As travel brands start their smart recovery, they may want to take full advantage of the digital self-service habits consumers have become accustomed to during COVID-19 lockdown and introduce new services which could cut costs and boost revenue.
To succeed, travel brands must identify and adopt the best practices of online retailers and service apps which have been keeping their would-be customers satisfied and connected during this period of social distancing.
They must also ensure that whatever new products and services are introduced can be delivered in a way that is consistent with their travel brand promise.
During the pandemic, online shopping, grocery and food delivery services, streaming entertainment, and on-demand app-enabled activities became critical aspects of everyday living.
Total e-commerce sales of grocery delivery and pickup services rose from $1.2 billion in August of 2019 to a height of $7.2 billion by June 2020. They had remained relatively high at $5.3 billion by May 2021.
These new consumer habits present new opportunities for travel brands to keep up with the shift in expectations.
"At the beginning of the year, when the travel industry started to open up, we noted that business travel had taken a back seat to leisure travel. Leisure travelers had become extremely adept at using technology during the lockdown," says Jacqueline Nunley, senior industry advisor for travel and hospitality at Salesforce.
"They had successfully shifted to digital channels and there was an incredible growth of digital communities. Service provisioning and consumption has become ever more digital and automated and is at the heart of interactions now. It's the type of support that consumers want and need to have at their fingertips based on their experience during the pandemic."
"To understand today's behavioral changes in travelers you only have to look at how we as consumers started ordering food and groceries to be delivered to our homes during the pandemic lockdowns. Not only were these new conveniences pushed into our ecosystem, but they were making everything much easier.
"People got up to speed quickly on how to serve or help themselves when it came to the conveniences they needed. Now, that creates an opportunity for travel to increase their services and develop new revenue streams, but it also creates some real problems.
"Travel companies have to mimic these conveniences that consumers now deem as the norm. You have to provide what travelers expect you should have as part of your offers."
For example, hotels can interest guests in a re-defined room service offering with on demand, app-enabled food ordering, or booking a reservation at the restaurant via an app. Hotels also must be prepared for handling consumers who have grown accustomed to food delivery services, like Uber Eats, which may offer a broader range of options.
Brand values
Partnerships become critical to augment offers for differentiation from competitors. But in that exchange of services, it is paramount that neither the product offered nor the brand represented be damaged or diluted.
"Hotels are grappling with those sorts of scenarios," Nunley says. "How do travel companies solve what they have in front of them in terms of customer expectations for convenience, while prioritizing keeping customers safe.
"If they can deliver that type of service successfully, it keeps them top-of-mind for future bookings, return visits, and eventually loyalty. So the question becomes: How do these companies implement travel ecosystem solutions that allow them to deliver this type of augmented services regularly and consistently, to serve the needs of the traveler?"
"Health and food handling/delivery protocols can raise concerns with some brands or even segments. Travel companies have to get creative so delivery is handled safely for both employees and guests. One option is delivery lockers where guests can be alerted and can pick up the food safely from the locker. Another alternative may be ghost kitchens that assist with having hotel based menus for exclusivity and continuation of hotel services that may have been discontinued temporarily due to the pandemic."
Butler Hospitality in New York was an early innovator in this space. The company transforms hotel restaurants into delivery hubs offering virtual room service to nearby full, limited- and select-service hotels. Butler designs a unique and varied luxury menu, prepares it in its kitchens, and delivers the food to the hotel guest in under thirty minutes, directly to the hotel room, charging the guest's credit card on file.
The company proved the benefit of the ghost kitchen model to hotels and their guests during the pandemic, supplying over 175,000 meals to healthcare workers, quarantined senior citizens, COVID patients, and military personnel.
"I'm particularly proud that so many of our partner hotels were able to stay in business during lockdown only because they were part of the Butler network," says Butler Hospitality, CEO Premtim Gjonbalic. "These hotels would not have been able to secure first responder contracts without the room service amenity we provide."
Thinking outside the box
While it has become a necessity in the hospitality space, the concept of outsourcing food and beverage and other services is not wholly unfamiliar in the travel space. Many airlines spun out their catering divisions during privatization to concentrate on their core competencies of air service.
At the same time, those catering divisions perfected their business models and expanded to providing food services to other carriers. What mattered most—maintaining brand integrity through the quality of food service—improved in this more competitive landscape as caterers refined their processes to meet more clients' demands. Airlines continue to work with their contracted catering partners to develop chef-designed meals to differentiate their brand.
During COVID-19 lockdown, many airline caterers quickly adapted to new health and safety requirements, and some even pivoted to home delivery.
Finnair's catering branch picked up on the rising popularity of home-delivery during the lockdown, announcing a partnership with food delivery service Foodora to deliver inflight meals to customers' homes. It’s not only a clever way to keep the business going, but to stay top of mind with their customers and attract new ones.
"This new cooperation with Foodora online food service makes Taste of Finnair available for a large number of new customers," said Marika Nieminen, Finnair Kitchen vice president.
"When so many people are dreaming of future travel, we want to offer a small Finnair experience at home. The Taste of Finnair was born from the desire to develop Finnair's business and offer employment to our people during the COVID-19 lockdown. I'm happy to say that we have managed to make it a permanent part of our operations. We will continue to develop both the products and the wider selection."
The airline also sells meals at select grocers in southern Finland.
The key is to ensure that whatever adaptations travel brands made or make to meet consumers' expectations are developed further to maintain mindshare with consistency, Nunley advises.
"It's essential to carefully consider the entire traveler experience, making sure that any new services added to generate new revenue meet the traveler’s expectations of the brand." Nunley says. "Whatever vendor you partner with is now acting on behalf of the brand.
Consumer perception
Even if the fault in service or product has nothing to do with the brand, the brand will still be held responsible in the consumer's mind. Brands need to understand that their travel ecosystem of vendors and partners will require their brand standards to be upheld whether through training, certification and or knowledge shared on how to deliver their brand promise.
"Otherwise, you're putting your brand at risk because you haven’t followed through on all the touchpoints that could affect or severely damage the guest experience."
Again, the airline catering space may provide some inspiration. While airlines have outsourced services that were once in-house, they have not forfeited control entirely. Specially designed menus, firm contracts, and regular audits of the catering facilities ensure continuity of the brand promise. But there’s also some inspiration to be taken from best practices on the vendor side.
It's about clearly defining standards and responsibilities for the product or service added. Nunley emphasizes that these new opportunities also re-open the long-standing debate over customer ownership at various points of the journey.
"Who actually owns the customer? At what point does a vendor own the communication?" Nunley says. "Now, the question is how to augment the customer journey. How do we begin to integrate the right communications, with the right follow up, with everything that leads to the guest having a good experience?"
Can there be a better handoff at the different steps along the journey - from home to the airport, the airline, the car rental or transport, and the hotel or alternative accommodation, then back again? And how do we make it possible to ensure that all partners benefit during that handoff?
"Salesforce can play a part in facilitating that," Nunley explains. "It's been talked about for years and years, how you essentially stitch the customer journey together. And some aspects work and some don't.
"I've seen this done in the luxury sector, where brands that control the transportation component can stitch that into the check-in process and recognizing the guest, but it typically stops there and becomes disjointed when it comes to connecting the hotel services seamlessly until you check out. It's tougher to stitch those components together when you sell a particular portion of the journey. But that is what we're trying to solve. Say a brand has a relationship with Uber.
"For operations, is there a way the brand can connect to their partner information to get a status on their guest's arrival? Is there a way for the brand to have an transportation portion on their app so the consumer can access all the conveniences they need at their fingertips?
"When the guest is due to check out, is that an opportunity for the brand to alert the guest about booking their prefered method of transportation, is it an opportunity for an alternative suggestion, a free ride as a perk? Those kinds of relationships and synergy have to be developed and perfected for interactions to deliver a truly differentiated travel experience."
Again, brand alignment is critical, and travel brands have to consider what companies to bring into their travel ecosystem carefully. Still, the future lies in automating that work and nurturing those partnerships to weave together a seamless journey.
"I truly believe that is the future of travel and hospitality," Nunley says. "Getting your travel ecosystem right, and your processes right, and ensuring your brand promise comes across. That is going to be what captures and lasts in the consumer's mind."