Redefining the Travel Customer Experience

Phocuswright White Paper

November 2017

In cooperation with

Written and researched byHollis Thomases

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2©2017 Phocuswright Inc. All Rights Reserved.

Travel and tourism is one of the world’s largest industries, valued at over US$1.2 trillion. The industry is well known for leveraging the latest advances in technology, not only to simplify the process but to deliver a great customer experience! While the Uberization age has brought the idea of the “connected traveler” and an “unparalleled guest experience” into focus, meeting the demands of digital transformation and customer experience can be a slippery slope. With each transformative change, customers expect more from their experiences, and need fingertip- and voice-based access to more travel options, and real-time status and social sharing.

At Hexaware, we believe that the Customer Experience Transformation will be at the heart of how smart travel and hospitality brands interact with their audiences, to provide a fluid interactive experience in their channels of choice at every phase of the customer journey. For many of our clients, a Digitally Transformed Customer Experience is a key consideration as they discuss their technology requirements and approaches to change how they interact with their end customers, employees and supply chain. At Hexaware, we help our clients enable that in the most cost-effective and agile manner, by:

• Harnessing the power of data to derive real-time actionable insights

• Modernizing applications and infrastructure landscape by creating a ‘Composable Enterprise’

• Driving process orchestration and re-engineering

• Using systems of differentiation to better engage with customers, employees and suppliers

We’re excited to present this commissioned paper with Phocuswright. The paper covers how and why the traveler’s expectations matter, customer journey mapping, the process of crafting great digitally-transformed customer experiences, coupled with used cases, digital transformation leadership requirements, and considerations for the future.

Happy Reading!

Vijay Iyer,

Global Head – Travel & Transportation

Hexaware Technologies

For more information, please visit: https://hexaware.com/industries/travel-and-transportation/

To get the latest updates on Hexaware, download our app below:

(Android) (iOS)

http://www.hexaware.commarketing@hexaware.com

An Introduction from Hexaware

Redefining the Travel Customer Experience / November 2017

3©2017 Phocuswright Inc. All Rights Reserved.

About PhocuswrightPhocuswright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, Phocuswright fosters smart strategic planning, tactical decision-making and organizational effectiveness.

Phocuswright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, mar-keters, strategists and research professionals from all segments of the industry value chain use Phocuswright research for competitive advantage.

To complement its primary research in North and Latin America, Europe and Asia, Phocuswright produces several high-profile conferences in the United States, Europe and India, and partners with conferences in China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce.

The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents.

Phocuswright is a wholly owned subsidiary of Northstar Travel Media, LLC.

www.phocuswright.com

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Contents

Table of FiguresTable of Contents

Executive Summary 5

Introduction 6

How Today’s Travel Customers’ 6 Expectations Impact the Business of Customer Experience

Creating Great Customer Experiences 8

Customer Journey Mapping 8

Digitally Transforming Customer 10 Experiences

Examples of Digitally Transformed 11 Traveler Customer Experiences

The Digital Disruptors 13

Digital Transformation for the 14 Business Traveler’s Experience

Future Gazing 16

Winning at Customer Experience 17

Figure 1 7Travelport’s U.S. Digital Traveler usage research reveals customer expectations

Figure 2 9Research needs to pull in “voices” from customers, employees and the organization

Figure 3 10Roll-up of a full journey combining stories and voices

Figure 4 12Disney MagicBands are customized for each guest in a watch-like box

Figure 5 13Delta’s SkyPro program puts real-time passenger information in the palm of flight attendants’ hands

Figure 6 14Example of beacon technology deployed at airports

Figure 7 15WhereFor Business reduces booking to three clicks and encourages, rather than forces the employee to choose options more wisely.

Figure 8 16Lola’s 24/7 mobile-powered personal concierge for business travelers

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Redefining the Travel Customer Experience

Executive SummaryTravel has entered a new post-Internet age, one now powered by digitally-savvy and perpetually-con-nected consumers. These evolved travelers have different expectations, demands and behaviors – characteristics that drive the industry toward “customer centricity,” a focus on the customer experience. Much of this movement involves the migration to more technology and data mining, and greater digitiza-tion of the customer journey. At stake for aviation, travel and tourism between now and 2025, according to a 2017 World Economic Forum report, are benefits valued at $700 billion for customers and wider society, and $305 billion in increased industry profitability. For those in the business of travel, strong, positive customer experiences are no longer a nice-to-have; they are a have-to-have:

• Today’s travelers want mobile-first enabled experiences – Up to 44% of travelers research and book their travel on a smartphone; up to 65% avoid hotels that charge for Wi-Fi; and up to 73% believe that mobile boarding passes make traveling much easier.

• They want easy, immediate answers and solutions to their problems – Up to 47% of travelers use voice search when researching a trip, and travel chatbots and mobile concierge services continue to proliferate.

• They expect personalized experiences – Up to 60% of travelers believe a good digital experience is important when choosing an airline.

• And what travelers share with their social networks and on review sites matters – 60% of trave-lers use video and photos posted by their friends as part of their travel research, and up to 81% use peer-to-peer review sites.

While digital transformation today entails tools and technologies like chatbots, artificial intelligence, machine learning, wearables and biometrics, the process of creating great customer experiences starts by understanding all the respective traveler scenarios and mapping out those customer journeys. To succeed requires transformative change at all levels of the organization. There are six common objec-tives in the digital transformation of travel’s customer experience:

1. Facilitated, frictionless interactions;2. Communications through preferred channels, by customer;3. Personalization;4. Alleviating pain while improving wonder and delight;5. Creating and reinforcing loyalty and positive brand sentiment; and6. Planning for and accommodating new generations of travelers.

In both leisure and business travel, examples abound of legacy companies and disruptors succeeding at creating great customer experiences. To guide this transformation, more and more companies have created leadership-level positions in innovation and/or customer experience. As companies consider their digitally transformed futures, they need to consider important questions now: “How long should we wait?”, “How much should we budget?”, “Who will lead our efforts?” and, most importantly, “What do our customers really want from us, and how can we give that to them?”

The pressure to delight is on.

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IntroductionTwenty years ago, the advent of the Internet and the browsable web radically trans-formed the travel industry. Today the industry is being transformed again, this time by mindset. The pressure to attract and retain customers in an ever-more competitive and fragmented landscape grows stronger every day. At the same time, travelers’ evolving expectations, public sharing and communications styles further change the dynamics. The travel industry – and many others – must now meet the customer where and how it matters most, and along the entire spectrum of their journey. The sum total of these interactions, whether interpreted by customers as good or bad, makes up their customer experience. In travel, “customer centricity,” the movement to focus on the customer experience, is no longer a nice-to-have; it’s a must-have.

This paper presents an overview of how and why the traveler’s expectations matter, the process of creating great digitally-transformed customer experiences, and mistakes that should be avoided. It also provides examples of digitally-transformed leisure and business traveler customer experiences, digital transformation leadership requirements, and considerations for the future of the customer experience.

How Today’s Travel Customers’ Expectations Impact the Business of Customer Experiences The benefit of digital transformation to both travelers and the travel industry cannot be ignored. According to a World Economic Forum report, between now and 2025, “digital-ization in aviation, travel and tourism is expected to generate benefits valued at $700 billion for customers and wider society, while at the same time creating up to $305 billion in increased industry profitability.”

Meeting the demands of digital transformation and customer experience can be, how-ever, a slippery slope. With each transformative change – from nuanced to leapfrogged – customers come to expect more from their experiences. The bar gets raised, delight gets

Redefining the Travel Customer Experience

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heightened, while customers’ patience and tolerance for sub-par experiences diminishes. Travel can be especially affected, since choice and competition abound along every phase of the customer journey.

In order to leverage technology to transform and create great customer experiences, travel businesses must understand what customers currently expect of them and accu-rately predict and prepare for what they will expect in the not-too-distant future. With travel’s first digital transformation, the human travel agent suffered. But something happened when the agent was removed from the equation – something the industry now realizes it must address. To cite Expedia president and CEO Mark Okerstrom’s statement during the company’s October 2017 earnings call: “We will become much more customer-centric, putting the A back into OTA.”

Today’s travelers want mobile-first enabled experiences. They want easy, immediate answers and solutions to their problems. They’re curious about home-sharing, short-term rentals, and last-minute deals. They expect personalized experiences. But they also need to trust that travel providers will protect their sensitive personal data. Recent Travelport research highlights U.S. travelers’ attitudes, behavior and expectations regarding the use of technology throughout the travel life cycle (see Figure 1).

Source: Travelport, November 2017

Figure 1: Travelport’s U.S. Digital Traveler usage research reveals customer expectations

©2017 Phocuswright Inc. All Rights Reserved.

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Separately, SITA research1 finds that:

• 97% of all airline passengers bring a mobile device when traveling.

• 72% of passengers are willing to share personal and geolocation data with travel providers, so long as they clearly understand the value they receive in exchange. Just 29% are willing to share this data for commercial purposes alone.

Creating Great Customer ExperiencesGreat customer experiences don’t just happen. They are the intended outcome of a well-thought-out strategy. To create and execute upon such a strategy, businesses must first know their customers and their respective journeys.

Customer Journey MappingThe customer journey is generally thought of as a lifetime relationship with a custom-er, from the moment the customer becomes aware of the brand, until the time the customer is no longer a customer. The fragmentation of the traveler’s entire journey makes it even harder to understand and control, because the journey may involve so many disparate providers. In business travel, because corporate policy requirements about where to shop and book may lead to sub-optimal preferences with respect to travelers’ choices, analyzing their customer journey and experience may be even more difficult.2

The process of describing and defining customer journeys is called “mapping.” “Mapping is a tool to diagnose and understand where your customer is across all experiences, to help you understand the gaps and opportunities to grow the customer relationship. It should be dynamic, constantly re-evaluated and continuously updated.”3 Customer journey mapping involves several components:

Understanding your customers. In travel, this doesn’t just mean leisure versus busi-ness versus group customers; it means breaking down customers into more meaningful segments. Whereas a common technique to journey mapping by segmentation has been to create demographics-driven personas, travel’s unique variability lends itself better to mapping by scenarios instead.4 For example, consider the same individual who in one scenario plans a vacation for her family, and in another is a corporate execu-tive administrator booking a trip for her boss. Her needs and expectations will be very different from one scenario to the next.

1) The Future is Personal, SITA, 2015.2) Interview with Balaji Krishnamurthy, Vice President Global Strategy, Corporate Development and Business

Intelligence, Sabre Hospitality Solutions (November 2017).3) Interview with Aileen Cahill, Certified Customer Experience Professional (CCXP), Co-Founder & Principal,

Agile Marketing Group (June 2017).4) Interview with Glennette Clark, Adjunct Faculty, UX Design, Maryland Institute College of Art (June 2017).

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360-degree research. To build customer journey maps, seek insights from many sources (see Figure 2). From within the company, involve representation from any de-partment – online or off – that might touch the customer. In travel, that could mean call center representatives, desk clerks or agents, bellmen, housekeepers, flight attend-ants, reservation agents, restaurant servers, managers, marketers and tech support personnel. Externally, survey or interview past and present travelers, mine social media mentions and sentiment; do some mystery shopping. Some companies conduct anthro-pologic, ethnographic, and/or deep data analysis; some even map their competitors’ customer journeys.

Building and interpreting journey maps. Once all the research data has been collected, the customer journey map-building process begins. It can be as manual and seemingly simple (but likely arduous) as putting each customer touchpoint on a sticky note. Alternatively, it can be flowcharted with tools or even specific journey-mapping software. An organization’s complete journey map will likely be relatively complex, as illustrated in Figure 3.

At the end of the exercise – which can take 10-12 weeks or more initially – the result should reveal the current state of the customer journey. The process typically iden-tifies “moments of truth,” during which travelers make key decisions such as their destination selection or where to stay. It should also reveal common pain points to create a vision of the ideal future state of the customer journey, and help build the

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(mechanics ofinteractions)

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Figure 2: Research needs to pull in “voices” from customers, employees and the organization

Source: SuiteCX©2017 Phocuswright Inc. All Rights Reserved.

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Figure 3: Roll-up of a full journey combining stories and voices

Source: SuiteCX©2017 Phocuswright Inc. All Rights Reserved.

roadmap – the strategy – to move from current state to future state.5 The strategy should be one that plans for this process to be an evolution, not an overnight success. The desired future state may take up to two years to attain.6

Digitally Transforming Customer ExperiencesExamples of digital transformation of the customer experience abound, ranging from radically disruptive (Airbnb, Uber) to experimental (mixed reality, or Aruba’s Happy Flow, which uses biometrics to process passengers without any documents). In today’s mobile-first world, digital both informs and creates travel customer experiences. Smartphones empower travelers to capture and share literally every leg of their journey, from photo images to live posts, reviews and opinions. In addition to providing web-like browsing and booking experiences, smartphones now act as cashless wallets, entrance tickets and door keys.

5) Interview with Aileen Cahill, Certified Customer Experience Professional (CCXP), Co-Founder & Principal, Agile Marketing Group (June 2017).

6) Interview with Aileen Cahill, Certified Customer Experience Professional (CCXP), Co-Founder & Principal, Agile Marketing Group (June 2017).

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At the same time, these connected devices also capture and transmit vast quantities of data in real time. This data, especially when married to legacy data, can enlighten, influence, authorize and personalize the traveler’s experience through machine learn-ing, predictive analytics and artificial intelligence (AI). This big data and the tools to harness it can be used to improve the customer experience in many ways.

The focus of digital transformation of the traveler’s customer experience revolves around several recurring objectives:

• Facilitated, frictionless interactions.

• Communicating how, when and by preferred means, including mobile apps, chatbots, natural voice recognition assistants, and messaging.

• Personalization – subtle and overt.

• Alleviating pain while improving wonder and delight.

• Creating and reinforcing loyalty and positive brand sentiment.

• Planning for millennial and digital native travelers, whose needs, loyalties and expec-tations are very different than previous generations.

Examples of Digitally Transformed Traveler Customer ExperiencesTo deliver the best customer experience possible, many of the travel industry’s new efforts attempt to tackle more than one of these objectives at once. For instance, long the poster child of customer experience, the Disney company continues to innovate. An experience at its theme park is now built around its MagicBands, which the company describes as “an all-in-one device that effortlessly connects you to all the vacation choices you made with My Disney Experience.” The band grants access to the theme parks, unlocks Disney Resort hotel rooms, and buys food and merchandise. It also “adds a touch of magic to your vacation by unlocking special surprises, personalized just for you” (see Figure 4). Delivering a complex, integrated experience like this requires intricate planning, engineering, and data-driven solutions, and companies must be bold to undertake it.

In an effort to attract Airbnb-loving millennials, the new luxury Public Hotel in Manhattan has stripped away traditional cost-increasing hotel services like a front desk, clerks and concierges, replacing them with self-serve tablet check-ins, floating staff, and free hi-speed Wi-Fi. The rooms may be sparse in amenities compared to traditional hotels, but come equipped with AppleTV, 12 power outlets, and bottled water.7 And what the hotel lacks it makes up for in stylish hipster restaurant and bar offerings and a rooftop lounge. “I just want to chill here all day,” writes one blogger.

In response to customer requests, Avis recently upgraded its mobile app to enable a

7) Tanay Warerkar, “Ian Schrager’s Public Hotel opens on the Lower East Side,” Curbed New York (June 8, 2017).

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more facilitated and pain-free car rental experience. The app allows renters to manage their entire experience from their smartphone. This includes: choosing the exact car they want; changing or upgrading vehicles with a simple swipe while at or near the lot; viewing their rental agreement; finding, locking and unlocking the car; locating nearby gas stations; calling roadside assistance; and even tracking the location of the courtesy shuttle bus.

Several airlines continue to push innovations to reduce friction and improve the cus-tomer experience at multiple levels. JetBlue, Southwest and Virgin Airlines are among those with self-serve check-in kiosks or mounted tablets. Ryanair hired over 200 IT specialists to overhaul its web and mobile solutions, one result of which was a new mo-bile app achieving 60% faster booking times.8 And airlines including JetBlue and Delta now provide flight attendants with hand-held devices to deliver passengers personal-ized information like loyalty points and connecting flight details (see Figure 5).

To advance facilitated experiences through more communications channels, over the past year, online travel agency Expedia has rolled out several customer-centric tools and inno-vations. These include: bots for Facebook Messenger and Skype; a voice command “cheat sheet” for using Amazon Alexa, Amazon Dot or Microsoft Cortana to plan, book, or check on a trip; and a virtual reality experience atop the Seattle Space Needle for HTC devices.

Figure 4: Disney MagicBands are customized for each guest in a watch-like box

Source: Flicker.com©2017 Phocuswright Inc. All Rights Reserved.

8) “Digital Transformation Stories: How JetBlue and Marriott Advance Travel Experience,” Altexsoft Blog (May 3, 2017).

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And to help improve the travel experience at the airport, Miami International Airport deployed a Bluetooth beacon platform that “can be used by airlines’, retailers’ and other partners’ apps to trigger useful content to passengers or staff”9 (see Figure 6).

The Digital DisruptorsThese are the pure-play solutions, those new digital platforms designed specifically to improve or transform the customer experience along every stage of the traveler’s journey:

Dream – By typing in just a few descriptive or aspirational keywords, view destinations that fit what you might be looking for (LuxTripper). Or put on a pair of virtual reality goggles and “try before you buy” (YouVisit).

Search – Using artificial intelligence, machine learning and predictive analytics, solu-tions like Hello Hipmunk do the legwork for the traveler.

Shop and Buy – WhereFor, for example, upends the way to search and shop for leisure travel. Instead of starting with a destination, the user starts with a budget. If the travel-er finds an appealing hotel and flight package, she can book directly on the site.

Share – Social sharing platforms have matured, and few contenders have really dis-rupted the original disruptors (Snap might even be considered “mature” at this point).

Figure 5: Delta’s SkyPro program puts real-time passenger information in the palm of flight attendants’ hands

Source: “How Delta’s New Flight Attendant App Makes It Easy to Recognize Elites,” The Points Guy (Oct. 23, 2017).©2017 Phocuswright Inc. All Rights Reserved.

9) “The Future is Personal,” SITA, 2015.

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However, live streaming video is starting to come of age, and video suits travel well. Look for users to share their experiences using platforms like YouTube, TripAdvisor and Facebook Live, and on early-stage companies like Tout.

New digital-born solutions also fit into the emerging disruption management category. Some, like chatbots and automated communications platforms (Interactions, Dazzle) integrate into the travel company’s backend, generally to improve customer service. Standalone “personal assistant” solutions associate with an individual traveler, and provide even more services like booking and rearranging schedules. Niche disruption management solutions have also begun to arise like Freebird, which can quickly rebook a plane ticket if a problem arises. Roomstorm is a startup focused on finding accom-modations for airline passengers and crews left stranded due to weather and other unpredictable circumstances,10 while Service and Airhelp help passengers get compen-sation for flight disruptions, cancellations or lost luggage.

Digital Transformation for the Business Traveler’s ExperienceWhen the travel customer wears a business hat, needs and expectations change. To the business traveler, time savings and reliability matter more, and costs matter less. Due to non-compliance, travelers with managed corporate travel programs can cost

Figure 6: Example of beacon technology deployed at airports

Source: Mark Gunner, “The Ultimate Marketing Tool - iBeacon Technology” (May 21, 2015).©2017 Phocuswright Inc. All Rights Reserved.

10) “Travel Disruption Management: Tech Opportunities in the Travel Industry,” Altexsoft Blog (July 11, 2017).

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their companies 15% more on bookings.11 While the leisure traveler doesn’t mind the pre-booking dreaming and planning phases and lots of options, the business traveler just wants efficiency; get in and get it done.12

Advances in mobile adoption, voice assistance, automation and artificial intelligence are making business travel the target of perhaps the most significant digital disruption. Traditionally the space of legacy systems and corporate travel management compa-nies, business travel stalwarts now face digital-born personal assistant providers (Lola, Mezi, Pana) – also known as mobile concierges – and next-generation digitally-enabled corporate travel management providers (Deem, WhereFor Business). These solutions strive to improve customer experience by: marrying corporate compliance with em-ployee satisfaction; addressing cumbersome booking and tracking processes; opti-mizing preferences and loyalty point earnings; and aiding the business traveler 24/7 throughout the entire journey (see Figures 7 and 8).

These solutions also help employers better serve their millennial employees, who view traveling for business as a means to develop their careers and also to see the world. Sixty-seven percent of business travelers also try to see local attractions, and the more business travelers incorporate leisure experiences, the more valuable these 24/7 personal and whole-journey assistant tools will become.13

Figure 7: WhereFor Business reduces booking to three clicks and encourages, rather than forces the employee to choose options more wisely.

Source: WhereFor Business©2017 Phocuswright Inc. All Rights Reserved.

11) CWT Research: Changing Travelers’ Behavior Can Cut Travel Over-Spend up to 15%,” Carlson Wagonlit Travel (Dec. 8, 2016).

12) Interview with Stan Boyer (VP, Customer Solutions) and Rodrigo Celis (VP, Airline Retailing), Sabre (November 2017).

13) The US Digital Traveler Research, Travelport (November 2017).

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Figure 8: Lola’s 24/7 mobile-powered personal concierge for business travelers

Source: Lola.com©2017 Phocuswright Inc. All Rights Reserved.

Future GazingWhile the travel industry can look to other industries for examples of innovation and the future of customer experience, it also has its own unique conditions. Long-time innovators like Southwest Airlines, Marriott International and KLM Royal Dutch Airlines continue to set the pace. But companies featured in this paper, along with others including Aeroméxico, which describes its digital transformation not as adapting to technology but instead as reinventing the entire organization, brand, and technology, are not standing by idly. Russian airline Aeroflot, for example, is pushing technology boundaries even more, leapfrogging market leaders by using analytics to effect real-time opportunities.14 Meanwhile, another major hospitality brand used big data analysis to discover that they were duplicate-marketing to 26% of their customer base, information which led to millions of dollars in savings.15

Others see their future as completely disrupted, and have begun pivoting or forming new alliances to meet the disruption head-on. Such is the case with Avis partnering with Waymo (owned by Google’s parent company Alphabet) to provide management of a fleet of self-driving cars, and a similar deal between Hertz and Apple.16 Because the costs and

14) Interview with Stan Boyer (VP, Customer Solutions) and Rodrigo Celis (VP, Airline Retailing), Sabre (November 2017).

15) Interview with Stuart Greif, Practice Lead Travel and Hospitality, Amperity (November 2017). 16) Interview with Stuart Greif, Practice Lead Travel and Hospitality, Amperity (November 2017).

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risks of innovation may be prohibitive for companies to undertake alone, expect to see more established brands partnering with startups, experimenting in their own innovation labs, and creating their own venture funds to invest in emerging technologies.17

These technologies don’t necessarily all have to emerge from Silicon Valley or Austin, Texas, either. Look for “micro-innovation” to occur in different parts of the world due to social or cultural norms, where trends and opportunities will be region-specific. For instance, in Ethiopia, people want to use mobile payments, so Ethiopian Air has worked with Sabre to roll out a system that includes mobile booking, payments and a “mobile concierge” that keeps passengers connected in airports with weak infrastructure.

And much as the iPhone brought mobile browsing and smartphones into the main-stream, Apple will be the catalyst for facial recognition to be widely adopted, because users can opt-in to the experiences as it suits them.18

Winning at Customer ExperienceNo doubt, digitally transforming the customer experience can be hard. And expensive. Don’t, however, wait in watch mode for too long. Businesses did that in the early days of the Internet, and many of them are now gone. Don’t think of this transformation process as an expense, as the World Economic Forum forecast predicts it will generate not only more revenue but greater profitability.

Help travelers along. Have empathy. Teach them new technologies where they’re un-comfortable. Travelers in flight or on trains have a lot of time to kill. Encourage them to provide ideas and feedback. Make them part of the transformation process. Earn their ongoing trust so they will let you into their worlds…and their data.

As the bar continues to be raised on the traveler’s customer experience, the more they will come to expect from providers. What will separate winners from losers will be those companies that are digitally aligned with their customers and can consistently deliver to those expectations. The pressure to continue to delight them is on.

17) Interview with Stuart Greif, Practice Lead Travel and Hospitality, Amperity (November 2017).18) Interview with Stuart Greif, Practice Lead Travel and Hospitality, Amperity (November 2017).