INNOVATION REPORT 2021 H
istorically, the travel sector’s mix of IT expenditure within WKH fiYH DUHDV RI VSHQG ZH analyse for this report differs markedly from the picture for all UK businesses. Travel has tended to focus its spend on Computer Services and Software which, combined, accounted for over 60% of the £1.9 billion spent in 2019. ,Q WKH 8. WDNHQ DV D ZKROH fiUPV have historically spent most on their IT Staff (£61 billion in 2020), well ahead of Computer Services (£47 billion) and Software (£42 billion). However, the drastic cuts in IT expenditure in travel in 2020 due to Covid has brought the sector’s spending pattern more in line, with IT Staff costs rising to the second-biggest behind Computer Services.
Cutbacks hit Computer Services and Software particularly hard, so they accounted for just 50% of the total outlay in 2020, 10 percentage points down on the previous year. Computer Services, travel’s biggest area of spend, was one of three areas that saw 40%-plus reductions in spend last year, with £344 million spent, down from £589 million (-41%). The biggest fall was seen in Telecom Services which saw expenditure reduce by 47% to £181 million, while Software spend was down 44% to £236 million. Hardware’s long-term decline in spend meant there was little meat on the bone in this IT sector, so spend was down 24% taking the total to under £100 million for WKH fiUVW WLPH LQ RYHU fiYH \HDUV IT and Telecom Staff cuts in travel ZHUH OLPLWHG WR MXVW
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fiUPV ZHUH IRUFHG WR SULRULWLVH DUHDV where they could make rapid savings as the pandemic took hold.
PREDICTIONS FOR 2021
It remains to be seen whether this greater focus on human IT resources, no doubt due to a mixture of furlough and the costs of making redundancies, becomes a feature of tech spend in travel. Our ➢
IT CATEGORY SPEND -47%
Chart 1: TOTAL IT SPEND IN TRAVEL IN 2020 BY TECH CATEGORY
TELECOM SERVICES IN 2020, THE
FALL IN SPEND IN
BIGGEST DROP OF ANY UK TRAVEL SECTOR
IT & TELECOM STAFF £306.1m
SPEND ON SOFTWARE IN 2020 – BIGGEST OF ANY SECTOR IN ANY IT CATEGORY
FALL IN OPERATOR -54%
IN IT SPENDING BY HOTELS IN 2021 – LARGEST
FORECAST RISE 35%
PREDICTED FOR ANY SECTOR
2%
– LOWEST FIGURE FOR ANY SECTOR
FORECAST RISE IN IT SPENDING BY PASSENGER AIR TRANSPORT
£312.1m IT & TELECOM STAFF
SOFTWARE £236.2m
HARDWARE £97.8m
TELECOM SERVICES £180.9m
COMPUTER SERVICES £344.2m
Chart 2: FORECAST TOTAL
IT SPEND IN TRAVEL IN 2021 BY TECH CATEGORY
£84.1m HARDWARE
£256.5m SOFTWARE
£223.3m TELECOM SERVICES
£462.4m COMPUTER SERVICES
34 — SEPTEMBER 2021 —
TRAVOLUTION.CO.UK
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