By Sandeep Bhasin, VP, Software Engineering, Sabre GCC, Bengaluru
It is rare to meet someone who does not like to travel. Everyone who travels has a different purpose and need. However, the travel ecosystem largely treats all travelers with the same lens. Unable to understand their individual needs, the industry fails to provide relevant & customized offers that help travelers reach their travel goals.
The global travel retail market is projected to generate $225,663.8 million in revenue from 2022 to 2031 at a CAGR of 16.0%, shows a recent report. One of the main elements fostering a favorable view of the market is the significant global growth of the travel industry.
Imagine someone who spends his wedding anniversary with his wife and children in the Maldives, every year. To plan his travel, he will look out for holiday itineraries, OTAs, etc., online for which he will start receiving offers from multiple airlines. The airline recognizes this behavior and reaches out to potential customers with a good ticket offer that includes baggage, seating together on the flight, pick-up drop, along with some delightful hotel room options that cater to a family of four, plus a potential upgrade.
Wouldn’t we all love this kind of travel purchase experience?
Personalization of travel retail experiences creates a win-win situation for the traveler and suppliers like airlines and hotels. In the wake of the pandemic, airlines and hotels are looking at increasing their revenue. It is increasingly challenging to distinguish offers from their competitors. While airfares have come under significant pressure in the last several years due to competition from low-cost carriers, the revenue from the ancillaries or the
add-ons like meals, Wi-Fi, etc., has seen a significant rise. However, not all ancillaries make sense for all travelers.
It is important to consider factors like leisure vs business travel, the number of travelers, the type of travel whether it’s a group, family, or solo trip, the trip duration, etc., when presenting and pricing an offer that is likely to be purchased by the traveler. Airlines and agencies must learn from non-travel retailers about providing individualized content for the customer and employ much more sophisticated retailing strategies.
Applying Artificial Intelligence/ Machine Learning (AI/ML) to the vast amount of travel ecosystem data helps derive the right offer for the right customer at the right time and price. It is imperative for business leaders to make optimum utilization of the technological resources and understand their market and competitors, and comprehend which offers would work and which would not. Airlines, hotels, and travel agencies, which successfully adopt this strategy, stand a better chance of building customer loyalty, increasing their profit margins, and delighting travelers.
The importance of data is crucial. When we think of personalization, many of us worry about our data being used for unintended purposes. Throughout the visitor journey, a growing number of touchpoints must be monitored. Modern cloud-based software and storage enable hotel organizations to utilize data in cost-effective, adaptable, secure, scalable, and privacy-compliant manners. Governments and regulations are also extremely sensitive to the usage of consumer data. Technology suppliers must show a lot of responsibility in treating customer data and ensuring its safety while creating a fair marketplace irrespective of who buys from them. As this is a relatively new retail experience in the travel space, it will take some time to build trust. However, once a customer develops a relationship of trust with a company, it is anticipated that they will remain loyal to that brand for a long.
For this reason, establishing trust should be the top priority for vendors aiming to offer specialized retail experiences. Over the next few years, the retail experience for travelers is expected to undergo significant transformation using personalization and AI/ML techniques. The airline, airport, and hotel experiences during travel will have to evolve to present offers that match the purchase experiences.
This will in turn ensure that our travel experiences are as evolved and personalized as our other retail experiences, in this digital and online world. In light of the aforementioned, travel organizations should be more enthusiastic about the prospects that lie ahead in terms of providing customers with even more personalized experiences.