The Future of Business Travel: How Personalized Experiences Will Save the Industry
For the travel industry to recover from COVID-19, it must provide travelers a personalized, seamless travel experience from start to finish. Companies that want to survive should transform their operations using advanced technologies like mobility as a service.
Imagine you’re in 2024. The coronavirus pandemic is an unpleasant memory and business travel has recovered and evolved.
Trips to a crowded convention center for big industry events have given way to high-value, face-to-face meetings with customers and partners in more intimate gatherings where safety is the top priority.
Gone too is much of what was frustrating and inconvenient about the business travel process. To book your business travel experience, let’s say to London, you work with a chatbot – a cloud-based artificial intelligence (AI) agent – that looks after your trip details from beginning to end.
You provide the dates, financial details, travel documents, and a photo for facial recognition to facilitate contactless check-in and -out at borders and hotels. Your bot may ask if you want to extend your trip over the weekend, and suggest nearby attractions and restaurants based on your budget. And your journey can easily be altered at any point through another chat with your bot.
ONE barcode on your mobile device covers everything: flight, airport parking, Heathrow Express to get in and out of London, public transport card for your stay, hotel and dinner reservations, and even theater tickets for Saturday night. You’re all set. Bon voyage!
Sounds good, right? But there’s a lot of work needed to make that vision of the future happen.
Prior to the pandemic, traveling for work was considered a perk by many. According to a report by travel marketing consultancy MMGY Global, business travelers aged 23 to 35 averaged 7.4 trips per year. The majority considered business travel a status symbol, and 40% said they would not a take a job that did not allow travel. Baby boomers were not far behind, taking 6.3 business trips per year.
Until now, travel and tourism accounted for 10.3% of global GDP and nearly 10% of all jobs worldwide. Business travel made up a significant portion of that amount; global business travel spending was projected to hit US$1.7 trillion by 2022.
We all know what happened: the global pandemic forced the cancellation of events and conferences. Working from home and virtual meetings became the norm. Walks around the block replaced flights to Barcelona or Beijing.
As a result, the business travel market is now expected to decline by $810.7 billion in 2020. McKinsey reports that two-thirds of global aircraft have been grounded, 18 airlines have filed for bankruptcy, and travel managers estimate business travel spending this year will be 85% to 95% lower than in 2019.
On the rebound
But experts see a latent demand for travel, and there are encouraging signs that the sector will recover. A recent Washington Post article on how the pandemic will change travel foresees a comeback of events but in a highly scaled-back version. Events may take the form of one-day meetings that are a hybrid mix of in-person and virtual attendees. Cleaning and contact-free technology will be top priority. Private air travel is on the rise. And people are realizing they can work anywhere, creating a trend that will benefit long-term home rentals over hotels.
As Skift.com Corporate Travel Editor Matt Parsons notes, “The pandemic has pushed many companies into new ways of working,” citing the example of GitLab, the DevOps company. Darren Murph, head of remote at GitLab, believes travel will become a core part of dynamic culture building, with teams of 10 to 20 people going on an offsite every quarter to build strategy and relationships.
“Travel managers will have to become much more creative as talent travel picks up,” says Parsons when interviewed. “Managers will travel to onboard new hires, people will meet in small groups to brainstorm, and there will be a sharp increase in single client business trips. After all, building relationships with customers is an ongoing process that requires personal engagement.”
With people working remotely, it’s easier to spread the talent pool globally. While people are traveling less, they are staying longer, and the closure of hotels has created a higher demand for extended-stay options. Companies like AltoVita are making it easy for people to design their own stay.
Parsons also cites a pilot project to test a digital health passport called CommonPass, a secure and verifiable way for travelers to document their health status as they travel and cross borders. CommonPass is sponsored by the World Economic Forum and aims to enable safer airline and cross-border travel by giving travelers and governments confidence in a traveler’s verified COVID-19 status.
There is little doubt that people will hit the road again as soon as public health restraints are lifted and safety precautions are in place. But recovery might take two to three years. What better time than now for the entire passenger sector, including airlines, airports, railways, hospitality, and urban mobility, to prepare to deliver a better travel experience?
Own the journey
Even before the pandemic, companies were looking for ways to make the travel process more efficient, more sustainable, and more practical for customers. “Every segment has been severely impacted,” says Kevin Schock, vice president of travel and transportation at SAP. “This crisis highlights the need for greater flexibility. At the same time, it accelerates the need for enterprises to digitally transform.”
“Enterprises in this sector need to become travel retailers selling a complete experience,” says Schock, noting that they need to be even more efficient in managing costs and generating revenue streams by providing new and innovative services to customers at competitive prices. As the focus turns to the experience economy, the well-being of both guests and employees, as well as supply chain and asset management, will be forefront issues. Enterprises need to prepare now for this new reality.
When advising companies in the travel sector, Schock first suggests addressing the long-term industry challenges. Owning the end-to-end traveler journey will play a key role in the post-pandemic environment, and that can only happen by expanding brand experiences and customer engagements through Web sites and social channels. Travel companies will need to sell additional products and services to enhance customer experiences and increase margins, because profits from just selling airline seats or hotel rooms will diminish or even disappear. “Moving towards subscription models, increasing creativity and flexibility, and offering specific travel services and products will help create a sustainable, profitable business model – whether you are an airline or travel agent,” says Schock.
This scenario opens the door for new ‘mobility-as-a-service models,’ where the customer can ride a bus, take a bike, use an autonomous car, or transit through a station or airport to their final destination – using one pass or ticket. But to seamlessly get a traveler to a destination using multiple transport services, operators must be able to continually assess the availability of their own and their partners’ services.
Technology will play a critical role in this industry transformation by enabling participants to adapt existing processes and use new physical and digital technologies such as drones, 3D printing, and virtual and augmented reality (VR/AR) to build the customer experience. Schock believes digitalizing and expanding the customer experience will become a strategic differentiator for companies that want to come out ahead of the game after the current disruption.
Create exceptional experiences
Delivering exceptional customer experiences is about understanding which moments matter most to customers and turning them into interactions that exceed their expectations. In the digital age, many of those moments occur online.
Hotels and airlines of the future will be even more competitive than today, and the secret to survival is to take advantage of technology. Speed is everything in the hospitality business. For example, the post-pandemic era will see less interaction between a hotel and its guests. The booking of rooms and services, including checking in and out, will increasingly happen solely online.
The customer journey will have two distinct, equally important elements – virtual and physical – both of which must be flawless. But the core success of any digital transformation is not about the technology. It’s about the company culture. People are the ones who deliver memorable moments, so employees will need to be prepared for a new way of working.
Business experts know that it’s not enough to improve the customer experience. They need to revolutionize it by making certain that anyone who interacts with customers has the information they need to help those customers get what they want. Digital transformation for any hotel chain must encompass a range of activities, from designating and training changemakers to converting the entire workforce into one big digital team.
Four transformation priorities
Schock and his team have identified four strategic priorities necessary for travel and leisure companies to transform their businesses.
- Digitalize customer experiences. Improving the overall digital experience for travelers is the foundation on which success in the new travel marketplace is built. This requires using customer feedback to identify and repair problem areas in the journey.
- Generate new business models. Millennials and other travelers expect their travel provider to provide a personalized offer that creates a frictionless, end-to-end experience with all relevant services included. Part of the experience will be created by humans; other parts will be provided by travel platforms using predictive capabilities. These platforms will engage with customers using chatbots or other voice communication techniques. Companies will form new partnerships and collaborate with a range of service providers so travelers can proceed seamlessly from one leg of the journey to the other.
- Adopt intelligent operations. Mobility as a service requires intelligent operations, making this the third imperative for success. The pandemic has made it clearer than ever that resilience and agility are strategic advantages. Companies must be able to quickly assess their business models and supply chains, so they can adapt to changing circumstances, with special emphasis on scaling up and down and providing visibility to the end customer.
- Manage assets intelligently. With slimmer margins, enterprises in the travel sector must manage their assets in an intelligent manner, using data for better decision-making and more efficient operations.
None of this is possible without the right technology. Big Data, predictive analytics, and AI enable rapid insight into customer intentions and behavior. How many times did the customer visit the Web site before booking a flight? What additional services did the customer purchase? What was their experience during the last flight? Only by answering questions like these can a travel company create a personal customer offering for a specific event at maximum revenue.
Back to the future
Business travel will recover in phases. When the time comes to resume travel, people will see many changes. To reduce person-to-person contact, facial recognition systems will be used for everything from checking bags to passport control. Checking in and out of hotels will be done virtually. Travelers may only have one ticket for the entire journey.
One thing is sure: those travel companies that want to be leaders tomorrow must take steps to digitalize and transform their operations today. Resources must be managed intelligently, new models and alliances must be forged, routine tasks must be shifted from humans to machines. Most importantly, the only path to maintaining profitability is to provide trusted, personalized experiences, such as the one-ticket-for-everything scenario. That’s the only thing that will keep customers coming back.