Phocuswright’s

Written and Researched by Colie Hoffman and Bob Offutt

Travel Innovation and Technology Trends 2015

Travel Innovation and Technology Trends 2015 q June 2015

Travel Innovation and Technology Trends 2015

Written and Researched by Colie Hoffman and Bob Offutt

Travel Innovation and Technology Trends 2015 is published by Phocuswright Inc. The information con-tained herein is derived from a variety of sources. While every effort has been made to verify the informa-tion, the publisher assumes neither responsibility for inconsistencies or inaccuracies in the data nor liabil-ity for any damages of any type arising from errors or omissions. All Phocuswright Inc. publications are protected by copyright. It is illegal under U.S. federal law (USC101 et seq.) to copy, fax or electronically distribute copyrighted material beyond the parameters of the license or outside of your organization without explicit permission.

©2015 Phocuswright Inc. All Rights Reserved.

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Travel Innovation and Technology Trends 2015 q June 2015

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About PhocuswrightPhocuswright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, Phocuswright fosters smart strategic planning, tactical decision-making and organizational effectiveness.

Phocuswright delivers qualitative and quantitative research on the evolv-ing dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use Phocuswright research for competitive advantage.

To complement its primary research in North and Latin America, Europe and Asia, Phocuswright produces several high-profile conferences in the United States and Europe, and partners with conferences in China and Sin-gapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce.

The company is headquartered in the United States with Asia Pacific opera-tions based in India and local analysts on five continents.

Phocuswright is a wholly owned subsidiary of Northstar Travel Media, LLC.

Travel Innovation and Technology Trends 2015 q June 2015

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An Introduction from Sonata:

CREATING THE NEXT GEN TRAVEL EXPERIENCEWe at Sonata Software have worked with some of the best-known travel industry brands across the globe in the tour operator, OTA, airline and rail segments. Our relationships span over a decade, as we help businesses transform key processes through modern information technologies. Travel has been more deeply transformed by information technology than perhaps any other industry. There have been significant shifts to digital channels, and devices and data have become pervasive at every stage of the travel life cycle, impacting how people and processes have evolved to address customer fulfillment. Our global team of over 600 consultants in the travel industry practice provides the high quality work that travel clients require, and as a business we have benefited from extending our learning to other industry verticals. As this report highlights, technology’s role in travel is a continuous journey toward new horizons!

This Phocuswright report, Travel Innovation and Technology Trends 2015, identifies the importance of the seamless travel experience as a super trend for which the travel industry must prepare. Customer experience management, personalization and big data-driven cognitive computing are among the key underlying drivers that can help companies achieve this bigger goal. Sonata has worked with several proactive travel industry leaders that have already taken important steps to realize the business value of these trends. A seamless omni-channel buying experience, a single view of the customer, personalized search and promotions – these all add up to significant results as we have seen in our engagements.

Our commitment to travel technology has also led us to invest in Rezopia, a cloud-based travel SAAS that brings multi-channel travel distribution, content, packaging, inventory, contracts and back-office operations on one single technology platform. With an aggressive roadmap that extends this to mo-bile applications, travel analytics and near field communication-enabled solutions, our goal is simple: a seamless technology platform that can help deliver a seamless travel experience to the customer! Early movers including destination specialists, member-based organizations and rail networks have already used Rezopia to redefine their businesses and customer experiences, reinforcing our convic-tion that a wide spectrum of travel needs can be enhanced with these innovations.

In sum, Sonata Software is proud and privileged to be part of the travel industry, which has been at the forefront of leveraging technology to redefine customer value. We look forward to the next phase of this exciting journey, as some of the trends identified in this report continue to reshape the industry. More importantly, we are committed to keeping in step with bold travel business visionaries as they innovate to define new ways of delighting customers.

Srikar ReddyCEO, Sonata Software Ltd.www.sonata-software.com

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Table of ContentsSection 1 Introduction 1

Trends 2015 1

Trend 1: No CEM, No Customers 2

Trend 2: A Market of One: The Brass Ring? 4

Trend 3: Artificial Intelligence and Cognitive Computing Open Opportunities 5

Trend 4: Collaborative Consumption 7

Trend 5: Digital Marketing - No Time (or Space) to Waste 8

Super Trend: Building the Seamless Travel Experience 9

Travel Innovation and Technology Trends 2015 q June 2015

Table of ChartsFigure 1 3 Year-Over-Year Performance Changes

Figure 2 3 Companies with VOC Programs Outperform Others

Figure 3 4 Data - Centralization, Segmenta-tion and Enhancement

Figure 4 6 Desti/Here Responding to a Hotel Query

Figure 5 10 One Portal, Multiple Travel Services

Figure 6 10 Mobile Screens from Edenspiekermann's Info Connectivity Project

Figure 7 12 JetBlue's Flight Attendant Passenger Service Tablet

Figure 8 12 Sabre's TripCase on Apple Watch

Figure 9 13 Augmente Reality in Action

Figure 10 14 iBeacon Helps Hotel Revenue

Figure 11 14 The Internet of Things

ContentsAreas marked with this symbol ( q) are interactive and clickable in the PDF version of this report.

Travel Innovation and Technology Trends 2015 q June 2015

Section One

©2015 Phocuswright Inc. All Rights Reserved. Page 1

Introduction

For technology futurists, this is a great time. We are able to observe in real time how new technology affects and improves our lives, enables new business op-portunities, and allows new and different kinds of human-machine interaction. In addition, many of the essential catalysts for technology-enabled growth1 – e.g., large numbers of highly educated people, rapid pace of technological discovery, globalization, and relative political stability – are at their strongest point yet in hu-man history.

The keys to business and personal progress in this tech-enabled era are con-nectivity and interoperability. Connectivity is already very high – there are mobile phone accounts for 96% of the people on the planet, and approximately 40% of the global population has Internet access.2 This connectivity is rapidly becoming the foundation for the global economy – and leveraging hyper connectivity for business value has just begun.

In travel distribution, marketing and IT executives need to look at new technology-enabled business opportunities through the eyes of venture capitalists – evaluate potential and risks and rewards; manage tech initiatives with a portfolio approach; and create a mix of shorter- and longer-term initiatives with varying ROI. Travel sales, which totaled $1.3 trillion in 2014, are expected to rise 6% in 2015, and competition will be intense. This year’s Travel Innovation and Technology Trends pinpoints the biggest trends that businesses need to consider before making their next technology investments.

For the first time, this year we identify a “super trend” that incorporates two sub-trends. While each subtrend would be unlikely to shift the trajectory of the travel industry on its own, together they represent a major direction. The focus of 2015’s trends: the customer and the trip experience.

Trends: 2015Trend 1: No CEM, No Customers

Trend 2: A Market of One: The Brass Ring?

Trend 3: Artificial Intelligence and Cognitive Computing Open Opportunities

Trend 4: Collaborative Consumption

Trend 5: Digital Marketing – No Time (or Space) to Waste

1) Hans-Paul Bürkner, “Strategic Optimism - How to Shape the Future in Times of Crisis,” BCG Perspectives (April 13, 2010).

2) “The World in 2014, ICT Facts and Figures,” International Telecommunication Union (April 2014).

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Super Trend: Building the Seamless Travel Experience

Content Remains King

Connecting Travelers and Trips

Trend 1: No CEM, No CustomersOverview: Customer experience management (CEM) could easily be the most important thing travel companies consider this year with regard to distribution – CEM quality may become the key differentiator in travel purchase decisions. In our 2014 trends analysis, we discussed how CEM involved engaging customers consistently and in a timely manner through multiple channels and devices (i.e., an omnichannel strategy) across all stages of the travel life cycle.

The challenges for businesses now are to understand the value of CEM to the customer, and to recognize how CEM boosts customer loyalty and sales conver-sions. Most companies don’t fully comprehend the ROI for CEM programs and are unfamiliar with how customer service – and a company’s online reputation for good versus bad service – translates to sales.

Two primary methods for companies to improve CEM are 1) to make CEM efforts cross-channel, and 2) to increase transparency. Travelers are constantly connected – to multiple types of devices – which means businesses need CEM at every touchpoint, regardless of channel. Transparency requires companies to provide travelers with information that is complete and consistent across all channels (i.e., “one version of the truth”): email, the web, call centers, events, trade shows, print/mail communication, social media, the physical store, and online customer communities.

Business Impact: Using traditional metrics to assess the potential and impact of CEM is a difficult task. With such heated competition between various points of sale – intermediaries vying with suppliers, OTAs demanding a bigger slice of the pie, and new technologies shifting channel share – a customer’s experience is likely to be the most influential factor in his or her choice of supplier. Investment in customer satisfaction pays off: Companies with omnichannel CEM programs gained 6% year over year in average profit margin per customer.3 The perfor-mance improvements shown in Figure 1 clearly demonstrate the need for travel companies to assess (or reassess) the idea of implementing a pre-trip, in-trip and/or post-trip CEM strategy.

Post-trip CEM tools, primarily voice of the customer (VOC) programs such as analysis of social network postings, comment cards and email queries, also provide substantial benefits. For example, companies with VOC programs garner much higher margins in upsell, cross-sell, and marketing ROI than those without programs (see Figure 2).

Technology: The technology involved in a pre-trip/in-trip CEM program may seem easy to implement, but it’s harder than it looks. Customer data is often

3) Omer Minkara, “The Rise of Omni-Channel Customer Care,” Aberdeen Group (Oct. 29, 2013).

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Figure 1: Year-Over-Year Performance Changes

Source: Aberdeen Group, May 2013© 2015 Phocuswright Inc. All Rights Reserved.

Customer retention

6.5%6.1%

1.0%

-0.7%

3.4% 3.4%

Year

-ove

r-yea

r pe

rcen

t ch

ange

Average profit margin per customer

Customer lifetime value

-2%

0%

2%

4%

6%

8%Companies with omni-channel CEM programs

All others

Figure 2: Companies with VOC Programs Outperform Others

Source: Aberdeen Group, March 2014© 2015 Phocuswright Inc. All Rights Reserved.

Cross-sell and up-sell

revenue

14.1%12.6%

-9.2%

-3.5%

-0.1%

2.0%

5.7%

2.0%

11.4% 10.9%

7.6% 6.7% 6.0%

-11.7%

-6.3%

-1.8%

Year

-ove

r-yea

r pe

rcen

t ch

ange

Return on marketing

investments

Customer win-back

rate

Annual company revenue

Revenue from

customer referrals

First contact resolution

Average response time to

customer requests

Net promoter

score

Average cost per customer contact

-4%

-8%

-12%

0%

4%

8%

12%

16% Companies with VOC programs

All others

4.1%3.3%

Travel Innovation and Technology Trends 2015 q June 2015

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fragmented, with shards in many different databases, which makes a single, shared view of the customer difficult to create. JetBlue, in efforts to develop such a profile, developed a customer “hub” sourced with information from multiple internal databases. Figure 3 shows the complexity of developing this kind of hub.

Travel companies looking at VOC should consider a variety of strategies, includ-ing monitoring social media, call center improvements and intelligent agents. Social media monitoring is a significant investment that requires constant at-tention. For call centers, common practice is tiered response – but by the time the customer hits the third or fourth tier, information entered on previous tiers is usually lost. A better approach: Use speech analytics in the first tier to understand the customer’s query in plain language, then route the call accordingly. Another approach is to use an intelligent virtual agent (e.g., “Jenn” at Alaska Airlines) to answer a query or route a call. The foundation of each of these approaches is a single source of customer information (such as the data hub in Figure 3). Having this source helps create consistency, regardless of the user interface.

Trend 2: A Market of One: The Brass Ring?Overview: “A market of one” refers to customer service so personalized that each customer feels like the company’s most important client. This is what the travel industry needs to work toward. At every touchpoint, travel companies must build and sustain relationships with travelers that are tailored to their individual needs and situations. Individualized marketing is critical to remaining competitive, and like CEM, it is likely to separate successful companies from the unsuccessful ones.

Figure 3: Data - Centralization, Segmentation and Enhancement

Source: JetBlue© 2015 Phocuswright Inc. All Rights Reserved.

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Customized, optimized content is even more important as mobile, with its limita-tions in screen real estate, increases its online share.

Business Impact: While much of the hype regarding personalization as a market-ing strategy has been driven by the media, tailoring content to a market of one is, for many companies, an effective tactic. In a 2014 study of over 1,000 organiza-tions that use personalization and marketing message optimization, the average conversion rate for the top 20% of companies was 4.5% or higher, while the over-all average was 2.6%.4 For airlines and OTAs, personalized marketing can improve conversion rates by 10-20%, increase revenue by more than 5% per week, and bring in 3-7 times more revenue per visit from repeat visitors.5

Technology: A variety of personalization products are on the market. They gener-ally include some version of the following capabilities:

0 Customer analytics: Analysis of customer behaviors and profiles to enable market-ing decisions through segmentation and predictive analytics. For example, the tool could perform semantic analysis of unstructured data (e.g., Facebook posts).

0 Business analytics: Analysis of past business performance, which can help pre-dict future performance.

0 Marketing optimization: Use of customer and business analytics to fashion customized or personalized marketing messages.

Trend 3: Artificial Intelligence and Cognitive Computing Open OpportunitiesOverview: Artificial intelligence (AI) is a machine’s ability to imitate intelligent human behavior and functions, such visual perception, speech recognition, and language translation. The components of AI necessary to pass the Turing Test are:

1) Ability to achieve human-level performance sufficient to fool an interrogator

2) Natural language processing

3) Knowledge storage

4) Automated reasoning

5) Machine learning6

In short, the machine must be able to communicate with, respond to, and learn from an interrogator, as well as develop reasoned replies, all in natural language.

Although we are nowhere close to AI-based technological singularity (the hypo-thetical point where AI exceeds human capability), there is a substantial amount of technology development in cognitive computing – a subset of AI – currently underway. Cognitive computing attempts to use automation to emulate human thought processes, whereas the goal of AI is to imitate human intelligence.

The number of smaller “smart” devices – e.g., car computers, wristwatches,

4) “Adobe 2014 Digital Marketing Optimization Survey Results,” Adobe Systems (May 2014).5) “Skift + Boxever: The Future of Personalized Marketing in Travel,” Skift and Boxever (Sept. 2014).6) Stuart Russell and Peter Norvig, Artificial Intelligence: A Modern Approach, 3rd Edition, Pearson (2009).

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Google Glass, and even smarter phones – is proliferating rapidly. Because most such devices have limited screen real estate and input/output capabil-ity, they can only work as intended if the server can deliver information that is highly responsive to the user’s needs and displayed in a way that’s practical for the user. Increased demand for such servers is driving demand for cogni-tive computing, which would allow devices to communicate with users (via natural language processing) and solve complex problems. Travel companies that use cognitive computing tools to improve trip planning and travel sup-port services (in a cost-effective manner, of course) have a golden opportu-nity to move ahead of the pack.

Business Impact: Cognitive computing has numerous applications in travel. Personal trip management applications for travelers, such as Amadeus’s Per-sonal Disruption Companion, enable airlines to learn a traveler’s preferences and automate itinerary changes accordingly. WayBlazer, launched in 2014, is a trip-planning system powered by the cognitive computing platform of IBM’s Watson.

The ability of AI and cognitive computing to create structure from unstructured in-formation makes them well-suited for applications that address the earliest stages of trip planning – dreaming and searching – as most of the relevant information is unstructured. However, efforts in this area are difficult to monetize. To remain eco-nomically viable, providers often have to expand their AI and cognitive comput-ing functionality to include shopping and buying. The alternative business model is monetization through advertising, which, historically, has been unable to sustain sophisticated technology costs for early stage travel planning.

Two companies, however, are working to beat these odds:

Nokia: Nokia has purchased Desti, an AI system from SRI (inventor of Siri – the AI system in iPhones), and folded Desti into its Here 360 maps product. The addi-tion of AI and natural language processing will allow Here 360 to understand user preferences on a much deeper level (see Figure 4).

Figure 4: Desti/Here Responding to a Hotel Query

Source: Here 360© 2015 Phocuswright Inc. All Rights Reserved.

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Utrip: Utrip’s cognitive computing platform uses a traveler’s interests and budget restrictions to plan detailed, hour-by-hour itinerary possibilities. It can generate over 10,000 iterations. One advantage of these itineraries is that they account for the minor (but often messy) details that people often forget to include, such as operating hours, distances between attractions, and transit time.

Technology: AI and cognitive computing technology can take many forms. For example, they can appear as user interfaces and reasoning engines (like Siri or Desti) or a massive computing system (like Watson). AI will likely evolve in such a way that users will not realize they’re using it – responses to user queries will become more and more relevant, but the reason behind this improvement won’t be transparent. Already, in systems called human-agent collectives, humans and software agents are working together in flexible relationships toward common goals (e.g., disaster relief), one or the other taking the lead as appropriate. Given the complexity of travel planning, these collectives may hold promise for travel-related AI in the future.

In travel, leading companies (Expedia, for one) are looking at the opportunities AI and cognitive computing opportunities can offer. For travel companies, cognitive computing should be included in near-term strategy plans and AI in mid- to long-term planning – either as laboratory efforts or experimental business initiatives. Failure to incorporate these technologies could mean losing a major advantage, as both will eventually be critical to internal operations and customer service.

For experimental business initiatives, deployment of AI and cognitive computing should be based on the business value these approaches can offer and on the level of technology-related risk the company is willing to accept. Cloud-based AI and cognitive services can provide the flexibility to experiment with new models without the capital investment of a data center. In addition, software and service providers that develop cloud-based AI and cognitive computing services will have a major opportunity to make white-label agreements with travel companies.

Trend 4: Collaborative ConsumptionOverview: The sharing economy – also known as collaborative consumption – is a peer-to-peer marketplace in which suppliers (everyday people) exchange or rent out excess capacity (e.g., sleeping facilities, room on a yacht, or even an evening meal). While the sharing economy does involve sharing, it also involves commer-cial transactions – i.e., the use of excess capacity in exchange for remuneration.

Business Impact: For many collaborative consumption activities, such as bicycle- or boat-sharing, the economic impact is simply additional consumption reflected in the GNP. Other sharing services are, economically, a zero-sum game in which the sharing service (with remuneration) acts as an alternative to a previous paid service. It is safe to say that collaborative consumption both cannibalizes existing business and creates new demand.

For example, car-sharing reduces automobile ownership, which means auto manufacturers lose money. But the area of greatest concern to travel companies is lodging – distributors that pivoted from air to hotels face significant competi-tion from Airbnb. The 416,000 Airbnb guests who visited New York City in the 12 months ending July 2013 cost the city’s lodging industry about 1 million room

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nights.7 An analysis of lodging suppliers in Austin, Texas (which has a high density of Airbnb properties) found that each 10% increase in Airbnb supply drives a 0.35% decrease in monthly revenue for hotels, which translates to 13% of Austin’s monthly room revenue.8

Technology: The sharing economy is not new, but new technologies and perspec-tives have breathed new life into it. The rise in collaborative consumption is driven by the convergence of specific societal, economic and technological factors.9 The technological influences are:

0 Mobile devices and platforms

0 Social networking

0 Online payment systems (e.g., PayPal)

To satisfy customers, travel companies (specifically GDSs) need to participate in the collaborative economy, either as suppliers or facilitators of shared content. Starwood has already partnered with Uber – with each ride, Uber passengers re-ceive Starwood loyalty points. Airbnb has collaborated with Concur to automate payments and expense reporting in an effort to attract business travelers. And these connections are just the beginning – plenty of local, regional and global partnership opportunities are still available, as is the potential for worldwide distribution deals. GDSs could join forces with sharing services to provide distri-bution, points of sale (e.g., travel agents), and technology platforms that support cloud-based inventory and content management. The window of opportunity to establish a foothold by acquisition, partnership or investment in this new line of business is relatively near-term (12-24 months).

Trend 5: Digital Marketing – No Time (or Space) to WasteOverview: Today’s travelers are almost always online, where they are deluged with irrelevant advertisements. Much of this advertising waste will disappear as mar-keters employ operational and predictive analytics to determine attribution and to predict future conversions. And, as user interfaces shrink (see the Super Trend below), limited screen real estate will restrict all but the most relevant ads.

And those ads must deliver value to both customers and suppliers. For consum-ers, this value can be contextual, personalized, location-based, comparative or situational, and should lead to a quality experience with the company. For suppli-ers, delivering value translates to ROI, goodwill and brand recognition.

Business Impact: For many travel businesses, digital marketing is unfamiliar territory. They will need to learn and test new marketing techniques, develop new skills, and design new campaigns. They must also respond with agility to ever-changing variables, including the perception of value by the consumer, user expectations for functionality, and online advertising technology.

Technology: The marketplace is flush with tools to improve marketing value: tools

7) Matthew Kurtz, “In Focus: Airbnb’s Inroads Into the Hotel Industry,” HVS (June 2014).8) Georgios Zervas, Davide Proserpio and John W. Byers, “The Rise of the Sharing Economy: Estimating the

Impact of Airbnb on the Hotel Industry,” Boston University (Feb. 11, 2015).9) Jeremiah Owyang, “The Collaborative Economy,” Altimeter Group (June 4, 2013).

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for content curation, personalization, content management and distribution ser-vices, SEO, social media management, and actionable and predictive analytics, as well as optimization of value, experience and sales channels.

Super Trend: Building the Seamless Travel ExperienceOverview: The end game for travelers is a convenient, fun experience – from dreaming through sharing – regardless of how, when or where they interface with technology and content. But that experience is still a long way from here: The content necessary for effective travel planning is fragmented and difficult to shop, which drives consumers to visit multiple content sources before making travel decisions. The trip itself is plagued by long lines, airport hassles, canceled or late flights, difficult ground transportation choices, problems finding out what is happening, and decisions about where to go and what to see. In a classic chicken-and-egg scenario, the travel industry tends to go through a period where it focuses on content, followed by one where it focuses on technology. While the pendulum is currently swinging toward technology, content hasn’t receded into the background.

Business Impact: The business value of a better travel experience is difficult to measure – but intuitively, the better the travel experience, the more likely the traveler will keep taking trips. This dynamic will continue to gain importance in the industry – especially for cruise and tour operators, whose entire business proposition is the experience. Emphasis on the trip experience will also boost sales of ancillary content and referral fees to businesses that recommend local activities. The following two subtrends have the potential to make travel more convenient and fun:

0 Content Remains King

0 Connecting Travelers and Trips

Content Remains KingSeamless and end-to-end services are technically feasible, even if they haven’t yet arrived in the day-to-day experiences of travelers. Amadeus’ Personal Disruption Companion is one real-life example (see Trend 3). Another, more comprehensive project – the Info Connectivity System – is the brainchild of Edenspiekermann, a European design and communications company. The Info Connectivity System is a demonstration that shows how various information and service sources could be blended to support a journey from Tokyo to a home in Amsterdam via Frankfurt (for example). The company’s vision was “to make traveling in Europe easier,” and the result is a single portal in which a traveler can access multiple travel services (see Figure 5). The portal can deliver services in a one-stop shop format, providing travelers with all the relevant information for their trip, at the right time and in the appropriate context and language. Figure 6 shows representative mobile device access screens for the Edenspiekermann project (of course, the portal’s underlying structure is much more complex than it looks here). In a production implementation that contains full commercial functionality, the provider should consider including contextual intelligence – for example, the traveler’s movements, social media activity and transaction history, and relevant environmental issues, such as weather. The challenge for system

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Figure 6: Mobile Screens from Edenspiekermann's Info Connectivity Project

Source: Edenspiekermann© 2015 Phocuswright Inc. All Rights Reserved.

Figure 5: One Portal, Multiple Travel Services

Source: Edenspiekermann© 2015 Phocuswright Inc. All Rights Reserved.

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designers is to take a horizontal slice from a number of vertical services and then find appropriate business sponsors.

Implications: Providing end-to-end information services (content) to the traveler is less of a technology issue and more of a business one. The travel industry needs to figure out how to aggregate individual services in the way that will most benefit the customer, but at the same time, it must keep the strategy economically viable through advertising, booking, markup and referral fees. In short: it needs to make a positive business case for this concept.

Leading airlines are also experimenting with automated service delivery. Flight attendants at JetBlue carry tablets that contain information about passengers – such as status, service history and disabilities – that is relevant to providing great service (see Figure 7).

The opportunity to offer seamless end-to-end services is an excellent reason for various parts of the travel industry to come together and develop technology standards that will benefit the entire travel community, such as standard XML vocabulary, messaging protocols, and content descriptors.

Connecting Travelers and TripsThis year, following several years of progress in smartphone technology and the development of innumerable apps, use of new mobile devices like watches and other wearables is rising rapidly, as are new user capabilities that contribute to the seamless travel experience (see Figure 8). Some of the tools and features that will contribute to the travel experience include:

0 Wearables:

• Watches: Apple Watch, which hit stores in April 2015, is the latest in a se-ries of multivendor innovations that employ wearable technology. So far, most smartwatch applications have focused on health and fitness (e.g., the user’s heart rate). But Apple Watch, as well as several new applica-tions,10 such as LoungeBuddy, which finds the best place in the airport to wait, and Spottly, a visual travel guide, will contribute to the seamless travel experience.

• Travel-friendly features to expect on wearable devices:

m Tools to shop for flights m Destination informationm Notification of departure gates, flight delays and the next event on

an itinerarym Baggage retrieval and connection informationm Details about local ground transportation m Ability to contact Uber m Tools to get hotel room information and unlock room doorsm Compatibility with iBeacon

0 Natural language interfaces: Although the technology for hands-free operation and speech interfaces (based on natural language processing) is still in early stages, it will become a critical component in travel, especially with wearable and mobile devices. Soon, travelers will be able to use their devices while driving a car or while navigating through an airport with both hands full.

10) Jessica Plautz, “23 Apple Watch apps that want to change the way you travel,” Mashable (April 23, 2015).

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Figure 7: JetBlue's Flight Attendant Passenger Service Tablet

Source: JetBlue© 2015 Phocuswright Inc. All Rights Reserved.

Figure 8: Sabre's TripCase on Apple Watch

Source: TripCase© 2015 Phocuswright Inc. All Rights Reserved.

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0 Heads-up displays: The most notable of these is Google Glass, a valuable experiment with a display unit, a speech interface and a camera that attaches to eyeglasses. Google Glass provided many of the capabilities of Apple Watch, but had too few applications. One potential travel-related use was processing of passengers or guests, but in most cases, the device was too slow. Because Glass also lacked the broad appeal that Google expected, the company has withdrawn it from the market (for now, anyway).

0 Charging: A major limitation on smartphone usage is battery life – we’ve all run out of juice at one time or another. But that may soon be a problem of the past. Technology developed by MIT physicists, now available through WiTricity, allows wireless device charging without a charging pad.

0 Location-based services: Location-based services are nothing new, but travel suppliers are just beginning to understand the value in knowing where their customers are. One barrier so far has been a deficiency in the technology: If it is dependent on GPS alone – which is true for most smartphones – it is not useful indoors. However, new technologies that provide indoor locations, such as iBeacon (discussed below), are available and in development.

0 Augmented reality: With this technology, a user can observe a scene through a phone camera (in the real world) that is augmented with relevant facts from the Internet. Although the technology is fascinating and fun, no company has yet found a viable business model for it. Phind is the latest contestant in this arena (see Figure 9).

0 Virtual reality: Virtual reality devices, such as computerized gloves, headsets or goggles, allow users to simulate experiences that usually take place in the physical world, and could enable travelers to take vacations virtually. VR is gain-ing momentum among gamers – an excellent test audience for the technol-ogy, which may spread to a more general audience.

Figure 9: Augmented Reality in Action

Source: Phind© 2015 Phocuswright Inc. All Rights Reserved.

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0 Beacons: The beacon (e.g., Apple’s iBeacon) is a “sleeper” in revolutionary technology (see Figure 10). Beacons can detect the location of nearby beacon-capable smartphones, collect location data, and send personalized travel information and offers. IBeacon technology is currently in numerous airports. Once adoption becomes widespread, travelers could engage with iBeacons in almost every airport – and airport shop – in the world.

0 The Internet of Things: From a macro point of view, the Internet of Things is the connection of objects – appliances, security systems, water sensors, etc. – to the Internet, and almost anything can be equipped with a sensor, connected, and remotely accessed (see Figure 11). The IoT has a ready commercial market, and travelers stand to benefit a great deal from functionality like smart bag-gage tags, automatic rebooking, line length detection, and preordering of food and hotel services.

Figure 10: iBeacon Helps Hotel Revenue

Source: GuestDriven© 2015 Phocuswright Inc. All Rights Reserved.

Figure 11: The Internet of Things

Source: Janua© 2015 Phocuswright Inc. All Rights Reserved.

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