The travel and mobility industries have been anything but stationary over the last year. As we move toward 2024, let us look back at 2023 to reflect on changes and predictions that will drive these industries into the future.
Mobility and travel are industries on the move, literally. Individuals from all walks of life have an almost daily need to get from point A to point B. Our needs, our finances, our environments and even our culture dictate how we move in our lives, and as times change so we must follow.
People are traveling more frequently than ever, the only difference is how they are traveling. McKinsey is seeing developments in full-service leasing, new-car subscriptions and financing for used cars as potential core mobility-finance markets by 2030. Furthermore, micromobility will continue to grow and contribute 5% of total revenue in 2030 compared to 1% in 2023. An additional niche area which will see some growth beyond 2030 is electric vehicle charging infrastructure.
As consumers are delighted about the variety of mobility trends on the horizon, respondents from a McKinsey survey found that almost one-third plan to up their use of micromobility over the next decade and 46% have already switched to more sustainable modes of travel with an interest in shared autonomous vehicles. But whatever the mode of transport, safety is key, and the increased need for identity verification has become clear along with the desire of growing digital services.
Wheels of regulation.
The travel and mobility industries have seen some exciting developments and steps forward this year, thanks largely to the increased adoption and implementation of identity verification solutions across the entire user journey.
However, 2023 could also be characterized by a series of significant stops-and-starts. The most pivotal event in the mobility industry occurred in September when, following an overwhelming vote to ban e-scooters in Paris, the French capital was cleared of the vehicles overnight. The main reason for the ban was safety concerns, following a streak of accidents.
This set the wheel in motion for the strengthening of micromobility regulation in different cities around the world.
“Right now, the market can be split into four types of cities ranging from unregulated, where e-scooters can be implemented without any limitation or regulation, to complete bans, where e-scooters are not allowed, such as in Paris” stated Edouard Baussier, Global Mobility and Travel Sales Director at IDnow.
The two regulatory archetypes, in-between no regulation and complete ban, carry certain stipulations such as an age verification process, speed limits, restricted numbers of operators and areas in which to park.
The ramifications of the Paris ban are likely to be felt for the next few years as each country and city decides its stance on micromobility. Opponents to the ban argue that it was a step back for sustainable transport, and that there are benefits to embracing a clear micromobility strategy that includes faster, more convenient, eco-friendly forms of transport that can help reduce urban congestion, and offer transport options to everyone, regardless of socioeconomic status.
Other changes likely to affect mobility in 2024 include ongoing digital transformation efforts, across every step of the user journey highlighting this need for progress.
Consolidation will also play a role in the future of mobility. “Mobility-as-a-Service (MaaS) will become key, as it will provide a new way to plan a full trip [whether bus, train, e-scooter, e-moped, bike, car or taxi] from one platform and one user experience.”
When reflecting on 2023, it didn’t come as much of a surprise to Michael Holland-Nell, Senior Sales Manager Travel & Mobility at IDnow that, much like mobility, digitalization within the travel industry played such an important role.
Michael explains that the major challenge facing the sector is that there is “a shortage of skilled workers and increasing customer expectations on the one hand, and low margins, rising inflation and conservative strategies on the other. Digitalization should be driven forward more rapidly, but most travel and hospitality companies still behave hesitantly and adopt a ‘wait-and-see’ approach.”
Despite the digital skepticism of some travel and hospitality companies, Michael has no doubt that digitalization in every area of the tourism value chain, and user journey, will continue to be the driving force for hotels, airlines and other travel businesses.
“Seamless travel, digital check-in processes and digital identities are hot topics that will simplify travel experience in the short and long-term. It is an ongoing process and courageous companies that prioritize digital projects and implement them ASAP will be able to gain a market advantage and be more successful in the future. Plus, IDnow will be there to support them.”
Hotel Fraud in the hospitality industry.
A side of hospitality.
Along with mobility and travel comes their partner, hospitality. Where would travel be without hospitality to lend a hand? Due to the increase in travel, hotels and rental companies are back to business but with a few more challenges on their plate.
Many hospitality businesses have seen a surge in fraudulent attacks in recent years. Coming in a variety of different forms, the most significant include loyalty card programs which fraudsters have developed a liking for and is projected to reach a market value at over $11 billion by 2025, as well as the ever-present credit card fraud which the airline industry is also heavily impacted by with IATA totaling the loss for airlines at $1 billion a year.
Fraud is everywhere, no matter the industry. Unfortunately, hospitality is feeling the effects due to the lack of protection and high turnover rate compared to other industries. And it isn’t just a loss in revenue but also reputation. Luckily, thanks to identity verification, chargeback and credit card fraud can be minimized, improving security of both the hotel and the guest from reservation to check-in to payment.
To the reusable future.
As the travel and mobility industries take stock of 2023 and look to the coming year, digitalization will play an ever-increasing role, especially through the use of reusable digital identities. While they can be applied in almost every industry, reusable digital identities are already taking off within the travel sector where airlines and the International Air Transport Association (IATA) have already showcased their Proof of Concept – End to End Digital Identity initiative near the end of 2023 in collaboration with IDnow. With such developments arising in travel, digital identities (travel credentials, boarding passes, visas, etc.) will be stored in digital wallets, such as the IDnow Wallet, ready-to-use within seconds making the future of travel much more pleasant and stress-free. The possibilities of tomorrow are only a [digital] wallet away.
To learn more about the coming trends in 2024 in the financial services, crypto and gambling sectors read our Unlocking the benefits of an identity-first 2024 blog.
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