What’s driving disruption in the travel industry?
Digital transformation. Every travel company has been investing in digital customer interaction. But this is likely the tip of the iceberg for what is coming next.
The industry has been at the forefront in the initial wave of disruption with players like Airbnb, Priceline Group and Uber dramatically changing the way we book and think about travel. But we expect a second wave.
To get to the next level of customer experience—providing a real-time, frictionless and context-aware experience—companies need to rethink how digital can change their operations and enterprise. This is required to get to the next level on customer expectations, but also to generate the fuel for growth through efficiencies and effectiveness in operational and enterprise processes.
Another reason why digital transformation is important for the industry is to accommodate the growth in travel demand. Currently there are about 1.2 billion outbound travelers globally. This is expected to double toward 2030. Digital platforms and solutions use physical space better to enable that growth, such as in security areas at airports or by combining rental concepts in high demand stay areas for hotels.
Industry, customer and technology trends are converging to redefine operating and business models in the travel ecosystem. What’s the implication for the travel industry?
Connecting real-time operations to the next level of end-to-end travel experience requires rethinking business and operating models. This is not only within the organization, but also, across the ecosystem.
Travelers expect that end-to-end travel experience. This means that collaboration is required outside the traditional boundaries of an organization. And an emerging strategic question for companies is whether to invest in developing digital platforms, partnerships, M&A or a combination of the above to make that connection to the broader value chain.
Expanding into the ecosystem also enables companies to expand capabilities faster instead of building it all in-house. Collaborating with digital native businesses can have benefits in the speed of transformation.
Travel providers want stronger interactions with customers, while drastically changing operations to glean better insights around customer preferences and operational performance. What’s needed to combine those?
There are two critical themes to consider here. The idea of connected or smart assets for instance. This is not only for the purpose of cost reduction or operational effectiveness, but also, to provide real-time information and status to travelers.
The other key theme is data and security. After all, the more processes that become digital, the more processes that need to be secured. And in most cases, the data that travel companies have is highly privacy sensitive.
We call this the data dilemma. To improve the customer experience, data sharing between companies is likely the way forward. However, to what extent are customers willing to opt-in? And how do travel companies secure that data if they share it among ecosystem partners?
New entrants—especially digital natives such as online travel aggregators, meta-search engines and travel service platforms—are shaking up the value chain. What’s at stake here for traditional industry players?
If the traditional travel companies don’t look over the boundaries of their current products and services, new entrants will get more ground.
When looking at MarketCap, Priceline Group is the largest travel company—larger than the major three airlines together—and its business model is purely about digital platforms like Booking.com and OpenTable.
Traditional travel companies need to pivot from products to services, and transform how they connect to the rest of the value chain. Ultimately, it’s about selling experiences and services, not purely rooms and seats anymore. You see the first movers in the industry investing outside what they traditionally considered their core business.
What are your recommendations for travel companies in this environment?
Our collaborative research with the World Economic Forum identified three recommendations.
First, legacy systems need to transform or connect into agile interoperable platforms, to enable plug-and-play interactions among partners in the ecosystem. This will help with asset sharing and generate new, seamlessly integrated products and services that make travel a part of people’s lives. This represents a significant investment for incumbents, but a necessary one to compete.
Next, travel companies need to support the transition of the workforce by reskilling current employees. They need to empower educational institutions to design curricula that prepare the next generation to work collaboratively with intelligent technologies. They should also offer more freedom and flexibility to workers, although there will be a challenge with regulation in some areas. The key is to find the right balance that protects the workforce and supports development, while keeping the industry competitive.
Finally, with data so critical to the success of the industry’s digitalization, a multi-stakeholder approach spanning the private and public sectors and civil society is needed to deliver regulatory frameworks that define the appropriate uses of traveler data, for instance on a Digital Travel ID. These frameworks will specify who owns the data, who can use it and how it will be protected.
You are the Strategy lead for Accenture’s Travel industry practice. Tell us a little more about yourself.
I am a homegrown Accenture managing director. I started with Accenture in late 2000 in Strategy for communications, media and technology. Since then, I’ve seen the diversity of what Accenture can bring, working in different industries, across geographies, and for clients of all sizes with unique challenges and opportunities.
On a personal basis, I live in Amsterdam, and wherever Accenture has brought me in the world that always has been my home.
Next to my business education, I also spent a year in art school after 10 years of working. Both on my travels and at home, I try to keep up with my photography. I mostly like the creativity in this. But photography also teaches you about patience—taking the best picture requires thinking (and waiting!) for all the aspects of the frame to come together.
You were once a gymnast. Any comparisons between gymnastics and Strategy?
Hmmm. I’ve never thought of that parallel. But, actually, I do think you can compare the two in some ways. They both require dedication, flexibility, and a push to always get the best out of yourself and the team.
In women’s gymnastics, in particular, you need to develop strength and elegance. And in some way, I’d like to think that is also a critical in Strategy too.
What are you seeing in the market when it comes to women leaders in travel?
I don’t think the travel Industry in general is much different from other Industries. However, I do think that there is a difference between segments such as aviation and hospitality.
By its nature, aviation is a more technical industry than hospitality is. I find that it’s more likely to find women leaders in hotels than with airlines. However, even with the majority of the workforce in hospitality being female, only 10 to 25 percent of the industry’s C-suite leaders are women. The travel industry is improving and working on gender equality, though there is still a way to go.
How can the industry help to create more female leaders?
This is a difficult question. I think it’s not only the industry that can create more opportunities, but also women leaders who see the opportunity. I did read an interesting fact, that the far majority of travel decisions are made by women. A way to get closer to the expectations of the traveler might be to also reflect this in the decision-making positions in travel companies.
I personally always value diversity, both in terms of gender as well as in demographics and personality. Different people bring different viewpoints. When you combine these effectively—and value the differences—you create better outcomes and results. In travel, we have quite a diverse set of people, and I hope we show that we welcome both men and women leaders into our teams.