How the Travel Industry Can Keep Up with Digital Transformation
During the COVID-19 pandemic, there was increased demand for touchless and frictionless travel experiences. These events didn’t occur in a vacuum—they took place during an already increasing acceleration toward fast, digital processes.
Inevitably, not every travel brand was ready for these changes, and some are still trying to catch up.
Here, we’ll explore how travel brands can step up their digital transformations to keep pace with the demands of both their customers and the industry at large.
Lessons from the Pandemic: How Digital Transformation Has Changed Travel
The COVID-19 pandemic has led to an acceleration of digital transformation in the travel sector. Customer preferences have shifted dramatically, increasing demand for online booking, contactless payment solutions, and tailored virtual experiences. Travel companies that embraced digital transformation early on gained a competitive advantage in adjusting to the new normal.
For example, hotels that adopted chatbots and real-time messaging were better equipped to address customer queries and reassure them regarding safety measures. Additionally, tour operators providing virtual sightseeing experiences have opened up new revenue streams, showcasing the power of innovation in times of crisis.
Some amount of normalcy has returned to the travel industry, and consumers are optimistic. According to a Booking.com survey, 72% of travelers in 2022 said traveling would be worth it in 2023. However, consumers continue to use and value digital experiences.
A survey by Women Leading Travel & Hospitality found that over three-quarters of consumers have increased their expectations of digital services. That means travel brands must meet these high demands, but they have opportunities to win market share by improving their digital experiences.
Key Technologies for Digital Transformation in the Travel Industry
Powering the travel industry’s transformation are digital technologies, and technologies that were considered "cutting-edge” just a few years ago are quickly becoming standard. For example, many travel brands now leverage fundamental AI programs, such as AI chatbots, to facilitate customer interactions. They are also using proprietary technologies like apps to build closer relationships with customers and manage expansive loyalty programs.
Here are a few of the most critical technologies for digital transformation in this sector:
Artificial Intelligence
AI-powered chatbots can revolutionize customer service by handling queries around the clock and providing personalized recommendations. AI can also be used to automate customer service tasks, help customers book experiences, provide helpful alerts, and identify deals and discounts.
Virtual and Augmented Reality (VR/AR)
Technologies like VR and AR can offer immersive travel experiences, allowing customers to explore destinations and accommodations before booking. Some companies are also creating "travel” experiences based entirely on AR and VR.
Data Analytics and Personalization
Utilizing data analytics can provide insights into customer preferences, enabling unique and personalized experiences based on individual needs.
Internet of Things (IoT)
IoT devices can automate processes, such as smart luggage tracking, and provide valuable real-time information to customers.
Blockchain
This technology offers secure and decentralized transactions, enhancing transparency and trust in the booking process.
Strategies for Implementing Transformation at Scale
Implementing digital transformation in the travel industry is a challenge due to its complexity and size. Many companies have decades of legacy systems that need to be integrated with new systems, and this process can be time-consuming and costly.
Nonetheless, transformation is imperative. Here are a few approaches travel brands can take to improve their digital transformation efforts.
Develop a Clear Digital Strategy
Identify the goals you want to achieve, prioritize the digital initiatives, and build a roadmap to guide your transformation. Ensure your strategy has buy-in across every aspect of your business. Significant changes in one department often require changes in another.
Invest in the Right Technologies
Carefully assess the needs of your travel brand and identify which technologies will bring the most value, ensuring a solid return on investment. Avoid investing in technology simply for the sake of it. Identify practical use cases for specific technologies and identify metrics by which to measure success.
Encourage a Culture of Innovation
Foster an environment that encourages creativity and experimentation, allowing employees to propose and execute their ideas. Formalize innovation and transformation as part of your strategy sessions. Not every idea will be actionable, but this approach can help you identify new opportunities.
Pilot Projects Before Scaling
Test new technologies and approaches on a small scale before expanding them across the organization, allowing you to identify any weaknesses or areas for improvement. This will help you avoid unnecessary costs, improve adoption, and set clear timetables for new projects.
Measure Success and Adapt
Continuously track the results of your digital transformation efforts and adjust your strategy as needed to stay aligned with your objectives. Report regularly to stakeholders on progress to secure the support you need.
Don’t Miss the Digital Travel Summit
Digital transformation will continue to bring challenges, but it also promises significant rewards for travel companies. If you’re interested in learning more about how digital transformation can affect your brand, don’t miss the Digital Travel Summit, the conference destination for digital travel leaders.
The next Summit will be held on September 12th through 13th at the Westin Hilton Head Island Resort & Spa, South Carolina. Download the agenda today to learn more.