Travolution Innovation Report 2022: Annual analysis of official data reveals travel industry’s increased Continued from page 64


relaxed and recovered earlier from the Covid-19 pandemic. Hotels’ £349 million


outlay on technology in 2021 accounted for a quarter of travel’s total expenditure, while the travel agency sector’s £314 million in spending accounted for 23%. The 23% uplift in hotel IT


spending last year was also by far the largest in travel year on year, although travel agents are forecast to catch up this year with a 70% hike compared with a 35% rise in the hotel sector. However, aviation (‘air


transport’) consolidated its position as travel’s biggest-spending sector in 2021 with 33% of the total, up from 29% in 2020, despite its £454 million outlay being 6% down year on year. A comparison of the


forecasts for 2022 with pre-pandemic IT spending in 2019 suggests the hotel sector will see the biggest rebound, with spending up 22% on 2019. No other sector is tipped


to record double figures. A 1% increase in travel agency spending compared with 2019 underlines how the sector is only just regaining lost ground. Tour operator IT spending


this year is forecast to be 7% up on 2019 and the overall aviation IT budget up 8% on the last pre-pandemic year, while the water transport sector remains 5% lower. The overall 4% growth in


travel IT spending in 2021 lagged the national average of 8% for UK businesses, but the 44% growth in spending predicted for travel this year is well ahead of forecast IT growth of 12% for UK business as a whole.


Spending upturn ma


TheTravolution Innovation Report has noted consistently for a decade that travel firms commit a smaller proportion of their total technology spend to IT staff than the UK all-businesses average. IT employees were the sector’s


second-largest IT outlay in 2021, at £377 million or 27% of the total. Computer services remained the largest area of spending at £435 million or almost a third (32%) of the total. By contrast, the amount spent on


IT staff among all UK businesses was comfortably the largest category of spending, amounting to £84 billion, with computer services a distant second on £51 billion. This disparity between travel and


UK business as a whole is only likely to widen this year as travel industry


spending on IT staff is forecast to grow by the lowest percentage of the five technology categories. Travel is forecast to spend 27%


more on IT staff in 2022 while spending on hardware will rise by 65%, software by 66%, computer


TOTAL IT SPEND IN TRAVEL INDUSTRY, 2021


Tour Operators £149.1m


Passenger Water Transport £113.6m


£1.5bn


Travel Agents £314.2m


TOTAL: £1.38bn


Passenger Air Transport £453.9m


services by 50% and telecom services by 31%. However, travel spending on IT staff was the only technology category to see growth during the pandemic, albeit marginal, reflecting the competition for scarce digital skills. Spending on IT staff across UK


industry is forecast to increase by just 14% this year and on computer services by 17%. Office for National Statistics


data confirms the largest UK travel firms account for most of the sector’s annual technology budget, as would be expected. The 35 companies with 1,000-plus employees recorded 50% of the total spending in 2021 or £686 million. Together with firms employing between 100 and 999 staff, they accounted for 80% of the total. However, the data reveals


IT SPEND IN TRAVEL, 2008-22 £2bn


£1bn


Hotels £349.2m


IT SPEND BY SECTOR PRE-PANDEMIC (2019) v FORECAST (2022)


£700m £600m £500m £400m £300m £200m £100m


2019 2021 2022 forecast


TRAVEL IT SPEND BY TECH CATEGORY, 2016


£800m £700m £600m £500m £400m £300m £200m £100m


Hardware 2021 2016 2021 2016 2021


Software


Computer Services


62


27 OCTOBER 2022


travelweekly.co.uk


2008 2009 2010 2011


2012 2013 2014 2015 2016


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