Investing in Technology During Uncertain Times: Travel Industry Examples

The travel, transportation and hospitality industries have felt the hardest hit by the COVID pandemic so far. In this article, Max Zhdanov explores how travel companies are using crisis as an opportunity to invest in technology and improve their offerings.
30/06/20
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By Max Zhdanov
VP Travel & Hospitality
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Investing in Technology During Uncertain Times: Travel Industry Examples

The extreme turbulence in the global travel market in the past few months poses a serious stress test for every industry player. For many companies, simply surviving the crisis will provide a competitive advantage. At the same time, despite drastic disruptions in business as usual operations, companies in a cash-heavy position, and those with asset liquidity, are using this crisis as an opportunity. Surviving with a better product is their goal.

You can’t fix the engine in a plane while it is flying. Now it is not.

In times of an industry-wide repose, these companies are wisely using their financial resources to improve their product, technology, and engineering, as well as preparing to meet their clients with better customer experience on the other side of the storm. The changes the COVID pandemic has brought to both customer behavior and the overall business landscape are the primary drivers for investment in travel tech.

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Driver for Investment in Technology: Changes in Customer Behavior

The pandemic has inevitably altered customer behavior patterns around planning and booking, and travel suppliers and providers must adapt. For instance, those investing in automation, social distancing or demand forecasting technologies with a view to smooth customer experience and increase revenue will continue to benefit once we fully reopen.

Travel Providers Make Cancellation Policies More Flexible and Invest in Cancellation Automation

Many industry players underwent a true “stress test” of their customer care in the first weeks after the outbreak, with a sudden spike in cancellations. Almost all bookings for the upcoming months were cancelled or rescheduled, many within weeks or even days before travel. This process was especially challenging for companies not equipped with automated cancellation mechanisms and clearly showed the importance of investing in this aspect of customer care.

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If you are performing a repetitive task, such as filling in a form or transferring files from one place to another, then it’s time to build your test case to see if you can automate the process – either on your own or with a technology provider. Get out there and automate!

Ed Silver

Strategic Advisor for leading travel and technology brands, former CTO at Flight Centre Travel Group

Automate to Regenerate: Cost Optimization Technology Insight for Travel Companies

International online travel agencies, such as Trip.com and Traveloka.com, faced a huge cancellation rate in their Asian market as early as in February, and they did not hesitate to heavily invest in automation – a choice that paid off in just a few months on the global scale. When the second wave of cancellations came in from international markets in mid-March, these companies were in a better position to automatically handle the volume of cancellations. 

Most airlines and hotels are now modifying their cancellation policy terms, as a kind of “peace of mind” measure. Travellers can cancel flights or bookings made before the global epidemic without any penalty, and/or receive credit for travel in the next 12 months, with rates unchanged. For new bookings and orders, cancellation terms will be more flexible, with travellers eligible for either a full refund or a credit for use within the next two years.

Travel and Hospitality Companies Invest in Call Centers and Automation of Customer Service via Chatbots

A major rise in customer service demand in the first few months of the pandemic showed that some large providers had failed to automate communication with customers. Early this year, when a lot of people simultaneously sought to cancel or reschedule their trips, customer support services became overloaded. Now, more and more companies are investing in AI-powered chatbots that are equipped to deal with all kinds of routine customer issues. As the bots are available 24/7, customers in all time zones can get solutions to their issues, without waiting for an operator. As Jane Lim, VP at TripAdvisor.com, puts it: “You need the human touch [to customer care], but you need technology to enable it at scale.”

The crisis has also challenged the traditional call center model. In most countries, call center CSR switched to working from home, forcing employers to avail their staff of failure-free infrastructure. For instance, Trip.com switched 15,000 employees in its call centers in China to remote work during lockdown, and immediately modified their infrastructure to allow call center agents to work remotely. Jane Lim with TripAdvisor.com adds, “People need to support people, but travel suppliers and providers clearly need to invest in products and technologies for their people to support people.”

I got stuck on a business trip in an emptying New York in mid-March this year, shortly after the US and Europe started to close borders. I was unable to change flights and depart early, as one of the major OTAs via which I booked my trip didn’t provide automatic means to rebook or cancel an ongoing trip without the magic wand of a call center representative. I ended up buying a new super expensive trans-Atlantic ticket, just because I was unable to break through a long waiting line or automatic answers: “We can’t take your call at the moment as we are experiencing unprecedented call volume.” There is still a long way to go in automation, product and tech improvements, even in large online travel juggernauts.

Theme Parks and Outdoor Attraction Spots Invest in Social Distancing and Crowd Management Applications

As theme parks and other outdoor public attractions prepare to reopen safely later this year, the concepts of carrying capacity and crowd management come to the fore. Though outdoor destinations are probably the safest public places to visit, crowd control measures and high hygiene standards are an absolute must. Following the new normal of social distancing, visitors of such public facilities should be able to pre-book a ticket for a specific time, online, without standing in a physical queue. Administration of venues should, in turn, ensure people do not gather in crowds around attraction hot spots, entrances or exits. 

The so-called crowd management or digital queuing systems allow public facilities to be agile, and offer a safer experience to both visitors and staff. For instance, Holovis offers a free same-name application that includes a reservation and queue management system, with real-time proximity alerts, meaning that operators in theme and amusement parks can see an overall picture of their site and avoid crowd hot spots forming. WishTrip is another example of a mobile app which allows both attraction administrators and visitors to monitor the number and location of people, and choose the safest (i.e. the least crowded) routes.

Moreover, as Peter Cliff, Creative Director at Holovis, puts it: the data from such applications can be viewed in real-time and retrospectively to analyze trends and help expand capacity, support staffing plans and manage attractions safely. Once administrators of theme parks and other public venues understand the new patterns in customer behavior, they can use this technology to manage crowds, by requiring pre-booking for the busiest hours of the day.

Hospitality Providers Invest in Demand Forecasting and Securing Their Guests’ Stay

As more travellers are expected to book a dwelling shortly before their trip, hotels and other hospitality providers should be prepared for sudden increases in the number of travellers and understand how to cope with them, without sacrificing service quality. Advanced software solutions, such as SIHOT.PMS, would help them forecast business demand and maximize both occupancy and overall operational effectiveness, through automated pricing decisions.

At the same time, hotels should employ property management systems – software applications traditionally used to manage property, equipment, legalities and personnel – to adjust existing service offerings, and plan ahead for manpower scheduling, to assess bottlenecks in service delivery, and to allocate resources wherever they are most needed.

Another step in making full use of digital hospitality platforms is by transforming them from one-way notification to two-way interactive communication mode. Hotels may utilize these channels to effectively understand and respond to customer needs in a timely manner. As an extra security consideration, some hotels can facilitate a completely contactless stay, which significantly minimizes the risk of COVID infection. For instance, via the IntercityHotel App, guests may complete contactless check-in and check-out, and make payments using their smartphone. The room door can also be opened without a physical key, while the paperless, environmentally friendly bill is sent via email.

Driver for Investing in Technology: Changes in Business Landscape

To accommodate potential rapid changes in the business landscape after the pandemic, travel providers and suppliers will need extra flexibility and agility. For instance, they should be able to streamline their marketing and promotion efforts to “safer” regions, as opposed to those countries where the epidemiological situation is unstable. In case of a sudden spike in infections, they need to be able to quickly re-target marketing campaigns or put them on hold for maximum cost optimization.

Companies will advance algorithms to target potential customers with travel ads and promotional incentives. Customer data, including Big Data Analytics, will prove especially useful in determining the age and geographical location of a target audience – two pieces of information that are now affecting all travel decisions. Generally, older people who are more at risk from COVID infection, and thus more concerned with safety and security, will avoid travelling to “uncertain” regions. Information about age and geographical location can be used to customize marketing messages and provide special services to certain segments of the population.

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Having a three-part foundation of clean data, strong analytic tools and the talent to drive practical insights lets companies respond quickly as the world - and therefore the marketing environment - changes. Adding a single data stream, like destination health risk scores, to existing demographic and purchase history data lets you target, test quickly and expand on the winners. But without the data, tools and talent, you’re just guessing. And guessing tends to have much lower ROI than science.

Mitch Gross

Travel Advisor, Angel Investor in multiple startups, Managing Director at Twelve Squared Growth

Travel providers also must strive to diversify their products and services beyond the travel domain. Traveloka.com is one of the fortunate companies that had invested in side business lines before the crisis. According to Webintravel.com its financial services, rolled out in 2018, became more relevant to customers during lockdown, when people paid their bills over the app, and bought more mobile data plans.

The turf battle in the travel industry will be won by those businesses that are taking this opportunity to improve their offerings: translating them into more languages, offering favorable cancellation terms for clients, and better cooperation terms for suppliers. For instance, according to co-founder and CEO of Berlin-based GetYourGuide, a sightseeing and travel experiences provider, an area the company is investing in right now is localization, so it can support suppliers by catering to demand off the beaten track.

Bottomline

The COVID pandemic has forced many companies to question how they design products for the future. Surprisingly, the crisis is an opportunity for many to make real improvements for their customers, partners, and the ecosystem in general. Clearer policies, better service quality and higher overall customer satisfaction must be the top priority for all industry players. This can only be achieved with a collaborative effort from all parties in the value chain. While the side effects of the pandemic will be felt for years, now is the best time to invest in technology and improve the products and services offered to travelers. 

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