The U.S. travel association has estimated travel spending will increase by 48% in 2023, compared to the pandemic low in 2020. And as expected, the year has got off to a strong start. In January, Barclays reported a 66% increase in travel spending compared to 2022, in spite of the cost of living crisis.
One thing is for certain – hospitality leaders need to prepare for this spike in demand. Not only to ensure they have the right capacity, but to also ensure that the guest experience remains as seamless and undisrupted as possible.
So what do customers expect when organising their travel or accommodation plans? Customers want a comfortable, but unique and engaging experience. Digitalisation will make this possible, delivering an online experience to customers that reflects the physical one. And that’s before their holiday even begins.
Delivering a personalised journey
As all staff in the hospitality industry will know, anticipating customers’ needs varies from guest to guest. Getting this right can have a huge impact on CX. It is important for industry leaders to recognise the value of personalisation in their online presence as well.
Generating an online experience which feels tailor made can help to attract and retain customers. 65% of consumers agree that personalisation earns loyalty, whilst driving engagement to increase website traffic.
Take Mandarin Oriental as an example. The luxury hotel chain predicted a post-pandemic rise in travel spending. They had the foresight to transform its online presence in the middle of the COVID-19 lockdown, so it was ready when restrictions were lifted.
The brand focused on creating a more personalised digital experience. This resulted in the average revenue per booking increasing by 40% and engagement behaviours rising by 10% by 2021. The brand’s most recent response to the predicted travel spending rise has prompted a complete redesign and re-platforming of their website. This has created an online presence which provides customers with a true reflection of the brand’s luxury service.
Hospitality leaders need to recognise the profitability in integrating personalisation into their online presence. This is to create a cohesive and unique experience for guests, both in person and online.
Accommodating guests on-the-go
Brands should also recognise that in order to meet their guests where they are, they need to go mobile first. Up to 44% of online travel sales are made via mobile phones. So designing websites around a mobile format will make user experience as easy as possible and prevent frustration from poorly designed websites.
Whilst website formatting is one aspect of going mobile first, using digital payment methods is also crucial. A recent study carried out by McKinsey found that 15% of digital wallet users leave the house without a physical bank card. Mobile payment and Buy Now Pay Later schemes are increasingly the norm. Encompassing these payment methods can help to avoid alienating customers and create a more streamlined system for booking travel.
How can AI maximise profitability?
As brands prepare for an increase in website traffic during this predicted surge in spending, hospitality leaders should also assess how to capture and maximise customer engagement. AI and machine learning technology can provide new and effective tools for improving digital capabilities. Recommendation systems can use customers’ search history, activities and preference to provide personalised results. Whilst AI-powered virtual assistants have been used to provide real-time customer support and answer queries across a company’s digital presence to boost satisfaction.
These technologies have provided sales teams with the ability to better track consumer habits, behaviours, and preferences. They can then produce targeted offers and promotions, maximising customer satisfaction and loyalty and overall revenue.
Brands might hold concerns about investing in expensive technology, given recent turbulence in the economy. However the example of Mandarin Oriental suggests otherwise. Investing in their online presence in the middle of the pandemic has paid off massively, allowing the company to greet the post-pandemic travel surge with a more engaging experience.
The outlook for the next year suggests an immediacy for other brands to act now when transforming their tech stack or risk falling behind those who already have. Investing in AI and other technology will certainly prepare brands for the predicted surge and will also maximise profitability.
Beyond hospitality
In light of the ongoing economic situation, budgets will be tightening and guests are going to be particularly cautious with their spending. It is up to hospitality brands to ensure a valuable experience that meets expectations. By investing in digital capabilities, the hospitality sector can go from strength-to-strength.
But leaders within other industries might also stand to benefit from these points when thinking about their digital customer experience. For instance, industries such as retail and healthcare would benefit from Mandarin Oriental’s example. Treating customers with the same level of guest attention to boost customer satisfaction. Retailers, for example, might want to rethink how they treat different types of customer experiences – creating a personalised experience for those who are simply browsing and others with a specific purchase in mind. Investing in a well thought out digital experience has the potential to produce exciting results beyond hospitality.