This post is co-authored by Farhan Mohammad, Global Head of Travel and Hospitality at Salesforce, an Accenture partner, and Michael Robinson, Managing Director, Travel at Accenture.
We are currently in the midst of the 4th Industrial Revolution - everyone and every thing is connected, and the travel industry is no different. The industry is moving at an increasingly rapid pace, and companies need to be prepared to meet traveler expectations.
We’ve come a long way since the first commercial flight in 1914. Travel is safer, cheaper and quicker. It’s more digital thanks to technical innovations in artificial intelligence, big data and machine learning. With this shift to digital, customer demands and expectations are changing as well. According to the World Economic Forum, digitization of the travel industry will shift $100 billion in revenue from old players to new ones over the next decade.
The companies that will become leaders are the ones that embrace these changes and collaborate with their ecosystem to create relevant, unique brand experiences. In order to move as fast as the market evolves, you have to be able to sense and respond to customer needs, and you have to move at the speed of the customer.
Travel and hospitality companies can undertake this transformation by taking bold steps to revitalize their core business and, ultimately, pivot to and scale new business and revenue models that can enable them to grow in the future. This transformation involves four key, interrelated initiatives:
Create engaging experiences
Sixty-eight percent of customers are satisfied with the travel companies they do business with, but only 44% feel loyalty toward these companies. That’s a problem! Travelers need to feel that airline and hospitality companies care enough to know them, and they expect intelligent, relevant and contextually aware experiences. Travelers expect cohesive engagement, across all channels, whether that be web, mobile or social.
Connect people and processes
Siloed people and processes are major sources of inefficiencies and higher costs. Integrate data across your business to connect people and processes more effectively, giving employees real-time insights into company operations and customer preferences to help them make better business decisions and create unique experiences for their customers. The experience for the employee is as critical as the experience for the guest. Companies with highly engaged workforces are 21% more profitable than those with poor engagement, and those that develop and design an employee experience in harmony with the customer experience, will come out as marketplace leaders.
Marriott is supercharging the guest experience by empowering employees and creating seamless and frictionless experiences for both employees and guests. Alex Ahluwalia, Senior Vice President, Global Operations at Marriott International said, “We’re leveraging technology to empower our associates and allow our customers to have a continuous conversation with us.”
Transform your legacy platforms
Margin pressure is rife across the travel industry, and airlines are just one example. While global passenger yields declined 2.1% in 2018 — and are expected to remain flat in 2019 — labor cost is forecast to increase by more than 10% during 2017-2019. New and emerging technologies provide opportunities for travel companies to reinvent their enterprise, and in the process, generate significant return on investment.
Capitalize on new business and revenue models
While the preceding three initiatives are critical to respond to today’s prevailing trends, the travel industry will need to pivot to new business and revenue models for long-term growth and competitiveness. That means a gradual shift away from the current business to one that shows the most growth potential. Initiatives can include, for example, an ongoing contribution model that fosters loyalty and creates customer stickiness through monthly or annual fees, or an open exchange that gives guests and companies the ability to bid, trade, and use services and labor across the ecosystem.
Enablers for Innovation
It’s understandable if this sounds overwhelming, extremely difficult and impractical to take on. Fortunately, we’ve boiled it down to three enablers that can help dramatically ease and accelerate the transition.
Data is the lifeblood of every travel company. Leverage all the data available to you, including internal, external, structured, unstructured, social and mobile, to generate deep insights and improve your business. This is vital to understanding traveler needs, streamlining asset maintenance, and becoming a highly agile and responsive business.
Take advantage of the ecosystem and partnerships around you to bring critical skills, capabilities and resources, allowing you to scale quickly and with far less investment. Travel companies must figure out ways to collaborate more effectively and efficiently with partners to meet ever-expanding customer expectations. Focus on what you do best, and leverage best-in-class industry solutions for the rest.
Advances in digital technologies make it possible for companies to grow while becoming more productive, competitive and profitable. Artificial intelligence, machine learning and analytics are more powerful than ever and are only going to get smarter and more efficient. Ensure that you have a future-proof platform in place that allows you to leverage data to make better informed business decisions, create hyper-relevant travel experiences and foster loyalty.
Travel today looks very different than it did during my parents’ and grandparents’ time. It’s an era of unprecedented competition, market volatility and disruptive business models. Traveler expectations are higher than ever. In this environment, travel companies can’t afford to stand still. The only option for organizations is to become agile in real-time.
Accenture and Salesforce have partnered to impact the end-to-end traveler journey, including pre, during and post trip. We help companies use data and technology to revitalize their existing business and eventually move to and scale new ones. It’s the difference between evolving with the industry and remaining an important player, or falling off the pace and eventually being left behind.
Learn how Accenture, using Salesforce technology, has helped Radisson Hotel Group develop and implement a new digital platform and mobile application, bringing them together in a single, scalable system that makes it easier for the company’s franchisees and owners to do business with the global hotel group.
 Accenture 2018 Travel & Tourism Global Consumer Pulse Research