Six travel technologists offer their thoughts on innovation, investment and partnerships
Travolution Innovation Report 2021: Tech strategies in the COVID aftermath
In the 2021 Travolution Innovation Report, six travel technologists offer their thoughts on innovation, investment and partnerships in the time of the pandemic.
Is investment necessary for innovation, or can firms be innovative even if they don’t have millions to invest in technology?
Jon: There’s no doubt innovation needs investment but it doesn’t have to be millions. There are many initiatives that a tour operator has to consider and these can often be consolidated to ensure maximum return on investment.
George: In our view the vast majority of companies in the travel space don’t have budgets at their disposal for major innovation right now. But the upside is that companies can launch beautifully designed B2C engines which target niche audiences – packages, elders, facilities, LGBTQ, youth budget travel, pet lovers and so on – at a fraction of the cost needed 10 years ago.
Manuel: It depends on the innovation. Process innovation is often not very investment-heavy, but rather a case of applying existing technology in smart and/or creative ways. This leaves a lot of room for travel brands to innovate with limited budgets.
Cressida: Investment in technology will be needed to innovate, but this should be considered a good overhead. By utilising RPA (robotic process automation) technology to do low-level tasks like document scanning and data inputting, the human cost can be invested in more-complex tasks of strategic thinking and growth. Investments can be modest to start with and don’t need to cost millions and it will be cheaper than increasing headcount.
Simon: Yes, investment is part of the innovative mix but as important as cash is the appetite for busines change and having adequate resource in the business to make that change. We’ve seen some simple technology changes, such as implementing a CRM (customer relationship management) system alongside an existing reservations platform, deliver big business benefits with relatively low levels of investment.
Andy: I don’t believe spend-level – the buck – has to directly correlate to innovation impact – the bang – by any means. Tech development can be painfully complicated, but it can also be wonderfully freeing and empowering when a simple, well-formed idea is easily communicated with a clear implementation strategy. A good developer can achieve something significant in a short amount of time, but you do need to be bold and to clear their path.
What are the sort of technologies that have emerged in the pandemic as essential if travel firms are to survive and thrive in the future?
Simon: Self-service tools are increasingly important but not everyone wants to do it themselves. The ability for the customer to make changes to their booking without having to call has been highlighted due to the high number of booking cancellations and rebookings.
However, it’s important not to forget that many customers prefer that an agent does it for them, so it’s important to give the agent the customer insight and tooling they need to do this for them.
Manuel: There are various areas where the pandemic has either accelerated technological development or even demanded new technologies to appear. Some examples are chatbots for being able to provide 24/7 customer service; contactless services in hotels, airports etc; more focus on online distribution; and support for flexible booking and cancellation options throughout the whole value chain.
Cressida: One of the largest areas of change for travel will be in payments. Covid-19 has highlighted both the inefficiency and complexity of payment processing. In other sectors, payment providers handle things like commission, supplier payments and refunds, which is cost-effective for all parties.
This is not only a cost-saving area for travel companies, but customers will come to expect the payment options they have available to them when purchasing other products through options like Klarna and PayPal.
Jon: It really depends on the type of travel firm. OTAs need more online info and a way to reach a high volume of customers. Even low-cost holiday clients need reassurance, so it’s essential that during the customer buying cycle they have the information they need.
OTAs tend to have the tech they need, so it’s relatively low-cost to implement FAQs and explain travel rules and regulations. For the low-volume, high-price luxury end of the market, it’s much more high-touch, so FAQs and chatbots will not be enough. Empowering agents to have the information they need at their fingertips is essential here.
Andy: Client self-serve, cancellation and amendment portals and apps with flexible payment models. This is where fintech entrants into travel will look to gain some advantage.
George: Companies that previously ignored their online and mobile presence needed to rapidly bring it up to date as people were not using the front door to visit their businesses. WordPress is now powering around 40% of all websites in the world and close to two-thirds of the CMS (content management system) only sites.
What is your top tip for travel companies that have more-limited IT budgets following the Covid-19 pandemic but which still want to innovate?
Cressida: Inhouse-built systems are rarely scalable and often more costly than businesses realise to support and maintain. Take a cold, hard look at all costs associated with your technology today and this also means the inefficient processes in your business.
A modular technology platform can be a modest investment and then you can invest more over time – you don’t have to eat the whole elephant at once with a tech system. Using a third-party platform will be more cost-effective and enable you to spend more of your budget on attracting customers rather than managing a technology team.
Manuel: Don’t reinvent the wheel. A lot of state-of-the-art technology is currently available in the market, often in a SaaS (software as a service) model, and can therefore be used without a lot of investment. Developing things in-house is often much more expensive than adopting what’s already available.
Simon: Look at how the tech can take the strain. Create a single customer view, aggregate data from your customer touchpoints and use it to automate the repetitive tasks that tie up your valuable people so they can focus on delivering that personal experience to help differentiate your brand.
Jon: There’s no doubt that we have seen many travel companies reducing their internal tech headcount as a result of the pandemic. This means that to innovate, these companies are going to have to make sure they work with travel tech companies who offer a customer-first, partnership model. My top tip is to get the right technology partner. Do your homework and speak to the technology partner’s existing customers.
George: Schedule a monthly innovation round-table with all the staff and brainstorm and reward the best ideas. See how you can reduce low-priority tasks of your staff in order to allow daily reflection time for innovation challenges. Innovation is a social process and your staff know your strengths and what customers would more likely adopt.
Andy: Travel firms can benefit from selecting an external tech partner that’s aligned to their business or requirement and that has a communal or SaaS-based technology. That way they benefit from the shared innovation and product roadmap without having to drive, and pay for, those improvements.
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How has the pandemic changed the nature of the partnerships that your company has with your travel clients?
Andy: It’s strengthened the bond, relationship and trust as we’ve gone through a rather painful shared experience and had opportunities to help each other out and have conversations you never thought you’d need to have – all from your bedroom.
From a more practical point of view it’s definitely accelerated the use of online tools for requirements gathering, training and support. We do much less face-to-face time with customers and can get much more done.
Simon: We’re fortunate to have partnerships with several large ‘staycation’ operators who have seen some unprecedented booking levels, but for the rest it is evident that there is no one-size-fits-all change across our clients. Every operator has approached the pandemic very differently and we’ve done whatever we can to support them as they navigate through their unique set of challenges.
Cressida: We have been through this incredibly tough time together and worked closely with our clients to help as each new challenge came our way. Our Net Promoter Score has moved in a significantly more positive direction in the last 12 months as we tried our best to find solutions to our customers’ ongoing challenges and I feel our partnerships and our methods of communication are now more transparent.
Manuel: We have seen a shift in customer behaviour towards more?standardised solutions. There is less appetite for custom-built solutions and customers are happier to get standardised product features that solve their problems. This is a much more scalable approach both for our customers and for ourselves and it aligns our interests even more.
George: Customer bonds have strengthened. Everyone needed financial help, discounts, extra features, new modules at reduced rates. So, when the daily runaround decreased by a huge margin, customers became more humane and understood how valuable an understanding and flexible IT partner is for their future business.
Jon: It’s really made us work much closer with our clients. We have set up a dedicated customer success team and we allocate a customer success manager to each and every one of our customers to ensure they are benefiting from our technology. This means we are understanding their needs and together making sure they are getting a real return on investment.
How has the pandemic prompted you to revise the focus and priorities in your company?
Cressida: We now have a laser focus on supporting existing clients while building a product for the future. Covid-19 hasn’t prompted this change in Traveltek – we had the plan before. But it has certainly highlighted many inefficiencies in the travel industry that technology can help to fix.
Jon: As I said above, we have been working much more closely with our customers who we have put at the heart of our business. For Kaptio we want every customer to be an advocate of our products and services. It’s been challenging over the past 18 months but we are witnessing the results of our hard work and our customers are feeling it too.
Simon: We’ve long seen the benefits of remote working and how teams can work efficiently and effectively while out of the office, but the big change we’ve made is how we engage with our customers remotely. To address this we’ve launched Inspiretec Academy, an online learning tool to help our customers quickly get up to speed and get the most out of our platform and we’ve already used it to support the ‘go live’ of new implementations.
Andy: It’s accelerated the strategy to launch more off-the-shelf and modular?based software. We’re launching a new product next month and that will be our third in under two years.
Our history and skills are more aligned with enterprise technology and relationships, and that won’t significantly change, but complementing that with a diversified product set that can be simply delivered to higher numbers of customers internationally broadens our opportunity. Putting our best technology in front of more people more simply sounds like something that shouldn’t need a pandemic to accelerate.
George: We offer a fully cloud-based solution, so delivering projects from home brought little change to our organisation. Our priorities have always been to deliver fast and feature-rich technology and we kept doing so regardless of Covid.
Bookings are now at +47% versus 2019 levels so we believe our focus on delivering really paid off. With our new ‘book as you grow’ pricing models, we have assisted our clients through the toughest period in memory and can look forward to seeing bookings and income increase going forward.
Manuel: The pandemic has certainly demanded more focus in various areas. We closely examined everything we did in order to assess whether it also made sense from a strategic point of view.
Furthermore, we have invested a lot in standardisation and process automation to be able to deliver a better service with less effort. Last but not least, we have focused more on medium-sized to large travel brands because many small players have gone into some form of hibernation, but we see this as a temporary impact.