First, the good news: However you differentiate yourself as a travel or hospitality operator, leisure and business travel are rising, as documented by numerous associations and surveys. In other words, a rising tide lifts all boats.
But this time around, it will take more than high water level to stay afloat. To return to pre-crises levels of travel spending and combat emerging competitors, individual hotels, travel agents and airlines must provide a more social, mobile, informed and consistent travel experience.
Whether it's cutting operational costs, improving sourcing or increasing bookings among millennials, social, mobile, analytics and cloud technologies (aka the SMAC Stack) are at the heart of these efforts. (see, “Don't Get SMACked: How Social, Mobile, Analytics and Cloud Technologies are Reshaping the Enterprise”)
For instance, consumers now use mobile devices to not only research their options but also book travel. Although the PC is still the favored medium, the number of Americans booking travel via mobile will reportedly more than double to 38 million by 2016.
These consumers also use social media to connect with friends and share pictures—either before, while on or even after vacation—which has drastically influenced the way people plan, book and experience travel. In doing so, consumers add to the already gargantuan pile of travel data with user‑generated advertising, both good and bad.
On the back‑end of this new economy, analytics are used to identify supply chain waste or understand changes in buyer behavior. For example, although travel and hospitality companies have traditionally relied on customer loyalty, they must now appeal to cost‑conscious and pragmatic millennials who switch brands at the drop of a social media recommendation or online user review. In other words, analytics mine and bring to light these kinds of insights.
Similarly, cloud computing provides anywhere—on any device—access to the latest software, user savings and company products to achieve enterprise‑wide efficiencies and allow operators to reduce costs, scale or right‑size more quickly and release consumer more apps faster.
Obviously, travel and hospitality operators face different challenges. While hotels are expected to outperform complementary partners (thanks primarily to consecutive annual growth in occupancy and daily rates), airline optimism is understandably tempered by high fuel and operating costs. Similarly, travel agents have seen their margins and commissions squeezed recently as more than two-thirds of online bookings are now made directly on supplier Websites, according to PhoCusWright.
Here's how SMAC can improve all three:
1. Revive customer loyalty. Due to changed values and greater access to competing offers, hotels are experiencing unprecedented erosion in customer loyalty. To minimize this, hotels must update and integrate their loyalty programs with customer social media (and interpret that chatter with analytics).
2. Predict behavior. Where will consumers go next? With analytics, hotels can anticipate changes in customer behavior and modify their offerings accordingly by comparing past behavior with future likelihood.
3. Improve customer relations. The more touch points, the merrier. As smartphones, mobile Internet and social media become an integral part of travelers' lives, hotels have more ways now to directly connect with customers, something that was difficult to do in the pre‑mobile era, especially the pre‑Internet one.
4.Boost productivity. How can hotels make better procurement and spending decisions? One way is to deploy a cloud‑based platform with organization‑wide access and built‑in analytics. This can have a big impact in cutting day‑to‑day operation costs.
5. Make more fact‑based decisions. Since the technology has the power to liberate more information and insights, SMAC can enable fact‑based decisions, in addition to cost cutting. As with any good idea, the key is getting buy‑in from the top, working hand‑in‑hand with technology teams and end‑users.
For Travel Agents
1. Contextualize recommendations. Travel agents are better suited than anyone to tailor a consumer's travel with location‑based offers. For instance, a travel app that pings users with nearby restaurant and shopping promotions.
2. Widen reach. As customers add new sources of information to travel decisions, travel agencies risk being marginalized. To avoid this, they must forge connections with travelers on social media with compelling content that customers will share.
3. Empower agents anywhere. As consumers have gone mobile, so too should every travel agent. This can be done with a cloud‑based communications that help agents respond to urgent customer requests on‑the‑go from their smartphone.
1. Build the future. Airlines are saddled with high operating costs and other external factors and their troubles will not vanish overnight. But cloud computing—the backbone of integrated SMAC—can further reduce costs, while enabling other mobile, social and analytic gains already discussed.
2. Enhance the passenger experience. With cloud technology, airlines can help customers make the most of in‑flight time. For example, Lufthansa's CloudStream service allows passengers to store and choose content for access after take‑off.
3. Brand with apps. Mobile apps such as the free in-flight Delta app allow airlines to create a presence on the device that a customer is most likely to use while planning travel. This may or may not result in direct business from the consumer, but it will add to the possibility of gaining wallet-share and influence.
4. Build trust. A strong social presence can drive brand loyalty in the same way as frequent flyer programs. For example, consider Delta's latest viral video, which just so happens to be its endearing, ‘80s inspired and genuinely funny in-flight safety video. See also Southwest Airline's dedicated social media team that not only responds to comments and questions, but also rebooks flights, tracks bags and issues travel vouchers via social media.
Whatever your next great idea in travel and hospitality, SMAC should play a vital role. Whether serving as the cornerstone of marketing communications, making company and consumer tools available on any device or better understanding traveler behaviors, social, mobile, analytics and cloud will take you there.
For more information, read the full white paper, U.S. Travel and Hospitality: Embracing a SMAC-Driven Future or visit our travel and hospitality practice.