12 Mar 2025

The Next Era of Travel Tech: Innovations Driving the Future of the Industry

Published: 11 Mar 2025
By: Jonathan Carter-Chapman, Marketing Director, Northstar Travel Group
Topics: AI in Travel, Booking Systems, Digital Transformation, Travel Technology Investment, Customer Experience
Read Time: 9 minutes

Quick Summary

AI, agile booking systems, and composable digital stacks are reshaping the future of travel technology. As operators seek greater efficiency, personalisation, and profitability, new tools are helping address operational gaps, staffing shortages, and rising customer expectations.

While websites remain the top channel for bookings, AI is now underpinning almost every layer of the digital travel experience.

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Introduction

The travel technology landscape is shifting at unprecedented speed. According to new research from the TravelTech Show 2024, 62% of travel businesses are increasing their technology budgets this year, with AI, booking systems, and mobile apps topping the investment agenda.

At the same time, operators are scrutinising performance, profitability, and customer engagement more closely than ever.

This article explores the defining innovations shaping the future of travel tech—from AI and hyper-personalisation to the rebirth of the direct booking channel and new strategies for overcoming inflation and staffing challenges.

AI Moves From Buzzword to Backbone

AI is no longer an emerging trend; it's a foundational layer in travel’s digital transformation. In 2024, over 80% of travel businesses plan to increase their use of AI tools, according to the TravelTech Show’s latest survey. Over half are making AI their top area of new tech investment.

Glenn Fogel, CEO of Booking Holdings, put it simply:

AI has the potential to make travel easier, more intuitive, and ultimately more rewarding—for the traveller and the operator.

The most common applications of AI in the sector now include:

24/7 customer service chatbots powered by large language models (LLMs)
Hyper-personalised recommendations based on past behaviour, preferences, and real-time context
Dynamic pricing and demand forecasting tools
AI assistants that support travellers throughout their journey

By combining operational automation with smart customer interactions, AI is proving to be a powerful tool for improving satisfaction, driving loyalty, and reducing support costs.

Booking Systems Are Evolving—Fast

Booking platforms are no longer just transactional tools. They are evolving into multi-functional, dynamic systems that unify inventory, pricing, payment, customer data, and marketing automation.

According to PhocusWire, investment is flowing into platforms that offer:

Real-time inventory and pricing synchronisation
Omnichannel support (web, mobile, voice)
Integrated payment processing and upselling engines
Open APIs that allow custom integrations

This evolution reflects a broader push towards modular, composable tech stacks. Rather than relying on monolithic systems, travel firms now seek agile, interoperable tools that can evolve with customer demands and industry disruption.

Direct Booking Channels Reclaim the Spotlight

Despite the dominance of OTAs in recent years, direct booking channels—especially websites—are making a comeback. The TravelTech Show’s survey revealed that 40% of travel buyers view websites as the most effective booking channel, with OTAs at 20% and social media well behind.

This shift is being driven by:

The desire for better customer data ownership
Lower acquisition costs than OTA commissions
The ability to cross-sell and upsell services directly

Travel brands are also investing in SEO, UX design, and personalisation to convert lookers into bookers. Social media still plays a critical role in discovery, but it is increasingly seen as a gateway rather than the final booking destination.

AI-Powered Personalisation and CX

Personalisation is fast becoming the baseline for customer experience. Travellers expect relevant suggestions, smooth booking journeys, and proactive support—all of which AI is now enabling.

A recent McKinsey report found that companies using AI for personalisation saw up to 20% revenue uplift and 30% higher engagement.

Examples include:

Customised itinerary builders based on preferences and past travel
Smart notifications that adapt to real-time events (e.g. weather, delays)
AI chatbots that can resolve issues or rebook trips without human intervention

Vicki Miller, Director of VisitScotland, comments:

By harnessing AI and data analytics, we’re enhancing visitor experiences while managing demand sustainably.

Technology as a Solution to Inflation and Labour Shortages

Rising costs and a stretched workforce have pushed many travel companies to turn to technology for relief. According to McKinsey, digital tools are now widely used to:

Automate repetitive tasks like check-ins, reservations, and follow-ups
Improve staff efficiency through scheduling and communication apps
Reduce operational waste in energy, procurement, and payroll

As one hotel tech director noted anonymously in Skift:

We’re not replacing staff—we’re making the team we have more effective with the right tools.

This trend is especially relevant for SMEs struggling to hire post-pandemic while also dealing with inflationary pressures.

The Fully Digitised Customer Journey

From inspiration to post-trip feedback, travel brands are rethinking how they interact with customers digitally.

The new model is one of continuous engagement, including:

Search and discovery powered by AI and voice search
Mobile-first booking and itinerary management
Smart recommendations during travel (e.g. dining, experiences)
Post-trip surveys and review incentives

Crucially, the best-performing companies treat each digital touchpoint as a chance to add value and build loyalty. The aim is not just a sale—but a relationship.

A New Era of Tech Stack Strategy

One major shift across the industry is the move towards flexible, API-driven systems. Travel firms are building stacks that allow them to test, scale, and replace tools without breaking workflows.

Key elements include:

Composable architecture to plug and play best-in-class solutions
Integrated data pipelines for analytics and personalisation
Real-time dashboards for performance tracking and decision-making

This agility ensures businesses are not locked into outdated systems and can adapt quickly to new opportunities—or threats.

Final Thoughts

The next era of travel tech is here, defined by intelligence, integration, and intent. Companies that invest wisely in AI, agile booking systems, and digital engagement tools will not only gain operational advantages but also create deeper, more meaningful relationships with their customers.

While the landscape continues to evolve, the message is clear: technology is no longer a support function in travel—it is the engine of growth.

Key Takeaways

AI is the most heavily invested-in tech for 2024, especially for personalisation and customer service.
Booking systems are transforming into integrated platforms that unify data, payments, and marketing.
Direct bookings via websites are regaining ground due to their profitability and data advantages.
Technology is helping operators navigate inflation and staffing pressures with automation and efficiency.
The entire customer journey is now a digital experience—from discovery to feedback.
Agile, composable tech stacks are critical to staying responsive and competitive.