Travel Brands Venture Beyond The Transaction
Travel planning and purchasing experiences have effectively been digitalised. Businesses are now shifting their attention to engaging with customers while they are on their journey.
by Angela Rumsey
Posted on 08-22-2017
This article is part of our August series on travel and hospitality. Click here for more.
Although half of travel bookings continue to be made offline, travel is arguably one of the most advanced sectors when it comes to digital transformation. By 2020, Euromonitor International predicts 44% of travel sales and bookings will be transacted online, whether via web or increasingly by mobile, placing the industry well ahead of retail, for example, where digital commerce will account for just 11%.
At a time when consumers prioritise and crave unique experiences, it’s unsurprising they have embraced online travel agents (OTAs) to make their own travel arrangements. In turn, OTAs, airlines, and hotels have digitally upgraded their digital research and booking journeys to more seamlessly meet their customers’ needs.
But with the inspiration, planning, and purchasing customer experiences effectively digitalised—as well as pre-trip spend—travel businesses are shifting their attention and digital efforts to what happens after a booking is made. “Brands are looking to engage more with their customers, and it’s when they’re travelling that those customers are most engaged,” Otto Rosenberger, CMO of Hostelworld, said. “If you’re only a transactional travel brand, those people are only engaged when booking.”
With that in mind, many travel players, including Hostelworld, are positioning themselves for a larger share of consumers’ in-trip digital travel experience, and spend, and looking beyond the purely transactional for new revenue streams and greater engagement.
With smartphone data roaming charges having been lifted in the E.U. this summer, new opportunities are emerging for marketers to engage with customers in-trip. As traveller connectivity expands, travel app usage is increasing. According to App Annie, worldwide consumer downloads of travel apps rose by 20% last year and usage is more than doubling in some markets.
“We’re seeing a real shift among travel apps and innovation, allowing customers to be at the centre of their own experiences and allowing travel companies to help them wherever they are, while building loyalty,” Bertrand Salord, senior director of marketing for App Annie EMEA, said.
Such innovations include those from airlines and airports sharing real-time information on flight delays and gate numbers to smooth travellers’ ways through stressful transit journeys, and hotels rolling out digital check-in, room selection, and use of the smartphone as room key such as Hilton’s recently launched Digital Keys app.
Breaking through its transactional layer and becoming a trip companion has been the primary driver of Hostelworld’s digital transformation journey as it looks to meet the needs of its young, often solo traveller customer who is on the road for a long time.
Research showed these customers are more interested in a great social travel experience over a great booking experience, according to Rosenberger. “We found that the bed is the least important part,” he said. “It’s about a local and authentic experience, so we looked at how that could help our customers to engage and what services we could offer.”
In response, Hostelworld shifted product focus to its app with native development teams for both iOS and Android, and launched the MyTrips area in March 2016. Functions include basics such as booking confirmations, but also a front-end experience that switches to content on local attractions and places to eat when its customers are travelling. Rosenberger says around 45% of customers have now interacted with the app, and more than 90% say they had a better experience from doing so.
This year, Hostelworld stepped up its aim to connect customers with the social aspect of travel by introducing a Hostel Noticeboard feature, which allows individual hostel owners to post information on activities taking place, such as cocktail hours or free walking tours.
And, in May, it launched a “Speak The World” feature using Google Translate to enable travellers to communicate. During its first four weeks, 1.2 million translations were made. “Who would have thought Hostelworld would offer a translation service? These things are quite exciting and allow us to reinforce the brand and drive engagement during the in-trip experience,” Rosenberger said.
Improving Real-Time Tours And Activities
Mobile, greater connectivity, and a better understanding of customer preferences are also driving much of the competition in the in-trip tours and activities market.
Industry insiders acknowledge TripAdvisor’s acquisition of Viator in 2014 as an indication of the potential of this market, and Airbnb’s move into trips and curated experiences towards the latter end of last year has brought it to the fore.
“The web allowed travel services to be unbundled and for consumers to book for themselves, but as part of the trend for brands to be more used, mobile is now allowing big players to bring those back together,” App Annie’s Salord said. In the U.K. market, four out of the top five travel and local apps by monthly active usage offer a broad range of services, including in-destination, while in France three of the top five do.
French online booking platform Ceetiz sells tickets for top attractions, city tours, and unusual experiences worldwide. Marketing manager Sébastien Gal said: “A majority of our clients book in advance, but more and more now book in-trip.” Ceetiz predicts this change in behaviour will result in a 150% rise in the use of its mobile app in the second half of this year versus the same period last year.
With only a small percentage of the global tours and activities product offer available to sell digitally, Ceetiz sees huge potential for growth. “Our focus now is making all activities instantly bookable and digitalising all tickets,” Gal added.
A poor in-destination experience for travellers lies behind the European B2B initiative PasTimes, led by EIT Digital as part of its Digital Cities programme. Starting in popular tourist hotspots Amsterdam, the French Riviera, and the Canary Islands, EIT Digital is this year working with travel technology provider Amadeus to collect and combine booking and local data with a view to commercialising an improved digital product offer to the industry.
Digital Cities Action Line leader Stéphane Péan said: “The main focus is on real time as the challenge for the travel industry is to be up to date. Travel is highly fragmented, and the industry is not meeting the needs of DIY travellers looking for customised travel.”
For travel marketers, the secret to enhancing the in-trip visitor experience lies in adding value where it matters and via the right technology. Smartphones are at the core of traveller engagement for those on the road, but for visitors in more controllable environments, other options are coming into play.
Visitor attractions including Disneyland and Universal, for example, have introduced wearable devices (MagicBand and TapuTapu) that serve as queue-busting fast-track tickets, room keys, and more. These continue to evolve and, from 2018, Carnival’s Princess Cruises will roll out waterproof wearables that can be used not only as room keys but also for navigation on-board, to adjust lighting in cabins, and to communicate and track companion family or friends.
“As experience professionals, we need to consider what is the right device for the context of the experience. Kids can be too young to have their own smartphone, and older travellers, often represented on cruise ships, may not take one with them when getting off the ship for a daytrip,” Klaus Sommer Paulsen, CEO creative director and founder of Danish experience design studio AdventureLAB, said.
For travel marketers, there are lessons to be learnt from the attractions sector. Sommer Paulsen added: “These more contained spaces really work as a sandbox for technologies to be tried and tested, before they become ubiquitous in other experience-based environments.”
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