Who 'owns' the traveler? A new industry model on the horizon

"Today's savvy consumer, bruised from the recent fallout of the crisis that beset the travel world, are now more than ever in the driver's seat."

Crises have a habit of transforming our world and, in this case, shaking the foundations of a travel and tourism industry that has enjoyed a sustained run of global growth over the last decade or more. A disruption of this magnitude not only flattens the playing field, they bring into the spotlight parts of the landscape that will likely be disproportionately impacted by a seismic shift coming on the other side of this crisis.

At the center of this disruption that has left an industry in tatters is travel marketing and distribution and more explicitly, who will legitimately ‘own’ the traveler relationship in the future.

For the everyday traveler, the transactional nature of some loyalty programs has exposed them for what they primarily are – points-based marketing to incentivize incremental behavior for profit when things are good, and yet not necessarily effective mechanisms to recognize the value of members in a widespread disruption.

And while airlines and hotels were quick to positively respond to the COVID-19 crisis by waiving change fees and crediting travelers who had booked non-refundable fares or rates, it has shed light on ancillary pricing practices and travel booking conditions that are considered by some to be archaic, and in some cases, quite the opposite of customer-friendly.

This experience has been further heightened for those who were caught in the crisis who booked through third party intermediaries, tour operators or travel agents, at times putting into doubt what they were entitled to and whether they were being treated fairly. Adding insult to injury, customer service levels fell to chaotic lows given the unprecedented surge in demand as travelers looked to cancel or re-book.

On-line travel agents (OTA’s) face their own fork in the road. In the period following the 2008-09 global financial collapse, for instance, OTA’s were well poised to help accelerate the recovery. Digitally-advanced and thriving, OTA’s provided much needed leisure and business revenue to a travel industry in need. That critical source of demand came at a high cost to the likes of hotels who soon saw the financial virtues of selling directly to consumers, avoiding the commissions and gaining access to guests for subsequent travel bookings.

The question beginning to surface in the midst of this crisis that has brought travel to its knees is whether hotels and other travel suppliers will again embrace OTAs or instead turn their back on them or at least limit their reliance as they look to restore demand.

In the past few years, major hotel companies have built out a powerful customer proposition, investing heavily in loyalty and brands to drive an aggressive book-direct agenda. The bid to ‘own’ the customer remains of paramount importance to any customer-facing organization looking to sustain profits and prosperity.

It’s worth considering then, whether this crisis offers an opportunity for the travel industry to take a fresh look at how they service their customers. Not only on-board aircraft, in the airport and on property at hotels, but also outside the actual travel experience.

Today’s savvy consumer, bruised from the recent fallout of the crisis that beset the travel world, are now more than ever in the driver’s seat. As a result, it’s likely they will demand more transparency and recognition going forward and expect to have a ‘voice’ in the travel solutions, journeys and experiences of the future.

Could customer-to-business, or ‘C2B’, be the next buzz phrase? Is this rising influence of consumers the new face of travel? Travel by design may well be the new engagement model, guided by the traveling consumer, as an industry goes in search of its reincarnated self.

This is travel and tourism’s opportunity to meet its moment, to lean in and be the global test market for active participation. In the quest to ‘own the traveler’, brands may well be forced to rethink how they service their customers if they are to earn the right to their business, their data and their loyalty. Certainly, they will need to create an open dialogue that enables the voice of the consumer to be heard, reciprocating by designing and re-constructing a more contemporary, customer-centric travel offering and value proposition.

What’s the prize for doing so? The right for a travel brand to build a sustainable and profitable relationship with its traveling public. One which is built on trust, recognition, transparency and positive change, for good.

Bruce Lahood is a senior partner at ICF Next.

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