Capturing the Lucrative Traveler’s Loyalty: Role of Digitalization

Like all industries, the world of travel is evolving rapidly through technological innovation and changing consumer demographics. As many studies* have shown, the lucrative tourists of the future are middle-class residents of USA, Central Europe, China and the Middle East, who leverage technology to choose destinations, providers and experiences. Their selections are based on ease of access and perceived quality and uniqueness of the experience. While travelling, these passengers spend freely on local products and adventures, then openly share their experiences and opinions with their communities back at home.

The ubiquity of technology today makes it easy for travellers to learn about various destinations, then select and book flights, rooms, tours and many related products and services – all from mobile or web devices. Traditional travel agencies, hotels, tour agencies and airport shopping are often circumvented as travellers‘ self-plan’ their own experience.

Gaining the ‘wallet-share’ of from these prized customers is one of the greatest challenges facing all organizations in the ‘travel value chain’ i.e. airlines, airports, hotels, ground transportation providers, tour operators, retail and food and beverage. Globally, countries, regions and cities are all in competition to attract and retain their loyalty.

As demonstrated in retail and consumer technology products, customer commitment and referrals are based on a provider’s ability to respond to and even anticipate customer needs. This combined with ease of access drives success. By ‘digitalizing’ i.e. making offerings easily available via mobile/web apps and then analyzing and leveraging data demonstrating customer behaviour, organizations enhance customer experience, leading to loyalty.

Digitalization of the Travel Value Network

Next Step, a global consultancy based in Silicon Valley with Europe subsidiary has led digitalization of technology, transportation, finance, retail/consumer and media businesses since initial success driving Adobe’s transition from a perpetual (license) software company to a leader in ‘marketing/creativity as a service’ in 2008.

Based on work with Avinor, United Airlines, Choice Hotels and Airbnb, Next Step has defined a vision of the European Travel Value Network through which a traveller can easily plan, prepare for, experience and share their travel experience. This includes a well-designed customer journey providing easy access to the travel value network. Technology is leveraged to maximize responsiveness, adaptability and customer experience.

Ultimately the Travel Value Network allows each of the travel providers (airport, airline, hospitality, transportation, tour operators, retail and food and beverage) to attain a sustainable role in the travel value network.

Through Next Step’s Digitalization Blueprint, the Travel Value Network will provide:

  • Travelers easy access to relevant (personalized) information, offers and services
  • Easy, pleasant booking, planning and experience of the journey travel
  • Integrate air, ground transportation, lodging, adventure, dining, shopping experiences
  • Offer and deliver relevant locally produced products, services and cuisines to travellers
  • Gain ongoing customer loyalty through facilitation of travellers’ communication and sharing of their experiences during and after travel
  • Personalize and enhance each traveller’s experience’s experience

Next Step Digitalization Blueprint for the Travel Value Network

Next Step’s proven Blueprint for Digitalization is built on the following key principles:

    1. Executive commitment to Digitalization Business Case including:
      a. Reasons to change and/or complement current approach with digital, service-based offerings.
      b. Stakeholder Requirements
      c. Financial model with five-year Return on Investment
      d. Key Performance Indicators and Success Milestones
      e. Risk Mitigation Plan
      f. Program and Project Plans
    2. Customer journey definition, monitoring, adaptation, and feedback processes to drive:
      a. Service/product offerings and business model decisions
      b. Pricing and packaging of offerings
      c. Collaboration partner selection with revenue and data sharing models
      d. Online communications
      e. Organization structures and business processes
    3. Value
      a. Identification of suppliers and complementary service providers required
      b. The business model, rules, processes and revenue share modelling
      c. Integration of go to market and digital offerings with partners
      4. Organizational readiness:
      a. Use of technology and tools to increase agility and operational efficiency
      b. Ease of sharing and utilization of business rules defined with value network partners
      c. Customer-led innovation and responsiveness
      d. Consistent execution of digitalization program and project requirements
    4. Integrated delivery and communications plan to provide regular personalized services and information to each stakeholder audience (customers and potential customers by segment, value network partners, shareholders, employees and the market).