It’s an exciting time to be in the travel industry. Changes in technology are making processes simpler than ever before, and it couldn’t come at a better time now that more people are financially able to travel again for pleasure and for work.  Or both – as we’ll see later.  Consolidations throughout the industry are leading to some reduced competition, though it can also mean the ability to increase offerings to guests.  So what else is going on in travel in 2016? Let’s look at eight of the top travel trends that are worth noting this year.

1. Travel technology

Technological advances continue to reshape the business travel industry. Technology can improve productivity on the part of both the travel agency and the traveller, and it can also enable smartphones to keep people connected to their work and to their families no matter where they are.

Travel technology such as apps and push notifications make travel a lot safer. It’s a lot easier to notify travellers of any travel warnings that may be issued during their trip, and it gives agents the chance to change their travel plans simply. No more worrying about weather or other problems.

Business reimbursements can take place quickly thanks to apps that enable travellers to snap pictures of their receipts and upload them to the company financial software for accurate record keeping and nearly instant reporting of the costs of business travel. Compliance is simplified. Tracking and reporting by the apps make quarterly reporting much faster and transparent. The Sarbanes–Oxley Act of 2002 is meant to make investing safer and reveal any gaps in accounting on the part of company accountants. Nearly instant financial reporting helps this tremendously.

One of the biggest trends is found in travel companies willing to provide a personal experience for its customers. Companies that can take advantage of this without coming across as invasive will have positioned themselves well. That means being able to keep data on individual customers as well as putting it together in the aggregate. An added pressure is trying to keep that data safe from hackers who could use it to steal identities.

An added bonus is that travel technology solutions improve travel agencies’ bottom lines as well. The booking programs available now are more effective at linking together all of the components of a trip, and they can integrate with apps for the consumer to use seamlessly. Booking programs also provide crucial financial data for companies, and that cohesion is bringing companies back to travel agents.

2. Travel is getting more mobile

2016 travel trends include the fact that mobile technology is exploding in popularity. Nearly every country now has its very own app that lets residents stay in touch with their clients and coworkers.

Worldwide, this change is dominantly driven by the millennial generation, who want to take advantage of travel opportunities to discover something new and experience more of life. They are embracing technology in ways and at rates that have not been seen before.  This can make things interesting given that for many companies the travel manager is often a baby boomer who has a very different way of doing things.

3. Rising markets

One of the newest places people are heading to is Cuba. Since the US re-established diplomatic relationships with the island nation and lifted some of the travel restrictions, Cuba has started to welcome tourists with open arms. It has been over 60 years since the island nation was cut off, and forward thinking travel agents are taking advantage of the changes. One third of travel agents surveyed by the US Tour Operators Association now offer flights and packages to Cuba. Half of travel agents are planning to offer trips soon.

Interestingly, in presidential election years people get nervous, so travel agencies will sometimes offer discounted packages to encourage travel. As this is a big election year, this could come to play later on, and trips to faraway lands might be more affordable than ever.

4. Online Travel Agencies

Online travel agencies, or OTAs, have revolutionized the travel industry. The subtle suggestions of add-ons like restaurant reservations and excursions let travellers completely customize their trip and give them the sense that their itinerary is complete. As mergers and acquisitions sweep through this part of the travel world much as consolidations have happened elsewhere, competition is reduced. Case in point – Expedia has now purchased Orbitz. That said, Expedia now has access to MetaSearch and hotels directly that will only help improve the service it can provide.

5. Airline industry

Travel trends in 2016 include some big changes in the airline industry. One big thing to keep in mind about airlines is that they are operating very lean, running only full planes and finding more ways to pack in more people per flight. With that crowding comes a reduction in customer satisfaction and an increase in viral videos of people arguing over reclining seats. Lighter weight seats are replacing the older, more padded ones, reducing fuel use per flight but leaving passengers with a more uncomfortable ride.

With the drop in global crude oil prices, however, airfares are dropping as well. It can be a bit misleading, as many airlines are now providing a la carte pricing, meaning meals carry a separate fee, blankets and pillows cost money, and even carry-on luggage might no longer be free.

6. Hospitality industry

The hospitality industry in 2016 is undergoing a major transformation. The new shared economy has had some impact on business travel, but mostly only in transportation where Lyft and Uber provide alternatives to taxis. Ride-sharing can save as much as 10% on taxis. Accommodation sharing sites like AirBnB have not made quite the same impact on business travel. There are a lot of factors as to why, but it’s mostly down to amenities.  A house is generally not set up with the same level of attention to the needs of business travellers. 

On the other hand, for those travelling for pleasure it should be no surprise that AirBnB and vacation rentals are on the rise, with bookings doubling in the last three years. They often come in cheaper than hotels with similar features, and since hotels are starting to take a page from the airline industry and charge for extras, AirBnB can position itself to provide a really good deal with just free Wi-Fi alone.

Thanks to a booming economy, hotel room rental rates are expected to rise approximately 5% this year according to the Global Business Travel Association. Hoteliers added over 100,000 hotel rooms in 2015, but demand is still on the rise at an even faster rate. Also adding to the rise in rates is the expected clearance of the Marriott/Starwood merger, which will reduce competition.

7. Corporate travel

Corporate travel is one of the mine canaries of the economy. As the overall financial climate improves, more people are able to get out and travel.  There is another factor leading to a rise in corporate travel, though, and that is the rise of Asian businesses, particularly in China.  Even though the Chinese economy is slowing slightly, the Global Business Travel Association expects that China will pass the US in amount spent on business travel later this year. Interestingly, Chinese business travel is dominated by internal travel – 95%, versus the US where as much as 20% of business travel is international. But, the biggest amount of growth for international travel is coming from India. They could overtake the US in just 15 years.

There is not an expectation that corporate travel in 2016 will slow down to a negative rate, but it won’t grow this year as much as it as in the last couple of years.  It is still expected to have a double-digit growth rate for 2016.

An interesting combination of business and personal travel, called bleisure, is taking off. Business travellers are mixing in vacation days either before or after their company portion of the trip, or they are bringing their families with them to their destinations. For some companies, this is viewed as a type of perk that helps improve the work-life balance of their employees. It can be one of the things that keep people loyal to their employer. The tricky part is no one is quite sure who carries the risk on the personal end of the trip, whether that falls to the traveller or if the company bears that burden.

8. Travel agencies

Travel agencies in 2016 are looking to grow with the increase in both private and corporate travel, so they are starting to do active recruiting of college students to try to get the best employees right away. Growth is anticipated to be steady if not stellar and agencies want to be ready.

Some travel agencies are getting ready for growth in business travel by helping arrange for their clients’ meetings and by providing incentives to business travellers for using their services. Bigger travel agency teams are dedicating staff to meetings, sometimes as much as 15% of the total number of employees.

Technological advances mean some travel agencies are innovating on their own, creating apps that will give business travellers the ability to book hotels that fully comply with their company travel policies. Other apps are designed to make it easy to get trips approved by the travel manager. This synergy is expected to grow and allow the innovative companies the opportunity to gain new clients.

In sum

It looks like it will be a great year for travel, thanks to people finally being able to afford to travel again and the importance of business travel coming to the fore once more. Seventy five percent of travel agents saw more business in 2015, and a whopping 90% are anticipating more growth this year. Whole families are taking trips together, creating new memories thanks to grandparents and grandchildren experiencing things together.

Defining travel in 2016 starts with technological advances that will continue to alter the travel landscape, and mergers and acquisitions that will reduce competition in some ways while prompting other companies to spring up in the void that is created. It’s shaping up to be an interesting year, as new travel markets open and old familiar places become more affordable than ever.