INNOVATION REPORT 2021
SPENDING PLUMMETS
TRAVEL AGENT AND AIR PASSENGER TRANSPORT SECTORS SLASHED TECH SPEND THE MOST IN 2020 IN FACE OF PANDEMIC. LEE HAYHURST REPORTS
T
he headline impact on IT spend in travel of a 36% reduction illustrates how far and deep companies in the sector cut back on their technology budgets as the pandemic crisis unfolded in 2020. $ FORVHU ORRN DW WKH fiJXUHV VKRZV MXVW where the impact was most keenly felt, with the industry’s two biggest spenders on IT, Air Passenger Transport and Travel Agents, seeing the biggest drops. In Air Passenger Transport, spending fell from £547 million in 2019 to £338 million, a reduction of 38% in a sector that has only achieved double-digit growth RQFH LQ WKH ODVW fiYH \HDUV
LQ This year’s forecast 2% growth
VXJJHVWV ZLWK LQflDWLRQ WDNHQ LQWR account, a stagnant picture for a sector that accounted for 29% of all IT spend in travel in 2020. In fact, the £345 million the sector is expected to spend in 2021 would be its second-lowest annual outlay of the last decade, behind last year. It should be noted, however, that the sector would be on track to grow 8% this year were it not for a one-off £18 million hardware investment in 2020. Travel Agents’ IT spending fall of 36% to £358 million follows double-digit UHGXFWLRQV LQ ERWK
DQG DOWKRXJK WKH VHFWRU UHPDLQV
travel’s largest IT spender with 31% of the total. Between 2014 and 2019, agents’ annual spending on IT stayed at a high level, but budgets last year and this have fallen back to levels last seen in the period between 2008 and 2013. The ONS data analysed for this year's
AIRPORT PASSENGERS v TRAVEL AGENTS AND TOUR OPERATORS' TURNOVER GROWTH, 2009-20
10 20
-80 -70 -60 -50 -40 -30 -20 -10 0
2009 2010 2011 AIRPORT TERMINAL PASSENGERS 2012 2013 2014 2015 2016 AGENTS AND OPERATORS' TURNOVER
Innovation Report LQFOXGHG D VLJQLfiFDQW correction for Travel Agents’ expenditure on Computer Services which had been RYHUVWDWHG LQ SUHYLRXV RIfiFLDO VXUYH\V Travel’s third-biggest IT spend sector,
Hotels, is forecast to recover all 35% of its 2020 retraction this year, taking its proportion of travel’s total to 25% from 21% last year. Hotels have shown steady, if unspectacular, growth in IT VSHQG RYHU WKH SDVW fiYH \HDUV VR WKH response to Covid could indicate a sector that has been slow to digitise is fiQDOO\ JUDVSLQJ WKH QHWWOH After Water Passenger Transport arrested a period of falling IT spend in 2013, the sector recorded sustained and steady growth and this year’s £102 million estimate is around double 2015 spending. Its 21% fall in 2020 was the smallest of all travel sectors, but this must be set against the fact that the sector accounts IRU MXVW
RI DOO WUDYHO ,7 VSHQG Accounting for 11% of total IT spend
in 2020, Tour Operators are forecast to follow up 2020’s 35% reduction with an
18% increase this year. The £156 million predicted for 2021 would be the third-highest outlay for the sector since 2008 as operators recover ground on the rest of the industry lost in recent years. Between 2008 and 2018, Tour Operators’ proportion of IT spend in travel tracked at around 8% to 9% a year, but has MXPSHG WR
DQG ZLOO KLW WKLV \HDU
if our predication proves accurate. While the Covid impact is likely to be
short term as travel recovers, the sector’s heaviest investors in IT, Travel Agents and Air Passenger Transport, are seeing longer-term declines in expenditure. Since 2016, the former averaged a 19% reduction, the latter a more spectacular UHflHFWLQJ VLJQLfiFDQW FRQVROLGDWLRQ in both sectors with the collapses of Monarch Airlines and Thomas Cook. With Travel Agents’ revenue growth so closely aligned with aviation passenger numbers VHH FKDUW DERYH , fiUPV WKDW SURYLGH WHFKQRORJ\ WR ERWK will be hoping a return to international fl\LQJ ERRVWV ERWK VHFWRUV
2017 2018 2019 2020
32 — SEPTEMBER 2021 —
TRAVOLUTION.CO.UK
%
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
