“We are all in the same boat/plane”—collaborative, strategic competition is one of the many new ways to beat this crisis.
At this point in the global pandemic, signs of recovery are beginning to emerge for the travel sector, led by domestic travel in the United States and China, where hotel and airline bookings have both increased in recent weeks.
Early signs of recovery are starting to emerge in the Asia Pacific region (APAC), too. As services resume, what is abundantly clear is that the consumer landscape has forever changed. The companies that fare best in the new operating environment will be the ones that find a way to adapt to the new rules.
So, how can the travel industry boost recovery fast and ride on the new optimism to recover and even emerge better than before? According to one expert, Wolfgang Krips, Senior Vice President of Corporate Strategy, Amadeus, here are five of the biggest opportunities for the industry to leverage:
- Domestic travelers and new feeder markets
Over the next few months, there should be a focus on the domestic traveler as recovery will be led by this group. Global travel data consultancy OAG feels that consumer sentiment towards flying will improve over the year, with travelers leaning towards domestic travel in the short-term, and international travel in the longer term. According to their recent survey, 76% of international respondents would take a domestic flight by the end of the year, while 58% would be confident to fly internationally.
In APAC, this trend is showing up, in domestic hotel bookings that have started to increase. As volumes pick up, APAC’s travel companies need to relook their business strategies and adapt to them as domestic audiences may not have traditionally been a key segment.
In the long term it is also key that travel providers stay agile, as they will need to keep up to date with the latest government guidelines and use data to inform their strategies to target the right audiences. Due to varying levels of impact and regulations across geographies, countries’ traditional ‘feeder’ markets may change, and the industry may need to identify new geographies to focus on instead. This would include tailoring offerings and promotions to appeal to very different and specific audiences.
For example, while New Zealand has traditionally not been a key target market for hoteliers in Australia, it is now one of the first geographies they are focusing on.
- Growth in small group travel… at a premium price
In a world where social distancing will be the norm such as work from office, it is critical for companies to relook their offerings and packages to tailor to this. Apart from government guidelines, we expect travelers themselves to prefer smaller group offerings or solo options, replacing ‘mass tourism’ which was previously popular in many parts of Asia Pacific.
As travel companies, especially travel agencies, tour operators, and hotels, rethink their tourism offers, they will also need to relook their price structures. The encouraging thing is that we expect travelers will be willing to pay a premium price for the reassurance of safety, so companies can still balance their bottom lines if they embrace the shift from quantity to quality.
- New realities with tech
The key to success is catering to the demands of consumers, and in the post-pandemic market, they will expect reassurance of personal safety and hygiene. The easier it is to limit human contact; the safer travelers will feel, and the sooner we will see recovery as an industry.
In the post-pandemic world, touchless travel will be the future, and technology will be the silver bullet that enable this. From biometric-enhanced airline boarding, to self-service kiosks for baggage drops in airports, to hospitality cleaning protocols and use of robotics—technology usage will increase, helped along by falling hardware costs and the rise of 5G networks.
Regardless of where providers sit in the travel ecosystem, they will need to embrace technology sooner rather than later, in order to adapt to the new rules and if they want a competitive edge in recovery. If done right and we see technology across the ecosystem, the traveler’s journey can come out more streamlined and efficient than ever before.
We are already working with customers globally to help them to adapt their current infrastructures and processes to the new norms in rules and expectations. The good news is that the industry was already looking into these technologies, we just need to embrace them and accelerate their adoption.
- Accelerated adoption of cloud technology
In the mid-to-long-term, the industry will be able to reap more benefits if it moves towards open systems and cloud together. And with the industry’s accelerated rate of digitalization in response to the COVID-crisis, we expect the adoption of cloud technology to speed up as well.
One key benefit in the long term is that it enables companies and travel providers to adapt quicker to new customer demands, through data sharing. To be able to adapt to new traveler expectations and needs that are only available from other vendors, businesses should ensure their cloud platform can connect directly to those other vendors to collaborate on providing a flexible customer experience.
- A turbo-charged climate of innovation and collaboration
As the industry finds itself in the same boat, it is encouraging to see an emergence of a more open culture of innovation and collaboration. Moving forward, collaboration and partnerships should be part of every Travel Industry to Boost Recovery, as it puts them in a better place for recuperate.
For example, established incumbents would be wise to consider partnerships with travel and technology startups that are traditionally more agile and innovative. They could consider incorporating a startup’s plug-and-play solution or co-create a tailored solution together.
On a larger scale, public and private industry players can come together to create a 360-degree view of the travelers’ journey, from the moment they leave the house, to airport immigration, to hotel check-in. In taking a more holistic view, travel providers can collaborate to ensure travelers have consistent and seamless experiences, and be prepared to work together to address any bumps that may arise along the way.
According to Krips, this is a challenging time for our industry and the road to recovery is long. However, if we all work together, we can overcome this crisis. “And more importantly, we have the opportunity to rethink travel and make ourselves and the industry better for the future,” he said.