Digital maturity in the Travel and Hospitality sector
The travel sector was among the early adopters of digital technology, ensuring it could meet the needs of tech-smart and social-media-savvy travelers. The disruption arising from digital-only companies such as online travel agencies, along with the “sharing” economy (think Uber, Airbnb), mean travel companies need to evolve their digital offerings continually to adapt to frequent changes.
In this series analysing the new Adobe report, Four Essentials Elements for Digital Maturity (2016), I recently looked at the retail industry, comparing players that were born digital with traditional bricks-and-mortar retailers. In the travel and hospitality industry there is similarly a vast difference between online and offline businesses – particularly in the airline sector, where the traditional players may have been slow to start, but some are now leading digital disruptors.
The Adobe report highlights four foundational areas for digital maturity: data-driven marketing, customer experience, mobile, and cross-channel marketing.
Adobe and Econsultancy also released a joint report, Digital Trends in the Travel and Hospitality Sector, in December 2015, substantiating the industry’s maturity.
• More than a third of companies (35%) in this sector classify themselves as “digital disruptors”, and a further 48% describe their organisations as “fast followers”. Companies in Europe are more likely to feel threatened by digital than their counterparts in North America.
• The sector as a whole has made good progress in the journey to digital maturity, with 43% of respondents saying their organisations have a “central, integrated function dedicated to digital transformation”.
There are many parallels between the travel and hospitality sector and the four foundational areas for digital maturity.
Travel companies seek to differentiate through their customer experience, especially by blending the physical and digital worlds. Of the companies surveyed, the top priority was growing the traveller or guest base, with customer experience a key focus area for customer acquisition and retention.
• “Customer experience” is the area where companies are most likely to be focused in the context of developing their digital capabilities over the next 12 months.
• More than a third (38%) of responding companies say they are committed to the use of digital at their physical locations while a further 26% say they have carried out pilots.
Of course travellers widely use their mobile devices to connect online and offline experiences seamlessly; for example, they can use a QR code on their mobile device as an airline boarding pass. Travel companies have really grasped the importance of mobile and we’ve seen a stronger focus on this than in any other industry.
• Respondents are most likely to say that mobile’s most important function is for customer service, though it also plays a vital role in driving both acquisition and customer loyalty, as well as in operational fulfilment.
• 41% of companies agree that they are “mobile-first” organisations, and almost two-thirds (63%) say that they have budgets specifically allocated to mobile experimentation over the next 12 months.
Data-driven, cross-channel marketing
The travel industry, especially airlines, often operate on razor-thin margins. So any opportunity to better understand the customer or provide a better service, upsell, cross-sell or add an ancillary product is an opportunity to increase that margin. Strong data analytics strategies permeate this industry so it can pinpoint where the customer is in their digital journey and provide them with the right information at the right time in the right context, irrespective of channel.
• Three-quarters (75%) of responding companies say they have a data analytics strategy, but a significant proportion (44%) of these say that this strategy isn’t multichannel. Companies in North America are more likely to have a data analytics strategy.
• The vast majority of companies (82%) say they are attempting to build a 360-degree view of customers in order to communicate to them more effectively.
The travel sector is a leader in digital maturity and I invite you to download the new Adobe report, Four Essentials Elements for Digital Maturity, for more detail and in-depth analysis. I also encourage you to join conversation and share your perspective: @rigbyscott