With 87 percent of senior business leaders saying digitalization is a company priority, only 40 percent of organizations have brought their digital initiatives to scale, says Gartner. 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 allowed the company to better manage the demand and apply flexible pricing, adjusting fares to demand.
Source – US Online Travel Overview 2019, Phocuswright
Loyalty programs and bonuses
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.
In-flight service and entertainment
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.
Digital self-service and facial recognition
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 and airports are adopting facial and biometric recognition technology together with online check-in and other self-service solutions. By eliminating unnecessary waiting and inconveniences, airlines, airports, and border control authorities strive to win customer loyalty and reduce operating costs.
IoT and Connected Items
Rooms of the future are already here. Increasingly more hotel chains are adopting IoT devices, voice-controlled virtual assistants, and connected apartments. Sensors and tablets for interfaces help control the room environment, in-space equipment, and adjust those to meet guest preferences.
Robotics and automation
Robots have increased in popularity in the travel and hospitality industry. Their application ranges in purposes and levels of complexity. Robots now can handle complex automated processes like self-driving vehicles for luggage and interacting with passengers or guests, providing relevant information, or answering questions.
Advanced analytics and personalization
More and more airlines and hotels have begun to understand the value of data. With so many sources of information, including customer data, on-site behavior, search history, social media chatter, hotels and airlines can elicit insights to either personalize customer experience or optimize internal operations, e.g. revenue management.
Concierge services
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.
Automated 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 100 destinations across North, Central, and South America. Founded in 1998, the company employs 22,000 people as reported for 2018. 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.
Fly-Fi, JetBlue’s inflight Wi-Fi, is now established and aims at gate-to-gate connection. However, the coverage varies with the type of plane and the route. All company’s flights have coverage over the contiguous US. Besides, JetBlue’s restyled Airbus A320 and A321neo aircraft also includes broadened coverage over most part of the Caribbean and Central America.
The internet connection also helped facilitate the crew’s productivity: Flight attendants equipped with tablets can access the seat map as well as the personal information about every passenger, including their type of loyalty membership, birthday, or a connecting flight if any.
Ryanair: Increased Efficiency Through Digitization
Ryanair is one of the most popular European low-cost airlines, serving 225 destinations across 40 countries. The company was founded in 1984 in Ireland and currently has a fleet of 469 aircraft including subsidiaries. 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 also 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.
In the summer of 2018, Marriott teamed up with Volara, a provider of custom, voice-based solutions for the hospitality industry, and became the first major hotel chain to introduce Amazon Alexa in hospitality, which is now available at selected hotels across the chain. The program runs as a virtual concierge, integrating with amenities and services. It’s adjusted to complete simple tasks like controlling the in-room environment, ordering towels, playing music, helping to choose local restaurants and attractions, calling, and checking out.
In February 2019, Marriott International rolled out the Bonvoy app for Marriott’s portfolio of over 7,000 hotels in 130 countries. Besides searching and booking, it allows for mobile check-in, use of a mobile key for the room (in some hotels), sending mobile requests for services and amenities, and communicating with hotel representatives before, during, and after the stay.
To better cover the Chinese market, Marriott International has also partnered with Alibaba Group and its online travel platform Fliggy. Such a partnership now enables Chinese travelers to book a hotel room through Marriott’s flagship store on Fliggy. After a mobile booking, the deposit and a room fee are charged automatically from the Ali account. When travelers arrive, they can use self-service kiosks powered by the Alibaba facial recognition technology. The check-in process, which takes up to two minutes, includes ID-scanning, posing for a camera, and picking up the room key.
Accor Live Limitless: Betting Big on Acquisitions
AccorHotels, now Accor Live Limitless, or just ALL, currently operating in 100 countries, is a French multinational hospitality company, which includes such world-famous hotel brands as Sofitel, Novotel, and Ibis. This 60-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.
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.
In 2018, Accor launched the Smart Rooms feature. The new accommodation experience is supposed to blur the lines between “accessible rooms” designed for persons with reduced mobility (PRM) and regular rooms. The Smart Room has a connected tablet that allows visitors to fully control their room, from air conditioning and TV to wardrobe with sliding shelves and rods. A bathroom is equipped with fully adjustable utilities.
Dorchester Collection: tapping into social media data to emphasize the best experience
Dorchester Collection is a brand of luxury hotels. For about five years, they’ve been using a data analytics system that helps managers check data coming from online reviews, social media, blogs, and rating platforms.
For instance, the system helped pinpoint that travelers were more excited and eager to review Dorchester’s breakfasts than their dinners, giving the team an additional direction to focus on. The insight inspired the hotel to personalize breakfasts and introduce a wider choice across the chain.
Another finding was that people preferred to share their experience about outdoor rather than indoor amenities at the hotel. Given the lack of outdoor photos, this was an important signal to start more marketing of those amenities on the website.
Today analyzing customer reviews can be approached with sentiment analysis. We have a dedicated article about that technique, and also we designed a sentiment analysis platform that helps travelers filter hotels by their preferences, relying on customer reviews. So, check those links out.
British Airways: changing in-airport experience with robots
Trying to offload Terminal 5, the busiest point in London’s Heathrow Airport, British Airways implements automation and robotics.
In late 2019, BA partnered with BotsAndUs to employ and test two Bills, waist-height robots. Smart robots are supposed to free passengers from immediate issues. They can communicate with passengers in several languages and provide up-to-date flight information. They can also guide people to service desks, help handle luggage, check travelers into the flight process, display cafes, and other facilities in the terminal.
It’s not the first BA robotic experience. Earlier, the carrier installed 80 automated bag-drop machines in the facility and also tested self-driving luggage vehicles. These features helped the carrier reduce the number of lines and improve customer journeys.
Uruguay’s Carrasco International Airport: using passenger data to prepare border control for high-risk passengers during COVID-19
Uruguay was one of the last countries to confront the COVID-19 pandemic, so the country’s government had time to prepare.
To fight the spread of coronavirus, the airport and the government partnered with Center of Excellence by Corporación América in Uruguay. To identify passengers from high-risk pandemic countries, Advanced Passenger Information and the Passenger Name Record (PNR) were integrated into the border control system. Risk profiling was based on a relevant list of high-risk pandemic countries.
This allowed for automated alerts transmission to the border control system, which signaled immigration officers to prepare for arrival of high-risk passengers in advance. The technology also helps spot passengers previously tested for COVID-19 and distinguish those who could potentially be infected.
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.
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. On top of that, we designed a personalization engine that caters to individual traveler preferences and suggests flights according to them.
