution. com


21 February 2019travelweekly.co.uk79


FEBRUARY 2019 in partnership with


supported by


INNOVATION REPORT 2019


Annual analysis of UK travel technology spend


TRAVOLUTION.COM


TVN_FEB19_001b.indd 1


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