With only 10 percent of the 444 companies surveyed by The Economist identifying themselves as fully digital, business transformation will remain a top priority across all domains in the near future. This article will focus on the challenges global travel providers must face when implementing future-proof strategy for the digital age.
How can airlines, travel agencies, and hotels use modern technologies to increase their competitiveness and revenue? Let’s take a closer look at opportunities in the travel and hospitality sector provided by digitization.
Redefining the Travel Experience: Digitization Trends to Watch
From searching for information, tickets, and accommodations to leaving reviews and sharing photos, most pre- and post-travel activities currently take place online. Moreover, smartphones have become the number one travel companion, allowing easy access to any information while on the road.
To keep up with the challenges of the digital age, major travel providers and hotel chains are actively looking for ways to stay relevant and competitive. In addition to creating convenient, frictionless, omni-channel experiences for their customers, travel brands tend to focus on the following digitization aspects.
Online booking and flexible pricing
While online travel agencies like Expedia or Priceline dominate the online travel booking industry, the airlines have started to catch up. Like hotel chains, such as Hilton and Marriott, which are actively promoting direct booking, offering lower prices, and additional bonuses, individual airlines, including Southwest, have restricted OTA access to their pricing data and currently offer only direct booking at their websites. Delta has recently joined the movement, announcing a war on OTAs. This will allow the company to better manage the demand and apply flexible pricing, adjusting fares to demand.
Source — Channel Surfing: Where Consumers Shop for Travel Online, Whitepaper by Phocuswright.com, 2016
Loyalty programs in travel are huge, but often go unnoticed by a majority of consumers, leaving over $48 billion worth of points and bonuses unredeemed. By digitizing their loyalty programs, travel providers keep their customers informed about possible benefits, thus increasing user engagement and revenue.
From in-flight Wi-Fi to advanced VR experiences, airlines are adopting various tools for better travel experiences and customer loyalty. For example, leading Australian airline Qantas has recently launched an innovative entertainment service in cooperation with Samsung Electronics Australia. The passengers can use VR headsets to watch the latest movies or learn about Qantas destinations in an interactive 3D video format.
No one likes long check-in lines at the airport. They obligate you to get to the airport 2 hours before the flight, are tiresome, and often stressful. That is why more airlines are adopting online check-in and other self-service solutions. By eliminating the unnecessary waiting and inconveniences, airlines strive to win customer loyalty and reduce operating costs.
Bots and smart assistants are booming. The eCommerce brands as well as travel providers can capitalize on these tools by deploying dedicated concierge services. Such tools can be implemented as a stand-alone mobile app or in the form of a chatbot for popular messaging platforms, allowing their customers to search for travel options or hotels and book the whole trip right within a Messenger chat. Some of the most prominent examples of virtual travel concierge services are Lola and Pana.
Besides personal assistants, there are more ways to use AI and data science in the travel industry, including recommendation engines, price forecasting algorithms, customer support, or travel disruption management.
One of the most labor-intensive travel tasks, airline disruption management is currently being digitized as well. Thus, the manual processes are being automated by the algorithms, allowing for faster and more efficient issue resolution. Both the airlines and passengers can see tangible results immediately.
As a result of the joined effort, digitalization in the travel domain is expected to create up to $305 billion of value for the industry through increased profitability by 2025. These companies are already benefiting from their digital initiatives.
JetBlue: Prioritizing Customer-First Travel Experience
JetBlue Airways Corporation is the 6th largest airline in the United States, serving 101 destinations across North, Central, and South America. Founded in 1998, the company currently employs over 200,000 people. Identifying itself as a “customer service company that happens to fly planes,” JetBlue is one of the airlines that took digitization seriously from the very beginning.
A relatively young company, it wasn’t burdened by the legacy systems or long-established processes when it started its digital endeavor. This became a competitive advantage allowing JetBlue to take the leading role in the industry quickly.
One of the company’s core strategies is to automate or completely eliminate any transactions that don’t add value to their customers. A shining example of this approach is the Auto Check-In process. This feature is used to automatically register all passengers who booked tickets 24 hours before the flight, assign seats based on their preferences, and send out electronic boarding passes. Since the feature was introduced, over 700,000 auto check-ins were processed successfully. Not surprisingly, the company will be expanding the service to other customers soon.
Fly-Fi, JetBlue’s inflight Wi-Fi, opens further opportunities to better serve customers and facilitate the crew’s productivity. Using iPad Minis, flight attendants can access the seat map as well as the personal information about every passenger, be it their type of loyalty membership or their birthday. They can also see if a passenger has a connecting flight and suggest alternative options in case of delays. In-flight purchases support Apple Pay. The latest innovation introduced by the company was its Apple Watch app, featuring mobile boarding pass, real-time flight updates, and in-flight purchases with Apple Pay.
Additionally, the company has recently launched JetBlue Technology Ventures, a subsidiary focusing on the Internet of Things (IoT), artificial intelligence (AI), big data, predictive analytics, virtual reality (VR) and machine-learning projects.
Ryanair: Increased Efficiency Through Digitization
Ryanair is one of the most popular European low-cost airlines, serving 192 destinations across 34 countries. The company was founded in 1984 in Ireland and currently has a fleet of 384 aircraft. However, its transformation into a travel tech company began not so long ago.
Having hired over 200 IT specialists, the company overhauled its web and mobile solutions and introduced its My Ryanair loyalty program. The modernization had a positive impact on the customer experience. The new mobile app, for example, saw some major performance improvements, resulting in 60 percent faster booking times. The app has recently set a record, reaching over 17 million downloads, while the customer ratings remain very high. The booking system can fill four 215-passenger Boeing 737s in a minute.
These solutions also allowed the company to gather and analyze customer data from its annual 106 million passengers, introducing more personalized offers while adapting services to customer needs.
To replace paper manuals, airport charts, and other reference material, Ryanair has recently provided its 3,500 pilots with iPad-based electronic flight bags (EFB), improving their in-flight accuracy and safety. And, with over 550,000 flights per year, removing 15–20 kgs (33–44 lbs.) from each aircraft allows for reduced-power takeoffs, substantial fuel savings, and CO2 emission reduction.
Marriott: Hospitality Gamechanger
Marriott International is an American hospitality company operating more than 5,700 properties in over 110 countries worldwide. One of the major international hotel chains founded back in 1927, it was also one of the first companies in the industry to address digitization initiatives.
One of the most significant achievements in this field is M Beta at Charlotte Marriott City Center, an innovation lab that reshapes the future of the hotel experience. This tech-enabled hotel serves as a testing ground for some innovative ideas, such as hosted arrival with personal assistants welcoming the visitors at various spots in the hotel, an on-demand fitness studio with over 1,000 group and personal workout plans available on screens, and the Dynamic Meeting Space that was created in cooperation with LG.
Additionally, the company has introduced “VRoom Service,” unique, on-demand virtual reality experiences delivered to hotel rooms through the dedicated extension or Marriott’s Mobile Request app. The project was created in collaboration with Samsung Electronics America.
AccorHotels: Betting Big on Acquisitions
AccorHotels, currently operating in 45 countries, is a French hotel chain, which includes such world-famous hotel brands as Sofitel, Novotel, and Ibis. This 50-year-old hospitality company launched its €225 million (over $239 million) digitization initiative back in 2014.
Since then, AccorHotels has significantly enriched its tech portfolio through a number of significant acquisitions, including onefinestay, FASTBOOKING, Wipolo, John Paul, and VeryChic. The company currently runs an online booking marketplace, which features thousands of independent hotels along with the company’s properties.
Following its mobile-first strategy, AccorHotels has introduced a number of mobile products and integrations. The company has reinvented its check-in process, offering online self-service through its website or mobile app. By eliminating the paperwork and the check-in desk itself, the hotels aim at offering a more personalized, friendlier customer experience. So, instead of filling out multiple forms, the guests are greeted by the hotel representatives upon arrival and immediately receive the room key.
Another mobile app deployed by the hotel brand in cooperation with Microsoft, Staff Hub, is focused on the company’s 240,000 deskless employees. It’s the first application that allows administrators and their staff to manage their schedules completely on their mobile phones.
With laser focus on customer experience, AccorHotels has deployed a location-based customer intelligence platform, Local Measure. The tool aggregates online content related to the hotel, including reviews, videos, or photographs, in real time. Using this platform, hotel administrators can interact immediately with guests and offer personalized services tailored to their stay, be it a birthday gift voucher or a romantic dinner for a honeymoon couple.
In addition, the company uses its proprietary platform “Voice of the Guest” (VOG) to track customer reviews shared on over 150 web sources. Thus, customer service representatives can learn about and address any problems immediately, improving the customer satisfaction and service efficiency.
Digital Transformation in Travel: First-Hand Experience
Building custom software solutions since 2007, AltexSoft has helped several travel companies successfully implement their digital strategies. One of the most prominent examples in this regard is our work for Best Travel Store Inc., a California-based online travel agency. Founded in 2002, the company relied on a complex travel search and booking engine for its core operations. However, the software soon became outdated, causing some major operational issues, which threatened the very existence of the company.
Following industry best practices, AltexSoft helped the company conduct an in-depth analysis and complete software revamp, keeping the business competitive and relevant. The result of our work, Fareboom.com, is a modern travel booking solution with a user-friendly, optimized UX, improved performance, and innovative search algorithm. (You can learn more about this success story in our case study — AltexSoft & Fareboom: Co-Building Innovative Travel and Booking Solution to Outperform the Competition)
In addition to the core system transformation, we have implemented some complementary products and features, including a brand new mobile app and a price predictor algorithm. The latter provides accurate forecasts on ticket price movements, allowing users to make better purchase decisions. (More on this product in our case study AltexSoft Creates Unique Data Science and Analytics-Based Fare Predictor Tool to Forecast Price Movements)
“Digital has completely altered the way consumers shop for, book, share and ultimately experience travel.” — The 2017 Digital Transformation Report, Skift
According to recent research conducted by Adobe and Econsultancy, the travel and hospitality industry is making significant progress in its journey to digital maturity: Forty-three percent of survey respondents agree that their organizations have a “central, integrated function dedicated to digital transformation.” Furthermore, over 35 percent of the companies in this sector identify themselves as “digital disruptors,” and an additional 48 percent classify as “fast followers.”
Judging by the notable examples listed above, digital transformation in travel and hospitality is on the rise: Businesses are actively capitalizing on the opportunities provided by the digital age. Namely, digitization efforts reportedly result in increased market share, better customer engagement, positive employee morale, and revenue growth.
So, if you are looking toward setting out on your own digital journey, the time is now. Establish a solid digital strategy and find a reliable technology partner to help with its execution before your competitors do.
To learn more about how digital transformation reshapes different industries, see other articles from the series.
Originally published at AltexSoft’s blog: “Digital Transformation Stories: How JetBlue and Marriott Advance Travel Experience”