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Why travel brands are particularly ripe for digital innovation

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In November, Marriott International installed an internet-connected mirror within a shower in the Irvine Marriott hotel located in Orange County, Calif., putting a new spin on “shower thoughts”—the idea that people’s best creative ideas and brainstorming take place in the shower. Steam from the shower first fogs up the mirror to create a digital whiteboard on a section of the door that allows consumers to draw all over the glass with their fingers and email the creations to themselves. While only currently in one guest room, the test is almost akin to a small research and development lab, and Marriott plans to crunch guest satisfaction scores in March to decide if the technology should be built into other properties.

At first glance, Marriott’s move into the Internet of Things seems like a stunt and a way for the brand to stay “innovative” in the eyes of management, but Matt Carroll, vp of global brand management at Marriott, said that the technology is part of a broader move to keep up with consumers’ changing travel habits and new competition from digital upstarts like Airbnb, HomeAway and online travel agents. In addition to the connected mirrors, Marriott has also invested in mobile-powered room keys and check-ins and created a Facebook Messenger chatbot that lets guests set up wake-up calls and order room service.

“It’s an ongoing process of testing, learning and trying new things,” Carroll said. “As we hone in on those things that resonate, we’re moving as quickly as possible and scale them across the brand.”

Whether it’s using artificial intelligence to give consumers better recommendations or trying IoT and voice to personalize the experience, travel brands are pouring millions of dollars into technology to keep up with consumers, as customers are using smartphones and tablets to make bookings and manage their reservations.

“The travel sector is already disrupting itself and disrupting itself again because it has all the makings of things that are going on in the consumer markets right now, which is in the direct-to-consumer, service-based moment,” said Brent Vartan, managing partner at Bullish. “Most of what is coming now in the marketplace is people trying to disintermediate as much as possible.”

According to data from Accenture and the World Economic Forum, digital changes to the aviation, travel and tourism industries will be worth more than $1 trillion in revenue and efficiency savings (defined as value) by 2027.

At the center of such investments: troves of data about everything from spending to location to insights about previous trips that marketers are practically salivating over.

“Because we have a lot of data, we have the ability to serve up [bookings targeted to] what types of vacations have they been on before, are they a traveler that is more inclined to relax on a beach or are they more adventurous?” Marriott’s Carroll said. “We’ll serve them up offers for experiences that align with their buying patterns in the past.”

That manifesto is easier said than done. Sixty-seven percent of consumers want travel companies to send them personalized recommendations, but only 44 percent said that brands actually do so, per an additional piece of research from Accenture. Moreover, only 33 percent of consumers said that online travel agents understand their preferences and what they’re looking for compared to 47 percent of consumers who said that airlines and hotels understand them.

For example, only 40 percent of brands use preference data to target emails based on someone’s interests. Another 37 percent ping consumers with emails after they add an item to a shopping cart on a website but ultimately do not buy.

To differentiate themselves from legacy brands and hotels, “an online travel service has to be that much more intelligent, anticipatory and know preferences and relationships,” Bullish’s Vartan said. “The further travel agencies go into the human element and the clienteling element, the better off they’ll be—the promise of AI and deep learning is interesting but only if you can figure out if you want to be in the relationship business or if you just want to maximize transactions.”

For TripAdvisor, which started as a platform of user-generated content and now has 7 million businesses, 500 million reviews and 450 million monthly active users, the site combines AI with data from reviews to understand a traveler’s intent and feelings. Hotel recommendations, for instance, are characterized based on individual interests, spend and proximity. Or if someone is comparing hotel room rates, TripAdvisor’s website surfaces price comparison tools to keep users on the page to finish the transaction.

“We are constantly mining the sentiment of our reviews to distill why a place is right for a very specific person,” said Jeff Chow, vp of product, consumer experience at TripAdvisor. “The biggest thing that we are pushing on is the idea that if we continue to build the relationship with the traveler and deliver results faster and more relevant to what they’re looking for, then monetizing the user will come.”

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