Whether the recession has just ended or we are sliding back into a double dip, no one seems to really know. but that hasn't stopped the recent surge in stories about how the airline industry is recovering, or that the recovery is slowing. The roller-coaster ride that the travel business has been on the past few years shows no sign of leveling out. In fact, more radical change may lie in store.
That's the word from one new study of the factors that are set to reshape the travel sector over the next decade. "The Travel Gold Rush 2020," developed by Oxford Economics, a prominent economic forecasting consultancy, and, incidentally, commissioned by my company, predicts the death of traditional air travel cabin classes, decine of business class, rise of face-to-face agents, dominance of Asia, and growing importance of delivering a "total travel experience."
What interests me is evidence of where the airlines' new revenue opportunities are going to be. What will be the drivers of profitability? What models will work for delivering services? How will travelers' taste change in a way that will influence the future of the industry?
One recent USA Today story ("If An Airline CEO Were Your Seatmate, He'd Give You An Earful") deals directly with that issue, focusing on the misunderstanding generated by the carriers' move to offer fliers greater choice in the form of cut-rate fares with the option to select from a growing menu of pay-for-play services, also knownin the travel industry as ancillary revenue sources. As the mythical CEO says in the article, "And please don't call these fees 'hidden.' They're all spelled out in black-and-white on our website, under 'fees.' You just have to read, all right?"
Of course, if you believe the International Air Transport Association (IATA), global airlines will earn a combined profit of $8.9 billion this year, which is triple what the IATA predicted just this June. One of the most interesting findings in this report is that more business travelers are buying premium seats. This is good news for the travel industry and those road warriors who are getting more comfortable air travel. But in just which corporate travel department are they finding the money? I wonder.
What it all means to me is that there is some good news mixed in with all of this extreme change that is coming down on the travel business. I suspect that one year from now we may not recognize a lot of the things that we take for granted in business travel.
What is your prediction?
Road Warrior • Miami • Madrid • www.amadeus.com