For the first time in the history of the travel industry, everything has come to a temporary halt globally. The pandemic has stopped all non-essential business and leisure travel.
While entertainment and retail can be consumed virtually, there is no online equivalent to travel yet. People have an innate need to travel and crave human connection. So, seeing the world come to a "ground stop" was an out of body experience for many in the industry.
Fortunately, there are some glimmers of hope emerging. We can already see travel coming back in some form and shape in certain parts of the world. In this evolving environment here are some key observations of where we are today:
Travel companies are expected to do more with less
Whether you are in the lodging, air, car, cruise, rail, activities, or restaurant business, we are all weathering the effects of the pandemic. But the impact is not the same across the board. The pandemic has created an existential crisis for small business owners and operators.
Larger companies are digging in for the long-haul, often meaning letting go or furloughing employees. Companies are learning on the fly how to engage their teams during a period of great uncertainty.
Although many travel companies have had to go through some necessary eliminations of redundancies in order to be learner and smarter in navigating the crisis, the industry still holds the belief that travel is resilient.
To prepare for the future of travel, we need to double down on the investments in technology - and in our people – with the ultimate goal of answering the question: how can we continue to delight, engage, rejuvenate & inspire our travellers.
Travel companies can no longer rely on traditional revenue management
Given the dynamic and unpredictable dance between supply and demand we are seeing today, traditional revenue management approaches that rely on historical data, established patterns, and inventory management tactics are no longer adequate.
If there was ever a case to be made for a future-proof approach to revenue management, relying on real-time market insights and future-looking demand insights that is accessible to all, it is now.
To build a future-proof travel industry, companies need to evolve into revenue performance - a practice that incorporates just-in-time insights, real-time alerts, and future-looking micro as well as macro demand indicators where commercial outcomes are predetermined and are in the context of the market.
Combined with scenario planning tactics, a cohesive commercial team that is measured and incentivized on shared goals, we believe revenue performance institutionalizes the agility that is much-needed during these times. While the planning cycles maybe longer, the execution periods required today to drive revenue performance are definitely shorter. Much shorter.
The travel industry is embarking on transformation
In the immediate aftermath of the pandemic, many of us have seen a shift in focus to domestic and local travel. As people emerged from lockdown and quarantine, the urge to travel took them to places closer to home.
National parks and local attractions surged in popularity as viable destinations for a population desperate to escape the confines of their homes. We satisfied our need to travel by boarding the flights to nowhere, experiencing travel, while going absolutely nowhere.
In the long term, we seem poised to break even more barriers to travel. What will travel look like with the Hyperloop? Is extra-terrestrial travel the ultimate leisure trip?
With the proliferation of 5G networks, will tech and travel be further intertwined by immersive augmented reality experiences of our favourite destinations? How will we evolve as an industry when all travel is discretionary, guest satisfaction is the only real measure of success, and travel is not dependent on or bound by the laws of physics?
What is required then is a reinvention of sorts, wherein the industry leaders and the traveler community collectively design the future of travel.
Are we there yet?
In an attempt to understand the ongoing impact of the pandemic, we asked ourselves: how can the hospitality and travel industry rebound? This is a snapshot of the learnings from our partner communities at Expedia Group and Salesforce.
For the purpose of clarity, we define guest intelligence and revenue performance as follows:
- Revenue performance - Maximizing demand and therefore revenue and profitability with the use of forward-looking market insights and demand indicators in the context of the market and competition.
- Guest intelligence - A comprehensive knowledge and understanding of guest spend patterns and preferences using an evolutionary approach that is enriched with incremental touchpoints. The objective is to leverage guest intelligence during physical and digital touchpoints to enhance pre-, post- and in-experiences, to achieve the overall goal of greater guest satisfaction.
We strongly believe in the need to converge the fields of guest intelligence and revenue performance. Traditionally these have operated in parallel, coexisting but not meeting. When market demand is on a growth trajectory, there is an abundance of financial resources, talent and historical insights.
But that is not the case now. With markets restarting in some parts of the world, businesses need to re-establish the baseline and revalidate assumptions in both revenue performance and guest intelligence. By converging the insights from guest intelligence and revenue performance, we can accelerate recovery.
So, how do we move towards a converged world of guest intelligence and revenue performance? Here are our thoughts:
1. Identify and engage your most dedicated subset of travellers
Past travelers who have been enthusiastic and loyal will be the first to return. This is assuming that no pandemic-driven barriers are in between. If they are, move on to the next set of dedicated travellers.
This is often the subset of travelers that is less likely to be price-sensitive and is more supportive of your business. So, dig deep into your guest intelligence data and reach out to your most frequent travelers, domestic, and cement those relationships.
2. Establish a "Learn from the Guest" mindset
With the current reduction in business, this is the perfect opportunity for your team to shine. Re-educate your team and reiterate the emphasis on guest preferences and personalization. A "Learn from the Guest" mindset means having meaningful connections with travelers to stay connected, even when they are not actively considering travel.
There are multiple options to engage travelers using destination content, property updates, and providing an "escape" from the work-from-home realities of today. Just because, travelers are not booked with you, does not mean that they do not crave engagement with brands that "get them".
3. Develop a high-performance commercial team and culture
We have to work to ensure guest intelligence & revenue performance insights are all-pervasive, all-inclusive. Reminding commercial teams to balance sustainable revenue strategy with guest centricity will ensure a longer-term recovery.
Having teams get timely and accurate guest intelligence and revenue performance insights is a good first step. Making sure that it is actionable and embedded in day-to-day decision-making is the ultimate goal.
4. Revenue performance is everyone's responsibility
Revenue performance and guest intelligence are two sides of the same coin. Neither can function in a vacuum. When the entire team comes together around the shared goals of guest satisfaction and revenue maximization, it transcends the function and becomes a part of the organization's DNA.
5. Focusing on the now, while preparing for the future
This is the reality for many businesses in travel. In the absence of relevant historical data and market insights, the best that anyone can do is focus on optimizing the right now, today, this week.
As mentioned earlier, the planning cycles and scenario planning cycles need to get longer while the execution periods get shorter. We all need to approach each day and every traveller interaction as an opportunity to inspire and excite.
Conclusion
Recovery from the impact of Covid-19 is unpredictable and may take longer than we would like. But we have an opportunity to design what that recovery looks like and manage the impact.
This is within reach and in our hands. The question is who among us will stay focused, execute with confidence, and stay obsessed with the traveler, to come out stronger on the other side.
Does this describe your team?