At this year’s fvw|TravelTalk conference, Dr Markus Heller, Managing Partner at Dr. Fried & Partner GmbH, presented the findings of a study on the future distribution of value added in the tourism sector. The study is based on 15 expert interviews with leading decision-makers from the travel and travel tech sectors and shows how AI, new platform and distribution models, and the increasing integration of the value chain stages are changing roles within the tourism industry.
Below is the article “How value added in tourism is being redistributed” by Markus Heller, published on fvw|TravelTalk.
1. AI is changing the way we engage with customers
The customer journey is increasingly beginning with AI-powered interfaces. Travellers can express their requirements in natural language, taking several factors into account at once – such as travel dates, budget, group size and individual preferences.
This is changing the way digital searches have worked up to now. Instead of a vast number of results, customers are increasingly being presented with a pre-structured selection. AI systems are therefore influencing which providers and products even come to the customer’s attention.
A new, upstream level of intermediation is emerging in the tourism sector. In future, the key question will no longer be simply how a company attracts customers to its website or platform. Rather, it must ensure that its offering is taken into account by the relevant AI systems.
Visibility thus becomes a key distribution capability. Product information must be complete, up to date, consistent and machine-readable. Prices, availability and service components must be clearly recorded and technically accessible. Data quality therefore evolves from an operational requirement into a strategic prerequisite for customer access.
This development can be described as ‘agent readiness’. Marketing, content management, product data, distribution and technology are becoming increasingly intertwined. The complete shift of the transaction to AI systems, however, is likely to take place more slowly. This requires real-time availability, technical interfaces, liability issues and reliable service processes. Particularly in the case of complex and high-value travel, it remains to be seen how quickly customers will hand over the entire booking process to AI systems.
2. Sales is shifting from a transactional approach to a consultative one
For standardised products that are easy to compare, the proportion of digital bookings continues to rise. The technical process of making a booking therefore represents less and less added value in its own right.
Personalised advice, on the other hand, becomes increasingly important where there is a high degree of complexity, uncertainty or individuality – for example, with round-trip holidays, specialised destinations, group tours or high-end products. The traditional travel agent is increasingly evolving into an adviser. Guidance, inspiration, trust and the personalised tailoring of a holiday are becoming key differentiating factors.
This also raises the question of the economic basis of consultancy in a new light. If consultancy creates value in its own right, this must also be reflected in the remuneration – for example, through additional services, greater value added in the product or new remuneration models.
At the same time, the source of demand is changing. Content creators and digital communities are increasingly taking on the role of inspiring and generating demand. This becomes particularly relevant when content is directly linked to commerce – for example, through curated products, affiliate models or direct booking options. This creates new interfaces between inspiration, marketing and sales.
3. Production becomes real-time orchestration
The future of tourism lies not in a complete move away from pre-packaged products. Rather, we are seeing the emergence of a coexistence of different business models: traditional package holidays, dynamic packages and travel modules put together in real time.
Pre-configured products retain their commercial significance when they offer advantages through purchasing terms, advance payments, guaranteed quotas or standardised products. Such advantages may continue to be particularly relevant in the early-booking sector.
Conversely, for more complex, higher-value and more personalised trips, flexible configuration is becoming increasingly important. Customers increasingly expect travel components to be tailored to their specific preferences.
Real-time bundling can overcome the limitations of pre-configured products. At the same time, it increases the complexity of commercial management. Prices, availability and contribution margins must be managed reliably, even when there are a multitude of possible combinations.
Technical flexibility alone is therefore not enough to constitute a business model. In-house capacity, exclusive content, brand, service and curated quality remain key differentiating factors. The orchestrator does not necessarily have to be a traditional event organiser. Platforms and technology providers can also increasingly take on the roles of packaging and curating content.
4. The linear value chain is becoming a network
The traditional boundaries between service providers, tour operators, platforms, distribution channels and technology providers are becoming increasingly blurred. This is particularly evident in direct sales. Airlines and other service providers can leverage their existing customer relationships to integrate additional travel services. Technological interfaces and packaging systems are lowering the barriers that were previously associated with setting up in-house tour operator structures.
However, the extent to which this vertical integration extends depends on the starting point. It is particularly attractive where the company’s own or controlled capacity, a strong brand and direct access to customers all come together. DMCs, too, can bypass stages in the value chain and work directly with tour operators, platforms or distributors. A full-scale entry into end-customer sales, on the other hand, continues to involve high demands on the brand, marketing and organisation.
5. Technology is taking over operational value creation
Technology is no longer merely changing the efficiency of existing processes, but is increasingly reshaping the way they are embedded within organisations. Functions that can be standardised, such as pricing, product sourcing, analysis, content preparation, customer service and complaints handling, can increasingly be automated.
AI is accelerating this development because it can process large volumes of data and unstructured information and derive recommendations for action from them. The division of labour within tourism companies is changing accordingly.
The consolidation of entire value-chain functions is going even further. Content access, connectivity, product logic, pricing, packaging, bookability and distribution can increasingly be provided via integrated platforms.
This reduces technical and operational barriers to market entry. At the same time, the pressure on travel tech providers to differentiate themselves is increasing. What matters most is not so much the provision of individual technical functions as the ability to integrate technology deeply into tourism processes.
For tourism businesses, this raises the ‘make-or-buy’ question anew. Functions that can be standardised can usefully be sourced from specialist technology partners. However, where technologies directly determine a company’s unique selling points – such as pricing, customer access, proprietary product knowledge or core business processes – retaining in-house technological control may remain strategically important.
Further automation will initially lead to a new division of labour between humans and technology. AI will take over standardised processing, delivering speed and scalability. Humans will focus more on oversight, handling exceptions and making decisions that require experience and accountability.
Conclusion: Value creation is becoming more flexible
These five developments all point in the same direction: the boundaries between traditional roles in the tourism sector are becoming more permeable. Customer access is shifting towards AI systems; sales must provide greater guidance; production combines pre-configured packages with real-time orchestration; and the linear value chain is evolving into a network. At the same time, technology is increasingly taking on operational value creation.
This does not result in a single, uniform model for the future for individual market participants. The pace and scale of the changes will vary depending on the business model and market segment.
The key change, however, is the increasing fluidity of value creation. Functions that are currently clearly assigned to an organiser, a sales organisation, a service provider or a technology provider may, in future, be taken over by other players or distributed amongst several partners. The strategic challenge for companies is therefore to identify their own distinctive capabilities, secure access to customers and build depth of value creation where it actually contributes to differentiation.