TRAVEL AND TOURISM

What the Data Tells Us About Digital Transformation,by Industry

The key ﬁndings for travel and tourism
Almost half of travel andtourism companies havesuccessfully completed digitaltransformations—25% morethan than the cross-industry
average. But another 25% havecreated only limited value withno sustainable change, double
the cross-industry average.

Among the six success factors,
the biggest challenges for travelcompanies are establishing anagile governance mindset anddeploying high-caliber talent.

The top digital transformation
objectives for the travelindustry are improving theircustomer-experience andgo-to-market capabilities.
Digitizing ecosystems andpartnerships and growth andbusiness model innovation
are other areas of emphasis.

Leaders are prioritizing
personalized and targetedmarketing for oﬀer generation
within next-generation sales,
Digital ID for check-in withincustomer experience, andpayment fraud protection anddetection within digital
support functions.

Within operations speciﬁcally,
airline leaders are prioritizing
new distribution capability,
smart predictive maintenance,
automated maintenancescheduling. Hotel/resorts
leaders prioritize
attribute-based pricing.

More than nine out of ten
travel companies plan toincrease investments toward
ESG (well ahead of thecross-sector average), withthe greatest emphasis onsocial priorities.

Source: BCG analysis.

Next-generation sales andmarketing and customer
experience and service are thetop digital priorities for all
travel companies going
forward, followed closely bydigitizing support functions
and—for airlines, hotels, andrestaurants—operations.

The data in more depth

Rates of successin digitaltransformation

Source: BCG analysis.

Topics of focus fortravel and tourism

Top priorities forthe future

The criticalhuman andtech enablers

The role of ESG
in digitaltransformation

RATES OF SUCCESS

Almost half of travel companies are in the win zone, 25% more than thecross-industry average, but the woe zone is almost twice the average
CASES BELOW SUCCESS SCORE (%)
100
80

Travel and tourism data points
Travel and tourism

60
40

Cross-industry

2021 cross-industry
average: 7.4

Travel and tourism
sector average: 7.6

Woe zone (success score <6)
Worry zone (success score ≥6–<8)

20

Win zone (success score ≥8)

002

468

10SUCCESS SCORE1

2021 BCG Global Digital
Transformation Survey overall

Travel andtourism sector

13%

52%

35%

25%30%

45%

Limited value created(<50% of target); nosustainable change

Value created but total Target value met ortargets not met;
exceeded; sustainable
limited long-term change change created

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10, using the guidelines in the table below.”
1Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

RATES OF SUCCESSThe travel and tourism sector struggles most with achieving an agile
governance mindset and deploying high-caliber talent
DISTRIBUTION OF SUCCESS SCORES ON INDIVIDUAL KEY FACTORS1Integrated strategy with clear transformation goals

2

Leadership commitment from CEO through middle management
Deployment of high-caliber talent

4

An agile governance mindset that drives broader adoption

5

Eﬀective monitoring of progress toward deﬁned outcomes6

Business-led modular technology and data platform

123456789107.5

130

7.9
6.9
6.6
7.5
7.2

Lower extreme Travel and tourism average Upper or lower quartile Upper extremeWoe zone (success score <6)

Worry zone (success score ≥6–<8)

Source: 2021 BCG Global Digital Transformation Survey, n = 22.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10 using the guidelines in the table below.”
1Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

Win zone (success score ≥8)

TOPICS OF FOCUS

Transformation priorities for travel and tourism include customer centricity,business model innovation, and digital ecosystems
Strategic objectives

Scope of digital transformation1

SHARE OF RESPONDENTS (%)

SHARE OF RESPONDENTS (%)
Customer experience and journeys

37

Improvement incustomer experienceand go-to-market

86

Marketing and dynamic pricing

82

Sales and market acceleration

68

Digital ecosystem and partnerships

64

Growth and business model innovation
28

Innovation and growthin the core and beyond

16

Performance improvement
through the operational
value chain

19

Performance improvementin support functions

Source: BCG Global Digital Transformation Survey, 2021, n = 22.
1
Respondents were asked to select all priorities that applied.

59

Digitizing support functions

55

New business venture

55

Digital procurement

55

Building resilience via cybersecurity
and compliance

50

Supply chain
Digital manufacturing and operations

41
23

TOP PRIORITIES FOR THE FUTURE

Next-generation sales and marketing and digital operations lead the digitalpriority list going forward
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)1100

Next-generation salesand marketing

2795

Digital operations

29100

Next-generation customer
experience and service

Digital support functions

2495
20

Share of respondents allocating any investment toward each digital topic

Average share of total investment

Source: 2021 BCG Global Digital Transformation Survey, n = 22.
1For example, the uppermost pair of bars can be read as “100% of travel and tourism respondents plan to invest in next-generation sales and marketing, allocating an average 29% of total digital investment.”

TOP PRIORITIES FOR THE FUTURE

Travel and tourism digital priorities: Next-generation sales and marketing
Digital initiatives (bars indicate relative prioritization of initiatives)
Continuous pricing and revenue management

1.00

Personalized and targeted marketing and oﬀer generation

0.65

Demand forecasting (with adjustments for seasonality)

0.42

Loyalty programs

0.38

Marketing spending optimization

0.33

Smart lead generation and handling

0.31

Website traﬃc optimization

0.25

Dynamic inventory optimization

0.23

Multichannel sales

0.23
Relative prioritization for all travel and tourism companies

Source: 2021 BCG Global Digital Transformation Survey, n = 22.

Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Travel and tourism digital priorities: Next-generation customer experienceand service
Digital initiatives (bars indicate relative prioritization of initiatives)
Digital self-support

1.00

Customer support (chatbots and interactive voice response)

0.92

Digital identiﬁcation (for check-in, lounge access, etc.)

0.86

Instant feedback mechanism through digital channels

Integrated itinerary management and “single travel token”

Immersive travel experience (AR preview of destinations)
Relative prioritization for all travel and tourism companies
Source: 2021 BCG Global Digital Transformation Survey, n = 22.

0.45

0.33

0.29
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Travel and tourism digital priorities: Digital support functions
Digital initiatives (bars indicate relative prioritization of initiatives)
End-to-end record-to-report digitization of ﬁnance activities

1.00

Payment fraud prediction and detection

0.79

End-to-end order-to-cash digitization for accounts
receivable management

0.74

End-to-end procure-to-pay digitization for procurement

0.71

End-to-end source-to-contract digitization for contracting
End-to-end hire-to-retire digitization (includingintegrated training) for HR
Relative prioritization for all travel and tourism companies
Source: 2021 BCG Global Digital Transformation Survey, n = 22.

0.67

0.52
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Hospitality and airlines prioritize digital operations
Digital initiatives (bars indicate relative prioritization of initiatives)

Hotels/resorts

Direct platform-based booking

1.00

Attribute-based pricing

0.72

Smart check-ins (mobile apps, biometrics, etc.)

0.62

Apps for customer services

0.48

Smart rooms (via mobile apps or voice assistant applications)0.38

Central reservation system
AR/VR for virtual tour of the room and property

0.34
0.17

Airlines

New distribution capability (NDC)

1.00

Smart predictive maintenance

0.60

Automated maintenance scheduling

0.60

Network planning

0.47

Disruption management through smart rerouting

0.47

Automated aircraft assignment

0.33Electronic miscellaneous document for optional/ancillary services

0.27

Crew optimization and scheduling

0.27

On-ground resource management (planning and deployment)
Relative prioritization for all travel and tourism companies in each subgroup
Source: 2021 BCG Global Digital Transformation Survey, n = 22.

0.20
Top priorities for win-zone companies

THE CRITICAL ENABLERS

Travel and tourism companies intend to invest across broad range of techand human enablers, with a stronger emphasis on tech
Nine out of ten travel and tourism companies plan to invest in infrastructure and cloud enablement, and AI and big data accountfor about 33 % of total digital enabler spending allocations in these areas, on average
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS ENABLER DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)1Tech100

Human958217Infrastructure
and cloudenablement

86867712

Modernizationof techarchitecture

16AI and big data

12Cybersecurity

77777313
7Modernization oftechnology
organization andoperating model

Share of respondents allocating any investment toward digital topic

New ways ofworking

78

Continuous
learning

Integrated
ecosystems

7
New talent andleadershipmodelsAverage share of total investment

Source: 2021 BCG Global Digital Transformation Survey, n = 22.
1For example, the leftmost pair of bars can be read as “100% of travel and tourism respondents plan to invest in infrastructure and cloud enablement, allocating an average 17% of their total digital enablers spending.”

ROLE OF ESG IN DIGITAL TRANSFORMATION

92% of travel and tourism companies
plan to increase investments toward
ESG, above the cross-sector average… with the greatest emphasison S

Share of respondents planning to increase/decrease/maintain investment toward ESG in coming years

Leading digital initiatives being prioritized
to support E, S, and G goals

38

Moderately
increase

54

Maintain as inprevious year(s)Decrease vs.
previous year(s)2580Source: 2021 BCG Global Digital Transformation Survey, n = 22.

56171Social

Signiﬁcantly
increase

CROSS-INDUSTRY AVERAGE (%)

Governance

PROVIDER AVERAGE (%)

Environment

SHARE OF RESPONDENTS PRIORITIZING (%)· Forecast-driven renewable energy· Digital supply chain optimization· Ensuring protection of clients', employees’,
and customers' data
· Improving diversity and inclusion withinfunctional organizational aspects· Improving adherence to code of conduct
through digital audit trails and monitoring· Real-time tracking/monitoring of risk

~48

~59

~41

If you would like to discuss this topic, please contact one of the authors:

AMANDA LUTHER

PRANAY JHUNJHUNWALAManaging Director & Partner, Austin
luther.amanda@bcg.com+1 214 850 4916

Managing Director & Senior Partner, London
jhunjhunwala.pranay@bcg.com+44 7769 932014

JASON GUGGENHEIMTAYLOR SMITH

Managing Director & Senior Partner, Atlanta
guggenheim.jason@bcg.com+1 404 434 6694

Managing Director & Senior Partner, New Yorksmith.taylor@bcg.com+1 917 327 1829