In a recent interview on S.M.A.C. Talk Live, Paul Pessutti, SAP’s leader for the travel and hospitality industry, talked about his ideas about the future of the travel industry. In the interview, Pessutti indicated four areas where travel brands, such as hotels and airlines, will need to better embrace technology to find success.
Travel brands must learn to communicate
Few frequent travelers lack a story about lost baggage or missed flights. In fact, the Bureau of Transportation Statistics indicates that nearly 20% of all flights in 2017 were either delayed or canceled, with over 11,000 diverted as well. Sadly, when these problems occur, airlines are doing far too little to communicate, both within their companies and with their customers.
Pessutti stated in the interview that he believes airlines are going to need to overcome this particular fault to be successful. He said, “We all have a mobile device, we’re all plugged in, all the time. If the airlines are able to communicate with us in a way that we understand the disruptions, we know why it’s happening, what’s going on, what’s next, and what they’re planning to do about it, we’re a lot more forgiving.” The technology is already in place for airlines and airports to offer this type of communication, but it will be critical that they utilize it and expand it.
Some airlines are already offering a higher level of communication, and consumers are responding by booking with them. CNN reports that Delta now has a service that sends messages to customers’ phones to help them track their baggage. This is the type of service that breeds loyalty with customers and will cause customers to spend more money even when low-cost options are available.
Travel brands must leverage data more effectively
Data is a buzzword in many industries, but in the travel industry is not yet utilizing it to the fullest. In fact, many companies find the sheer amount of data available to them to be overwhelming. In the future, they will need to find tools to help them analyze and use that data.
Data can be used to reach customers more effectively. It can also help airlines maintain their equipment more effectively, which will also improve customer service. For example, airlines need to avoid delays in order to make customers happy. One way to do this is to make maintenance processes more streamlined and intuitive. The Internet of Things allows for this, with sensors collecting data from aircraft that can be used to make proactive maintenance decisions and avoid unnecessary airplane downtime. Adding sensors to the entire airport infrastructure, including bag-drop stations, baggage carousels, boarding gates, and even elevators will keep staff and passengers connected and informed and remove common travel stress points.
Travel brands must learn to personalize
One of the benefits of the data that is available to today’s travel companies is the ability to create custom, personalized travel experiences for customers using that data. Yet, brands are missing an opportunity to engage with their customers. Pessutti referenced a recent trip to Madrid that he took during the start of the La Liga football season. He had spent time tweeting and posting about his interest in tickets to a Real Madrid game. When he arrived at his hotel, he still had to find a way to get tickets. “This is something that a hotel chain that knows me very well could have predicted, could have helped me secure those tickets ahead of time [and] have them waiting for us when we checked in,” he said.
The potential of personalization is extensive, and it will build loyalty by helping customers better enjoy their travel experiences. An airline could welcome a passenger landing at a new destination and recommend a place to eat, and a hotel could utilize data to offer arriving customers things like age-appropriate toys for their children or directions to the person’s favorite coffee shop. In the future, travel customers may see more personalization from their favorite travel brands.
There is one potential risk to personalization, however, and that is the fact that some consumers may find this particular type of innovation a bit disturbing. Knowing that hotels, airlines, and railroad companies are monitoring social media and online behavior is something some consumers will have trouble accepting.
According to Pessutti, it is possible to create personalization without breaching customers’ ideas of privacy. Huffington Post agrees, pointing out an area where personalization can be woven into travel experiences, without crossing any boundaries. Travel brands can assess what their customers need based on interests, demographics, and physical location, pushing notifications in the moment when travelers are away from home that will draw more business and make the travel experience more memorable.
Travel brands must build connections with each other
To use and leverage data more effectively, the infrastructure of the travel industry will need to change. “The real problem is the overall platform and infrastructure that these properties and the airlines are running. They’re running in silos,” said Pessutti. “They are not connecting this together and leveraging the power of a platform where they can plug in these different data sources and analyze that in real time.” In other words, the airlines, hotels, and other travel brands have data about customers, but they are not working together to create a travel experience from start to finish.
Pessutti anticipates this changing and feels that the brands that embrace the change first are the ones that will rise to the top. Brands that can create a common digital platform will be able to use the information to improve the customer experience.
Though they may be slow, changes are coming to the world of travel. According to Pessutti, those changes will bring many positives to both travelers and travel professionals.
To learn more about these changes, listen to the full podcast interview. Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading Accelerating Digital Transformation in Transportation.