How the World Does Travel: Sector Checks In Late on Digital Engagement

The travel industry, long defined by in-person transactions and physical tickets, is gradually moving toward digitalization. However, according to the PYMNTS Intelligence report, “How The World Does Digital: A Global Benchmark Of Consumer Digital Transformation,” that transition is lagging compared to other sectors.

The study, which surveyed 67,000 consumers across 11 countries, found that travel-related digital engagement is among the lowest. On average, consumers engage in digital travel activities just 12.3 days per month, far below the sector-wide average of 281 days. Key activities, including using home-sharing platforms, purchasing airfare online and consulting travel information websites, show infrequent usage, highlighting the sector’s struggle to fully embrace a digital-first approach.

Country-Specific Trends: A Mixed Bag

The report also highlighted significant variations in digital travel engagement across different countries. While some countries are embracing online travel tools, others remain reliant on traditional methods.

United States: American consumers displayed a relatively high level of digital engagement in travel, with 13.9 activity days per month. This suggests a growing preference for online platforms for travel planning and booking. The widespread availability of high-speed internet and the popularity of online travel agencies likely contributes to this trend.

United Kingdom: The U.K., with 18.4 activity days, showed an even stronger inclination toward digital travel solutions. The U.K.’s mature digital infrastructure and the presence of major online travel players could be driving this trend.

Japan: In contrast, Japanese consumers exhibited the lowest digital engagement in travel, with only 5.8 activity days. This indicates a continued reliance on offline channels and a slower adoption of digital tools in the travel sector. Cultural factors and a preference for personalized service might explain this reluctance to embrace online travel solutions.

Brazil: This country, which earned the No. 1 ranking for digital transformation in the “How the World Does Digital” report, saw its citizens engage digitally with travel an average of 13.9 days per month. Brazil’s digital success stems from a comprehensive national strategy aimed at leveraging digital technologies for economic and social progress, coupled with innovative initiatives such as the PIX payment system. This system, which facilitates free and seamless digital transactions, plays a key role in enhancing financial inclusion. Together, these efforts underscore Brazil’s strong positioning for an increasingly digital future.

France: French citizens, on average, connect digitally with travel 14.4 days per month. French Generation Z users are the most active, with 464.8 activity days per month and about 15.5 activities per day — the highest engagement by Gen Z in any country in our report.

Generational Divide: The Young Lead the Way

The report also highlighted a pronounced generational divide in digital travel engagement. Younger generations, especially Gen Z and millennials, are more inclined to use digital tools for travel planning and booking compared to older generations. This trend emphasizes the need for travel companies to tailor their digital strategies to meet the preferences of these younger consumers. As digital natives become the predominant consumer group, travel companies that do not provide engaging online experiences risk losing market share.

The Road Ahead: Challenges and Opportunities

The gradual pace of digital adoption in the travel sector presents a blend of challenges and opportunities. The industry must work to persuade a substantial portion of consumers to transition to online tools, yet it also stands to benefit from a burgeoning market of tech-savvy travelers.

By developing intuitive platforms, offering tailored recommendations and ensuring smooth booking processes, travel companies can expedite their digital transformation and meet the demands of today’s travelers. Still, incorporating advanced technologies such as artificial intelligence and virtual reality could further refine the digital travel experience and attract new clientele.

While the travel sector’s digital evolution is in motion, it trails other industries. The differences in digital engagement across generations and countries underscore the complexity of this transition. However, the rising inclination toward online travel solutions — particularly among younger consumers — offers a crucial opportunity for the industry to innovate and align with the digital era.

Amid an uncertain economic outlook, consumers are increasingly postponing or reducing their spending on travel and experiences.

According to AAA booking data, overall domestic travel over Labor Day weekend increased 9% and top destinations included Orlando, New York, Boston, Las Vegas, Denver, Chicago and San Francisco.

Meanwhile, international travel over Labor Day weekend dropped 4%, according to AAA, while the cost to travel internationally rose 11%. Top international destinations included Vancouver, Rome, Dublin, London, Paris, Amsterdam and Barcelona.