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What the cloud will do for the travel industry next

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From planning and booking to making payments the internet changed the way we travel, enabling us to do what once required a travel agent. The cloud changed things further through apps that provide real-time information and travel suggestions, but this is just the beginning.

Innovation has made traveling easy. A range of web-based options enables travelers to find the most suitable routes and accommodations, while mobile technology allows them to plan and pay on the go. It began with the likes of Lastminute.com and Kayak and is gathering pace with firms like Uber, Citymapper and Routehappy.

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"The leisure tourism industry has been completely disrupted by new technology," said Neil Ward-Dutton, research director for business advisory firm MWD Advisors. "First there was the initial wave of online booking services allowing travelers to assemble their own trips and compare flight prices. Then the second wave of digital disruption brought together the power of real-time information, universal connectivity and mobile."

Industry consolidation

While much of the recent innovation has been driven by startups and smaller companies Ward-Dutton expects tech heavyweights to get in on the action.

"I wouldn't be surprised if Google bought into the industry soon," he said. "I can see Google buying a company like TripIt.com... In fact it's a natural extension for Google after launching Flight Search."

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TripIt is a free online service that lets users create itineraries that include maps, directions and weather information. TripIt also offers real-time flight alerts and notifications about a user's journey for a fee.

If Google doesn't buy a tool like TripIt, Ward-Dutton expects it could build its own: "Google could make the service very powerful by integrating capabilities from the rest of its portfolio, such as its planning tools, calendar or maps," he added.

Travel agent type apps

Cloud firms don't always present travelers with the cheapest options, said Mike Davis, a principal analyst at Msmd Advisors, who anticipates more sophisticated travel apps that mirror the capabilities of high street travel agents.

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"[Comparison websites] allow you to easily book a flight, a holiday and a car, but there are a number of different contracts and no insurance should anything go wrong," he said.

"More sophisticated travel apps could bring you all the protection you get in a package holiday. The obvious people to create such an app are the Thomas Cooks of this world, who already have the infrastructure to do it," he added.

Travel agent-type apps could also become more personalized making traditional travel guides a thing of the past.

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Utrip, for instance, combines the cloud with big data analytics to produce personalized travel itineraries based on a user's interests. Utrip learns from its overall user base and integrates with social networks and other web sources to create itineraries.

"Product development cycles are quicker than other industries," said Annie Wilson, UK managing director at travel search engine Kayak. "The start-up spirit is rife and everyone wants a piece of the technology pie, so if your product isn't the very best it can be then someone else will quite simply step in to do it better."

Challenges remain

Startups that offer alternative travel options face hostility from the entrenched travel industry.

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San-Francicso-based Uber – a taxi service that allows users to book cars from any location using a smartphone app – had problems in the U.S. for not offering a licensed taxi service. Meanwhile, traditional taxi drivers in France recently took to the streets to protest, while Belgium declared Uber illegal. In the U.K., black-cab drivers are fighting for the High Court to ban Uber.

Airbnb – a website that lets people rent out their apartments on a short-term basis – also bumped heads with traditional travel players. It faces challenges in New York and Berlin amid claims that it violates housing and hotel laws.

"Traditional hotel chains would be better off trying to partner with Airbnb than protest its legal standing," said Ward-Dutton. "There are figures that qualify Airbnb's growth in the last few years. The website now offers more rooms than the Hilton or International Hotel Group."

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Thus far Uber and Airbnb have weathered the backlash. Uber recently raised $1.2 billion in funding; it's now valued at $18.2 billion. Meanwhile, Airbnb is valued at $10 billion after a recent round of fund raising.

With increased funding and growing market share cloud-based travel apps are here to stay. As the industry evolves traditional travel companies will have to adapt to the new business models to remain competitive.