31st March 2019
Tourism - How do we manage the increasing complexity of consumer behaviour in the travel & tourism industries?
At 56 Degree Insight we bring passion and expertise developed over many years working with clients across a range of sectors. As we approach our launch in June we will be sharing some details on our offer, our points of view and our recent experiences. Let’s look at the increasingly complex landscape within the tourism industry...
Over the last couple of decades, there has been a revolution in the travel industry. Travellers are no longer reliant on the High Street stores and traditional tour operators to choose and book their breaks or on guidebooks and brochures to choose where to eat or visit – the tools are now in the hands of consumers themselves, who are increasingly confident and willing to experiment. This has also made travel brand management more challenging than ever given the sheer complexity of working out what really matters to consumers and then trying to identify the optimum role for their brands. Three factors in particular are worthy of focus:
The constantly changing relationship between customers and brands: Consumers now have much more direct access to solutions thanks to the internet. The number of touchpoints for brand engagement is exploding in terms of destination and product choice, planning and the actual experience when there. Technology – and the smartphone in particular – has increased complexity. Travellers now engage in smaller and more frequent bursts of digital activity at every stage of the travel process – from choosing destinations and products through booking, planning, the actual trip itself and post-visit. This offers a clear opportunity for brands but also makes it more and more difficult to manage expectations and consistency of messaging. The proliferation of social media, online review sites and blogs have forced brands to react quickly and positively to protect and often enhance their brand reputation. When this hasn’t been managed effectively, the results can be disastrous. For example, back in 2008, when Canadian musician Dave Carroll’s guitar was broken by baggage handlers during a trip on United Airlines, the subsequent reaction from the airline to turn down his request for compensation led to him writing and publishing a song which he released on YouTube. It became a viral sensation and a public relations embarrassment for the airline. Within 4 weeks of the video being posted online, United Airlines' stock price fell 10%, costing stockholders about $180 million in value. This was one of the first high profile examples of how a brand lost control of its messaging to a consumer. In contrast, there is the example of the mid town Manhattan hotel manager who spotted the tweet from a disgruntled guest about the housekeeping in his room– on his return that evening, the guest found an apologetic note from the manager together with a complimentary bottle of wine. Proactive social media handling turned a disgruntled customer into a delighted customer.
The emergence of disruptive brands are impacting the traditional travel industry models: Airbnb is transforming the accommodation sector and the way many consumers select their accommodation –all achieved through the sharing economy with no need for new physical developments, a smaller staffing infrastructure and more competitive costs. Uber too is changing how we get around the cities we visit and traveller expectations about destination travel. This impacts on car hire and traditional taxi businesses. Other new brands are also emerging and changing the goalposts.
This is not ‘bad news’ for the industry. There is much evidence to suggest that these brands are actually enabling the travel industry to expand and attract more customers. These companies, and others like them, are not a replacement to traditional providers - instead they have supplemented the industry and allowed it to grow. Also, they have forced the more traditional players to re-examine their own businesses and adapt accordingly to compete. Thomas Cook, for example, has stepped up its digital innovation, introducing virtual reality experiences across select stores providing customers with an immersive experience when choosing holidays, and providing a new reason for customers to use High Street agencies. But it is all adding to the complexity!
The expectations of travellers are increasing: Travel is becoming more and more accessible – and our world is shrinking with people travelling further and further afield and more frequently. What was premium a few years ago is now mainstream. Destinations such as much of South East Asia, the Caribbean and South America were previously only in the reach of high end UK travellers – in 2016 they are now well within the reach of many and becoming mainstream. The consequence of this for destinations and brands closer to home is that exposure to these new experiences increases demands and expectations on all of their trips– a further reason to continually evolve and develop the product and service offering.
So how can brands make sense of all these challenges and this hugely complex consumer environment? To obtain a holistic, integrated view of the customer’s entire journey is vital. Every element of the customer journey plays a key role in formulating the overall travel experience – from destination and product choice through booking, planning, and all of the stages and products that make up the trip itself. Only by focusing on the individual elements of the travel experience and understanding what really matters to consumers, will travel brands be able to compete by delivering experiences which really matter to consumers.
The mobile device is increasingly fundamental to almost every step of a typical travellers’ customer journey and physical journey: as accessibility and data roaming costs decrease, travellers now use their smartphones as crucial trip planning tools while on holiday – impacting on the more traditional ‘offline’ touchpoints. This makes understanding the customer journey increasingly complex given the incredible intricacies which need to be managed but it also offers an opportunity to view mobile and the proliferation of touchpoints as an opportunity to collect data and create a holistic view.
At 56 Degree Insight, we help travel and tourism brands to break down the visitor journey in its entirety – from consideration through planning, booking, travel, the occasion itself and associated experiences through to post visit views and actions. Our research approach and techniques help to identify the most important interactions and moments across this whole journey to identify where the focus should be. The most successful innovation comes from finding moments where traveller needs have traditionally not been met and addressing them in a completely new way – we can help develop the strategies to make this happen.
Please get in touch to find out more about how we can support you in tourism research