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TravelTech-01

Mindset of the

Travel Tech: A brand’s science project or something that changes consumer behavior?

SNAPSHOT

  • Travel tech innovation and progress are low on the priority list for most travelers, but some digital experiences will get the attention of their wallets more than others, especially when it makes their travel more manageable.

  • The planning and booking stages of a trip are when technology is top of mind for travelers. This is when tech contributes the most to brand loyalty.

  • Access to reliable, fast, device-agnostic internet still tops the list of features travelers want brands to invest in. This is complemented by expectations of seamless integration of experiences driven by artificial intelligence.

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MODIV'S CALL TO ACTION

What we hope you see in this report is technology's role in enhancing the travel experience is acknowledged by travelers, but that its importance varies across different segments. Our findings suggest commercial opportunities for travel brands in focused digital experiences that make travel easier. Once digital teams have defined and brought the technical solutions to life, capitalizing on the opportunities they create will require nuanced strategies across sales, marketing, brand, loyalty, and revenue management teams. The complexity and sophistication needed to activate technology as a commercial lever underscores the value of specialized expertise. MODIV has played a crucial role in guiding travel brands through the process of transforming findings like these into revenue-generating strategies. We’re always ready to sit with you and your situation and devise a roadmap.

MODIV’S TAKE BY COMMERCIALLY IMPORTANT SEGMENTS

Table
How important is it? How top of mind is it for them? What did they tell us about it? MODIV’s Commercial Inspiration
Road Warriors
Travelers who take more than 3 trips per month
★★★★★ ★★★★☆ Technology needs to connect the dots across my trip. I’ll pay premiums for anything that makes things seamless. I’m really the only one willing to try your innovations but I’ll be quick to drop them. Brand: Craft stories and capture testimonials of how the brand has successfully integrated technology to improve the travel experience for the travelers most heavily dependent on tech-forward travel brands.
Marketing: Highlight innovations and tech features that save time and reduce travel friction.
Sales: Offer customized travel packages that are tailored to the individual needs of Road Warriors, such as priority boarding, fast-track security, and flexible booking options.
Revenue Management: Use data to identify the most valued services and adjust pricing based on demand and traveler feedback.
Loyalty: Offer early or exclusive access to new technological innovations, apps, or services as part of the loyalty program
High-income Millennials & Gen-Zs
The traveling population with the most income and generating the most demand for travel
★★★★☆ ★★☆☆☆ There are few things as frustrating as when a digital or technology part of travel fails me. It should just work, and I shouldn’t have to think about it. The number one feature I look for is a reservation-making and changing experience that takes me no more than a few taps. There isn’t much tech I’m willing to pay extra for. Brand: Focus on perceptions built around tech-savvy, minimalist, and efficient user experiences.
Marketing: Highlight the simplicity of your digital interfaces and how they cater to a seamless travel experience.
Sales: Ensure the sales process is highly digital, intuitive, and requires minimal effort, with a focus on mobile-first strategies.
Revenue Management: Use pricing strategies that reflect the importance of technology but also acknowledge this segment's reluctance to pay extra for it.
Loyalty: Offer rewards appealing to the tech-savvy, such as discounts on future tech enhancements or digital services that enhance the travel experience.
Big Budget Travelers
Travelers comfortable with higher nightly rates in hotels and more expensive airfares
★★★☆☆ ★★☆☆☆ Technology needs to be there, but I typically don’t notice it. If it does impress me, it’s usually a bridge to some exclusive experience – something I’m willing to pay extra for. Brand: Create exclusive, memorable experiences, that leverage “invisible” tech.
Marketing: Create marketing materials that focus on the exclusivity and luxury of the travel experiences enabled by technology.
Sales: Develop and sell high-end, technology-enabled experiences that are exclusive and unique, marketed as premium offerings that enhance the travel experience.
Revenue Management: Implement dynamic pricing strategies for exclusive, technology-enhanced experiences, ensuring that these offerings are priced to reflect their exclusivity and the value they provide.
Loyalty: Offer points or perks that can be redeemed for further exclusive experiences, encouraging repeat business and deeper engagement with the brand's high-end offerings.
Globetrotters
Travelers who spend most of their trips traveling out of their home country on longer, extended trips
★★★☆☆ ★★★☆☆ I’m most interested in creative ways to plan trips. When there are digital solutions that help with this, I remember them and will seek them out on future trips. Technology is important to my sense of security. There are very few tech features or experiences I’d be willing to pay for. Brand: Craft the brand's identity around being a partner in exploration, emphasizing its role in facilitating unique and extended travels through technology.
Marketing: Develop marketing campaigns that highlight the company's digital solutions for trip planning, focusing on how these tools can uncover hidden gems and create personalized travel experiences.
Sales: Emphasize your sales tools built for ease of use and personalization, catering to the desire for creative trip planning.
Revenue Management: Instead of charging extra for tech features, bundle them with other services to create value-added packages. For example, offer a package that includes premium support through the trip planning tool.
Loyalty: Offer points or perks for using the tools to plan trips, encouraging repeat usage and loyalty to the brand's digital platforms.
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THE SETUP

Almost on cue, the travel and hospitality industry appears to have cycled back to an extreme focus on technology. With 2024 well underway, there has been no shortage of coverage for the hot trends on the digital side of travel. Whether covering the progress in safety-focused tech (e.g. bio-metric screening at airports) or richer brand exploration and shopping features such as augmented and virtual reality, the variety of advances being talked about is impressive. Complementing the coverage of these and other innovations has been the rising volume of news surrounding the amount of investment money being moved into the tech side of travel. As Sean McCracken from Hotel News Now noted recently, “The message is clear to [venture capital] folks that it looks like a sector with wind behind it."

But is this pulse in technology-focused progress moving the commercial needle for travel brands? Have these healthy investments on the digital side of the industry gotten the attention of travelers and guests, influencing them to open their (or their company’s) wallets and spend differently? Other industry cycles focused on tech have not always yielded the downstream bottom-line impacts brands were hoping for – mostly because they missed the mark with consumers. We recently used MODIV Mindset to put some framing around answers to these questions.

From a list of 15 areas travel brands could focus their time and resources on, the 2,500+ respondents ranked technology and digital areas as number six, behind areas like improved comfort, more flexible booking and cancellation policies, and growth into regions they need and want to travel to; a ranking that was consistent across generational segments and across the 25 countries we studied. While this signals a need for continued investments in the non-tech fundamentals of the travel experience, brands should not do so at the cost of slowing the evolution of their technology roadmap. What we’ve found is there are specific areas of that roadmap that would come with bigger commercial rewards than others. 

From Insight to Impact: Leveraging Trust in Your Brand Strategy

Whether a new shift in mindset for travelers or something that’s been a steady consideration for years, it’s clear that activating against traveler trust offers travel brands meaningful commercial opportunities. Doing so requires pulling a very complex and sophisticated lever that requires a unified effort across an organization’s commercial teams – marketing, sales, brand, loyalty, revenue management – to align priorities and strategies. It will be a team sport and not everyone will even be aware of the rules. It will take proactively engaging with and educating all your revenue stakeholders on the value of trust and then mapping a playbook for starting to mine the value of trust. We’ve partnered with organizations looking to do just this, so if you’d like to chat, MODIV is always available to go deep on this topic.  

MOVE FWD WITH MODIV

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FINDINGS

1. “I want access to easier travel and new experiences.”

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82% say their most memorable travel-tech experiences involve making travel more convenient
64% of travelers stated that a brand's technology and digital experiences significantly influence their trust in the brand

  • Despite the lower ranking of importance, technology and digital-based solutions do appear to be on travelers’ minds. 76% told us they believe technology’s primary job in travel is to make it more accessible and manageable. For many, this means less friction in making and changing reservations: over 82% categorize their most memorable travel-tech experiences as having something to do with making travel more convenient. For others, it means digital ways of inspiring and guiding them to the type of trip they should take. 67% say digital recommendation tools have played a key role in their travel planning in the last 12 months, with 89% of those saying they want richer planning experiences from travel brands.

  • In other research MODIV has done, brand trust was identified as a key component of a traveler’s reason for choosing a brand [Read our Mindset report on The Trust Gold Rush: The Commercial Value of Brand Trust in Travel]. In this study, 64% of the travelers we spoke with told us that a brand’s technology and digital experiences play a key role in their trust in the brand, and 77% told us digital services such as mobile payment and digital boarding passes make them feel more secure when traveling.

  • 83% of travelers also told us they wish travel brands would spend more time “focusing on travelers’ to-do lists”. For them, this means the basics of checking in and out, updating their reservations, and reliable access to the internet. This contrasts with the 41% who said they are interested in and willing to try what they consider “new and innovative” technologies such as virtual reality experiences.

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2. “Unless I’m traveling for business, just give me booking tools.”

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87% of travelers emphasized the importance of technology in all travel stages except the actual trip
68% of business travelers emphasized the importance of technology throughout their travel experience

  • 67% of respondents described today’s travel and hospitality technology integrations as a “distraction”.  53% described them as “noise”.

    • 56% of business travelers and road warriors1  say that tech “just doesn’t work.”

    • 73% of experience seekers2 describe technology “as getting in the way.”

    • 66% of general leisure travelers3 agree that tech is “unnecessary for most of their trip”.

  • Digging deeper, these sentiments towards technology seem to be rooted in the feeling that brands are putting technology at every step of a traveler's journey. 87% of travelers we spoke with told us technology is important to them in nearly every stage of the travel journey except the actual trip. Nearly all (96%) of these told us that technology in the other phases “wastes their time” or is “more of a burden”.

  • Digital and technology-driven solutions are the most important during the planning-booking phase4. Of the travelers we spoke with:

    • 87% are looking for a simple and quick digital booking process.

    • 77% are looking for easily accessible information about the brand’s quality.

    • 57% are looking for information about their destination's culture, scenery, and local activities.

  • An exception to this has to do with accessing the internet. This was the only “while I’m on the trip” technology that stood out as meaningful to travelers, with over 84% of them calling it a “key part of their satisfaction with a brand.”

  • When asked, these mindsets hold for all trip types and purposes, except for business travel. 68% of business travelers told us technology is a key part of their travel experience from booking to getting home. They are looking for digital experiences that make changing their reservations “a few taps away”.


1 Business travel includes Conference Attendance, Client Meetings, Training and Workshops, Team Building/Retreats, and Sales & Marketing Events.
2 Experience travel includes Adventure travel, Non-Work Related Education, Medical treatments, Sports events, Cultural events, Religious, Reunions, Shopping trips, Food and culinary experiences, Gaming conventions, Art and museum exploration, Nature retreats, and Music festivals.
3 General leisure travel includes: Vacations, Family visits, Weddings, Honeymoons, Anniversaries, and Solo getaways
4 The planning-booking phase includes all activities that take place when a traveler is thinking about, planning, and making the reservations for their trip.

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3. “Signing in to my Netflix on the TV or connecting with other travelers? No thanks.”

We tested 34 different travel experiences that leveraged technology, ranging from biometric screening at airports to connecting personal streaming services to hotel and airline devices. As before, most travelers want brands to focus their efforts on the pragmatic things that help them tick things off a list, not add things to it.

The four digital or tech-based experiences that appear to be noise and a possible waste of travel brands’ time are…

  1. Augmented and virtual reality shopping experiences

    • 91% told us they have never seen these done well

    • 88% said even if they had seen them done well, they would not be willing to spend more for them.

  2. Bring your own streaming services (e.g. Netflix, Amazon Prime, YouTube TV, etc.)

    • 78% said they have never and would never use this feature.

    • 84% said they would not be willing to spend any more money to have this capability.

  3. Sharing feedback and connecting with other travelers

    • While 42% said they have tried this type of digital experience, 89% of them described it as “just OK”.

    • 87% would not be willing to pay more for this type of experience.

  4. Tracking of environmental impact

    • While 57% of travelers told us the impact of their travel on the environment is something they think about, over 88% of all respondents told us they do not need help tracking it digitally,

    • 77% told us they’ve never seen this type of reporting or tracking done well.

    • 83% would not be willing to pay any more for this type of offering.

4. “Fast reliable internet should be table stakes – why is this so hard? After internet access, I want AI – just like everywhere else.”

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77% expressed willingness to pay extra for more convenient, flexible ways to make changes to reservations
87% say the number one feature they are looking for from travel brands is related in some way to artificial intelligence

Similarly, across these 34 technology or digital experiences, three emerged as important and memorable for travelers.

  1. Easy access to fast, reliable internet that I can connect all my devices to.

    • 67% said this was among the top two drivers of their satisfaction with a travel brand. 65% said it was a reason they stay loyal to a brand.

    • 81% said they are willing to pay for the premium versions of easier, more reliable internet access that are already available but wish they were more readily available and consistent.

  2. More convenient, flexible ways to make changes to reservations.

    • 57% say this is a key part of their travel experience.

    • 77% told us they would be willing to pay more for this feature.

  3. Advanced AI solutions for customized travel recommendations and instant response customer service

    • 47% of those we spoke with told us they depend heavily on AI tools like Chat-GPT in many areas of their lives and now expect travel brands to be there too. 87% of respondents told us the number one feature they are looking for from travel brands is related in some way to artificial intelligence, signaling the importance of investing in these features.
    • 63% told us that they would be willing to pay more for AI solutions that help them plan travel, but just 12% indicated they would be willing to pay more for concierge or customer service-related features. 
B2B Photos5.png-4
78% more likely to pay extra for trusted hotel brands
vs
67% willing to do the same for loyalty programs
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ABOUT MODIV MINDSET

MODIV findings represent

24,000+ travelers surveyed annually
22 Countries Represented
11 localizations
2,000+ digital conversations in a month

The Why & What

What is MODIV Mindset and why was it created?

MODIV Mindset is a bi-monthly global survey engaging with over 1,000 travelers across 22 countries and 11 localizations. We created it to supplement our clients' existing insights strategies, providing them with rapid, actionable information on connecting with travelers and their ever-evolving expectations in commercially viable ways.
What consumer trends led to the creation of Mindset? Modern consumers, particularly travelers, demand a personalized experience; they prefer brands that understand their unique needs and preferences. The hospitality industry faces numerous challenges in this regard, especially in the wake of the impact left by the global pandemic-induced disruptions. MODIV Mindset was created to help hospitality brands navigate these challenges and deliver experiences that are individually tailored and purposed.
How does Mindset help with consumer research needs? MODIV Mindset was designed to address the challenges our hospitality clients face in cataloging, interpreting, and using consumer insights. The survey provides agility, speed, price efficiency, and specificity. It serves as a real-world, inspirational starting point for our clients to develop unique strategies for identifying, marketing to, and fostering relationships with modern travelers worldwide.
Who are the target respondents of Mindset?

MODIV mindset tracks 16 psychographic, demographic, professional, and travel behavior dimensions – with standard segment and brand reporting. Each bi-weekly wave of MODIV Mindset is tightly screened to ensure we’re speaking with:

  • Travelers who are at least 21 years old
  • Travelers who take 4+ trips per year (covering all stay occasions) 
  • Travelers living in one of the 25 countries we monitor

We also balance our samples (oversampling when necessary) to ensure we’re capturing:

  • A balanced representation across genders
  • A representative sample from each country based on the percentage of that country's GDP made up of travel (inbound and outbound)
What parts of the travel industry does Mindset cover? The survey covers lodging, air, and car rental (including on-demand services). It provides over 16 demographic, psychographic, and professional attributes for complete, real-world segmentation. It catalogs drivers of expectations, preferences, and trust across these segments and explores expectations of travel brands at various price points and for different trip occasions.
What is modiv's approach to reporting patterns and trends? MODIV Mindset focuses on identifying patterns and trends that persist over multiple survey waves. We refrain from reporting anomalies or insights that do not recur or grow over several waves. Furthermore, our emphasis lies in understanding future-focused mindsets rather than past behaviors – we are interested in what travelers hope and expect in the next 6-12 months.
How is your research validated? Our results are regularly reviewed by industry experts for validation and interpretation. This ensures that our survey lives up to our expectation that it provides commercially relevant, real-world insights.
How have travel brands used MODIV Mindset? Our clients have found numerous applications for MODIV Mindset, from defining unique marketing strategies to building meaningful relationships with modern travelers. If you'd like to see specific examples or explore how you might be able to use it too, please contact us directly. 
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