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Customer Engagement will Drive Travel & Hospitality Renaissance in a Post-COVID World
Amitava Sengupta Executive Vice President - Digital Consulting, Digital and Analytics | June 5, 2020
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Travel & Hospitality is arguably one of the worst hit industries by the COVID-19 pandemic. According to the World Travel and Tourism Council (WTTC), the pandemic has put around 75 million jobs at risk, while the loss in GDP for the sector is expected to surpass USD 2.1 trillion. At one point, nearly 96% of global destinations had imposed some form of travel restrictions, shutting off the influx of travelers. Sub-sectors have also been impacted severely: Airlines with capacity reductions of 70-80%, hotels with vacancy rates of 80%, and cruise lines, which became hotspots for infections, halting their services across the globe.

When seen from a value-chain perspective, the crisis appears to be even more devastating. The demand side has witnessed a significant drop in both new and advanced bookings, thanks to travel restrictions and the general environment of caution and anxiety around travel. This has also led to a high number of cancellations and refund requests, further leaching revenue. On the supply side, business owners now find themselves with a substantial amount of unused inventory, leading to dramatic schedule reductions and removal of service capacity. Downstream suppliers have been privy to the cascading effects of these losses and find their revenue streams choked off as well.

With the pandemic showing no signs of slowing down, the near future is going to be tough for the industry. Even if scientists miraculously find a cure within the next few months, public paranoia around travel and public venues will be at an all-time high.

To its credit, this isn’t the first time the industry has been delivered a harsh blow and survived to tell the tale. After the attacks of 9/11 and during the 2008 financial meltdown, consumers aggressively pulled back on discretionary spending, cancelation of planned travel, and businesses tightened their grip on corporate travel expense accounts. But the industry found ways to pull a renaissance of sorts by rethinking their operating models to emerge stronger.

The key to this resurgence lies in customer engagement, customer experience management, and process and business model reinvention in a manner that considers the ground realities of the post-COVID world. In the months, and maybe even years, that follow, the travel and hospitality sector will have to fight to win back their customers’ confidence and assure them that it is perfectly safe to leave their homes.

The Evolution of Customer Engagement:

According to a research by Preferred Hotels and Resorts, more than 50% of respondents worldwide stated that they will book a trip in 2020 as soon as the travel restrictions and lockdowns are lifted. The research further revealed that 75% of the respondents intend to travel with family. If things go well, most experts predict that the travel and hospitality sector will start gradual recuperation by the end of 2020.

However, organizations that would survive and thrive must consider the temporary and permanent behavioral changes among customers brought about by the current crises. These changes will play a major role and possibly define customer behavior and customer expectations in the days to come. Consumers will have two priorities when they travel post-COVID:cost-effectiveness, and health and safety. In a sentence, low-cost travel that assures a certain quality of hygiene, and promotes social distancing practices and norms, will do well.

For brands, building the two-fold image of being safe and economical will require innovations in the areas of self-service, social distancing, touchless interactions, and expanded digital content. Simultaneously, travel and hospitality players will also need to focus on building adaptable, flexible, and resilient processes and platforms that underpin effective customer experience management. This will also include providing customers with a means to interact with the brand from anywhere at any time, and facilitating a human experience, without necessitating close contact with humans.

For brands, building the twofold image of being safe and economical will require many innovations

Technology as a Customer Engagement and CX-enabler:

The travel and hospitality ecosystem is changing irreversibly. The industry, today, should look at this crisis as an opportunity to reassess their digital strategy. In the wake of the COVID-19 chaos, it is quite evident that consumers' perception of experience and engagement will have been molded by the current crisis. However, digital transformation around the key tenets of CX and customer engagement will be a key differentiator in this highly competitive market.

We are likely to see significant investments in the short/medium term on analytics that will enable the industry to conduct travel routes analysis and optimization for cost elements, and marry this information with external inputs such as route specific trends, competitive data, etc., to intelligently predict and fulfil demand. This will be complemented with a focus in the short- and long-term on business restoration planning by managing the constraints around demand, costs, staffing, and financial considerations. Journey maps of different segments of travelers will also need to be reexamined and reimagined, to drive maximum business value.

Going forward, contactless intelligent operations, large-scale automation, and initiatives related to customer safety and care, such as contact tracing, will all be part of the key digital themes dominating the travel and hospital industry.

Here are just some of the ways in which technology can enable them:

  • Analytics to map end-to-end customer journeys

    The travel and hospitality industry generates a massive amount of data across multiple channels and platforms. These include customer research, planning, price comparisons, actual bookings and reservations, itineraries, fare charts, enquiries, and customer feedback. Incumbents and new entrants alike can explore the use of big data analytics to harness this information about the customer journey and draw insights that can help them deliver more targeted services, better pricing strategies, and personalized travel experiences. Of course, data analytics tools will only serve the purpose if users are assured that their data is secure.

  • Facial recognition for touchless operations

    In a post-COVID-19 scenario, travel companies can leverage high-end technology such as facial recognition to build touchless operations. Instead of having customers wait in a long queue at check-in desks at hotels or airports, companies can use facial recognition software to scan guests and shorten lead times as well as ensure adherence to social-distancing practices. In 2018, a joint venture between the Alibaba Group and Marriott International announced that it was testing facial check-in technology, so, clearly, the technology is already being explored.

  • Artificial Intelligence and chat bots for smart rooms

    For the last few years, AI in the travel and hospitality sector is directly responsible for how people search and book accommodation and transport. Today, it is poised to drive even greater change. One great example of this is an AI smart-room solution developed by a leading hotel chain. Unlike conventional guest rooms, the AI-enabled rooms come with state-of-the-art voice control technology that delivers a more natural human-computer interactive experience. Such technology, when integrated with IoT, can open endless possibilities in hygiene management and personalized service delivery.

  • Robots as the new housekeeping staff

    Robots can ensure service continuity for hotels struggling with staff shortages caused by COVID-19. From cleaning rooms and managing guest luggage, to handling front-desk bookings and customer queries, robots can do it all. In the coming days, robots could well become an increasingly important part of the travel and hospitality value chain in a world where consumers will prefer touchless travel.

The Road to a New Normal is Paved with Digital:

As organizations in the travel and hospitality sector plan a recovery, they will need to tread carefully. Customers moving out of their homes or cities for the first time in months are likely to be overly cautious and have exacting standards. Old brand loyalties and affiliations will take a back seat to companies than can prove themselves fully equipped to tackle the challenges of COVID-19, and a misstep can have far-reaching consequences.

Planned application of digital technologies can help brands optimize costs, forecast and fulfill demand, plan for contingencies, and deliver exceptional experiences that are above and beyond customer expectations. Brands that manage this will find themselves retaining, as well as winning new customers and brand ambassadors.

In these dark days, I often recollect the words of Barbara Brown Taylor. "I have learned things in the dark that I could never have learned in the light, things that have saved my life over and over again, so that there is really only one logical conclusion. I need darkness as much as I need light." As the industry moves ahead, incumbents and new entrant in the T&H industry must heed the lessons from the current situation and prepare themselves for the possibilities, challenges, and necessary innovations demanded by the brave new world.