2024 was a milestone year for the travel industry as volumes in many categories met or exceeded levels from 2019, the full year before international lockdowns took place. In spite of inflationary pressures and economic uncertainty, leisure travel chugged along and is expected to surpass pre-pandemic levels. Business travel, on the other hand, continues to power ahead as businesses are eager to invest in onsite visits and corporate get-togethers in an effort to drive revenue. Global business travel spending is expected to break above $1.48 trillion, exceeding 2019 levels by approximately $50 billion. This past year signaled a new era for the travel industry as COVID-19 shutdowns become a distant memory and demand and volumes stabilize and return to the growth track seen prior to 2020.

A Look Back at 2024

2024 saw continued adoption of new technology in both the back end and customer facing facets of the travel industry. With rising operational costs and iffy economic fundamentals, travel businesses prioritized creating efficiencies and maximizing opportunities with technology. 2024 saw strong adoption in the following areas:

Artificial Intelligence for both customer engagement and operations analysis

Data analysis to improve marketing prospects

Social media engagement as an additional customer service channel

Improving payment technologies with contactless options and cryptocurrency acceptance

Virtual reality marketing

AI has proven to be a flash point for the travel industry as more brands and providers offer AI powered services to assist and encourage purchasing decisions. Improvements in technology have increased plain language understanding with a push towards voice controlled and voice activated services. AI powered technology has delivered increasing benefits to business and corporate travel with its ability to quickly plan, book and purchase complex itineraries and schedules. As travel consumers demand more value, travel businesses will explore ways to augment products with AI powered services that enhance and elevate client experiences.

The Travel Tech Startup Landscape

The demand for travel related technologies continues to ramp up as traffic and bookings return to pre-pandemic levels. The travel technology industry itself saw a somewhat robust 2024 with Generative AI startups dominating the landscape. Increasing costs and fiercer competition is driving the needs for technologies that offer competitive advantages in both operations and travel consumer facing infrastructure. Venture capital flows suggest increasing confidence in travel technology as SKIFT recently reported VC investment at $4.6 billion through August 2024, a dramatic increase from $1.8 billion the previous year. Heading into the new year will see continued innovations in AI technology as well as growth in mobile travel apps that deliver efficiency and benefits to travelers during the entire experience.

2024 Travel Business Challenges

In spite of travel demand returning to growth, challenges still exist in the industry and 2024 highlighted some lingering effects of the global lockdowns during the COVID-19 pandemic. One of the more important challenges faced in the past year is the continuing labor shortages in frontline and customer facing teams that create service gaps for travel providers. Hiring and training qualified and enthusiastic individuals is an uphill battle but AI technology, such as hospit-Ai-lity, can help mitigate those gaps with faster and more effective training processes. Protecting information and electronic assets is another critical challenge for travel businesses in 2024 as bad actors increase their efforts to obtain sensitive information through nefarious means. Cybersecurity and data integrity will be primary focuses for travel businesses in 2025 as security and protocol needs evolve and attaches increase in sophistication.

The Travel Industry Ramps Up

Travel businesses have been eyeing 2024 as the year for recovery as leisure and business travel volumes finally exceed 2019 levels. Returning demand is fueling the travel technology sphere as demand for efficiency and conveniences increase on both ends of the market. The outlook for 2025 is cautious but optimistic as political and economic instabilities put a damper on ‘revenge travel’ demand. Business and corporate travel is expected to continue with healthy growth but expectations from travel technology will also increase alongside that demand. Travel providers are prioritizing efforts to increase business and control costs while travel consumers are seeking increased functionality from mobile devices and digital platforms. Travel technology and the startup industry is expected to ramp up in 2025 to meet those increasing business and consumer demands for capabilities, convenience and benefits.