An environment of disruptive technologies has made business difficult and competition tense for a variety of organizations, and brands operating in the travel industry are no different. The question of how to maintain an edge in this environment is top of mind for hotels, airlines, and transportation brands. Customers want the most convenient services, the best rewards, and the most engaging experiences, and they won’t consider a brand that doesn’t offer something unique.
Brands must adapt to these changing customer habits. Just over twenty years ago, before the advent of the Internet and mobile technology, customers had limited access to brand information and competitive options. Now, though, the speed of communication offered by such technologies has made customers more informed about their choices than they ever have been before. They also expect engagements to occur when and how they want, to receive relevant suggestions, and to navigate their purchase experiences on the go.
The issue of how to tackle this disruptive environment seems like a challenge in and of itself. How should a brand reach out to its customers? Push marketing, email alerts, text messages? When those questions are decided, more arise. How do brands personalize so that customers receive relevant offers? What methods should brands use to determine which targeting strategies will appeal to which customers? The choices brands face, each of which could go right or wrong depending on how brands react, seem endless.
On top of these questions, travel brands must meet the challenges that are specific to their industry. To help organizations across a range of trades identify and adapt to the obstacles presented by a disruptive environment and changing customers, Loyalty360 speaks with senior-level marketing representatives from a range of industries to establish best practices. In one of our recent discussions with such representatives, we noticed several challenges that are specific to travel brands. We also identified other challenges that are common across industries but which travel brands have to navigate in specific ways.
The travel-specific challenges include communicating the importance of the services that travel brands offer, increasing the accessibility of travel experiences, and figuring out how to maintain travel-brand transparency. The common challenges include personalization, using mobile technology effectively, and evaluating the potential disruptive effects of new technologies as they appear. Here, we present an overview of these challenges and the quotes from brand representatives that led to this overview.
One: Communicating Services
The travel industry encompasses a variety of services and products. Airlines, buses, and trains provide transportation, while hotels and resorts give people a place to stay during business trips and vacations. Cruise lines, interestingly, offer both transportation and housing in one experience. Because of the multifaceted nature of the travel industry, brands need to differentiate their services from both those of competitors and those of non-competitive but ancillary organizations. A cruise line, for example, may need to indicate to customers that, though it is not technically a hotel service, it offers overnight housing in most contexts. Such differentiation can be extremely beneficial, since it enables customers to make better decisions about the type of experience they want. This, in turn, leads to customer satisfaction and improved brand loyalty.
Matthew Hardison, Chief, Sales Distribution & Customer Service | Amtrak: Amtrak is inherently a challenger brand because we are unique in the market. We are in a competitive marketplace. We are competing with cars, buses, and airplanes, but we are unique in that we are a rail service opportunity. The key things that we face are the needs to be able to communicate the services that we offer, the value that we offer, and the onboard amenities that we offer because they are all unique to rail.
To read the full article with Matthew, click here.
Two: Increasing Accessibility
One of the major issues facing customers when they choose to travel is accessibility. Planning for vacations, which are meant to be relaxing and fun, can cause anxiety and stress about expenses and time requirements. For this reason, travel brands need to make their services as accessible as possible. They need to make sure that they have a presence in most, if not all, regions, and that their locations are easy to find. In addition, they need to accommodate larger parties, as more and more customers are choosing to travel in big groups. To create this kind of flexibility, travel brands may need to consider operating in new locations where competitors haven’t established a presence, offering extended service hours, providing package deals, and partnering with non-competitors to gain an edge over other brands.
Christine Duffy, President | Carnival Cruise Line: We really don’t see other cruise lines as our competition as much as we see land-based vacation choices. So for us, it’s how we deploy our fleet. Right now, 50 percent of the population can drive to a Carnival Cruise vacation in six hours or less. One of the big trends in travel is more and more people are traveling with families or extended families, so the idea that I can drive to my Carnival cruise, I can save money and save the hassle and that makes it pretty compelling. We’ve got ships in places that are outside of traditional cruise port cities. Of course, we have ships in Miami and South Florida, but we also have ships in Galveston, Jacksonville, New Orleans, Charleston, Tampa, Baltimore and Long Beach. It’s about delivering value and access and making our cruises accessible that has made us a disrupter for people who might otherwise get in the car and drive to a local beach town or other land-based resort.
To read the full article with Christine, click here.
Three: Creating Transparency
Because customers have access to almost any kind of information they can think to look for, they are very attuned to a brand’s integrity, or lack of it. Customers can see from online reviews, social media, and fact-based reports if brands are acting in honest, ethical ways. For this reason, travel brands need to be as transparent as possible. For example, if a negative hotel review appears, that hotel should acknowledge the problems the reviewer experienced, apologize, and seek to correct them. The reason to do so isn’t just to take responsibility for a fault. It’s also an excellent opportunity for a brand to turn a negative scenario into a positive, revenue-generating one. When customers see that a hotel or an airline fixes a problem, they will think of that brand as more trustworthy and will be more likely to use its services. It can also increase the possibility of retaining a customer it would have otherwise lost.
Lauren Davis, Director of Brand Strategy and Client Experience | Delta Private Jets: Our industry has certainly had an interesting couple of years. We’ve certainly had disruptors come into the industry, forcing everyone to think a little bit differently. What it also brings with it is transparency issues. As a marketer, I find the lack of transparency to be one of the greatest challenges in our industry. A lot of money can buy you a lot of great messages, but are they really delivering that behind the scenes? I think we’ve seen that in some of the disruptors that have entered our space in the past couple of years. To deal with that, the key for us is being truly grounded in who we are and what we have to offer that is so unique—that commercial/private air travel component. What we are doing is thinking about different ways to create that value add for our customers but making sure we keep our four pillars the focus of everything we do. Safety really is key. Is that really what our disruptors have done? Again, we don’t have transparency to that, so I think we focus on being that real customer-centric company and we are working continuously on those value adds that put us in a unique spot against our competition.
To read the full article with Lauren, click here.
Four: Personalizing Offers
Most brands are aware that customers have come to expect, well, pretty much everything they want. They don’t tolerate standard experiences and products anymore. For example, now that Amazon Prime provides free, two-day shipping on most items, customers will often not buy a product from any brand if shipping time is the standard four or five business days. This requires that brands personalize, that they offer customers services and merchandise specific to their needs and desires. In the travel industry, personalization is even more difficult, because housing and transportation services must necessarily operate on a mass scale. A hotel can’t function with only two or three rooms, nor can airplanes fly only a handful of passengers. So, travel brands have to figure out ways to meet the individual needs of their customers while they simultaneously cater to a wide base. This means offering a range of services and designing those ranges based on the kinds of things customers want. For the frequent traveler, a hotel might need to provide homestyle amenities that an occasional traveler doesn’t need. At the same time, the hotel must provide infrequent travelers experiences with which they will be happy.
Mark Weinstein, Senior Vice President & Global Head of Loyalty and Partnerships | Hilton Worldwide: I think about disruption a lot, and here is the thing: life is a disruptor. People’s preferences change, and what is fascinating for us the way you experience all brands is changing. If you look at a three-year-old kid who picks up an iPad and knows how to use it, that is certainly changing the landscape of how customers want to interact with their favorite brands and experiences. For us, it is making sure that we understand consumer preferences and deliver those experiences. It’s also just as much about disrupting our own brand. We are an industry leader and we have been an industry leader for over 97 years. We have always been disrupting what is normal and what is expected in a hotel. While there are definitely market forces in play at any given time, our biggest opportunity is to disrupt ourselves to push the limit, to reinvent, to challenge our customer to expect more, to look for more, and to experience more at our hotels. While the world is definitely changing and technology is rapidly evolving, for us the biggest opportunity is to disrupt ourselves and the incredible brands that we have today, and we have a lot of exciting stuff on the horizon for the future combining brands and technology to ultimately deliver a loyalty experience back to our guests.
To read the full article with Mark, click here.
Five: Competing Through Mobile
Mobile technology has given customers on-the-go access to an infinite amount of information. They can see brands in the area, compare prices between them, make reservations, and write reviews, all while they’re sitting in their cars, hanging out in a lobby or waiting room, or eating a restaurant. Because of this, brands need to have a mobile presence, and this presence is more important, probably much more, than having a website that can be viewed from a desktop. Brands need to have engaging applications, websites that are easily viewable on small-screen devices, and friendly interfaces that people can operate on touchscreens. For travel brands, having a mobile presence may be of greater benefit than in any other industry. Travel customers are always on-the-go, and so they require access to brand information and services through mobile devices. Thus, differentiating from competitors through an enhanced mobile presence can really give a travel brand an edge.
Noah Brodsky, VP of Global Partnerships | Wyndham Rewards: It is an evolving marketplace out there, and I think the players that are in it today won’t necessarily even be the ones that we will be talking about in a few years as it continues to change. It certainly doesn’t feel like we’ve settled yet, and so at Wyndham we are keeping a really close eye on everything that is going on. We are competing where we think it is appropriate, such as with a great app and fantastic new mobile websites, and we are continuing to watch where we don’t think the dust is settled yet.
To read the full article with Noah, click here.
Six: Evaluating Disruptions
Technology has proliferated since the mid 90’s when the Internet and mobile phones became commonly available. Each year, thousands of new devices and platforms appear, and the sheer number of them makes evaluating potential disruption difficult. An application may get released that people flock to, and it totally upends businesses focused on a now outdated model. On the other hand, a platform may come out and, after an initial surge, it quiets down and takes up a consistent but small portion of a given market. Because of this variability, travel brands need to anticipate changes to their industry, determine how those changes will affect them, and act accordingly. If a new way of finding nightly accommodations comes on the scene, such as Airbnb, then competitors (hotel brands) will have to shift a little bit while realizing that they’re not going out of business. Alternatively, if teleportation is invented and made inexpensive, then airlines and automobile companies will need to divest their stocks right away to get a share in the new technology. Normally, of course, such an extreme won’t occur, but travel brands still need to be prepared.
Tammy Lucas, VP of Marketing | Best Western Hotels & Resorts: I’m sure you saw one of the articles that came out that said despite the fact that they have been one of the fastest-growing companies, hotel brands have still seen strong occupancy and ADR, so [Airbnb hasn’t] been impacting them. I think for us, what we like to do is approach it more in a partner relationship, very similar to what we have done in the OTA space. You can’t force your customer to book with you. You can give them the reasons why they should. You can make it simple for them. But at the end of the day, we’re all customers. Nobody forces us to do anything, maybe our bosses, you know what I mean? Nobody forces us to do anything. We make our own decisions, and we make our own choices, so as a brand we need to be keeping an eye on the disruptors and watching what they’re doing and evaluating the impact that it’s making on our business. But again, we have to stay very focused on what it is, who we are as a brand and what it is that we’re trying to accomplish.
To read the full article with Tammy, click here.
Conclusion
Disruptive technologies have changed customer expectations. The Internet and mobile devices have provided rapid access to information from any location. For this reason, customers are more informed about their choices and have greater awareness of competing brands. Thus, they demand more convenience, a greater range of services, and unique experiences. To maintain an edge, travel brands need to communicate their services in an effective manner, increase the accessibility of their services, and make sure that customers see them as honest and credible. In addition, they need to make sure that they offer personalized experiences, have a robust mobile presence, and evaluate the potential disruption of emerging platforms and applications. Loyalty360 has seen that the brands that take advantage of these opportunities tend to be more successful.
This article is derived from a larger feature on how and why customers are changing across all industries. To view it, please click here.