Passenger personalisation is complex = potential for travel providers: CAPA Americas Summit (VIDEO)
For years travel technology providers have promoted the benefits of personalisation to improve the customer experience. But the reality is that the march to personalisation is a slow evolution as travel suppliers, including airlines, are just starting to understand the elements of crafting effective personalisation strategies.
As mobile and other platforms rise in importance, travel service providers including airlines, travel managers and global distribution systems need to evolve their thinking and product offerings to optimise the experience of the connected traveller and expand revenues. A challenge in optimising that experience is determining how to tailor and target offers to customers that they find relevant, without notification overload.
The possibilities to maximise technology to improve the travel experience seem endless; but making the right decisions in adopting new technologies is a far more complex exercise.
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Personalisation of travel offers remains in its infancy, but some progress is being made
Personalisation has been a buzz word in the travel technology business for several years. But arguably, putting the concept into practice is a slow process for travel providers.
During a panel discussion at the recent CAPA Americas Summit, the SAP Mobile Services senior director value services, Johnny Thorsen, stated that the beginnings of proactive search are appearing in the market. He believes airlines should recognise that, for example, a passenger has travelled to an annual conference in Barcelona for the past five years: "It might be a good idea to reach out to me a couple of months before and say here is your flight ready to buy".
There are signs of emerging personalisation in the travel experience outside booking and ticketing. Mr Thorsen offered a personal example, recounting that on a recent flight he had ordered a sandwich and drink and the flight attendant had noted his certain loyalty level, then saying that he did not need to pay for the food.
But delivering consistently relevant personalised offers is not yet widespread. Korean Air VP sales and marketing, North America, John Jackson, stated that airlines are adept at marketing one offer to many passengers, but are less effective in executing personalised offers on a one-on-one basis. "One important thing is to get into the customer's shoes and find out what works", Mr Jackson stated.
The question is how much personalisation; balancing offers is the key to success
One of the obvious challenges for personalisation is the implication of data mining, and passenger sensitivities about how data is used in targeted offers. Mr Thorsen said a key point is that travellers want to decide who sees their data and how it is used. On the other side, he stated, "suppliers think they have the right to mine data and hit me with anything they want". Mr Thorsen concluded that as yet there is no solution for that balance.
Another consideration for creating personalised offers is how much is too much. Orlando International airport senior director of marketing and air service, Vicki Jaramillo, stated that the airport plans to run a trial of targeted duty-free offers to passengers, through the airport's app. Ms Jaramillo remarked that there are revenue opportunities with personalisation, but it is important to strike a balance.
Along with an evolution in booking and personalised offers, travellers' methods of payments are changing. The UATP manager of product development, Rachel Morowitz, told the CAPA audience that there are more than 300 different forms of global payment other than credit cards. UATP forges partnerships with companies that offer those different forms of payment in order to create a seamless experience for the customer, said Ms Morowitz. In the consumer segment of UATP's business the company has a partnership with Bitnet to allow airlines to accept bitcoin as payment. Ms Morowitz stated that some industries are hesitant to accept bitcoin, but one of the benefits of bitcoin is that there are no chargebacks.
Mobile is on course to becoming the dominant travel technology across multiple platforms
Just a few years ago, mobile technology represented just 1% of revenues for customers of the travel app developer MTT but that figure has grown to 10%, said the company director of consulting and digital insights, Glenville Morris. There is a movement of mobile to a cross-platform experience, said Mr Morris, noting that MTT is developing apps for smart watches and tablets.
Mobile is not just a channel that travel providers need to think about but in fact is becoming the dominant, almost primary, channel that travel brands should be considering, Mr Morris stated.
Airlines have also matured in their app offerings, Mr Morris said, and they now want to create apps that entail the whole travel cycle, including weather and destination information. "Airlines don't want to to push a user to another brand or experience," he stated.
Global Distribution Systems remain relevant for airlines seeking premium bookings
Lufthansa made a bold move in 2015 when it decided to institute a fee for bookings made with outside travel agencies that rely on fare data from global distribution systems. Mr Dabkowski, of Amadeus (one of the three large GDS companies), said that he had not seen any evidence of other airline following Lufthansa's lead. He remarked that many airlines, including Etihad and Air Canada, had recently signed full-content deals with Amadeus. He also remarked that low cost airlines were either joining or rejoining GDS, citing Ryanair as an example.
Mr Dabkowski stated that global distribution systems remain a cost-effective channel for delivering high-quality bookings. He calculated that two thirds of bookings made by travel agents are premium sales, either first or business class or premium economy, and average yields from agency bookings can be 20% to 40% higher.
Google's strategy undefined, but it will be a formidable force in travel technology
With the rapid changes occurring in travel technology, it is a question of what travellers can expect in the future. Mr Morris predicts a mix of artificial intelligence and human interaction in the travel experience, and he also cited voice commands as an interesting trend to watch.
A general consensus among panellists was that Google would become a major player in the travel technology space, but the company's strategy is still somewhat undefined. Mr Morris remarked a year ago that Google was only offering boarding passes and flight status cards. Now the company offers complete itinerary management, destination information, weather, and the ability to book flights and hotels together. He said that Google is trying to insert itself into the gap "between you [technology providers] and the passenger".
Mr Dabkowski praised the current Cloud technology, concluding that it is an IT solution that has come along at just the right time. Cloud-based solutions enable companies like Amadeus to put computing capacity where it needs to be, allowing for a quick scale-up and scale-down of capacity within minutes. Amadeus has done some work with Lufthansa that drove close to 100% reliability for the airline's Cloud-based session.
Technology is an important conduit for improved customer experience and growing revenues
The travel technology space continues to be one of the most dynamic in the global travel business. The endgame is to create a richer experience for passengers while expanding revenues for travel service providers.
There are numerous ways to achieve those goals, and some have a higher level of maturity than others. Key to successfully exploiting all the emerging technology is gaining a deep understanding of passenger preferences, maximising the opportunities from increased personalisation.