Technology continues to evolve as businesses adapt to new market dynamics. In a world where today’s solution rapidly becomes yesterday’s news, companies must stay ahead of the curve to increase profits and maintain flexibility. Travel and hospitality companies face the unique challenge of anticipating the needs of tomorrow’s traveler in a rapidly changing industry. In 2017, we expect travel and hospitality companies to sharpen their focus on three areas of development: customer-experience management, revenue growth from new channels, and the workplace of the future.
More than half of our discussions with business leaders in the industry revolve around enhancing the customer experience. Companies have begun to realize that every customer displays a range of behavioral patterns depending on the situation at hand. A traveler will prefer a different set of activities on a leisure trip versus a business trip, and these preferences will change depending on the season, geography, presence or absence of family, and more.
In our engagements in the hospitality and travel sectors, we aim to understand the unique customer in order to provide personalized promotions that take the customer experience to the next level. We integrate customer data from various functional applications and create a 360-degree view of behaviors and trends. From there, we construct customer persona models that provide a richer, more dynamic context for marketing efforts. A recent survey shows a dramatic increase in sales when the right product is pushed for the right price on the right channel to the right customer at the right time.
Revenue growth from new channels
The integration of various industries have helped to make ancillary services a new source of revenue for travel and hospitality companies. We saw many interesting efforts take shape in late 2016. For example, airports are experimenting with the revenue-sharing model by providing airlines with new services like vouchers for restaurants. Companies like Airbnb now offer travelers a way to purchase experiences through local hosts. And some airlines have partnered with Netflix to offer in-flight streaming. About 40% to 50% of our survey respondents report plans to cross-leverage some parts of customer data to increase ancillary revenue.
Another emerging trend is the disintegration of bundled services, allowing customers to pick and choose what they actually need. For example, instead of offering standard rates for a room based on its proximity to an elevator, bed size or view, hotels can break down a room charge into components, so customers can arrive at an individualized rate by choosing the features they need. This kind of disintegration can open up a new set of ancillary offerings that are still under the direct control of hotels.
Workplace of the future
In addition to customer-facing initiatives, travel and hospitality companies have taken steps to establish their own workplace of the future. Through digital transformation, they can address the needs of the growing millennial workforce, break down information siloes, promote collaboration and improve task management. We have launched a few programs in our innovation lab, the Digital Pumpkin, for clients to shape their vision and strategy for their workplaces. We are also in discussion with airlines about predictive forecasting of revenue and traffic for better network and schedule management, and we have worked on chatbot initiatives with our Travel management companies, car and airline partners.
We look forward to an interesting and eventful 2017, full of technological advancements that help the travel and hospitality industry reach greater heights. While most companies are thinking of making digital innovations to their business, many are still trying to get clarity and priority for these initiatives. We recommend a design thinking–based workshop at our Digital Pumpkin to identify relevant industry trends and learn how we can work together to achieve your goals.
Get our take on the technologies worth watching in the coming year. Read: THE 7 MOST UNDERRATED TECHNOLOGY TRENDS FOR 2017.