Kennet Nordlien, chief executive of travel risk intelligence organisation Riskline, believes travel insurance will continue to gain popularity in light of the new disruptions the past few years have brought
In 2023, global travel volume will continue to increase; 30% growth is expected this year, catching back up to and surpassing pre-pandemic levels. This does not mean smooth sailing ahead. The past several years have demonstrated just how suddenly demand can collapse and free movement of people be interrupted by current events.
Extreme weather, strikes and political crises will continue to cause disruptions. In addition, the lingering effects of the pandemic on labour markets and currency inflation mean that staff shortages and industrial action will continue to adversely affect travellers. Cancellations on short notice and for extended periods can arise from prolonged disputes.
The growing risk of major disruptions happening on short or no notice at all will continue to drive the transformation of the travel industry, as booking managers and casual tourists alike look for solutions. Offering flexibility and customisation to travel options can not only serve as a means to increase revenue but also give travellers the confidence that they will still be able to go on trips or have other options available if and when issues arise.
Chronic underfunding of necessary upgrades is coming back to bite, as evidenced by major system outages affecting domestic carriers in the US in recent years. Whether through human error or software and hardware failures, travellers may find their plans upended on short notice so long as this trend of deferring necessary upgrades due to costs continues, even though these disruptions will cost more in lost time and money.
To address this, we expect to see continued growth in providers increasing both vertical and horizontal integration across brands and networks. The aim is to give travellers more options when they are caught in the lurch and ensure that the return to travel continues its trajectory.
Travel insurance is expected to continue to gain in popularity in light of all the new disruptions the past few years have brought. While Covid-19 concerns are driving this, the uptick in strikes and extreme weather events will continue to encourage travellers to protect themselves and their pocketbooks by purchasing insurance.
Travel managers will need to ensure that contingencies are covered, even if they seem unlikely at the time, as the past several years have demonstrated how quickly circumstances can change. The shift towards embedded insurance and the growth of new insurtech start-ups offer new ways to meet these needs, particularly with the availability of more customisable policies and dynamic pricing.
Business travel is also transforming, with more work trips combined with leisure time and remote work changing white-collar jobs worldwide. Companies can expect increased demand for such combined work-leisure trips by employees and structure employment around them.
Travel booking tools are introducing new features to make it easier for companies to manage these split-purpose trips and streamline the experience for employees. Travel managers can work closely with HR and benefits teams to define policies to govern them, make easy booking tools available, and ensure that both business and relaxation are happening successfully.