Artificial Intelligence- Personalization trends in the Travel industry.
After these tough times have passed by and the world comes back to normal, people will start appreciating the simpler things in life that they earlier took for granted. Being able to move around and travel would be the most significant of these. From ages, mankind were nomads, moving from place to place in search of new land, food and a new life. The earlier need for travel, gradually evolved and as civilizations flourished and modern economies came into structure the love for travelling took new meaning and satisfied new needs . ‘Wander lust’ they now call this innate desire of people to move and travel. And once the borders which are now closed for the global medical emergency are opened people will start appreciating the freedom to travel more than earlier.
Technology has made travelling safe, convenient and more accessible to millions around the world. It has helped solve the hassles of travelling to a foreign land without knowing the routes or the language. It has helped find newer destinations and activities to engage in while travelling.Personalization powered by digitalization and automation is where we enable software to tailor fit needs of each individual customer. Personalization allows marketing specific services based on customers preferences. Let’s look at how artificial intelligence enables personalization in the travel industry.
According to a holiday report by the travel and tourism company, SOTC India, 71% of travelers across four age groups chose flexibility and customization in holiday preference. Of this, the age category of 25 and less had 59% preferring flexibility and customization as the top reason for choosing customized holidays. The result is 69% when considering millennials who are between 26–35 years old. They have recently introduced AI powered holiday planning tool- ’Trip planner’ that used around 23 million data points to create customized itinerary according to customers preferences, making it easier for them to plan their next holiday. Many such companies are starting to realize the importance of personalization and customization.
According to the PwC 2019 Hospitality and leisure trends report, there are three strategic approaches to enable higher personalization which are to : modernize the service offering; hire high-touch oriented employees who can make guests feel noticed, welcomed and pampered; and implement the latest technology to realize savings on back-end administrative processes, which could be invested in new digital-based programs that improve the quality and convenience of the interactions between guests and the hotel.
Planning the trip
Planning a trip, whether intentional or unintentional includes several tasks- finding a destination, finding out places to visit, activities to do. It also includes booking travel tickets and accommodation which will be further elaborated. Since a journey or a trip is mostly panned as a vacation, for several people it is extremely special and intended to be memorable. Personalizing their planning according to preferences will benefit travel companies, when due to more and more third party booking sites facilities like accommodation is becoming more of a commodity. Companies like SOTC have created AI powered tools like Trip planner to create customized itinerary for customers according to their preferences. Travel brands can create customized recommendations for their clients with the help of artificial intelligence. Booking.com conducted a survey revealing that one third of travelers would not feel uncomfortable if their travel history is used by an algorithm or computer plan for their next trip.
Booking tickets
The earlier struggle for people to contact a travel agent for booking flight, bus or train tickets are now non-existent. Online booking services have now entirely replaced earlier booking agents. Technology is making booking more easier and accessible to people. Companies like Makemytrip and Goibibo which enables travel ticket booking have used AI powered chatbots to create and send suggestions and alerts of ticket bookings. They also have experimented with voice technology enabling customers to book tickets by talking to the chatbot. Google flight even predicts and announces flight delays before the airlines themselves do. Travelers are expected to visit around 4–5 websites and spend roughly 40 sessions prior to making travel purchases. It clarifies the importance of personalizing the booking experience to save time and improve customer retention. Booking platforms like goibibo and makemytrip have user login and retain history of travel purchases made prior to that to facilitate frequent bookings to those destinations.
Making hotel bookings
There is a rising use of third-party booking services by customers while planning for hotel accommodation. Websites like booking.com, hotels.com, tripadvisor, trivago are competing in this space to improve customer service. As mentioned earlier hotel rooms have increasingly become commoditized in these platforms, price being the only differentiating factor. Customer ratings and reviews have almost replaced brand reputation. This change has directly impacted the profits of players in the hotel industry. The commissions paid to these third party booking services range from anything between 10% to 18% of revenue for larger and smaller chains respectively. Third-party presence has made the hotels focus less on hotel brand awareness campaigns and more on creating a highly personalized experience with proactive anticipation that surpasses customer expectation. They rely on customer allegiance and word of mouth to retain and expand their customer base.
Room services
Hotels are now enhancing customers’ on property experience by deploying chatbots and AI powered voice assistants to answer questions, carryout requests and offer real time recommendations. High end hotels like Marriot and Hyatt earlier used to retain histories of customer orders and requests. As part of proactive anticipation, they fulfill these requests the next time for the same customer without him/her having to ask. These can be seen as primary applications of personalization in the hotel industry. The Edwardian hotels, Cosmopolitan have their own virtual concierge. Also, companies like Amazon and IBM have launched hospitality specific assistants. IBM’s Watson assistant for hospitality is white labelled and helps in retaining guest data.
Scheduling activities
AI enabled voice and chat assistants help customers schedule and manage their activities, especially for people travelling for work and not leisure. They have little time to spare for scheduling and these tools help personalize this experience. IBM’s Watson assistant for hospitality also has several other features, which helps schedule activities. In case the guests’ flight is arriving late, it enquires to the guest by name and asks for confirmation on any usual orders. It also gives new suggestions from the menu. It checks with the guests calendar and makes arrangements for transportation, helps in scheduling guests’ meetings and sets alarms for usual activities like gym. Voice assistants like Watson provide opportunities for upselling by tailoring recommendations to alert guests on services they might want and enabling smooth transactions.
Collecting Feedback
AI is used to power online listening tools to monitor social media comments and guest reviews which is cumbersome to be done manually. Tracking tools are used to monitor guest reviews and notify hotels if they are mentioned or commented on online. This enables hotels to respond quickly to negative feedback and improve services according to guest sentiments. There are also paid tools that provide detailed reports, analytics; monitor blogs, social media and review sites. Thus big data analysis helps hotels understand what their guests think of them which can help in social engagement and marketing.
With increasing competition in the travel industry and commoditization of facilities due to the involvement of third party websites, creating a valuable and delightful customer experience can have the difference between life and death for travel and hospitality brands. Personalization of all services is what the industry is moving towards. It is no longer about segmentation. Customer segmentation and subsequent targeting is a thing of the past. Customization and efficient use of customer data to fulfil customer requirements proactively is what will strengthen the bottom lines of the companies.
