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The transformation of travel: A leader’s guide

Leading Off

Hitting the road ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
Leading Off

Brought to you by Alex Panas, global leader of industries and senior partner, & Axel Karlsson, global leader of functional practices and senior partner
An image linking to the web page “Now boarding: Faces, places, and trends shaping tourism in 2024” on McKinsey.com.

Travel patterns show notable shifts, according to a new McKinsey report by senior partner Caroline Tufft and coauthors. While most travelers still prefer to stay close to home—domestic and intraregional trips dominate the market—where they come from is changing: for example, the number of first-time tourists from Eastern Europe, India, and Southeast Asia is increasing. More travelers are visiting locations that are off the beaten track. To capitalize on these trends, tourism players may need to consider strategies such as providing tech-forward travel offerings, creating memorable experiences for varying budgets, connecting with different demographics through social media, and collaborating with logistics providers to promote new destinations. “Creative collaboration among tourism stakeholders can help put lesser-known destinations on the map,” suggest the report’s authors.

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An image linking to the web page “What AI means for travel—now and in the future” on McKinsey.com.

AI has begun to disrupt many industries, and the travel and hospitality business is no exception. What may make the sector stand out, though, is the extent to which AI can personalize its customer interactions, says McKinsey partner Alex Cosmas in a podcast. “The promise of AI has been to take the pattern of history, take the pattern of millions, and boil that down to the individual response that is relevant to me as a segment of one,” he says. “Nowhere is that promise needed more than in travel, where the experience should be a segment of one. That’s what makes it magical.” For example, AI and other advanced technologies might enable hotel staff to know and cater to individual customers’ needs, preferences, and behaviors. Cosmas cautions, however, that effective hyperpersonalization requires a combination of technology and human judgment. “If you can’t send a personalized message without making it feel generic, then don’t,” he says.
An image linking to the web page “The way we travel now” on McKinsey.com.

It’s a rare traveler who doesn’t have at least one tale of a trip gone awry. Whether the hapless tourist is mistaken for a fugitive, trapped in a bathroom, stuck in a hotel room without electricity, or enduring a scary taxi ride, travel horror stories are rife in the industry. Travel and logistics providers may find that such mishaps could cost them dearly as more people become travel-savvy and share their experiences with others. The results of our survey of more than 5,000 travelers from five major markets reveal unexpected traveler archetypes and customer segments to which industry players may need to pay close attention. “The familiar, one-size-fits-all tourism offerings of the past have grown outdated,” note the authors of the survey report. “Today’s travelers want to indulge in creative experiences that are tailored to their priorities and personal narratives.”

Lead by understanding trends in travel.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:28 - 1 Jul 2024