Let's face it: even the best laid plans can be subject to change. And if the past few years have taught us anything, it’s that achieving growth in the wake of a pandemic, economic uncertainty and geopolitical conflict requires expecting the unexpected.
The travel industry remains a people-facing industry at its core—even as companies explore new realities via the metaverse. After years spent separated from loved ones and colleagues, the world is ready to get back to travel, with new technologies offering innovative solutions that make the journey easier for all. To stay competitive, the industry will need to remain flexible for whatever lies ahead. Meet the next travel adaptation.
Welcome to a brave new world
Travel companies are facing dramatically different post-pandemic era challenges where uncertainty is the rule, not the exception. No doubt the travel industry has endured tremendous challenges over the past decades, from the direct impact of September 11th to the subsequent 2008 global financial crisis. Still, each time the industry has been able to adjust to the new landscape that it has found itself in.
Workforce challenges have also made it difficult to meet everchanging and evolving consumer demands with customer expectations for E2E traveler experiences. Growth now calls for bold action and a courageous mindset if the industry wants to prepare for the disruption that is on the horizon.
A heroes’ journey
Every great epic has a hero. For the travel industry, there are millions. Some load luggage, serve meals or clean rooms. Others plan routes, train staff or manage loyalty systems. Still others develop strategies, execute deals or develop brands. They all help make travel journeys happen—from the routine to the once-in-a-lifetime. All while managing through disruption.
As the industry looks to the future, travel heroes will face even more forces beyond their control. They are continuing to observe and adapt to new traveler expectations. Wonder if new COVID variants could spur the return of restrictions. Need to find their place on the metaverse continuum. Adopt more sustainable practices. And prepare for other disruptions in the future.
But heroes rise to adversity. They perform best when times are hardest. They know how to seize opportunity and remain bold in the face of change.
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As travelers return with their giddy anticipation of a vacation, the wonder of a far-away landscape and freedom of an incredible adventure, so will our travel heroes guide travel’s growth journey.
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Three forces impacting the industry
Over the past year, clients and colleagues I’ve spoken with from across the globe appear more than ready to meet these challenges head-on. Facing unpredictable situations requires adaptability, and they’re prepared to explore new ways of understanding and approaching those different, ever-changing dynamics that we’re grappling with.
Our vision of the industry shows us that there are three main forces impacting travel companies today:
- The new traveler. Travelers today are getting back to pre-pandemic levels as restrictions subside. According to Accenture consumer research, not only do two in three consumers want to travel like they did before the crisis, 61% have already booked a trip. Values that drove purchasing decisions in the return to travel in 2021 remain—such as health and wellness, living locally and sustainably, and making ethical choices—but the ‘new traveler’ continues to evolve. Their economic concerns now outpace health concerns. Their tolerance for service disruptions has decreased. Their service expectations have increased exponentially. Their desire for a seamless end-to-end travel experience has increased. New segments, such as the digital nomad, “bleisure” traveler, and luxury leisure have made a mark on the industry. And the small and medium-sized enterprises (SMEs) returned faster than corporate business travelers.
- The weight of the world. It is no surprise that an industry that opens 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. Underlying any potential journey back to growth is the phenomenon of the Great Resignation. At a time when the industry needs its people more than ever to best serve its customers, it’s facing the challenge of a depleted workforce that are more reluctant than most to return to the “front lines.” The volatility will continue for a long, foreseeable future. Offering comprehensive training and upskilling programs is critical for the industry at-large, including hospitality, aviation and travel services companies.
- The readiness factor. Travel companies’ ability to drive growth—the speed at which they can move and how easily they can react to changing strategies and situations—depends on the readiness factor. Readiness is a function of companies’ strategic, operational and technological maturity. To be successful, travel companies need to infuse leading technology, data and AI into every part of the business to reinvent how they work, interact with customers and drive growth. We call this total enterprise reinvention, and we see it as the foundation of Travel’s next act. 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.
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Five areas to get back to growth
To embrace change and enhance the foundations for getting back to growth, companies must focus on these five specific areas:
- Recovery Strategy and Sustainable Growth. Continue to grow revenue without adding back cost by evolving the revenue model, operating margin streams and profit engine with an emphasis on sustainability and responsible business practices.
- Traveler Experience. Develop stellar experiences that regain customer confidence across the travel journey and bring together the travel ecosystem to create new retail products and services that drive revenue and loyalty.
- Data-Driven Travel Operations. Empower the enterprise with data-informed and intelligent technology to improve operations, sharpen responsiveness and enrich experiences for travelers.
- Workforce Excellence. Build an effective organization that is fit for purpose and cost-efficient to outmaneuver uncertainty while improving the overall experience of their employees.
- Technology Transformation & Cloud. Modernize the technology landscape to cloud-based future systems architecture by breaking down the silos to reduce costs, improve performance and boost resilience.
It’s time to grow
Realistically, it will be a challenge. 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.
Yes, leaders will continue to face difficult decisions amid continuing uncertainty. But by recognizing the dawn of the next travel adaptation, and accepting that this is the time, once again, to tap into their adaptive gene, they can build the future of Travel. And we have the experience, skills and passion to stand by their side and help them become heroes in their own journey. The time for stopgap solutions is over. The industry is already talking about where the next big disruption might come from, or what the agenda-shaping trends will be for the next decade, from subscription models to NFTs.
Leaders who can recognize important inflection points as the moment at which they need to flex their adaptive muscles once again can be reassured that they have conquered the mindset shift required to embrace change, take bold action, and lead their company forward on its journey to growth.
Today is the day to prepare for this next phase of “beyond”.