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The travel industry has seen plenty of change in recent years, with even more disruption – and opportunity – on the horizon. The second annual Skift Global Forum, held in Brooklyn, New York, on 14-15 October 2015, drew marketers, technologists, and executives from across all travel industries to explore disruption, innovation, and the future of travel. Across speakers, three ideas emerged as central: That travel consumers have fundamentally changed; that the importance of authenticity is at an all-time high; and that there is a general need to redefine customer engagement to address these new demands.
Both InterContinental Hotel Group CIO Eric Pearson and Wyndham CMO Josh Lesnick stressed that traditional segmentation methods have become ineffective. While millennials have emerged broadly as a key group to target, Mr Pearson claimed that IHG has found developing strategy around occasion of travel to be more effective than age or other demographic indicators. Mr. Lesnick took the conversation a step further, highlighting that there is disconnect between how consumers and companies view brands. Wyndham has found that price is not the only way to differentiate, even at the economy end of the market. Mr. Lesnick cited research that found consumers and companies classified brands by price tier in very different ways (with consumers for example, rating the positioning of Wyndham brand Microtel much more highly than Wyndham itself did).
Another significant trend – and one especially relevant for any company hoping to use occasion of travel as a segmentation strategy – came courtesy of Ninan Chacko, Travel Leaders Group CEO, who spoke about the increasingly blurring line between business and leisure travel. Employers and travel companies alike need to review the implications of this and adjust their strategies accordingly. Beyond these, numerous speakers cited the role technology – specifically smartphones – has had. Consumers are more informed and empowered than ever before, and they expect brands to keep up.
Many speakers noted a marked up-tick in desire for authenticity as another consumer shift, a trend relevant across consumer-facing industries but especially travel. Several speakers cited giving up some control over a brand’s message as a way to build authenticity, not to mention audience engagement. This is perhaps most apparent with campaigns playing out on social media. NYC & Company, for example, ran a campaign called #ThisIsNewYorkCity, which encouraged visitors to New York City to post photos and messages around New York City using the campaign hashtag. The campaign relied on visitors to carry the campaign, and had strong results in terms of engagement and reach. President and CEO of NYC & Co Fred Dixon described the messages they received in the following way: “some were smart, some were snarky, some were sassy – just like New York.”
As Mr. Dixon of NYC & Company went on to point out, technology makes it impossible for companies to maintain total control over their brands, even if they want to. Social media provides a free, unprecedentedly broad-reaching platform for consumers to speak their minds and share their experiences. One such platform with powerful reach within the tourism space is review sites like TripAdvisor. Speaker Dr. Camilla Vasquez, a sociolinguist at the University of South Florida, has spent the past few years studying the language in online consumer reviews, and as she explained, bad reviews generally occur as a result of a mismatch between anticipation and experience. But bad reviews are surmountable, she pointed out, and better than no reviews. First, they often prompt other customers to engage (for example, to contradict the bad review in defence of the business). Second, they give a forum for companies to respond directly and publicly, which when done well – genuinely, and not in an attacking fashion – offers an opportunity to reinforce branding overall.
Of course, striving to offer an authentic experience may mean ceding some control over not just message, but also operations. For some, this is an acceptable trade-off; Craig Kreeger, CEO of Virgin Atlantic, claimed the airline is “willing to sacrifice some constituency in the interest of people being themselves.” Authenticity, it seems, is incompatible with complete consistency in terms of experience. Numerous speakers, including founder and CEO of Abercrombie & Kent Geoffrey Kent, echoed Mr. Kreeger’s sentiment and stressed the importance of the quality and empowerment of the individual employees guests interact with. Finally, BlueSmart CEO and founder Diego Saez-Gil gave one additional reason for companies to accept this trade-off, claiming that consumers – and particularly millennials – are more concerned about transparency than perfection in the first place.
As companies build new strategies around the new demands and interests of consumers, a key focus area should be to internally redefine what the consumer experience constitutes. Lippincott CEO Rick Wise dove into the neuroscience and behavioural economics of marketing and consumer perceptions with some important takeaways for travel brands. For example, according to Mr. Wise, consumers that connect emotionally with brands are estimated to be worth nearly twice as much as non-emotionally-connected customers across both retail and travel. Travel companies can build this kind of connection by leveraging nuances in how people form memories. Companies, Mr. Wise says, should put increased focus on building anticipation before a travel experience and maintaining the “afterglow” post-trip, not simply delivering during the actual stay or transaction. Such a strategy takes advantage of the fact that anticipation plays an important role in the overall memory or an experience, as well as the fact that we as consumers generally weight the high point of an experience, as well as the end, more heavily than the overall average. Finding ways to surprise mid-experience and end on a high note are thus key.
These themes and takeaways have broad reaching implications for all companies in the travel and tourism market, from hotels and airlines, tour operators and travel agents, to start-ups and established brands, for attracting consumers and building status as an experience company, not a commodity. Technology can certainly be a useful tool, whether through apps, beacons, or simply making better of use of existing data, but achieving the goals laid out by the speakers at the Skift Global Forum will more importantly require increased creativity from travel brands to respond to these trends, which will only intensify over the next five years as consumers become more connected, more knowledgeable, and more engaged.