4 common misconceptions about digital travel companies

- Technology - Jun 17, 2016

Digital transformation is a topic which is currently getting a lot of attention across a range of industries. With CIOs saying their key focus this year is driving business innovation, digital transformation is a way to achieve this goal. Digital transformation has become vital for businesses aiming to expand but also survive. The travel sector, in particular, needs to have digital transformation at the heart of its strategy - with companies such as Airbnb, Uber and Google leveraging data to disrupt this industry, the traditionally established hotels, airlines and travel agents can only thrive if they catch up - and fast.

Research shows 84 percent of travel businesses already have a digital transformation function in place within their company. However, this impressive figure has translated into digital transformation initiatives with varying degrees of success. With this in mind, what innovations should be adopted and how do these benefit both the business and the customer? With a variety of opportunities available, the travel sector needs to prioritise which innovations are more appropriate to their business, as tick box adoption will fail. After all, what is right for an airline, might not be fit for a metasearch group.

The first step towards a successful digital transformation strategy is to understand what digital transformation is and what it can achieve for each individual business. Unfortunately, this is a step which many companies ignore, especially as there are many different definitions of what digital transformation is. Worryingly, research shows only one quarter of the companies have a clear understanding of what digital transformation means.

Fundamentally, digital transformation is the process that realigns technology and business models so customers are effectively engaged at every touchpoint in their journey with the business.

What digital transformation isn’t

Given the current diversity in digital transformation initiatives, it is vital travel businesses understand just delivering the following doesn’t constitute successful digital transformation.

1. A website

More than ever, travel businesses are improving their online presence. However, even if a company implements a Facebook page, a Twitter account, an online chat function and a mobile app, that’s still not digital transformation. The missing ingredient here is the alignment between all these separate initiatives - the wire that binds them all together in a consistent, effective and seamless customer experience (CX). Additionally, all these elements have to be aligned with the business model and goals if digital transformation is to achieve growth for the company.

2. Exclusively online

Many companies focus on transforming their digital presence and creating an enjoyable and seamless experience online, but forget about their bricks and mortar presence. For example, a customer books their hotel online, has a brilliant experience on the hotelier’s website and gets all the information they need. However, they get to the hotel and realise there’s no Wi-Fi and need to queue to check-in, as the hotel doesn’t offer self-check-in kiosks. Is that really digital transformation?

3. Free Wi-Fi

Today’s customer is very tech-dependant and expect their chosen hotel, airline or travel agency to offer innovation they don’t have access to already. Offering free Wi-Fi in this day and age is like retailers offering free shipping. Research shows it’s expected and considered part of the standard package now, with in-flight Wi-Fi availability influencing the flight selection process for almost two in three fliers. Various airlines are starting to realise this, including Emirates, Norwegian and Air China, who provide free in-flight Wi-Fi. However, if a company offers free Wi-Fi and it turns out it's either poor quality and none of the staff know how to fix it, this can become counter-productive for the CX.

A good example of innovative use of technology is Virgin Atlantic trial of Sony’s Smartwatch 3 in the upper class lounges at London Heathrow airport, enabling staff to start the check-in process and update passengers on the latest flight information, weather and local events at their destination. By investing in wearable technology, these airlines have shown they understand customer needs and are experimenting with the technology available to provide users with the seamless customer experience they’re searching for.

4. Driving people apart

While many believe technology prevents human interaction, digital transformation is set to do the opposite as it must have the customer at its core. For travel businesses this means personalisation. Digital transformation should allow companies to collect more customer data than they could’ve ever hoped to gather previously. Digital transformation must then effectively use this data to personalise the CX, so users feel closer to that particular business, even if they’re 2,000 miles apart.

What digital transformation is

So what is the real meaning of digital transformation, and how can it be adopted to help travel businesses thrive?

1. Customer-focused

Simply put, if digital transformation isn’t driven by a customer-centric approach, it will fail. All digital transformation strategies need to allow a business to create an extension of their brand with the help of technology, and this should be translated in a consistent seamless CX.

Too many companies see digital transformation’s main purpose as having a spectacular online presence. What companies need to focus on, is making digital transformation work in the background - collect data, manage it effectively and break down data silos to develop the most comprehensive, personalised experience possible for the travel customer.

Global resort Caesars is an example of this, with the hotelier using apps to empower customers during their stay. The myTR app allows Total Rewards members to manage reward points, check existing reservations, look at special offers and locate a Total Rewards casino anywhere across the country. The firm’s Las Vegas or Atlantic City apps also provide access to a mobile concierge, real-time event information, a room ordering service and even wake-up calls. Caesars loyalty program Total Rewards uses analytics to deliver a personalised experience for its customers, with plans to extend its data-driven approach with mobile technology. Through this, Caesars has created the ultimate CX, benefitting both the business and the end-user.

2. Ubiquitous

Digital transformation should streamline technology across all customer touch points so they have a consistent, high-quality interaction with the business, regardless of their preferred channel. Both physical and digital CX are vital for the travel and hospitality industries in differentiating from their competitors. With 47 per cent of people revealing virtual reality (VR) tours of holiday resorts would be appealing, travel companies need to utilise this technology in-store. It will increase holiday bookings by humanising the process. Instead of holiday makers anticipating what their hotel will be like, VR will provide the user with the information they need to make a decision on whether this is the right accommodation for them. Virgin Holidays are already utilising VR within its Bluewater store, by offering customers the chance to experience the holiday in-store. It is this type of activity which balances the digital and in-store CX, which is vital to successful digital transformation and offering a seamless travel experience.

3. Integrated

To excel with digital transformation, it must be woven into all business aspects - from strategy to customer service, marketing, operations and IT. What then becomes crucial to the success of digital transformation in any company is that the strategy is devised with an inter-disciplinary focus in mind. Enlisting the help of experts, whether in-house or externally, will provide the consultancy and expertise to ensure businesses are utilising the tools available to them, and explain why it needs to occur. Having this knowledge will ensure the travel sector is doing more with digital transformation and excelling in this transition.

To ensure a successful digital transformation can occur, businesses must invest - in technology, as well as other resources which support this activity.   Regardless of how this is achieved, travel businesses need to address how best to implement these strategies to ensure a successful digital transformation is implemented. 

By Simon Jones, Co-founder and Head of Innovation at Black Pepper Software

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Read the June 2016 issue of Business Review Europe magazine.

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