2020: Inspire Journeys, Connect the Trip, Crack CX

As the new decade dawns, Pamela Whitby is clear on two things: everything must be viewed through the lens of the customer, and no travel company can be an island

The fragmentation of the customer journey remains one of single biggest challenges facing travel brands in 2020, but it is certainly not the only one. As the new decade dawns, travel companies must continue to seek innovative partnerships, invest in the latest technology, and approach collaboration in fresh and forward-thinking ways. At all times, they must remain focused on one thing: the customer experience.

The EyeforTravel brand has long played its part in building these relationships, and will continue to do so as it enters 2020 under the new banner of Reuters Events. Ahead of The Travel Summit 2020, which takes place in San Diego on June 1-2, we have been talking to the industry about their challenges, investment priorities and predictions for the coming year. Here is some of what they had to say.  

The rise of the Super Apps

If we are talking about the importance of partnerships, the past year put super apps on the map – the likes of WeChat, Didi, OLA Cabs and Grab in Asia.

The extension of Singaporean-based Grab’s travel offering is a good example of how this is playing out. Already offering food delivery and digital payments services via mobile app, this year the group signed a partnership with UK-based Splyt to improve the inbound and outbound travel experience by offering travellers easy access to ride-hailing services, without the pain of downloading yet another app. In addition, Grab has signed deals with over 150 partners across major airports in Southeast Asia to drive loyalty with special lounge access and food and beverage deals; and there are Grab-branded airport pick up and drop off zones too. If that is not enough, popular hotel-booking partners have been included on the platform, and loyalty programmes shared with the likes of Booking.com, and numerous national airlines. Like we said, partnerships are key!

With more than a billion users this is an essential, ubiquitous, and all-encompassing super app that no one is really talking about

Prasanna Veeraswamy, CPO, Zouba

If Grab has the travel G-factor in Asia, in the west Google Maps cannot be ignored. “With more than a billion users this is an essential, ubiquitous, and all-encompassing super app that no one is really talking about yet,” says Prasanna Veeraswamy, until recently chief product officer if Zouba, a metasearch platform for tours and activities.

Google Maps has indeed become indispensable to travellers in both the planning and in-trip stage, and most people are using it for much more than navigation, they are using it to explore the world around them. And, make no mistake, says Veeraswamy, the tech giant is investing heavily to load Maps with all sorts of travel content - from hotel prices to restaurant reviews, local activities, and photographs. And, thanks to the sophisticated tracking Google does via search, email, browser, photos, and other applications, it is hard not to get locked into it, “without even realising it is a super app!”

In 2020, super apps are likely to continue to gain traction, and may even lead to the death of ‘crappy websites’, something hoped for by the founders of integration start-ups like Duffel, Ubio and Impala Technologies.

The shift to platforms and the ‘connected trip’

Google’s ongoing drive to capture the $1.7-trillion global travel market is an concern for many companies, and Bobby Healy, CTO of UK-based tech firm CarTrawler, which recently signed a major deal with EasyJet, hopes that 2020 will spark an EU-led investigation into illegal practices specifically in relation to Google Flight Search.

Even travel’s original ‘baddies’, Expedia and Booking.com, are feeling the heat. Both companies have seen stocks fall as organic search engine results have weakened and spending has risen on pricey paid links in Google. Although both firms maintain they are still in the game to deliver on the ‘connected trip’ high profile resignations at Expedia are a sign of how tough the market has been.

Abhijit Pal, Head of Research, Travel Partners Group, Expedia Group admits to having concerns about Google. But he maintains that Expedia, which is continuing on its evolution into a ‘platform company’, has more customer travel intent data, than any other company. “Going forward, we want to have more of a streamlined, seamless platform that sits between customers and suppliers, that enables us to share information and technologies across our different assets,” he says, “and we think we can be a strong a advocate for consumers across the entire travel ribbon. Essentially what we are saying is that we putting the A back into OTA.”  Crucially, this will be delivered by sustained investment in artificial intelligence (AI).

Essentially what we are saying is that we putting the A back into OTA

Abhijit Pal, Head of Research, Travel Partners Group, Expedia Group

David Armstrong, CEO of travel search platform Holiday Pirates is also banking on AI, which he believes could be revolutionary for the travel industry. “Used correctly, it could help ease the information overload that many holidaymakers face, by providing personalised offers, content, customer service support, and sentiment analysis,” he says. More broadly, it could help to tackle issues of over-tourism that cities like Venice or Barcelona are suffering. This, he adds, by recommending unique experiences that direct tourists away from these areas, while also remaining relevant to their travel needs and desires.

To date Holiday Pirates’ business model has been mostly driven by organic traffic, but Armstrong acknowledges that it is a tough and challenging business environment. “We have seen how relying on Google algorithms can expose companies to the risk of losing visibility,” he says. Looking ahead to 2020, many companies will “be looking to secure stability and success though the diversification and independence of their distribution channels.”

Game on: The race to real time data

Delivering relevant, highly personalised experiences is a battle still to be won by travel suppliers. While the already data rich OTA heavyweights work out how to address the threat of Google, those delivering the direct experience, the airlines, hotels, cruise lines et al, must accelerate the race to real time, Stuart Greif, a stealth start-up advisor and former travel & hospitality lead for Microsoft, says:  “There is an absolute race on by suppliers of travel to meet the customer in the moment with the things that really matter to them as an individual.”

You can't provide an Amazon or Netflix type experience if you can't bring all your customer data together and action upon it in real-time

This is still not a reality today and Greif believes the travel industry should look to the “juggernaut that is computer gaming” for lessons in how to harness real-time behavioural data. He is talking about companies like Minecraft and Fortnite that use LiveOps platforms to engage customers and keep them loyal and, crucially, spending in real time.

"These [gaming] companies are all making significant investments in real-time data capabilities, particularly around customer data, which is absolutely essential to deliver the kind of experience customers increasingly expect. You can't provide an Amazon or Netflix type experience if you can't bring all your customer data together and action upon it in real-time," says Greif who believes LiveOps platforms are the cutting edge of what's coming next in customer experience in travel and across consumer industries.

Brexit, still the big divide?

In the UK, CarTrawler’s Healy is worried that political uncertainty as a result of Brexit will continue to depress travel. In addition, given Boeing’s decision to temporarily halt production of the 737 Max plane, airlines will need to further reduce capacity leading to higher prices which in turn will hit the industry. “It’s a double whammy that could start to hurt airline growth very quickly next year,” he says.

But not everybody is worried about Brexit. On the contrary, Rob Paterson, CEO of Best Western Hotels, expects the British economy to surge thanks to greater certainty following the election victory. “We'll see new money entering the UK and hotel owners will subsequently look to review their cost base and maximise earnings before interest and taxes,” he says. High on the cost review, “will be the big fees owners/investors pay to the corporate global brands coupled with the on-going arbitrary demands of remaining brand compliant and the lengthy contracts they tie investors into.”

Taking a more global view, Klaus Kohlmayr, the chief evangelist of tech vendor IDEAS solutions, is broadly positive about the outlook for travel and hospitality. However, he acknowledges that there is no shortage of data to suggest potential for economic uncertainty in the hotel business. “Focusing on profitable revenues will be increasingly critical,” he stresses. One of the ways that this is playing out can be seen from the recent multiple investments from leading hotels into the online distribution of ‘group and meeting’ business. Increasingly, Kohlmayr believes revenue leaders will shift their attention to managing all revenue streams of a hotel, not just guest rooms!  With this in mind, he says traditional revenue management KPIs such as RevPAR will continue to lose dominance.

More alternatives to ‘alternative lodging’

Aside from rising costs of distribution, the impact of Google and the OTAs on race to the bottom in pricing, the traditional hotel industry will continue to be rattled by the alternative lodgings camp. With Airbnb’s planned IPO some commentators are arguing that 2020 will be the tipping point for alternative lodging.

One truly interesting trend in the US is the merging of hospitality with real estate. Jason Fudin, CEO of fast-growing WhyHotel, refers to this as ‘co-mingled real estate. Fudin thanks Airbnb for changing people’s perception of an alternative stay in the US, and providing the backdrop for operators like WhyHotel to exist. “You simply don’t have to have a separate hotel, apartment, conference centre or office – all those things can be interwoven,” he says.

To date, WhyHotel has raised a total of $33-million. With its first product, the pop-up hotel, under-utilised real estate is put to work with a 24/7 hospitality offering, and Fudin is confident that these will roll out in every major US market. The second next product – Hospitality Living, will see the group build ‘forever flexible; properties from the ground up. These could be furnished or unfurnished, short or long stay, depending on the location, the season and so on. “These will take a lot longer [than popups] to deliver but this is where the world will end up,” Fudin says.

Clearly, hotel CEO Paterson is making no understatement when he says: “We must remain vigilant towards disruptors entering the market, both online and offline.”

On matters green and diverse  

If there is one trend that will really matter in 2020 it is the issue of sustainability. Daniel Wishnia, who is overseeing the digital transformation of 250 hotels for German real estate firm AroundTown, for one, is preoccupied with how to ensure hotels meet the sustainability goals of UNWTO. Hotels are, he says, unquestionably looking for sustainable solutions because customers are demanding it! In Europe, this is also helping to accelerate the deregulation of rail networks as we reported earlier this year in ‘How the Greta effect is putting long distance rail on the fast track’.

The travel companies that survive the next decade will be those that show their support and educate customers about how to be more eco-friendly

Sustainability has been a major focus for Holiday Pirates, which has created a page specifically for eco-friendly travel. Armstrong acknowledges that this is a small step but is clear that “the travel companies that survive the next decade will be those that show their support and educate customers about how to be more eco-friendly.”

Aside from sustainability, Expedia’s Pal says gender, racial, and other diversity in the travel industry is far from where it should be at the management and executive levels. “The industry continues to attract very diverse talent pools so we can make great strides by enhancing inclusion and taking steps to support women and minorities for advancement,” he says.

The more forward thinking companies understand that the customer experience begins with the employee experience, and this will be another important focus for travel brands as they journey in 2020.

Join us at the The Travel Summit 2020 by Reuters Events, San Diego, USA, June 1-2, where we bring together the most senior decision makers in the travel industry.

 

 

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