Study Unveils Secret Recipe To Booming Travel Business
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Millennials will soon outspend any other generation before them on travel.
That is just one thing we learned from poring over data in Mindtree’s latest study as well as speaking with the extremely insightful North America Head — Travel & Hospitality at Mindtree, Karthik Balasubramanian.
But it’s not exactly important that we glean a great deal from the immersive study on global travel trends. In fact, travel brands and businesses are the entities that would do extremely well to dive into the report on marketplace personalization and consumer expectations.
It will open your eyes to how the market is situated and what you may be doing or not doing to attract customers.
Now before we get too far along in the study, which explains that personalization is a huge deal for consumers —although you wouldn’t know it by some of the statistics on how many firms employ the practice — we do want to get a peek at an infographic that does a fine job of laying out what is at the heart of the study.
The above graphic as well as the study, sheds some startling light on how effective personalization can be for the travel market.
The study states: “Consumers indicate that personalized promotions encourage them to buy products and services they have purchased before (78 percent), as well as relevant products and services they have never purchased (74 percent).”
Those are extremely promising numbers that would lend credence to going above and beyond to catering to the potential consumer in this way.
However, there is much work to be done as Mindtree follows this by stating: “Only 28 percent of the decision makers from companies surveyed globally say their organizations are investing significantly in personalization to improve the online purchasing experience.”
What we gleaned from the data is that many in the industry want to believe they are leading the charge, but there are major discrepancies in what is being offered online.
We managed to get some words of wisdom from Balasubramanian who spoke to such things as millennial and business travel trends as well as the importance of personalization.
TravelPulse: Across the travel industry, which companies and brands are doing the most to personalize their relationship with the consumer?
Karthik Balasubramanian: The ones taking the lead seem to be the airline and hotel industries followed closely by cruise liners, resorts, and timeshares in no particular order.
There are three levels of personalization to start with — Customer level (someone who regularly uses the firm’s services), Consumer level (someone who has consumed services in the past and likely to consume it in future), friends & families (family and friends of Customer and Consumer).
Most organizations in the travel industry are working on entry level of personalizing services for the their loyal customers first. For instance, the leading hotel chains and airlines already do the first level of customer personalization, which is based on self-reported attributes like what kind of pillow would you like, what floor do you want to be on and how much time it would take to get to the airport from your current place etc.
TP: What innovation, if any, do you see on the rise in the travel marketplace that would garner the most brand loyalty and consumption?
KB: We have seen that innovation in the following two areas garner a huge degree interest that we think would drive consumption and loyalty,
a. Personalization in the area of building “sense the need and respond with a service” business use cases. This enhances a brand’s image as an innovative, proactive and caring brand which automatically has a direct bearing on customer satisfaction and loyalty.
b. Mobile enablement and Self Service where the customer is able to see the services catalog order and consume services seamlessly. Just the convenience and the speed to service is a major factor.
TP: What trends are you seeing in the travel marketplace among millennials? Business travelers?
KB: Almost everything about millennials is exciting and new, throwing open a plethora of opportunities for the industry. In a few short years, we expect millennials to spend more on travel than any generation before them. As they move into their prime earning age, they are also likely to travel even more and spend even more per travel. Personalization, customization and "one click service" are key decision factors for service selection by the millennials. Impact of social media is probably the highest with millennials. Most millennials are active on social media on a daily basis and are more likely to not only post their experiences but also seek suggestions from their social circle on travel choices.
When it comes to the business traveler, the lines between business and leisure is rapidly blurring and business travelers seem to like an opportunity to explore more even when they travel on business. Business travelers are also looking for every opportunity to be more productive and be able to network during their travel.
TP: It seems like a great deal of companies benefit from personalization but don't see the value in making it a key part of their consumer experience. How might this trend remedy itself?
KB: Personalization has two major benefits in our view. The first one is to generate ancillary revenues. These are special class of revenues because the margins are typically much higher than the low single digit margins the industry is used to.
The second one is to improve customer satisfaction by providing relevant services, which otherwise the customer would search for and consume on their own. We see that the first and second aspects are very closely woven together and inseparable in many ways.
Take the example of a leisure traveler staying in a hotel and via the personalization efforts the hotel knows that this customer enjoys spa services and hence pushes the typically underutilized spa service as a discounted service. If the customer consumes it, the hotel would have generated good quality ancillary revenue at a high margin and at the same time, the customer enjoys the convenience of getting the service in the place of stay at a discounted rate!
So, personalization business use cases such as the above are already beginning to remedy and address the customer satisfaction part along with ancillary revenues.
TP: Are there any other things you think our readers might like to know.
KB: At Mindtree we are investing in building a personalization platform for the travel industry. We also realized, through experience, that implementing personalization services also mean the underlying legacy IT infrastructure should be able to scale up to support personalization efforts. We enable this through our "API-1" approach wherein we drive digital modular transformation efforts to add personalization capabilities end to end.
A new generation is inching towards having the funds to really make a huge impact on the travel marketplace.
They come with an expectation that their brands will not only be personalized and easy but they will be mobile. For those slowly maneuvering to address this demand it’s time you put things into top gear, because business is booming for those willing to innovate.
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