India’s travel and hospitality sector is undergoing significant digital transformation, with dominant players deploying technologies such as artificial intelligence (AI), extended reality and metaverse for customer relationship management, digital marketing initiatives, in-room automation and surveillance, and other uses.
A look at some of the technological trends shaping the sector and the way forward…
AI
A recent Deloitte survey ranks India as the leader in terms of generative AI adoption in the Asia Pacific. Enterprises in the travel and hospitality sector are using AI for round-the-clock assistance via chatbots, virtual voice assistants for travel bookings, tailored room choices, and effective resource allocation based on anticipated demand fluctuations. For example, Air India’s generative AI virtual agent “AI.g” manages about 30,000 queries per day.
Moreover, AI-powered dynamic pricing algorithms are being used for maximising revenue streams. This is done through the the assessment of several factors, including market trends, events nearby, flight cancellations, competitor pricing, choosing appropriate marketing platforms and observing customer behaviour patterns to adjust pricing in real time. For instance, Yatra launched its expense audit solution in May 2024 with cutting-edge features such as large language models and a Power BI dashboard. Some companies, such as Club Mahindra, have also come up with bespoke offers and personalised marketing campaigns based on AI.
Meanwhile, cruises are using AI for intelligent navigation by analysing weather forecasts, ocean currents and other environmental factors to avert disruptions. AI features such as thermal imaging and facial recognition are also being used to non-intrusively monitor guests’ health parameters and alert authorities in case of unforeseen health exigencies. Meanwhile, robotic bartenders at ships are dazzling guests with their precision. At the back end, AI is being leveraged to reduce food wastage and optimise energy use onboard.
Blockchain
Blockchain is another technology that is transforming the landscape of India’s travel and hospitality sector. One of its key features, traceability, allows airlines to maintain a secure record of an aircraft’s gears, maintenance history and other sensitive information, as every part can be etched in the immutable ledger. Blockchain is also being utilised by players to handle flyer points and loyalty points. Digital record keeping has other advantages such as reducing manual errors, paperwork and paper waste.
Besides maintenance, blockchain has safety applications. Generating a tamper-proof ledger of transactions and data can prevent fraud and counterfeiting of goods in real time within the cargo supply chain, while verifiable identity management can bolster security. For example, 28 Indian airports currently have digital biometric systems, which eliminate the need for boarding passes or ID checks for native passengers who deposit a selfie prior to travelling.
This technology also has the capability to systematise the certification process for individuals and equipment. For instance, Indian Railways is using blockchain to generate phygital non-fungible token (NFT) certificates.
Further, the industry has started accepting cryptocurrency as a form of payment. Tourists prefer these transactions as they are cashless, convenient, less risky and not susceptible to double spending, while business entities prefer associated benefits such as the lack of card processing costs, speedier settlement times and enhanced financial security. For example, airBaltic, Expedia, and the Dubai-based Palazzo Versace Hotel are accepting cryptocurrency as a form of payment.
Cloud computing
The industry is also harnessing cloud computing to gain better insight into customers and their operations in real time. The “pay-as-you-use” model permits enterprises to scale up computing resources during peak holiday seasons, and scale it down during not-so-busy periods. It also lets users add new features to their existing systems at competitive costs and without disruptions.
Additionally, cloud computing can also be used for reservations and event management. Further, cloud platforms are suitable for cashless transactions and delivering omnichannel personalised experiences. For instance, Royal Orchid Hotels has adopted Hotelogix’s cloud-based PMS, which utilises a centralised guest history to curate guest-centric experiences.
eXtended reality
Like other technologies, eXtended reality (XR) has left its imprint on the travel and hospitality industry. XR, which is the confluence of augmented reality (AR), mixed reality (MR) and virtual reality (VR), facilitates multi-sensory social interactions. From designing AR-powered brochures, virtual tours and interactive dining experiences to detailed event planning and remote collaboration, top brands are leveraging XR for differentiation, to improve customer experience and ultimately boost their sales. For example, Vistara Airlines is planning to use these technologies for hiring and training staff.
Travellers are also turning to plug-in VR headsets and AR goggles for a panoramic experience of tourist destinations. For example, Kerala’s VR video programme allows digital tours of the state’s iconic tourist destinations with brief histories being narrated in the background.
Although these technologies are still in the emerging stages, they offer tremendous business opportunities. A study projects that XR will drive the anticipated 6.7 per cent growth in the Indian hospitality sector. An area that looks promising for VR deployment is letting passengers enjoy immersive tours of exotic destinations without having to leave their ships. Incorporating the interests of passengers into these VR adventures is another direction that could be explored.
Internet of things
Internet of things (IoT), along with technologies such as AI, enables the travel and hospitality sector to customise their solutions and enhance customer experience. IoT apps can be deployed to allow patrons to download an electronic key card for checking in, while IoT sensors notify the hotel staff about the guest’s entry so they can promptly offer their services. Hotel guests can also use IoT to set the room temperature, moderate lighting and modify in-room features.
Cruises are using IoT for inventory management, tracking passenger movements, making restaurant reservations and personalising recommendations for guest events to elevate the travel experience. Meanwhile, car rental services in cities can manage their fleet using IoT.
Further, IoT solutions are revolutionising the aviation industry. Solutions such as eTags equipped with radio frequency identification are being leveraged by top airlines in the country such as IndiGo. Not only do eTags ease the process of checking in luggage, but they also let travellers track their luggage at any time and facilitate a hassle-free travel experience.
IoT applications can also help the industry save costs, increase operational efficiency, and reduce carbon emissions. In the context of buildings, estimates suggest that IoT implementation can save approximately 10-36 per cent of energy costs. For example, Le Meridien, Goa, has curtailed its energy costs by 10-12 per cent by using Schneider Electric’s IoT solution for energy management.
Other major use cases of IoT are data collection, predictive maintenance and security. Aeronautical engineers can collect real-time data to track fuel consumption and performance of air carriers, and accordingly foresee component failures, schedule maintenance and reduce unforeseen downtime. Hoteliers, cruise staff and airport security can use smart CCTVs to detect unwanted human presence and alert security personnel.
Metaverse
The metaverse allows for the creation of digital avatars, which can then be used by consumers to attend live events such as concerts, international summits and sports events in virtual stadiums; explore museums; dance at events; and evaluate hotels before booking. For instance, Indian musicians such as percussionist Bickram Ghosh and singer-songwriter Manasi Scott are drawing their fans into the metaverse through karaoke studios, masterclasses, release of new songs and jamming sessions.
Companies are also extensively deploying NFTs blockchain for ticketing solutions, encompassing flight tickets, room key cards or concert passes. It also allows companies to optimise reach with minimal investments. In March 2024, the Indian Railway Catering and Tourism Corporation unveiled colourful NFT tickets for two Tejas trains running between the cities of Delhi and Lucknow, ahead of Holi celebrations in the country. These digital souvenirs showcased historic landmarks from these two cities against vibrant backdrops. Distributing brand NFTs, purchasing advertisements in the metaverse, and undertaking product placement through gamification are further ways in which the metaverse is being leveraged for digital marketing.
Future outlook
India is currently the eighth largest leading player (valued at $231.6 billion) in the global travel and tourism market, according to the World Travel and Tourism Council. However, its ICT readiness score of 3.84 in the World Economic Forum’s Travel and Tourism Development Index 2024 indicates that the country still has a long way to go compared to regional competitors such as South Korea (6.55), Singapore (6.41) and China (6.1).
Effective and expeditious technology adoption is the key to India leapfrogging to the list of the top five travel destinations in the world. To this end, organisations in the sector must focus on leveraging cutting-edge technologies to make the user experience more personalised than ever, while ensuring the protection and security of their personal data.
