How the travel industry can turn failure into opportunity

Following on from our wildly successful Travel DAZE conference last month, one of our speakers, and GM of Performics, Stephen Marovitch has penned this handy little guide on how the travel industry can make lemonade out of lemons.

Transformation in the travel industry

The travel industry is in a constant state of flux, under continuous pressure by direct and indirect influences. Operators contend with demanding, complex situations and clients – and these clients are all searching for personalised, unique and new experiences.

They expect immediacy on their terms, and they expect operators to be relevant and anticipate their needs.

Enter technology. Digital transformation is generating efficiencies and improving customers’ experiences – with technologies like AI and machine learning speeding up campaign optimisation, anticipating consumer intent and achieving closer contextual connections. When it’s done right.

Yet embracing technology too quickly often leads to failure, particularly when you embrace technology just for the sake of it.

The key is to learn how to fail smartly, not spectacularly. Before we look at how to do this, let’s see how technology is changing the travel industry.

What technology is being embraced?

Right now, the travel and tourism industry is using machine learning to forecast demand. Using the insights and data generated, we can create campaigns that contextually engage the audience from consideration through to acquisition and then into retention.

By 2018, it’s expected that half of all consumers will interact with cognitive computing via the likes of voice-assisted search and bots.

AI and machine learning is fast becoming ubiquitous – which means your audiences will simply expect it to be part of the experience.

To make all this work you’re going to need data and lots of it.

Data and technology can be used to create connections between a brand, their products and the customer’s needs. With data, you can see if customers are just researching products, or considering options, or are ready to buy.

Data defines the boundaries, while opening the door to opportunities.

Let’s look at an example. InterContinental Hotels Group (IHG) used data and analysis to turn the problem of comparison sites into an opportunity.

They knew they were losing around 20 per cent of their direct bookings to third-parties (comparison sites).

That’s one fifth of their opportunity walking out the door. Worse, they discovered that customers were often paying up to 30 per cent over the direct booking price through comparison sites without knowing it.

IHG implemented a programmatic campaign supported with content to target potential customers, communicating a ‘direct booking price’ option to dispel the myth that third-party sites provide a better deal.

They used available technology to solve a problem via data-lead insights – had they have not done so, they would have experienced a form of failure.

Controlling failure

With rapid technological change comes the need to quickly learn and improve – which is often achieved by rapid failure. So that failures aren’t too painful or expensive, you have to control them. It’s called testing and learning.

At Performics, we do it by applying a 70/20/10 rule to our methodologies: 70 per cent on the stuff that you know that works and delivers results, 20 per cent on the stuff with hypotheses based on strong insights, and 10 per cent on moon shots.

This approach creates opportunities for us to view things from different angles. We can continually revise, enhance and improve our processes – which leads to a better product, better service, better understanding of our audience and a better result.

Remember AI? It’s not going away – so get busy testing and failing.

AI-driven voice interaction will become incredibly important, very quickly.

It took less than 10 years to become mobile-first. The AI-first transition is likely to be more rapid. Indeed, AI already recognises the spoken word just as well as we do. All that’s left is to nail how AI responds.

This partly depends on content. Which means you need content that is accessible to virtual assistants. Indeed, we now consider this a subset of your technical SEO and performance content strategy.

It’s all about making the consumer-to-machine interactions personalised and unique. It’s about using customer data to inform bot processes and making them relevant.

Lessons from Amazon

As you embark on this transformation journey, remember that even the best of the best fail. Look at Amazon’s attempt to crack the travel industry.

It teamed up with Expedia in 2001. That failed.

It tried a partnership with Sidestep in 2006. That failed.

It tried to sell hotel rooms via Amazon Local. That didn’t work out either.

And then Amazon Destinations came and went in 2015.

Despite these failures, Amazon continues to innovate – and won’t stop trying to crack the travel industry. Clearly, failure has not stopped them from trying and it shouldn’t stop you either.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

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