How can you adapt to ever-changing travel customer behaviours?

How can you adapt to ever-changing travel customer behaviours?

The customer of 2022 is shockingly different to the customer of 2019. Despite a gap of barely 3 years, customers are now buying faster and later than ever. For the customer who expects delivery by 1pm tomorrow, booking a holiday 6 days or 6 weeks ahead, rather than 6-12 months, makes perfect sense. Yet for the airlines, hotels, travel agents and tour operators they book with, such buying patterns represent a major challenge. And this is just one of many new customer behaviours impacting the travel industry today.

Another major challenge is loyalty - customers who went 2 years without booking holiday have chosen new brands to try, new destinations to visit, and new services to use – this leaves travel companies with the task of rebuilding brand loyalty and bringing old customers back into the fold.

There is also a new generation of millennial customers who seem to have wildly different criteria for choosing where and how to travel. Some want more sustainable options whilst others want ‘experiences’ that differ from the sit-by-the-pool fare that has long been the norm.

The big question is – how can travel companies adapt and keep adapting to accelerating changes in traveller behaviour?

Data-Driven, Data-Led:

Of the investment priorities for travel this year, the most urgent is data & analytics, according to our most recent survey. 63% of travel leaders we surveyed rank it as their highest priority within the next 12 months. By investing in improving the collection and use of data, that 63% is laying a solid foundation for understanding customers in real-time so they can adapt in real-time.

This is by no means a quick fix or a silver bullet, but this shows that the travel industry is on the right track and has learned the lesson a lot of industries were forced to learn from the past 2 years.

Virgin Atlantic is just one example of a company that has made great strides in harnessing the power of data by breaking down the siloes that stop it from flowing. In doing so, they have created a single-customer view in real time (you can hear from Tom Barber, Head of Data Management at Virgin Atlantic as he discusses how Virgin is harnessing data at next year’s Digital Travel Connect Europe conference).

By knowing what your own customers want and need in real time, you can keep pace with new behaviours.

Can you hear your customers?

Generally, customers are quite clear about what they like and what they don’t like (normally the latter). If you want to understand what a customer wants, building in the processes to gather and action that information is critical, especially when customers could be saving you money. If, for example, you have a customer who has to speak to a human representative to make a booking because the website is too hard to navigate, it could very well be your website’s design that has led to the waste of resources.

Your customers are the ultimate warning system but only if you give them the tools to help you.

This not only serves a vital purpose in providing real-time feedback on CX design but can also highlight missed opportunities to upsell and cross sell – your customers just might want to spend more money but only if the value proposition is clearly laid out for them.

Enterprise Rent-A-Car has done excellent work in embedding the voice of the customer to guide decision-making. As Charles Dodd (Director of European Digital Marketing, Enterprise Rent-A-Car) explained at the Digital Travel Europe Summit earlier this month, by using customer voice to guide the CX design process for insurance offerings, the Enterprise team were able to embed a simple solution that resulted in significant reward.

(Re)Building Loyalty:

How do you reconnect with customers who have been unable to engage with your brand in 2 years? Such a situation has never occurred before. There’s no handbook on where to go from here.

Creating loyalty within travel is often challenging enough – customers only buy your products 1-3 times a year, so consistent engagement that can foster loyalty is hard to achieve. You have limited time and opportunity to establish a clear value proposition for the customer.

One starting point is the human touch. Providing a white glove service to your customers can be a key differentiator that allows your brand to stand out.

Another key component is building an engaging, user-friend digital touchpoint for your loyal customers – in the post-COVID world this is non-negotiable, particularly when building a loyalty rewards programme.

Radisson have made some excellent progress in this area with the launch of their new Radisson Rewards program. Radisson has stated that their new program will allow their VIP members to advance to “the highest tier twice as fact as before”.

Even more interestingly, the new rewards program allows members to redeem their points to offset their carbon footprint, adding a sustainability aspect that is now in high demand, particularly from younger travellers.

Whilst time will tell how this rolls out, these improvements show some great promise.

New customers, new preferences:

There is a great deal of concern within the travel community about what younger people want. For a lot of young people, it is their first time booking their own holidays. But do you really need to reinvent the wheel to cater to younger travellers?

New customers, new preferences:

There is a great deal of concern within the travel community about what younger people want. For a lot of young people, it is their first time booking their own holidays. But do you really need to reinvent the wheel to cater to younger travellers?

In terms of marketing channels, it comes of no surprise that gen-z and millennials prefer social media, with it ranking as the first and second most popular channels respectively. Influencer marketing is becoming increasingly popular as a solution for travel companies looking to reach younger audiences, with 47% of travel companies we surveyed using promotions through influencers. Investment in these channels will likely become more significant over the next 12-18 months as the value proposition becomes clearer.

It is also important to remember that further digitalisation, which is a priority for most in travel already, will help significantly towards making your brand more marketable to younger generations who prefer to engage via their mobile phones and social media.

Much of gen-z are in the early stages of accumulating wealth having just entered the world of work, making affordable travel options immediately more attractive, particularly given the current economic climate.

They also want more focus on sustainability and immersive experiences from their holidays, so communicating these aspects will definitely help your brand turn gen-z lookers into bookers.

Conclusion:

Despite so much focus on the challenges facing the travel industry right now, looking to the future shows that some preferences are returning to their pre-COVID norms. A significant number of travellers are starting to book further out, even further out than 2019 in some cases, according to the Expedia Q4 2022 report.

Many travel businesses are returning to 2019 numbers when it comes to passengers and guests, albeit with different proportions – business travel seems to have not recovered whilst leisure travel has bounced back enough to make up for the shortfall.

Yet, many of the changes happening now are irreversible and for the better – more digitalisation and more data are now the norm, resulting in more personalised products and marketing. Adapting to new customer preferences will become easier, and with more understanding comes greater opportunity.

Author: Josh Lloyd-Braiden