The Business Model: How can travel companies repivot their operating model to drive long-term loyalty?

Travel companies need to reinvent their approach to loyalty by making innovative and hyper-relevant changes for the post-pandemic era. We believe that there are three key areas: the experience model (soul), the data model (mind), and the business model (body). In this article, we focus on the last of these.

How can travel companies rethink their operations and restructure their organizations to provide the seamless, personalized, hyper-relevant experiences that keep travelers loyal over the long term—and help them to win market share?

Let purpose lead you

The travel industry’s traditional efforts to secure customer loyalty have been focused on points-based programs. But the power of these programs has been badly hit by the collapse in travel volumes since early 2020, with far fewer travelers earning the points needed for the benefits on offer. Loyalty programs need to be reimagined as data-driven, real-time tools for decision-making, that are highly adaptive and can be evolved at pace—to meet the business’s needs and fast-changing customer expectations.

As we explore in our article on ‘soul’, those expectations include an even greater emphasis on the end-to-end experience of traveling, with convenience and ease of doing business at a premium.

We have also seen a clear rise in the importance to consumers of company values and purpose. Accenture research on purpose-led brands has found that consumers are no longer making decisions based solely on product benefits or price. Instead, they are assessing what a brand says, what it does, and what it stands for. Our research found that 47% of consumers disappointed in a brand’s words or actions on a social issue would walk away—with 17% not coming back, ever.

47%

of consumers are disappointed in a brand's words or actions on social issue would walk away per Accenture research.

17%

of consumers are disappointed in a brand's words or actions on social issue would not come back per Accenture research.

And the pandemic has seen values become a critical driver of purchasing decisions. From debates over diversity and inclusion to sustainability, the travel industry must face the new reality: consumers will support companies with a brand purpose and values that align with their beliefs—and reject those that don’t. Travel operators need to take a more values-based and purpose-led approach to their brand and business operations, and demonstrate authentic alignment with their customers’ values.

Start living: Structure the business around services

When they start reworking their business models to drive loyalty, many travel companies will need to revisit their underlying organizational structures. Across the industry many firms, including airlines and hotels, are siloed—and poorly connected with other partners in the travel ecosystem. Aircraft maintenance, baggage handling, booking functions and in-flight service are highly specialized and usually operationally separate. That will have to change.

Take baggage handling. The aim could be to connect all aspects—from developing and selling the baggage value proposition through to the baggage journey itself. Customers could be given notifications about the progress of their baggage from bag-drop to the collection carousel. For the passenger, there would be real-time visibility—which would be consistent and seamless as the baggage is handled by the airline, the airport or baggage handlers. That integration would also come to the fore when things go wrong. For example, if a passenger’s baggage missed a connection due to a delay, the passenger could be notified in real time—preventing a nasty surprise upon landing. They could be offered express delivery of clothing and utility essentials from a retail partner catalogue while still on their flight. There could be options for having the baggage re-routed—to their current city, to home, or maybe to the city where they’ll be two days later, as needed. Booking, baggage, and in-flight functions work in unison for a seamless baggage recovery experience.

Great customer experiences rest on the idea that customers interact seamlessly around services.

The business of experience

To win customer loyalty in the new era, travel businesses need to provide a more holistic company-wide experience. Keeping pace with customers’ new, often unmet and frequently changing needs demands a “Business of Experience” (BX) model. BX galvanizes companies to push beyond the customer experience philosophy (CX) and organize the whole business around the delivery of exceptional experiences. It is an approach that allows organizations to become customer-obsessed—and reignite growth. Where CX optimizes customer touchpoints around products and services, BX solves for human needs around a purpose.

Ultimately, the future belongs to those who can perpetually adapt their products and services to meet customers’ needs. In the new era, the businesses that win loyalty and seize market share will be those which create, launch and scale new products and services at the speed of customers’ changing needs—and develop the organizational muscles to adapt as those needs evolve.

Think like an app

One way to think about the new approach to the “body” or business model is to see the organization as a computer program with many APIs (application programming interfaces). The APIs enable seamless links between different parts of the organization and allow new systems to be plugged in as they are developed.

For many travel companies, this is a fundamental shift in mindset. It’s one that will make them more agile in developing new products and services. Cloud-enabled secure data flows can be structured around on-demand services. Each team has access to the information they need—when they need it—to make business decisions. Even better, they can be shown relevant insights and next-best action recommendations to help make those data-driven decisions. And when talent is structured around the customer experience, enabled by rich insights, it is far simpler to make small, iterative changes in response to customer demand and to test the success of such changes.

They build powerful ecosystems

To create and sustain loyalty, businesses will have to offer travelers a broad range of products and services, presented seamlessly to the customer through an integrated partner ecosystem.

Integrating ecosystem partners at speed and scale requires a flexible underlying technology-enabled fabric. This underpinning fabric gives a constant view on a customer’s current state—and their potential needs and desires at every step of the journey. At the right moments, it triggers hyper-relevant actions and offers from a vast pool of internal or partner service offerings, to engage and delight the traveler in meaningful ways—from airport assistance to duty-free discounts, in-room services, local experiences and much more.

Key priorities include identifying partners to deliver customer-facing services such as add-ons, and finding the right technology partners to build the flexible core.

They incubate innovation

One company that has set itself up for constant reinvention, experimentation and adaptability is Marriott International, which worked with Accenture and start-up incubator 1776 to create a Travel Experience Incubator program.

The program began with a challenge to identify promising start-ups and solutions, and from 160 applications, seven were selected for a 12-week incubator. Experts from Accenture, Marriott and 1776 guided them as they developed a pioneering travel and hospitality solution. Accenture co-created a custom curriculum, facilitated a mentorship program, and provided strategy, technology, and design support. Marriott took forward six of the seven ideas, including Marriott Homes and Villas, which is a homestay platform, with the assurance of the Marriott brand and links to their Bonvoy loyalty program, offering customers a new product offering that aligns with their purpose, in a short amount of time.

And they are creative, empowering places to work

Many travel businesses lack the resources to invest in transformation, and fear that large-scale transformation is too risky. One way around this is “creative pragmatism”: be realistic about resources but bold in your aims and inventive in finding ways to achieve important wins without major investment.

Business-model change also needs to address company culture and decentralize decision-making. Leaders should be empowered to make decisions that drive positive change within their own business areas, and customer-facing staff need the capacity to make decisions that drive great customer experiences without constant reference back to management.

Seizing the next big opportunity means bringing ideas to life, fast. Ideate, experiment, and incubate. Learn to go to market with speed and at scale. And build the organizational mindset and muscle for growth, with the right governance, a customer-centric culture and intelligent operating model.

The ultra-competitive world of post-pandemic travel is forcing providers to revisit the idea of customer loyalty. The ones that will rise to the top are the ones that have a clear purpose while keeping moving. Instead of being rigid entities, these businesses can adapt to travelers’ needs as they change—that is how to stay relevant.

SEE THE NEW ERA

Liselotte de Maar

Managing Director – Strategy, Travel, North America


Dave Unipan

Senior Manager – Interactive, Marketing Transformation


Andrew Maliszewski

Senior Manager – Strategy & Consulting, Travel

MORE ON THIS TOPIC

Travel industry recovery: Business or leisure?
Business travel with a leisure flavor
The force of change in the travel experience

Subscription Center
Stay in the know with our newsletter Stay in the know with our newsletter