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- 1 Four Trends in the Post-COVID Era of Travel
- 2 Building a Robust Online Presence in the Travel Sector
- 3 Key Considerations for Crafting a Digital Strategy
- 4 The Impact of Digital Evolution on Travel vs. Banking Apps
- 5 Owning the Complete Customer Journey
- 6 Effective Customer Engagement Strategies
- 7 Takeaway
In an era where customer experience is top priority, it is critical for us to understand the digital evolution reshaping travel experiences.
Several key trends are redefining this landscape, including the rise of online travel agencies (OTAs), a growing focus on mobile usage, and the need for businesses to establish a solid online presence.
I had the privilege of interviewing a leader at the intersection of technology and travel, VP of Product & Customer Platforms at FlightHub, Ramzi Rahbani, to discuss digital transformation within the travel industry.
With a diverse background spanning banking to retail, Ramzi brings over 13 years of leadership experience in driving digital innovation. His dedication to a product-first approach and expertise in fostering high-performance teams underscore his commitment to enhancing travel experiences and creating a more connected world.
During our conversation on the Behind the Growth podcast, Ramzi shared insights into the dynamic nature of the travel industry, future trends, and the pivotal role of data and customer feedback in shaping services to meet the evolving needs of travellers – and I’m happy to share his celebrated and eye-opening perspective in this article.
Four Trends in the Post-COVID Era of Travel
The aftermath of COVID-19 has left an indelible mark on the travel sector, redefining its landscape and charting new trajectories.
But the travel industry is now navigating a path of recovery and adaptation, and examining the post-pandemic landscape reveals four prominent trends that are reshaping the travel sector.
1. Strong Resurgence in Travel
Firstly, there is a strong resurgence in travel, marked by a forecasted 6 percent growth in 2024 compared to the pre-pandemic peak of 2019. This indicates a remarkable recovery and hints at a robust future for the industry.
2. Changing Consuming Behaviours
Secondly, changing consumer behaviours post-pandemic are influencing the way people engage with travel. The shift towards online bookings has become pronounced, with major players aiming for 100 percent online transactions. American Airlines, for example, is currently at an impressive 80 percent online booking rate, underscoring the importance of digital channels.
3. Growth of Online Travel Agencies
Thirdly, the growth of Online Travel Agencies (OTAs) has become a significant trend. With a projected Compound Annual Growth Rate (CAGR) of 6 percent leading up to 2028, OTAs are establishing themselves as key players in the industry. This trend is reflected in the success and growth of platforms like FlightHub, highlighting the evolving dynamics of travel bookings.
4. Shift Towards Mobile-First Approach
Lastly, the travel sector is experiencing a shift towards a mobile-first approach. Mobile bookings now comprise a substantial portion of the total volume, reaching around 50 percent. This shift emphasizes the necessity for travel platforms to prioritize mobile accessibility and engagement, recognizing it as a fundamental channel rather than a mere luxury.
Building a Robust Online Presence in the Travel Sector
Establishing a robust online presence has become imperative for gaining a competitive advantage. This entails catering to diverse customer preferences across various channels — mobile, web, and walk-in.
Understanding the nuances of each channel is crucial. For example, mobile app users tend to be four to five years younger on average than website users. And while walk-in or call-in options persist, acknowledging a diverse age range in the customer base — and each demographic’s needs — is vital for sustained success in the travel industry.
The prevalence of an omni-channel approach becomes evident in travel planning habits, with 94 percent of leisure travellers seamlessly switching between devices during the trip planning process — starting on mobile for searches and possibly shifting to a website for the actual booking.
Acknowledging this behaviour, we need to seamlessly integrate their services across platforms, ensuring a cohesive and uninterrupted customer experience.
Key Considerations for Crafting a Digital Strategy
The digital channels you choose must align with a comprehensive business strategy.
There are a couple of important elements that need to be integrated so businesses can effectively leverage digital channels to drive customer engagement and achieve sustainable growth in the digital era:
Defining the Strategic Role of Mobile Apps
Fundamentally understanding the role of mobile apps in the overall business strategy is crucial as this is what sets the foundation for subsequent strategic decisions. This begins by asking a critical question: What purpose does the mobile app serve? This will help us understand whether these channels serve as central drivers, enablers, or peripheral avenues.
Aligning Digital Channels with Business Objectives
The app becomes a channel for enhancing customer experience by leveraging the native capabilities of the device. The goal is not merely app development but a conscious effort to align the digital channels with broader business objectives.
Setting Short-Term KPIs
Businesses should set short-term key performance indicators aligned with broader business goals. This involves a meticulous examination of the business strategy, identifying the intended outcomes, and establishing targets. KPIs will serve as benchmarks for measuring the effectiveness of digital channels.
Building a Customer-centric App
While the app needs to be tailored to meet specific business needs, more importantly, it has to be customer-centric. This involves translating strategic decisions into practical steps, ensuring that the app is not just a standalone feature but an integral part of the customer engagement strategy.
The Impact of Digital Evolution on Travel vs. Banking Apps
Digitalization is taking over our lives, and every industry is feeling the pressure to provide customers with fast and easy digital access.
For example, banking apps are central for financial transactions, making their perceived utility quite high to users, who tend to stick around due to their essential nature. Even if they are flawed, they’re necessary for day-to-day payments, which makes the cost of switching quite high for the customer.
Travel apps, on the other hand, are used less frequently and have an extremely low cost of switching, so they need to make the most of moments when users find them useful during travel transactions.
This means that travel apps face a unique challenge because of the sporadic nature of travel. They need to stay relevant, provide value, and meet the varying needs of users in the digital era.
To tackle this, travel apps can go beyond just selling tickets. By being part of the entire travel journey — from planning to arrival and beyond — we can keep users engaged and build lasting connections.
Owning the Complete Customer Journey
Strategies to dominate the entire customer journey involve a comprehensive understanding of customer needs and transitioning from being a mere flight partner to a comprehensive travel partner.
This evolution involves observing and addressing customers’ unmet needs throughout their journey, ultimately providing value beyond the basic flight booking. Expanding service offerings becomes key in this approach. Statistics show the rise in last-minute bookings, indicating a shift in consumer behaviour.
By catering to these evolving needs, we can become indispensable travel companions, offering services like hotel bookings, Wi-Fi access, activities, and car rentals seamlessly.
Effective Customer Engagement Strategies
Tailoring engagement strategies based on the average lead time from booking to departure and return is essential.
For shorter lead times, a focused approach on immediate post-booking engagement is crucial, while longer lead times allow for a more gradual and tailored engagement process.
This is what brings customers back to the app. To maintain customer interaction between transactions, we must leverage various channels effectively. Utilizing push notifications, gamification, nudges, app messaging, and emails strategically helps in building awareness, enticing customers to explore offers, and bringing them back for continuous learning and engagement.
Takeaway
The travel sector’s digital transformation in the aftermath of the pandemic has shown resilience and adaptability.
However, to continue thriving, we have to develop strategies to connect with customers and provide great experiences. Success today boils down to having a strong online presence, grasping how consumers behave, and adopting a holistic approach to engaging customers.
Looking ahead, the industry’s future in the digital era hinges on how well we manage these trends.
If you want to learn more about these trends and gain deeper insights into the transformations happening within the travel industry, be sure to tune into the full episode of Behind the Growth!
Find it here:
Transforming the Travel Experience
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