The Push Toward Fully Aligned Journeys in the Travel and Hospitality Industry Customer Experience in 2017, Part 2

Customer Experience

It wasn’t so long ago that hotels held con­trol of the book­ing process. But those days are over. Today’s trav­eller won’t even con­sid­er click­ing the “book” but­ton until they’ve com­pared prices through online trav­el agents (OTAs) like Kayak and Tri­pAd­vi­sor, and per­haps even inves­ti­gat­ed non-hotel options like Airbnb and HomeAway.

With OTAs mak­ing up the lion’s share of book­ings, many trav­el brands are push­ing to move away from that dis­tri­b­u­tion chan­nel. Only a few brands, such as South­west Air­lines, have made that leap suc­cess­ful­ly; while Mar­riott and Hilton both devel­oped major cam­paigns in 2016 to dri­ve cus­tomers to book direct. At the same time, inde­pen­dent bed-and-break­fasts had to slash their rates to com­pete with peer-to-peer room rental ser­vices. Since these brands can no longer com­pete on the basis of price, they’ll have to find new ways of dif­fer­en­ti­at­ing them­selves in terms of cus­tomer experience.

To find out how top hotels and oth­er trav­el and hos­pi­tal­i­ty brands plan to set their cus­tomer expe­ri­ences apart from the crowd in 2017, I sat down with Julie Hoff­mann, Adobe’s head of indus­try strat­e­gy for the trav­el and hos­pi­tal­i­ty ver­ti­cal, for part two of this five-part series on cus­tomer expe­ri­ence in 2017.

Julie is a data-dri­ven mar­keter with more than 18 years of expe­ri­ence in the areas of e‑commerce, dig­i­tal mar­ket­ing, and cus­tomer loy­al­ty. Pri­or to her time at Adobe, she served as exec­u­tive direc­tor of dig­i­tal and con­sumer expe­ri­ence for MGM Resorts Inter­na­tion­al, where she over­saw the launch of the hotel chain’s dig­i­tal mar­ket­ing plat­form, led mar­ket-based research to define the brand’s cus­tomer jour­ney, and devel­oped the company’s roadmap for mobile appli­ca­tion marketing.

JB: Julie, how do you define cus­tomer expe­ri­ence in the trav­el and hos­pi­tal­i­ty industry?

JH: That def­i­n­i­tion is real­ly evolv­ing late­ly! For all brands in trav­el, cus­tomer expe­ri­ence is not new as the indus­try is designed to co-cre­ate amaz­ing expe­ri­ences that enrich lives. Trav­el is about mak­ing expe­ri­ences that will last a life­time. Broad­ly, it’s every­thing the cus­tomer touch­es and inter­acts with, whether a dig­i­tal chan­nel or a phys­i­cal, along their entire jour­ney. I’d define it not only as the guest’s expe­ri­ence at the air­port, the hotel, and the des­ti­na­tion, but also the ways in which the customer’s behav­iour on mobile and oth­er chan­nels inte­grates into their expe­ri­ence in those phys­i­cal locations.

JB: Yes, I’ve been hear­ing the word “phy­gi­tal” to describe a sort of inte­gra­tion between dig­i­tal data and phys­i­cal loca­tions, like air­ports and hotels.

JH: Absolute­ly, but only 38 per­cent of trav­el brands have said they’re com­mit­ted to that lev­el of inte­gra­tion, and only 26 per­cent have actu­al­ly car­ried out tests. In a lot of ways, the data that trav­el brands gath­er from dif­fer­ent sources remains unconnected—isolated by depart­ment and loca­tion. That real­ly needs to change if these brands are going to com­pete effectively.

JB: And that data dis­con­nect isn’t the only big chal­lenge for large trav­el brands. I’ve been hear­ing a lot about dis­rup­tion on the part of OTAs like Kayak, which have tak­en a big bite out of hotels’ prof­its. Are the big chains still fight­ing this, or are they look­ing for ways to work around it?

JH: Over the past year, espe­cial­ly, I’ve seen a lot more trav­el and hos­pi­tal­i­ty brands begin to accept this new real­i­ty, and look for oth­er ways to dif­fer­en­ti­ate them­selves as sup­ply increas­es and book­ing func­tions for dis­tri­b­u­tion con­tin­ue to expand. In fact, 56 per­cent of trav­el brands say guest expe­ri­ence is the pri­ma­ry way they’ll seek to dif­fer­en­ti­ate them­selves in 2017. When guests book a hotel room, they’re not only pay­ing for the room, they’re also pay­ing for a jour­ney that will unlock new expe­ri­ences that shape their per­spec­tive even when they head back home. Con­se­quent­ly, a grow­ing num­ber of hotels are widen­ing their scope and pro­vid­ing local­i­sa­tion of ser­vices dur­ing their vis­it, part­ner­ing not just with OTAs, but also with restau­rants, enter­tain­ment venues, and oth­er attrac­tions. Through this they are able to pro­vide each guest with a vaca­tion or busi­ness trip that’s ful­ly aligned around that individual’s desires.

JB: It sounds like these two issues—disconnected guest data and dis­rup­tion by OTAs—may be more close­ly linked than they seem. OTAs have been so suc­cess­ful because they inte­grate data from huge num­bers of hotels, air­lines, and venues to pro­vide all guests with exact­ly the expe­ri­ence they’re look­ing for. If hotels and oth­er trav­el brands want to set them­selves apart on the basis of guest expe­ri­ence, they’ll need to bring all their guest data togeth­er, and look for pat­terns that pre­dict exact­ly what a par­tic­u­lar guest will want.

JH: Exact­ly! In my pre­vi­ous role in Trav­el & Hos­pi­tal­i­ty for two of the largest brands in Las Vegas, it was clear that OTAs had clear­er lens­es on the con­cept of the holis­tic jour­ney. As of today, no one can tele­port straight to their des­ti­na­tion and their home away from home– and OTAs have expressed an under­stand­ing of this fact, with the breadth of their offer­ings. How­ev­er, hotels and air­lines have a wealth of first-par­ty data on their repeat guests—data that no one else has. That info can pro­vide a major com­pet­i­tive advan­tage for any brand that can bring it all togeth­er, crunch the num­bers, and sur­prise and delight guests with per­son­alised expe­ri­ences they didn’t even expect.

JB: Like a sort of per­son­al concierge for every sin­gle guest. Are there any trav­el brands that have actu­al­ly achieved this—brought all this data togeth­er and used it to sur­prise guests with tai­lored experiences?

JH: Princess Cruis­es recent­ly faced the chal­lenge of empow­er­ing a vari­ety of dif­fer­ent teams to share data. The com­pa­ny used a data man­age­ment plat­form (DMP) to inte­grate data col­lect­ed by a wide range of dif­fer­ent sources, includ­ing email and onsite, to iden­ti­fy spe­cif­ic guests and cre­ate deep, uni­fied pro­files of each of them. Princess used these insights to avoid tar­get­ing guests who had already booked a cruise, to gen­er­ate ide­al ads and con­tent tar­get­ed at indi­vid­u­als who hadn’t yet booked, and to scale out its address­able audi­ences. The results were strik­ing: a 65 per­cent sav­ings in cost per land­ing page, across all its prop­er­ties, and a 300 per­cent increase in iden­ti­fi­able audience.

JB: Is Princess just way ahead of the pack on this, or are any oth­er trav­el brands doing some­thing similar?

JH: We’re see­ing a huge dri­ve to improve mobile expe­ri­ence right now. We know that 71 per­cent of trav­el cus­tomers use mobile devices to check itin­er­aries, while 64 per­cent use mobile to check into flights, and 49 per­cent use it to check into hotels. Recent­ly, Mar­riott shared at the North Amer­i­can Adobe Sum­mit that it’s achieved $1.7B in sales on its mobile sites and mobile app, and has seen 70 per­cent growth again this year. More hotels and air­lines have also begun tak­ing mobile seri­ous­ly as a core com­po­nent of their book­ing sys­tems. For exam­ple, Motel 6 recent­ly brought all its book­ing sys­tems togeth­er onto a sin­gle dig­i­tal plat­form, mak­ing sure room prices are updat­ed in real time, accord­ing to demand, across all phys­i­cal locations—as well as on the web­site and mobile app. As a result, the chain saw a 20 per­cent lift in macro­con­ver­sion rates.

JB: Inter­est­ing that such a small change pro­duced such an imme­di­ate lift in revenue.

JH: It’s strik­ing, isn’t it? Lufthansa/Eurowings recent­ly did some­thing sim­i­lar. The air­lines inte­grat­ed its reser­va­tion and tick­et­ing sys­tem into every page of its web­site, and broad­ened the range of ways in which cus­tomers can book. That seem­ing­ly small change net­ted the com­pa­ny a two-point lift in macro­con­ver­sion rates. We’re see­ing a lot of small steps in the right direc­tion right now, and as more hotels and air­lines see the val­ue of bring­ing their data togeth­er, we expect to see these expe­ri­ences become more inte­grat­ed across dig­i­tal and phys­i­cal touchpoints.

JB: I hope we’ll soon see more hotels and oth­er trav­el brands bring­ing their data togeth­er on a larg­er scale. Thanks for join­ing me today, Julie.

Join me next time, when I’ll be inter­view­ing Adobe’s FSI expert about how finan­cial ser­vice com­pa­nies can dif­fer­en­ti­ate them­selves in 2017.

Customer Experience
Jamie Brighton

Posted on 04-24-2017

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