Navigating the Future: How Incorporating New Technology is Transforming Travel
Globe Thrivers is captivated by the report, "The Promise of Travel in the Age of AI," jointly published by McKinsey & Company and Skift Research, which delves into how technology is reshaping the travel industry. Let's uncover the key takeaways and the most fascinating insights it has to offer!
Living in the Digital Era
In the current digital era, it's evident that society is inseparable from digital devices, with technology seamlessly integrated into our daily lives. From the moment we wake up, our phones are a constant companion, delivering messages, Instagram likes, and the latest new trends. These devices have become an intrinsic part of our identity, reshaping how we connect with others and navigate our surroundings.
Since 2013, people have increased their time spent on devices by 70%
Unsurprisingly, individuals now turn to their trusted devices when planning their next dream vacation.
Embracing AI’s Role in Modern Travel
In recent years, the travel industry has witnessed a significant transformation, driven by groundbreaking technological advancements including:
Artificial Intelligence
GenAI
Machine Learning
Whether it's assisting travelers in crafting their dream getaways or ensuring a smooth journey, the travel industry is reshaping the future of travel.
Following Through with Your Promise
While traveling to a new destination is exhilarating, the journey often comes with stress, both in the lead-up and during the trip itself. Travelers frequently find themselves dealing with cancellations, poor customer service, lost belongings, and travel delays, turning what should be an enjoyable vacation into a source of frustration.
80% of American travelers experienced at least one travel-related problem.
For companies, the key to fostering customer loyalty lies in successfully bridging the gap between their promises and the real traveler experience through exceptional customer service. Yet, the integration of AI to help close this gap can be a challenging task.
Many companies allocate their IT budgets to managing outdated systems rather than investing in AI.
Companies are unaware that incorporating AI advancements can lead to a significant EBIT increase of 15-25%.
The Rising Investment in Travel Tech Startups
Investors are showing remarkable faith in the potential to redefine the travel industry, as they remain eager to invest substantial funds.
In 2021 alone, $11 billion was invested in the industry.
Their financial commitment signifies the belief investors hold in the industry's capacity for growth, even in the face of the challenges brought about by the COVID-19 pandemic. With such significant funding, all-sized companies can capitalize on an investor’s willingness to help their company succeed.
Recommendations at Consumer’s Fingertips
Today's travelers turn to various sources such as:
Web searches
TikTok's trendsetters
Influential travel bloggers
Instagram profiles
Pinterest boards
These sources are used to uncover not only the trendiest hotspots but also those hidden gems. Recent studies reflect the considerable influence of social media on the travel industry, with three-quarters of travelers agreeing that they've been inspired to visit specific destinations because of what they've seen on these platforms.
As a result of all the scrolling, a traveler's quest generates a great amount of data, a dream for companies seeking invaluable customer insights. With data at a company’s fingertips, consumer expectations for a personalized experience have skyrocketed. In this digital age, AI chatbots, powerful search engines, and the vast amount of social media data provide companies with the tools to understand what travelers expect and desire. Furthermore, it is becoming more common for companies to source third-party vendors, specifically MarTech companies, to separate valuable insights from the noise. These MarTech companies help by:
Analyzing the data and pinpointing the right segment for the product/service
Utilizing the segmentation pyramid to identify the company's "hyper-segmentation" group, enables the strategic use of various segmentations for different products
Hyper-segmentation in action: Crafting distinct marketing campaigns for specific segments
Steps after Sifting Through Data
Once MarTech companies assist in segment analysis, businesses shift their focus toward delivering value-added, personalized experiences to their customers. The key to this transformation lies in the realm of hyper-personalization, a concept that revolves around creating experiences that adapt in real-time to cater to individual needs, preferences, and behaviors. One standout example of this approach can be seen with Accor, a multinational hospitality group making substantial investments in this domain. Accor utilizes an AI-powered customer-relationship management (CRM) suite to tap into internal customer data, enabling highly detailed segmentation.
According to Accor's Chief Digital Officer, Alix Boulnois, their system encompasses more than 400 attributes, resulting in a significantly enhanced customer communication approach. Furthermore, she stated, “The revenues from our emails have been multiplied by three, just through this change.”
However, hyper-personalization comes with its set of challenges, primarily stemming from the fact that different individuals possess varying needs. Furthermore, the same customer may have diverse requirements depending on the nature of their trip.
Jetblue’s take- Jetblue relies on data-driven research. For travelers repeatedly using the same route, Jetblue employs hyper-personalization to enhance their experience. On the other hand, when a customer books a different route, the airline leverages insights from other users who have previously booked a similar journey.
This dynamic approach allows them to strike a balance between catering to individual preferences and adapting to various travel scenarios.
Communication with Consumers
Personalization isn't confined to the booking stage but extends across the entire journey, creating opportunities for deep connections with consumers. Timely and accurate communication, especially during travel difficulties, offers a chance to build lasting trust with travelers. The power of data-driven personalization allows companies to engage in ongoing conversations, delivering tailored messages during the moments when travelers face hardships. It's not just about transactions but about fostering customer loyalty. Continuous testing and learning are essential in this evolving landscape, such as:
Feedback cycles
A/B testing
After all, feedback is crucial to gain a following and loyal customer base. By leveraging customer feedback, companies will be able to provide not only tailored experiences but excellent customer service. Through feedback, a notable discovery was made.
73% of surveyed travelers expressed a high likelihood of returning to a hotel that fulfills their technological expectations.
Leveraging Technology with Your Workforce
To deliver the finest customer service, companies need to hire a workforce that understands the company's goals and mission. Since the COVID-19 pandemic, turnover rates have risen, and hiring the correct personnel is taking longer. However, thanks to technology, performance can be enhanced.
GenAI- increases workforce capacity, automating tasks and freeing employees to excel in customer interactions
Virtual Reality (VR) and augmented reality (AR)- increase employee confidence and satisfaction through immersive training experiences
Artificial Intelligence (AI)- promote constant improvement by using personalized coaching systems and training
Additionally, AI and Machine Learning have been utilized to create simulation models that can analyze different inputs and the probabilities of each output. These simulation models can also help with real-time adjustments to itineraries and decrease any chances of travel difficulties. With the ever-evolving technology, companies should use these advancements to create a delightful experience for the customer’s experience.
Conclusion
As outlined in the McKinsey & Company and Skift Research report, technology is rapidly reshaping the travel industry. To excel in delivering top-notch customer service and achieve peak performance, companies must leverage AI, GenAI, and Machine Learning. At Globe Thrivers, we're thrilled to be among the trailblazing companies revolutionizing and redefining the travel experience. Our mission is to create a global travel community where you can effortlessly save your inspirations, plan your trips, and earn rewards with the assistance of cutting-edge technologies.
