Digital Transformation in Travel

Digital Transformation in Travel

Resort’s customer data – personal information and behavior data, help sales team send promotional messages to Mr. Ramesh Sharma. The programmatic campaign offered the guest whether he would like to make another booking this year – and offered a free spa treatment as an incentive. The campaign also offered him the corporate discount for his personal booking.

Ramesh decided to go on a family vacation.

Marketing team, on reaching the resort, offered him champagne of choice as a welcome gift. Mr. Ramesh was delighted by the hospitality of the resort. This journey of customer delight was backed by the digital innovation initiatives of the resort. Digital system at the resort reports that Ramesh visited a specific resort twice a year during the last one year. The data pulled from the system details shows that he used a specific booking site to book the last two stays and the previous stays were booked by a specific travel agency. The customer data at the resort also shares that the first two visits were sponsored by the corporate, and the other two visits were with college friends and with family. The guest’s old digital records help resort management know guest behaviors and areas visited – for example, the spa, coffee shop, and others.

In the current age travel companies collect massive amounts of data about their customers during every single step of the journey – flight paths, bookings, food and drink preferences, every movement inside premise, etc. This wealth of information helps travel companies design a programmatic campaign with specific offers for the customer. The idea of a personalized campaign of this nature would be impossible without the company’s capability to capture, store, and process data. This is just one of many wonders of digital innovations.

Digital Transformation in Travel Industry

We are in the era where the travel industry is rapidly digitizing the business operation and innovating business model, and customers are increasingly using digital technologies to plan their travel. The travel companies to gain the advantage over others are constantly evolving their digital offerings. It is observed that travel companies innovate to gain competitive advantage.

In today’s world, the travel industry is one of the prime revenue contributors. The industry, in the last three decades, has gone through a series of digital innovations. The industry has witnessed – rise of digital-native companies, such as Airbnb and Uber, and the rise of digitally transformed traditional travel companies. The traditional travel companies have reimaged businesses and adopt digital solutions, processes, and technologies to remain relevant and competitive. The travel industry is at the forefront of digital innovation and continues to transform in every aspect of its operations, which reflects in the market size of digital transformation initiatives. The World Economic Forum’s Digital Transformation Initiative (DTI), suggests that digitization processes in the travel, tourism, and aviation sectors will be worth up to $305 billion between 2016 and 2025. The report estimates that digital transformation will generate benefits valued at $700 billion for both the customers and society.[1] The report also suggests that digital transformation initiatives are also expected to migrate $100 billion of value from traditional companies to their new digital-native competitors.

It is believed that for travel companies it can be challenging to meet the tourists needs and provide innovative and creative services; however, digitalisation and technological development provide significant opportunities to be competitive in the global market as well as to be able to reach markets it was not possible before.[2] It will only be apt to say that the travel industries to keep up with the changing customer demands, expectations and preferences are embracing the journey of digital transformation. They understand that the digital transformation journey is not a one-day activity. In fact, it is the sum-total of multiple digital initiatives backed by technologies such as the Internet of Things, location-based services, artificial intelligence, augmented and virtual reality, blockchain technology and many others. The journey of digital innovation that started in the 1990s has matured now and we are witnessing one of the most digitally transformed industries. In the 1990s the progressive companies in the travel industry started to use electronic cash registers, financial software, mobile phones, email, internet banking to digitize their operational process. The decade of millennium witnessed Property management systems, computerized ticketing and stock control systems, online booking systems, customer reservation systems, email and mobile marketing, customer relationship systems, augmented reality, among others. In last one decade the industry has witnessed rise of digital marketing, social media marketing, virtual reality, mobile applications, cloud computing and online data storage, use of wearable technologies, google analytics, review websites, collaborative online environments chatbots and instant advice, platform collaborative economy; commons collaborative economy, Internet of Things, location-based services, artificial intelligence, augmented and virtual reality, blockchain technology and many others.

One of the key digital innovations of the last three decades in the travel industry is online travel booking platforms, such as Expedia, Yatra, makemytrip, Booking.com and others. The rise of online booking platforms has made it easier for customers to compare prices and book trips, and they have put pressure on traditional travel agencies to change the way they do business in order to stay competitive. It will be apt to say that the online booking platform was one of the first major digital innovations that transformed the industry in the last three decades. It has also given the industry some of the first digital native companies.

Digital transformation in the travel industry is led by a variety of companies, including both traditional travel companies and new digital-native startups. On one hand, Airbnb is a digital-native Startup that has disrupted the traditional hotel industry by offering a platform for people to rent out their homes and other accommodations to travelers. On the other hand, a traditional airline company KLM has embraced digital technologies to improve the customer experience, such as by offering mobile check-in and boarding, and by providing virtual assistants to help customers plan and book their trips.

The travel industry has been at the forefront of digital disruption. The digital transformation in travel has been ongoing for several decades, but it has become increasingly important in recent years as technology has advanced and made it possible to do more with digital tools and data.  Many companies in the travel industry across the globe are now using digital tools and data to improve their operations and provide better experiences to customers and offer personalized experiences. Some of the digital native companies, such as Airbnb and Uber – have changed the way we travel. They have improved people’s lives in different ways as well as in the traveling process. The extensive use of digital technologies such as mobile apps, online booking platforms, and virtual reality can help travel companies to provide a more personalized and seamless experience to their customers.

[1] Digital Transformation Initiative – Maximizing the Return on Digital Investments; World Economic Forum; May 2018

[2] Digital Transformation In Tourism: Opportunities and Challenges; Inita Kindzule-Millere, Sandija Zeverte-Rivza ; Latvia University of Life Sciences and Technologies