After nearly two years of playing a global game of wait and see, the summer of 2022 has made one thing clear: Travel is back.
But it’s not the same. The COVID-19 pandemic has reshaped the very nature of how and why people travel and what they expect from brands along the way.
So what’s in store for the industry? In this post, we explore three of the most important and interesting trends reshaping the travel and hospitality industry and what they mean for brands big and small, near and far.
1. Loyalty programs are evolving to meet the needs of the new traveler.
The nature of travel is changing—and so too is what travelers expect out of loyalty programs. Whereas in the past, many programs in this sector were based on frequency, now we’re seeing brands pivot on how loyalty is measured and rewarded.
For example, when it comes to measurement, American Airlines simplified its AAdvantage rewards program around one metric: loyalty points. Members can earn points any time they use a branded credit card, as well as through flights and purchases with partners.
On the redemption side, IHG’s new loyalty program, IHG One Rewards, provides an excellent example of how points have become more versatile, letting guests choose a reward that appeals to them in the moment—be it a room upgrade, free breakfast, food and beverage credits, or lounge access.
As time goes on, we expect more travel and hospitality brands to simplify how they calculate loyalty points, and to expand their rewards portfolio to offer more choice and personalization.
2. Digital is presenting new opportunities to personalize and extend the experience.
Travel has never been a singular experience. Now more than ever, brands should consider how they can enhance the digital booking process by allowing guests to easily add or customize services as a single bundle.
For example, offering hotel guests the option to add a spa service or dining experience at a discounted rate at the time of booking could not only increase reservations in general, but also reduce on-site bookings through the concierge. The property could personalize the offer based on the type of room the guest is interested in, as well as other available data. For example, if a guest is booking a family room, an experience bundle could focus on child-friendly activities or childcare services.
Speaking of the concierge, digital is helping to evolve this service as well. While an in-person hotel concierge is invaluable in many ways, some requests can be easily managed through technology and simple web searches. Examples include booking a taxi, making a dinner reservation, and checking on such services as laundry, package delivery, fitness center hours, and spa services. Offering guests the ability to manage such requests or research their options via a mobile app, QR code or an integrated menu on the in-room TV can contribute to higher guest satisfaction and the optimization of staff resources.
One area in which we’re seeing further evolution in digital concierge is video chat. Travel tech companies like Crave have capitalized on this opportunity, adding this capability to their existing QR-enabled digital services menu and payment platform. Remote concierge and video chat services could be hugely differentiating for cruise operators, resorts or any brand that serves a large number of guests during peak times with limited space.
Finally, we should note that as companies become more digitally mature, there will be more convergence between the online and physical experiences. For example, hotels that equip HVAC units, lighting systems and entertainment systems with sensors and integrate them within a management console are essentially creating more opportunities for control, both by the guest and the business.
Over time, large chains thus equipped would be able to replicate the guest’s idea of comfort as it relates to temperature, lighting, music, in-room beverages and snacks, and other amenities. The secondary benefit for properties is that they can also optimize operational costs through smart thermostats, auto-saving electricity features, timers and more.
3. The metaverse is reshaping the employee and guest experience.
For travel and hospitality brands, the metaverse presents many opportunities to reimagine all aspects of the business, including the employee experience. Airlines, hotels, restaurants, rental agencies and experience providers are leveraging this highly engaging platform for employee onboarding and training without degrading the customer experience or slowing down service through traditional in-person training. This platform is particularly effective when it comes to younger employees, who tend to prefer learning in a digital or hybrid model, as well as through gamification.
Hilton Worldwide was among the first hospitality brands to embrace the metaverse and develop a virtual training program for its workforce of nearly 150,000. The organization partnered with learning and development leader SweetRush to leverage the Oculus Business platform and virtual reality technology to simulate a variety of common training scenarios, including check-in, room service delivery, room cleaning and maintenance. With this program, Hilton allowed staff to role-play common guest interactions in a low-risk learning environment; the brand was also able to reduce its traditional training program from four hours to 20 minutes.
Looking to the future, the metaverse can also be a defining element of the guest experience. Hotel brands have begun to experiment with creating online games, marketplaces and other digital experiences where guests can interact while visiting the property. It’s also a way to drive exclusivity. For example, earlier this year, Norwegian Cruise Line hosted an NFT marketplace featuring digital works from Italian artist Manuel Di Rita, more commonly known as “Peeta.” The six-piece collection sold via auction in just 20 minutes.
Enabling the trends of 2023 through cloud transformation and business modernization
To succeed today, companies must reinvent business operations and adopt a cloud-native architecture that supports advanced data collection, analytics and sharing to drive engaging, personalized digital experiences and manage all forms of disruption that will continuously redefine the landscape. While each of these trends is primed to deliver significant value to the business—in the form of improved customer satisfaction, enhanced operational efficiency, or new opportunities for revenue generation—many legacy technology platforms, as well as existing data models, are not designed to support these new use cases. They require advanced cloud, data, automation and artificial intelligence capabilities.
While companies have begun to invest in these technologies, our view is that the bigger opportunity of better experience is yet to be realized. Businesses must integrate the rich capabilities to deliver on the promised guest and employee experience.
This article was written by Joseph Rajadurai, Vice President in Cognizant’s Travel and Hospitality practice.
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