In travel, getting up close and personal with your customers is the key to success. Data and personalisation technologies are enabling just that, according to speakers at a major Enterprise Ireland international travel technology summit in Cork.
For hoteliers, the challenge is finding ways to work with online travel agents (OTAs), while at the same time encouraging guests to book direct.
It’s a fraught topic for many hoteliers but not so much a question of ‘them or us’, as ‘them and us’, suggested David Byrne, CEO of the Great National Group.
The Irish company is one of Europe’s fastest growing hotel services providers and the developer of room revenue management software Revanista.
The rise of OTAs is inexorable. Currently dominated by the likes of Booking.com and Expedia, in the coming years we are likely to see Facebook Hotels, Apple Hotels, Instagram Hotels and Ali Baba Hotels too. “Google already has hotels,” he said.
Using data to get close to travel customers
With Booking.com already spending billions of euros a year on Google, it makes sense not to try and compete on search, he said.
Instead, an increasing number of hoteliers will rely on data, which can help grow revenues by fuelling the personalised communications that help prompt and nudge customers before during and after a visit.
Data-based technologies can also provide the dynamic pricing models that optimise room rates depending on such factors as demand and occupancy rates at other hotels in the same location, on a particular date, he said.
Algorithms can then calculate a price that comes in at a discount for those booking direct.
For Byrne, OTAs should be used as a shopping window to the hotelier’s product. “We should use them to our advantage. Ultimately once you’ve a trustworthy site, a trustworthy engine and a trustworthy brand, people will book with you if it’s cheaper.”
Changes in the EU’s regulatory environment make it harder for OTAs to put pressure on hoteliers not to provide cheaper prices to those booking directly.
OTAs provide an important service to the sector, he pointed out, including increasingly in the promotion of local attractions.
“On the flip side, what we are finding in our hotels is that, in the first quarter of this year, 40% of all online travel agent bookings that came through our portfolio cancelled,” he said. Their free cancellation policies encourage behaviour where people book one or a few hotels and then try to sort flights.
“Alternatively what we are seeing in some cases is customers actually getting price data from the OTA sites and then actually ringing hotels to see if they can get a better rate if book direct.”
Irish personalisation platform Boxever, which works with airlines such as the UAE’s Emirates and Peru’s Viva Air, as well as local carriers Aer Lingus and Ryanair, uses data and artificial intelligence to improve customer experience.
While data analytics is not new, the move to harness it is increasingly evident, said Ru Barry, Boxever’s director of business solutions.
Whether it is put to use in operations, process automation or personalisation, the upshot is that it helps people understand their business better. “Whatever you are doing, you are using data to make better business decisions,” he said.
What does personalisation mean in travel?
What exactly personalisation is has never been clearly defined. For some, it means targeted outbound communications, while for others it means offers and recommendations. In some cases it might be the way in which an airline can help you find your lost luggage. In all cases however “it’s about how to improve the experience, make it better,” he said.
Ditto automation. Here too the industry is seeing not so much advances in automation technology as increased incidences of it being put to work, helping businesses with the processes they do today.
What is coming down the baggage carousel may be even more interesting however, including increased use of visual recognition technologies, which will see passengers recognised and assessed for risk as they move through the airport, without needing to show passports, he said.
But just as Netflix does for content and Amazon for retail, there is an increase realisation generally that one way to make more money “is to treat people the way they want to be treated,” he said.
It’s more possible to do too. Where 10 years ago a personalisation project would have taken two years to develop, and significant capital expenditure, cloud computing has done away with those barriers, he said.
It’s an area travel guide company Lonely Planet is looking at too. Where previously it had a universal content model, which primarily saw digital as a way to sell books, it now has a separate digital strategy in place.
Said Noirin Hegarty, Lonely Planet’s VP digital content: “For us it’s about personalisation and seamless journeys, they’re the two most important things for us. While we are really good at inspiring people, we haven’t been so good at bringing them down the funnel to transaction, so that’s going to be part of our strategy going forward.”
Leveraging social media will become increasingly important. “We viewed it as a bit of an add-on, when actually it’s key to content.”
It has been experimenting with Alexa and video, and has trialled successfully with Snapchat, as a way to reach under 25s. “We don’t want to be a legacy brand that everybody loves but no longer makes money,” she said.
Leveraging consumer travel trends
The company is keenly alert to the consumer travel trends. “Right now, it’s solo female travel, multigenerational travel, especially from the US to Ireland, but overall it’s sustainability and environmental concerns, particularly from millennials. Over-tourism is a debating point and how the industry responds to that is important. Unplugging, detoxing, dark skies – getting away from the every day, the total escape, is also what we’re seeing.”
Regulatory changes have put increased pressure on the need for greater data transparency, another trend likely to inform consumer behaviour in travel, delegates heard. People will want to know why they got one recommendation rather than another, suggested Ru Barry.
In all sectors, proper governance around AI decisions will be required, including software products with the kind of user-friendly interfaces that allow such trails to be identified. “Innovation is helping,” he said.
In fact, it has become central to even the most traditional of business sectors – hospitality. Great National Group has conversion specialists, an SEO team, data scientists, “and we’re a hotel company”, said Byrne.
For Lonely Planet, the advent of distribution platforms such as Apple News has been “a game changer”, said Hegarty.
“A US $50 piece of content you can create in London goes out on Apple News in US and you can have 750k or 1m views on that – that has been phenomenal. Who knew two years ago we’d need a growth director, now you can hardly afford one because they can name their price.”
It uses data science and analytics, as well as tools such as that developed by Irish company NewsWhip. “Everything is changing. It used to be you could create a piece of content, produce a good headline, and put in your keywords. Now it’s much more about how you distribute, how you engage with the user, and what platform that is on,” she said.