Travel Industry Trends: Optimize to Survive and Thrive

The travel industry has always been a competitive space, but it has never faced a challenge quite like COVID-19. With fewer customers, increased (and rapidly changing) regulation, and shrinking profit margins, cost optimization is now at the forefront of every CXO’s agenda.
8 min read
All articles
By Max Zhdanov
Vice President, Travel, Transportation & Hospitality
Travel Industry Trends: Optimize to Survive and Thrive

There are many varied technological routes to optimization, including process automation, bots and legacy system modernization. Success in this domain has already been shown possible by key industry players, but each company’s path depends on their size, budget and needs. Luckily, you do not need to be to implement technological progress; you can be more nimble and flexible than they are. There are optimization options available for all company sizes. Read on to discover some of the key ways technology can help your business optimize its way to survival. 

Automation Is Key

Automation is the primary method for achieving realistic, measurable cost optimization, and the good news is that automation can be incorporated into multiple varied systems, including:

1. Cancellation Processes

The recent crisis highlighted a structural flaw in many travel provider’s systems as thousands of customers tried to simultaneously cancel travel plans. Automated cancellation processes helped companies to quickly adapt to their customers’ changing needs and fluctuating internal policies regarding refunds and rebooking, while those companies without automated systems suffered. Some quick-thinking competitors even managed to pivot to this new tech between the first wave of cancellations in February and the second wave in late March, thereby ensuring they were better prepared and, in the process, highlighting how swiftly this tech can be adopted.

Case In Point

A well-known airline was hit with a sudden spike in ticket cancellations in February; they struggled to manage the increased demand for customer service and ticket changes, and as a result their brand suffered. Customers were upset and the company was penalized for non-compliance with industry standards. But they quickly implemented robotic process automation (RPA) bots that were able to extract key ticket information from customer emails and instigate refund applications automatically from this data. This resulted in a 700% increase in processed customer requests and a much smoother customer experience, without any additional staffing costs. This, in turn, improved cash flow.

2. Customer Service

24/7 chatbots are becoming standard across many industries, and travel is no exception. AI-powered chatbots can handle a number of routine tasks, freeing up human employees for more involved or complex issues and simultaneously improving customer experience and processing times. This is crucial in a paradigm where travellers are facing unprecedented uncertainty and need more company interaction than ever before. Some companies, for example, hotels, are taking this customer service automation one step further, allowing contactless check in and check out, thereby minimizing physical contact during the pandemic.

When I got stuck while travelling for business in New York and Florida in March 2020 when the global pandemic was getting closer to its high peek, I tried to get thru the call center IVR with no luck for three days just to reschedule my departing flight to Europe with one of the largets Online Travel Agencies that has abundance of technology resources at hand. I ended up buying new expensive trans-Atlantic flight to Europe. Later this year, this large Inline Travel Agency has implemented intelligent chatbot that easily handles such similar cases, but at that time the OTA had lost tons of trust from otherwise loyal travelers that got caught in similar circumstances and were never served.
Max Zhdanov VP of Travel, Transportation & Hospitality Practice, DataArt

Technology helps not only with replacing certain mundane functions, usually performed by paid staff, but also with enabling existing staff to do their work more effectively. For example, during lockdown many call centres faced an infrastructure issue when their employees had to work from home. Modifying accessibility to allow people to work from anywhere is another example of how customer service can be made continuous and enhanced, regardless of external circumstances.

3. Crowd Management

Social distancing guidelines are now the norm, but this poses quite a logistical challenge for large venues, such as theme parks, outdoor attractions, stadiums and other busy, crowded spots. Crowd management applications can reduce the number of staff required for:

  • defining an optimal safe pathway through a venue or premises, to minimize customer interactions
  • enabling smart booking for safe entry
  • enabling digital queueing to avoid physical queues
  • monitoring, analyzing and managing venue capacity, attendance and hotspots, often in real-time

These are by no means the only areas where automation can assist in cost optimization, and anywhere there exists a repetitive task, automation has the potential to step in, with minimal investment needed. This is as true in booking systems as it is in in back-end functions, such as file transfer, form completion and reconciliation.

Automation does not just mean cost reduction; it can mean better service and increased employee satisfaction, garnering better retention and thus benefiting the organization as a whole.
Greg Abbott Head of Travel, Transportation and Hospitality Practice, DataArt

Regardless of what area you are looking to automate, or your budget, DataArt can help. Our experts have deep industry knowledge and can work with you on your RPA, intelligent automation, chatbots and more. And it is not just about adding new functionality - ML and AI can also help you to cut your existing costs. Read on to discover how.

How ML and AI Help Reduce Expenditures

Machine learning (ML) and artificial intelligence (AI) are the backbone of adaptive, smart automation that will pave the way for future success. These technologies are not just about cutting operational costs and surviving the short term; they will also enable savvy businesses to:

  • identify new opportunities
  • maximize profits
  • adapt to changing industry norms with the minimum of expenditure
  • optimize operational efficiency

Here is an example of how ML can help in the current crisis:

Demand forecasting is a useful tool regardless of circumstance, but it can provide invaluable extra help to travel companies facing unprecedented levels of uncertainty. Advanced analytical software solutions are able to extrapolate from past data and provide forecasts for future travel expectations - allowing companies to maximize occupancy, automate pricing decisions, optimize personnel and resource use, and address service bottlenecks.

Case In Point

A Scandanavian airline was experiencing an unusual amount of fraud through its customer loyalty program. Historically, it had used a fraud detection team - an expensive and time intensive endeavor - but even they were unable to match the scammers who were constantly adapting. But by using ML to identify patterns in the company data, the airline was able to pinpoint and mitigate fraud within this program, on an ongoing basis. The system automatically retrains itself for constantly improving accuracy, so as to remain abreast of the latest scamming methods. This is just one example, but this same airline has used ML to reduce food waste, optimize ticket pricing, forecast sales, identify customers to target with upgrade offers, and reduce staff.

Smart tech allows for contactless customer interaction during the pandemic
Smart tech allows for contactless customer interaction during the pandemic.

Legacy Modernization and Cloud Migration Can Address Inefficiencies

The travel sector has some major legacy system issues, leading to inefficiencies, software outages, expensive maintenance, poor customer experience, and profit impacts. These legacy structures can be found in both front-end and back-end systems, and many companies are aware of the need to modernize, but are wary of the cost to do so.

Modernization need not come with a high price tag though, and many companies who have made the leap quickly realize that the savings far outweigh any initial investment. Modernization can also be done without service interruption, thereby ensuring continuous operations while maximizing efficiency.

Case In Point

Best Day Travel, a large Latin American wholesale travel company, realized that their cloud-based systems were expensive, constraining company development, and unable to meet business needs. But changes to their infrastructure had to be made quickly, in time for peak travel season, so they turned to DataArt as their strategic IT partner. DataArt identified a more suitable cloud platform for Best Day, and restructured and migrated their machines and databases, without interruption to the service they provided to multiple lines of business. In just two months, the entire system was upgraded, and the company set to address its needs in a more effective and efficient way.

Modernization can allow companies to:

  • provide better customer service
  • enrich product offerings
  • increase client conversion rates
  • integrate with more suppliers
  • accelerate basic processes
  • improve productivity
  • optimize use of resources
  • improve QA
  • perform more accurate system tests
  • collect high quality data for analysis
  • reduce service failures
  • improve consistency
There are always ways to optimize your operations while not investing too much.
Edward Silver Strategic Advisor, Former CTO, Flight Centre


Although COVID-19 has hit the travel industry hard, it has also provided companies with a rare opportunity: the downtime needed to address long-outstanding issues within their processes. Optimization via technology is crucial to surviving both the ongoing crisis and the changing industry landscape. Without investment in products, technology and engineering, companies risk becoming obsolete. But this investment does not have to stress your business’s finances; with the proper IT partner you can identify the most impactful areas to address and draft an achievable, realistic plan to implement the changes you need.

Contact DataArt to discuss what might work for you; we have a wealth of travel industry expertise and can help you find the most efficient ways to optimize your way to success.

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