underline travel’s resilience in uncertain times. Lee Hayhurst reports

Sector’s spend on IT rises by 5% to £1.6bn

Last year’s Travel Weekly Insight annual report offered an upbeat assessment of the UK travel sector reflecting “resilience, investment and innovation in uncertain times”.

Uncertain times related to

an economy that was stalling, weakening consumer confidence and stagnating real wages, as well as Brexit and concerns over terror and company failure. However, a resilient sector for

holidays saw outbound departure numbers rise 5% in the 12 months to November 2017, according to the Office for National Statistics. A similar picture of continued growth in adversity is revealed in

the Travolution Innovation Report 2018, published this week. Its analysis shows spending on IT

by the UK travel sector grew by 5% last year to just shy of £1.6 billion. While this growth was down

on the 2016 figure of 7% and the lowest since 2012, it matched year-on-year growth in technology spend across all UK industries. For 2018, the report predicts

that growth in spending on IT by travel companies will dip again, to 4%, a rate that would see the sector lag growth across all UK industries for the first time since 2012. The good news for technology suppliers is that the travel sectors


Travel agents’ share of all industry’s spending on technology in 2017

with the biggest budgets – air transport, travel agencies and tour operators – are growing as quickly as at any time in the last decade. These three sub-sectors of travel account for 78% of annual travel technology spend, with travel agents accounting for 37% and air transport 30%. The ONS data on travel

technology spend reveals 34% of the total was spent in computer services – outsourcing, training and consultancy – in 2017. However, the next biggest

category of IT spend, software, has seen the biggest increases over the last four years, particularly among larger travel agents and operators. All travel sectors bar hotels,

which employs the most number of people, spend well in excess of the £4,671 UK average. Agents spent £8,765 per employee on IT. In this year’s report, emerging

technologies such as artificial intelligence are tipped to enable travel firms to keep pace with

Travolution Innovation Report sponsor

Atcore specialises in software and services for the leisure travel sector. Atcore’s Atcom and Tigerbay reservation and e-commerce platforms are designed to give businesses an edge in today’s highly

competitive and rapidly evolving market. Based in Slough, and with offices in London, Sussex and Cardiff, Atcore (formerly Anite Travel) is owned by its management and private equity partner Inflexion.

changing customer behaviour. Dave Cruickshank, chief

executive of Atcore, says the shift to voice-enabled devices, natural language, semantic search and more flexible tour operating models will drive innovation. But he says the onus is on the

technology providers to work in partnership with travel clients to ensure they are ready for the future. “As a travel company you do not necessarily need to be putting half of your development budget into becoming voice-search capable,” Cruickshank said. “We look at these emerging

technologies because we need to make sure our platforms are future-proofed so they can support

changes in consumer behaviour. “Tesla is a good example of this.

They are building cars capable of being fully autonomous, but that will only be turned on when the market is ready. “All travel technology providers

are under pressure to continually improve their products because clients expect you to be innovating faster than they could in-house. “What do [travel companies]

need to do themselves to be successful and in what areas are they best using the expertise of a partner to get there faster and more effectively? “What you have to decide is are

you a travel company or are you a technology company?”

About the Travolution Innovation Report 2018

The Travolution Innovation Report analyses IT spending in five travel industry sectors based on government figures. Data for the travel agent,

tour operating, hotel, air transport and water transport sectors is also split into five areas of IT spend: software, hardware, computer services, telecoms services and IT staff. The figures can be analysed on the basis of company size in terms of the number of employees, ranging from 1-9 staff to 1,000-plus. In addition, Travolution draws demographic data on the UK travel sector from the Office for National Statistics. With this data we can see

how travel companies’ IT spend per employee compares

to the national average. This year’s report was due

to be officially launched on Wednesday at a special Travolution Business Breakfast, sponsored by Ixaris, and at the annual Travel Technology Europe trade show. Speakers at the breakfast included report contributors Thierry Gnych, IBM’s travel European lead for intelligent operations, and Jon Pickles, The Travel Corporation’s global director fo 360 engagement, as well as Travel Counsellors chief executive Steve Byrne and Gareth Healy, partner at Inflexion Private Equity, parent of report sponsor Atcore. › To read a digital version of the Travolution Innovation Report, go to:

22 February 2018 71

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