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The Transformative Power of Cloud Computing in the Travel Industry

Just like the majority of service industries these days, the travel and tourism industry is undergoing digital transformation at an unprecedented scale

Updated: December 13, 2023 11 mins read Published: April 25, 2023

Travel CEOs are looking to harness the cloud in travel applications as an effective means of cost optimization, service diversification, and achieving better business outcomes in a highly competitive market.

Modern cloud platforms, AWS and Microsoft Azure being the most obvious examples, offer an array of tools and cloud-based technologies that help companies like Intellias build scalable travel platforms, rental management systems, and a variety of other solutions.

This article takes a deeper look at the increasing role of cloud computing in the travel industry. It explores the business benefits of adopting cloud technologies and laying out a cloud strategy for years to come.

What are the business benefits of the cloud in the travel industry?

If you are reading this article, chances are that you either work for or run a company in the travel business — anything from a boutique-type agency selling tours to just a handful of select destinations, to an international travel operator with thousands of clients and partners. There are multiple differences between such travel companies, but the one thing they are likely to have in common is the outdated, cumbersome, on-prem software they’ve been using for decades.

Travel executives are well aware of this problem and fully realize that their failure to keep up with global technology trends may undermine their business and, even more important, will not enable them to lay a solid foundation for future growth and diversification. The solution lies in the wider adoption of cloud computing in the travel industry.

The benefits of implementing cloud services are diverse and profound, so let’s mention just a few of them:

 

Considerable cost savings Switching to a cloud infrastructure takes away the need for significant upfront investments in servers, network hardware, and specialized software, and instead allows companies to pay for only what they use, leading to significant cost savings.
Remarkable scalability The cloud enables travel businesses to dynamically scale their operations up or down quickly and easily (or even automatically), depending on fluctuating demand for storage and compute power. This optimizes the use of resources and results in truly efficient cost management.
Unmatched flexibility Cloud-native systems can be accessed 24/7 from anywhere in the world, making it easier for travel agents, tour guides, booking managers, and other personnel to work remotely, effectively collaborate with their colleagues, and access information on the go from their mobile devices.
Centralized data management Once you migrate to the cloud, you start enjoying the luxury of having all of your data stored in a single, central location, which makes it much easier to analyze the data generated by your company’s operations, produce increasingly accurate forecasts, and deliver much more personalized customer experiences based on the history of their travel.
Better customer service Cloud services enable travel businesses to be more effective by granting employees real-time access to up-to-date information about customers, including preferences, orders, and past interactions of any sort.
Improved security Any cloud-based solution typically offers better security features than traditional on-premise systems, including strong encryption, multi-factor authentication, and other advanced security options.

How does the travel public cloud accelerate digital business innovation?

The global tourism industry has performed a quantum leap in a matter of just 10-15 years, parting with nearly all physical offices and moving almost all operations online. According to recent stats by Research and Markets, online sales in travel are going to reach a whopping $1.8 trillion by the year 2025 and travel cloud innovation will be the key driver of this process.

This aligns well with the general statistics on cloud usage as more and more enterprises embark on their cloud journey. Consider some impressive numbers (research by Zippia):

  • 94% of enterprises use cloud services
  • The average office worker uses 36 cloud services every day
  • 67% of enterprise infrastructure is now cloud-based
  • Almost half of the businesses (48%) store their business-critical data in the cloud
  • The cloud computing market is projected to have a CAGR of 16.3% through 2026

Dynamics of the amount of corporate data stored in the cloud

The Transformative Power of Cloud Computing in the Travel Industry

Source: Zippia

Going back to our topic of cloud in travel adoption, it’s not enough to execute a lift-and-shift operation and just migrate IT systems to cloud platforms to completely change the way you do business. Cloud computing in travel and tourism has immense potential in providing fertile soil for further innovation involving not just cloud technology alone, but also groundbreaking changes in the overall business strategy.

From the technical standpoint, any travel business that has already ​​transitioned its IT infrastructure to a public cloud has gained a competitive edge. Namely:

  • They no longer need to support the expensive, aging on-prem hardware infrastructure or pay hosting providers for dedicated servers that are rarely utilized to the fullest
  • Integrating with other travel solutions via powerful cloud APIs is now considerably less complex than it used to be in the old days
  • Modern storage and compute services coupled with professional cloud development services from trusted vendors can work magic in terms of data processing and forecasting, real-time predictive analysis, distributed search and content delivery, AI-based interactions, and much, much more
  • They can be sure that performance, security, and service availability are now handled by the platform itself and not their own in-house IT team or on-call specialists
  • Thanks to the global scale of modern cloud platforms, users can enjoy nearly identical service performance anywhere in the world
  • Development and deployment of new applications and application updates are now fast and seamless
  • Hosting in the cloud comes with the added benefits of continuous backups, fault-tolerance, and data recovery tools that address data security and integrity issues

As you can see, cloud computing brings a lot to the table, and the highlights above are just the tip of the iceberg. The right question now would be “How does one get the ball rolling?”

The answer is a balanced cloud strategy.

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What are the most important elements of cloud strategy for travel and tourism companies?

A public cloud is a great tool in the hands of CIOs and CTOs looking for a way to boost the delivery of successful business outcomes. It gives them the necessary flexibility and leeway to experiment, approach specific business goals and challenges from various angles, measure the impact, and continuously optimize the workflows and the infrastructure.

At the same, not every travel and tourism company out there can be classified as cloud scalers, which means that only a fraction of them have truly adopted the cloud as their primary avenue of future development, while most have only checked some of the boxes so far.

Types of cloud adopters among companies in the travel industry

The Transformative Power of Cloud Computing in the Travel Industry

Source: Accenture

Implementation of any cloud strategy is a multi-step and often long process that requires a high degree of C-level commitment and the full involvement of key personnel. Let’s outline the steps required to adopt a public cloud model and successfully implement it across your travel company.

Step 1. Define the initial migration scope

First and foremost, identify the critical workloads that should be moved to a cloud platform with the highest priority. Typically, these are the ones responsible for user acquisition, retention, deal closing, core service delivery, content distribution, and more. Second-tier services like email and accounting, for example, are not as important initially, but you can migrate them at a later stage, if necessary.

Do some market research to pick the cloud platform that best meets your needs in terms of functionality, ease of development and infrastructure maintenance, terms of service, and, of course, running costs. Choose the most suitable cloud platform and initiate the transition with the help of your own IT department or a trusted software development partner.

Step 2. Match expected cloud outcomes with the organization’s business goals

Once you know what workloads should go into the cloud, it is time to convince other stakeholders, including the IT department, of the necessity to migrate to the cloud and move most or all of the infrastructure expenses from the CapEx to the OpEx column. If you are advocating for an enterprise-level cloud initiative, your case should be built around:

  • The innovation factor
  • Flexibility and scalability on a whole new level
  • Guaranteed service delivery thanks to a global network of CDNs
  • Considerable savings across the board
  • Better security for sensitive data
  • Ease of maintenance
  • Shorter development cycles

After you’ve won the hearts and minds of your organization’s decision-makers, it’s time to execute.

Step 3. Execute, measure, analyze, optimize

This process may take a while and require some serious cloud management and DevOps services, as well as a company-wide consensus on what needs to be done, how, and when. Measure the effect of cloud migration after each iteration and regularly evaluate your progress toward your business goals to implement a continuous improvement practice across the board.

What are the most common types of cloud computing and cloud services?

Cloud management

Cloud management is a highly complex discipline with multiple layers. Companies providing cloud management services typically focus on a single platform, and seldom on two or more — all because of the complexity of knowing the nuts and bolts of even one of them and having enough certified DevOps engineers to support a large number of customers.

Cloud management can be broken down into several distinct areas:

  • Cloud provisioning and orchestration — deals with the initial cloud architecture design and subsequent changes, deployment of storage and compute resources, their configuration and continuous monitoring.
  • Cloud governance — deals with cloud security, enforcement of compliance policies, and risk management.
  • Cloud resource management and optimization — deals with regular cloud audits aimed at identifying excessive/inactive resources draining your budget and service replacement/reconfiguration to achieve cost reductions.

Cloud migration

Cloud migration encompasses all the elements of cloud management and also covers a variety of activities pertaining to the process of moving workloads to the cloud. They may include:

How do you control and optimize cloud costs for the travel business?

Operating costs are invariably one of the top reasons for migrating to the cloud. The flexibility and automatic resource allocation capabilities offered by modern cloud platforms enable businesses to control their spending and avoid paying for resources that are not in use.

However, cloud resource management is still a very important process that must be a part of your regular infrastructure audits, especially at the early stages of cloud deployment, where most of the work is done.

It is not uncommon for development teams to spin up too many extra environments, allocate resources with a “safety margin,” experiment with services, and then forget about cleaning up once their job is done. Such situations call for a scrupulous analysis of what is actually used and how, and optimizing your cloud inventory to avoid paying for things you don’t need.

You may also find that some of the services and workflows that have been implemented in a particular way can be redesigned — and that the amount of effort and money required to do so will be lower than the combined excess spending on the current implementation over a relatively short period of time.

All of these reasons make regular audits of your cloud infrastructure an important item on your cloud optimization “To Do” list.

Cloud security challenges and how to mitigate them

Despite all the benefits that cloud-based technologies bring to the online travel landscape, there is still the question of security that needs to be addressed to prevent data breaches, cyberattacks, and other security threats.

Such threats can come from cloud misconfiguration, intentional sabotage, compliance issues, and, of course, outside attacks. In order to mitigate these risks, organizations need to implement a multi-layered security approach that includes access control, encryption, monitoring, and regular security assessments.

Typical security risks relevant to using the cloud in travel applications

The Transformative Power of Cloud Computing in the Travel Industry

Source: Norton

A great deal of preconfigured security features are provided by cloud platforms as part of their general framework, but it does not mean that travel corporations should be complacent with what they get out-of-the-box. It is essential that organizations also adopt security best practices such as regularly training employees on security awareness, limiting user access, having detailed onboarding/offboarding checklists, and implementing strong passwords along with two-factor authentication.

Cloud data management for travel companies

Cloud management practices in travel are hardly any different from those in other industries. Travel leaders have earned their success through years of hard work and they need to keep the bar high to retain and grow their customer base.

This can be achieved by offering lucrative deals with a high degree of personalization and making their online services convenient, consistently fast, secure, and available at any time. Many (if not all) of these goals can be achieved by leveraging the tools that the modern cloud has to offer.

From the technical perspective, cloud management for the tourism industry should primarily focus on the high availability of customer-facing applications, uninterrupted data flows from external sources for just-in-time processing and delivery to corresponding applications, as well as multi-tier security at all levels.

What is the future of cloud computing in travel?

As more and more casual and business travelers turn to online channels to plan and book their trips, the demand for cloud-based travel solutions will be growing at a steady rate. On top of that, recent breakthrough advancements in AI technology such as ChatGPT are expected to further enhance the capabilities of travel platforms, leading to even more innovation and efficiency in the industry and more personalized, connected travel experiences for everyone seeking to maximize the travel value per dollar spent.

With the travel industry offering plenty of lucrative opportunities, market leaders are stepping up their game by providing comprehensive platforms that cater to every need. Amazon is a prime example, with its AWS for Travel and Hospitality platform that is revolutionizing the industry. This platform not only helps companies cut costs on a large scale, but also provides advanced user experience personalization tools, enables global omnichannel content delivery, and gives travel companies and service providers access to a wide range of powerful, AWS-native computing and data storage services. As the industry continues to evolve, these innovative solutions are poised to fuel its growth and success.

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Conclusion

The future of cloud computing in the travel industry looks bright, as it increasingly moves towards digitalization and automation. Modern cloud technologies allow travel companies to collect, store, manage, and instantly access vast amounts of data and applications powering search engines, reservation systems, online payment tools, and support services from any location and on any device.

The flexibility and scalability of the cloud enable travel companies to better manage their operations, improve the customer experience, and reduce operating costs. If you are considering a cloud migration project for your own company, Intellias offers a wealth of cloud services and has years of concentrated expertise in the cloud space, which is everything you need to succeed.

FAQ

Cloud computing in the travel industry plays an important role in transforming this global business by providing a scalable, flexible, and cost-effective platform for managing data, deploying cloud-native applications, and interacting with customers in ways that were impossible in the “before times” of on-prem or hosted apps.
When you migrate your data and software infrastructure to a public cloud like AWS or Azure, you start paying only for the resources that you actually use and no longer need to maintain and update your own hardware or rent an expensive dedicated server from a hosting provider. In addition, cloud automation tools free up a lot of your employees’ time so that they can focus on higher-priority assignments. Finally, data-driven operations and powerful analytics tools help identify bottlenecks and optimize processes, thus enabling you to achieve better business outcomes.
Modern cloud-based technologies can enhance the customer experience by providing personalized, real-time recommendations, intelligent scheduling and booking tools, and AI-enabled communication channels through multiple devices and platforms.
Cloud platforms like AWS and Microsoft Azure are secure by design and can address security and compliance concerns by offering strong encryption, identity verification and access management tools, as well as compliance certifications to protect your customers’ data.
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