First off, it’s worth reminding ourselves that the long-term growth profile for travel is positive. The World Travel and Tourism Council said travel, in dollar terms, will grow by 3.6% a year over the next decade. That might seem modest in percentages, but it’s greater than the overall world economy, which it says will grow by 2.4% a year over the same period.
But how many business owners in travel tech would be satisfied with 3.6% growth? I think we know the answer to that.
Returns on investments
Travel tech businesses should be doing quite well, with more people traveling, more people adopting tech and tech becoming more accessible and usable. The travel industry landscape and the tech industry landscape are the foundational external factors that mean many leadership teams post-acquisition are looking at more than just organic growth.
Organic growth happens fairly naturally. You've got your ongoing sales and marketing efforts, existing clients to service and retain and existing clients to possibly upsell to. But when business owners push rapid growth, business leaders and their executive teams need to think beyond what comes naturally and find ways to deliver on the new targets.
As the CEO of a recently acquired medium-sized travel tech business, expectations are that I will steer the business beyond organic growth and deliver results that would be classified as rapid growth. It’s great to have a budget to help with new hires, plus access to shared resources.
This removes a bit of pressure, allowing our leadership team to think strategically, while also giving us a degree of autonomy when it comes to finding creative ways to hit these new targets.
Alternative options
Not all rapid growth stories follow this path, and not all rapid growth is defined in the same way. Increasing share in specific markets, raising awareness and brand equity, customer acquisition, driving profitability—whether through cost reductions, increased revenue or both—owners will decide which rapid-growth KPIs suit their business objectives, ideally empowering staff to help outline the direction of travel.
However, not all growth targets are set in stone, unless you’re listed and you’ve told the markets and set expectations. Different business cultures have different approaches—so there’s realistic goals and stretch goals—let’s call them achievable and aspirational.
Some companies think that setting aspirational goals drives growth through the innovation needed to try to reach targets, and if the targets aren’t met, no big deal, we’ve innovated trying. Others set achievable goals as a nonnegotiable, with incentives in place to encourage teams to aim for the aspirational.
Whatever the approach, companies should engage with leaders and employees when defining and setting rapid growth targets. Buy-in from all sides is needed to move towards success. If not executed correctly, a rapid growth cycle can end up having a negative effect on the company as a whole. Therefore, it’s critical that all parties involved are clear on what is expected out of the next growth cycle.
Internal pressures, external opportunities
A key part of negotiating a rapid growth cycle is keeping your existing customers and employees happy and not overlooking and overworking them, respectively, while you continue to deliver on those expectations. In our case, we’ve brought in many new hires to support and grow the existing team.
We also had to reorganize. Historically, everyone had their main role but always did a little bit of everything. Now we're becoming more specialized as we get bigger. Implementation team members now focus on implementations, while support team members focus on support, and so on. However, we still foster a team atmosphere where we help each other out when needed. Rapid growth can lead to organizational pressures—in expected and unexpected areas—so teams must be flexible enough to recognize and respond to these situations.
Elsewhere, flexibility also comes into play when geopolitical, macroeconomic or environmental disruptions materialize with no warning. You have to ride the waves and still deliver rapid growth. So for us, the conflict in the Middle East, where we had a solid business, forced us to look elsewhere and rethink how our products could work in new markets. As a result, we started to win business in other geographies, keeping us on track.
AI helps deliver but is not the driver
All leaders are asked about how AI is reshaping business expectations, and there’s no doubt the landscape is shifting for everyone. However, AI is not the primary reason we’re entering a rapid growth cycle. Other owners might have a different stance, but I can only answer for our company on this point.
Do we have a company-wide AI agenda? Yes, we do. Are we embracing it to make everyone as efficient as possible? Of course. Are we incorporating AI into our tech solutions? Absolutely. But to be honest, I don't think AI comes into play directly whenever we are defining our growth cycle and what our goals are. We see AI as a way to facilitate the KPIs, not drive or define them.
Final thoughts
So is there ever a stage where business owners think that a period of rapid growth has run its course, and revert to accepting organic growth? If you keep hitting or getting close to the stretch goals, doesn’t that become the expectation?
Maybe that’s not a bad thing. Travel tech is about improving existing products and developing new ones, servicing existing customers while winning new ones, maximizing human resources and using tech to drive efficiencies. If the net result is regular double digit rather than single digit growth, everyone benefits.
