Companies can take steps now to be prepared for the coming months and years.
COVID-19 has slowed the progress of the travel industry. Although recent headlines about travel bans or cancellations of major events make this seem like the distant past it is important to remember that the industry was strong and broke records before the pandemic.
These challenges aside, history has taught us that travel is one the most resilient industries in the world. While we don't know when travelers will return to force, we can be sure that they will.
Publicis Sapient’ s global travel and hospitality leader, SoHo Choi said that the industry has survived many disasters, including 9/11 and the Great Recession. However, in all cases, travel has always rebounded and thrived. He said that COVID-19 is unusual in that there's no end in sight and no economic model to predict the length of the virus's existence.
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Lessons from Past Crises
The Marriott Corporation, which survived the financial challenges of the The Gulf War, was split into two companies: Marriott International, and Host Hotels. This was the beginning of the asset-light franchise model, which has been widely adopted in the hotel industry all over the world.
Prior to the terrorist attacks of September 11, 2001, most airport security was handled by private companies. After 9/11, security management was transferred to the Transportation Security Administration (TSA). This agency became an integral part of every customer's expectation during the entire airport journey. These partnerships led to the creation of programs like TSA Pre Check today.
Many consumers needed new employment options after the 2008 financial crisis. This led to rapid growth in gig and sharing economy and companies like Uber and Airbnb that were founded during times of economic uncertainty.
What will the future look like for hospitality and travel after COVID-19? These are the four steps that travel brands can take in order to be ready for the future.
1. Keep customers in mind.
Many travel companies may be cutting back on their budgets in order to save money, but they may forget that marketing is still vital. Companies that travel are an integral part of local communities should continue to participate in COVID-19. For example, Delta is providing free medical volunteers, Four Seasons New York City offers free rooms to healthcare workers, and Carnival is offering their ships for use as offshore medical facilities.
Companies that have invested in marketing and prioritized it during recessions are a great example for travel brands. Research has shown that brand awareness and brand value can help accelerate a company's recovery after a recession. Visit Las Vegas' #OnlyYou Campaign is one example of a destination that has put this to use. This video shows a deserted Las Vegas strip, and reminds people that they will always be there when you travel again.
2. Digitize your contact center and make it more efficient
Companies are experiencing unprecedented volumes of guests cancelling and shifting their travel plans around the globe. Contact centers in these countries are seeing an increase in business volume. Publicis Sapient, a digital business transformation company, found that customers waited on average for over two hours during the third week in March 2020. One airline saw as much as 50% of customer calls go unanswered.
Companies can decrease call center volume by streamlining digital touchpoints. Customers can cancel or rebook through digital channels, making it easier for them to do so. Leading companies have merged their call center and digital teams, using natural language processing tools to automatically analyze calls and optimize customer needs across channels.
Khurram Farooqui (group vice president at Publicis Sapient) stated that travel brands should take advantage of the slowdown to streamline their operations and diversify by improving customer service, showing empathy, earning consumer trust and increasing inventory and products for when there is demand.
3. Reevaluate your competitive landscape.
COVID-19's economic impact is unavoidable. Many small and medium-sized hotels and regional airlines will be in financial trouble and may go bankrupt. As different parts of the globe fight to stop the spread of the virus, recovery will not be uniform. International travel will likely recover quicker than domestic travel. Some countries will also be open to business sooner.
Brands will need to evaluate the potential competitive landscape after recovery. Although it is difficult to predict the exact timeline, companies that are in a position to make this happen need to act now to increase market share, gain new markets and offer new products.
Although entering new markets can be difficult, it is possible to understand and attract new customers. Companies have access to a wealth data to help them analyze customer behavior and identify the right prospects.
These markets can be identified by companies so that they can streamline their marketing technology and processes in order to reach the right customers at exactly the right moment. Brands will bounce back faster if they can set up dynamic segmentation and then coordinate the right offers or promotions.
Brands will likely need to invest more in digital channels that connect directly with customers due to the evolving competitive landscape. For example, cruise lines will be able to sell direct to consumers as they can compete with smaller, more niche-oriented travel agencies. As travelers seek greater flexibility and quality assurances in their cancellation and rebooking options, they will be less inclined to book directly through Airbnb properties or online travel agencies
4. Contactless technology brings health and wellbeing to the forefront.
In a post-COVID-19 environment, health and wellness practices are no longer a luxury. Travelers will expect higher standards in order to maintain their health and well-being. Digital tools will allow them to expand on existing "no touch” options.
Mobile-first technologies like contactless payments, for example, have been on the market for some time, but with little adoption. Recent behaviors indicate a rise in adoption, as customers become more comfortable and rethink who and what they are interacting with. Mobile usage will grow throughout the travel experience for both guests and travelers, including passports, boarding passes and keyless entry at hotels and digital checkout at hotel.
To personalize digital interactions and enable social distancing, hotels will need to increase their investment in "no touch” technologies such as biometrics and gesture controls. The Chengdu Shuangliu Airport in China is a prime example. It has kiosks that use facial recognition to assist travelers with their flight status and finding their gate.
Publicis Sapient strategy and consulting lead David Taylor said that the travel industry is currently at a critical point. The future will be brighter, but not as different than what we have seen. "As we look at the economic implications and the explosive growth of new technologies, from 5G to AI, I'm excited for how companies will respond and evolve. This event will also have a positive impact on the startup community.