I don’t know whether it’s the rows of backpacks and stationery supplies lined up in my local stores. Or the fact that my neighborhood suddenly is strewn with school buses in the early hours again. But September always feels like new beginnings. More so than January perhaps.
Back to school. Back to business. And, for the travel industry this year, back to growth.
Being creative and pragmatic is the way forward
But travel companies are finding that what worked pre-pandemic is unlikely to fit the bill now. Customer segments are totally different and there is no relevant historic data from the past year for travel companies to rely on. And that’s just the start of it.
It will take a new mindset to guide the strategic choices that will serve companies now and lay the foundations for long-term success.
We call this mindset creative pragmatism. Put simply, it is about finding creative ways to work in the situation you find yourself in. It combines a realist’s clear vision and an innovator’s bold spirit. It allows for more flexibility and encourages new ways of thinking—both of which are nonnegotiable for travel companies to build their new futures.
The travel industry is no stranger to adversity. But the pandemic has been uncharted territory. And left the industry certain of only one thing – that it will never again be exactly what it was.
A heroes’ journey
For an industry that’s based on human experiences, that agility and ability to overcome adversity is largely due to the people who play a key role in making the industry what it is today.
We think of them as heroes, and in the travel industry there are millions.
Some plan routes, train staff or manage loyalty systems. Some load luggage, serve meals or clean rooms, while others develop strategies, execute deals or develop brands. Each and every one of them help make our travel journeys happen.
They, and the companies they work for, are each on their personal journeys to growth. Working to ensure that we as individuals can enjoy the growth experiences that the travel industry offers us.
Helping us, after 18 months of restrictions to get going. Get moving again. Back to travel. Back to growth.
<<< Start >>>
<<< End >>>
Three forces impacting the industry.
As I speak to clients and colleagues across the globe this year, I’m getting the sense that, while the pandemic is certainly not over yet, at the very least we’re starting to get our heads around this unpredictable situation that we find ourselves in and to understand what those different, ever-changing dynamics are that we’re grappling with.
Our vision of the industry shows us that there are three main forces impacting travel companies today in one way or another:
- The new traveler. Today’s consumer has very different values than the traveler of 2019. According to Accenture consumer research, 95% of people surveyed said they made at least one change to their lifestyle that they expect will be permanent. Months focusing on protecting their health and that of others has made integrated personal wellness top of mind. With life centering around the home for so long, people now value living for local. And consumers are also now more mindful of doing real good—66% say they will make more sustainable and ethical shopping choices. These values will not disappear overnight —and some will influence behaviors for years.
- The weight of the world. It is no surprise that an industry that opens up the world for people is shaped by the forces of change in it—economic, social, cultural and geopolitical. The industry has been tested in ways it has never been before, and the impacts of the pandemic have played out very differently in every market. Travel companies have had to pivot accordingly as nations have made their own course corrections to respond to the progression of the virus, and they cannot rely solely on governments to figure out the complexity of the post-pandemic travel landscape. The volatility will continue for a long, foreseeable future.
- The readiness factor. Travel companies’ ability to get back to growth—the speed at which they can move and how easily they can react to changing strategies and situations—depends on the readiness factor. This is a function of several things. First, there is companies’ strategic, operational, and technological maturity. Second, there is the debt they are carrying and access to aid programs. In essence, how ready travel players are coming out of the crisis will establish how well they will perform on the growth journey that’s ahead. Despite their adaptive nature, travel companies face challenges here. Of all the disruption in travel, two fundamental areas have been hit especially hard; people and assets.
Three areas to build momentum
While there are many challenges to tackle—and opportunities to seize—we believe that there are three areas where the industry can start to build momentum with this new mindset.
- Rebuild the bond. The industry needs to focus on rebuilding confidence and trust with travelers by fulfilling on brand promises throughout the journey. This commitment must run deep through the organization and ring true to the workforce just as much as the travelers they are serving.
- Inspire the dream. Travel companies must simultaneously capture pent up demand by inspiring consumers to travel with them again and giving people reasons to choose them over the alternatives. But they have to do this using the limited resources they have. This means capturing their minds by reflecting their culture and values, offering topnotch experiences and irresistible deals too. Approaching incentives and loyalty schemes in new ways, and capturing their hearts with dreams of travel.
- Flex your adaptive gene. Travel players have had their teams and budgets decimated. Moving forward, building adaptive cost models will remain vitally important for the foreseeable future. New technology and working in new ways will help companies scale up as the industry grows back to its previous size and sideways as it continues to shift in different markets. And by redirecting cost savings to reinvest in growth, companies can expand capabilities even in lean times.
It’s time to grow
None of this will be easy. There are real constraints. It won't be possible to redesign or relocate hotels overnight, and it won't be economical to fly aircraft at current load factors forever. Travel companies need to think about how to be a provider of choice and offer consumers a good product with the assets they have available.
But the way to make traction is to begin moving. To start exploring and asking themselves the tough questions about what’s next for them.
Just like travelers will often rave about that hidden gem they discovered when their flight was cancelled and they had to find an emergency place to stay for the night having already used up their entire travel budget, the travel industry is getting to grips with the idea of doing things differently—and doing different things—to start their journey back to growth.
People will guide travel back to growth. The things that we love about travel will be back too. They never really left us, did they? The giddy anticipation of a vacation. The wonder of a far-away landscape. The freedom of an incredible adventure. None of this happens without travel heroes.
So, I’ve been looking forward to September with the same energy as I had when it meant back to school. But this time it’s about getting back to business. Back to growth.
Back to but different than before.
<<< Start >>>
<<< End >>>