THE 2021 TRAVEL & HOSPITALITY TRENDS REPORT SHOWS THE DAMAGE CAUSED OVER THE LAST YEAR. DISCOVER THE STRATEGIES TRAVEL AND HOSPITALITY BUSINESSES ARE USING TO INCREASE THE NUMBER OF BOOKINGS AND ADDRESS CUSTOMER CONCERNS.
Key insights from
5 trends as the industry opens up.
In the height of the pandemic, two-thirds of airlines were grounded and hospitality around the world was forced to close. This accelerated existing trends and changing behaviours in ways that will persist well beyond the end of the crisis. Here are five key trends that we uncovered from the 2021 Travel & Hospitality Trends Report.
Prepare for a hyper-personalised future.
As travel and tourism companies prepare to open back up, they’re about to face a very different landscape. There are already signs that the pandemic has changed travel preferences, at least in the near future. We can expect to see a rise in short-haul, domestic and non-urban holidays due to coronavirus fears and tighter household budgets. Travel companies will also need to address a wide range of customer concerns around topics such as cancellation policies, hygiene measures and available facilities at the destination. Since these requests will vary depending on factors such as location and demographic, companies will need to personalise their customer service. 65% of the senior executives we surveyed agreed that buyer expectations are further ahead than organisations’ current digital capabilities. As we emerge from the pandemic, the quality of customer experience is widely recognised as a key source of differentiation and driver of loyalty.
Our top recommendation for 2021:
Generations of customers have moved online over the last year, with expectations set by digital leaders in other sectors. Travel and hospitality should focus on developing and optimising digital channels to keep up.
Falling budgets are a barrier to personalisation.
The disruption over the last year turned personalisation from a luxury into a necessity. The travel and hospitality sector is dealing with constant changes in demand, varying levels of health concerns among different demographics, and ongoing announcements that could impact scheduled bookings. At the same time, the collapse in revenues from 2020 has forced many businesses to take drastic steps to survive. The World Travel & Tourism Council (WTTC) predicted that industry job losses at the end of last year could be in the region of 174m. In the 2021 Travel & Hospitality Trends Report, we found that 37% of companies expect a significant cut to their marketing budget (more than a 10% reduction) in 2021. However, many companies expect to meet these challenges by redirecting budget to marketing technology, with the aim of increasing efficiency and improving their customer experience.
Our top recommendation for 2021:
Because the way demand will return is uncertain, and because consumer concerns and pain points will be different post-pandemic, the ability to respond quickly to emerging customer needs will be paramount.
The answers to 2021 are waiting for you here.
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Lack of data is making predictions difficult.
Fewer customers travelled over the last year, creating a shortage of data. Without access to insights and with such a low volume of travel, it’s hard for companies to anticipate how customer behaviours have changed. On top of that, the shape and speed of the recovery is still uncertain, making predictions even less reliable. Even with this widespread issue, travel and hospitality companies are surprisingly confident about their grasp of the data. In the 2021 Travel & Hospitality Trends Report, 72% of companies agree or strongly agree that they have the deep understanding of customer insights required to meet evolving needs. Yet this belief doesn’t necessarily translate into delivering a better customer experience. Almost three-quarters of businesses said they have a fragmented approach to marketing and customer experience technology, which will likely prevent them from using their data to create more meaningful customer interactions.
Our top recommendation for 2021:
Part of the problem is that travel companies have historically adopted traditional and market-driven strategies. Future investments in martech should be centred on the wider organisation’s needs rather than adopted in fragmented stages.
Digital capabilities are a work in progress.
If there’s one silver lining for travel and hospitality companies, it’s that the pandemic has encouraged them to innovate. In the 2021 Travel & Hospitality Trends Report, 82% of businesses accelerated their digital transformation over the past six months and 87% plan to launch new digital offerings to boost engagement. This will place them in a much stronger position when the economy opens up again. For instance, touchless experiences have become more of a necessity and 34% of respondents are already using technology or apps to help manage guest experience. The trend for low-contact engagement will likely continue after the pandemic is over. In the report, we share an example of how one resort is reopening using keyless hotel check-in, in-app ordering for room services and personalised housekeeping management via mobile. However, around a third of the companies we surveyed still had a long way to go in creating any kind of live digital functions.
Our top recommendation for 2021:
Chatbots are currently an overlooked opportunity for the sector. Fewer than 22% of survey respondents use them, yet they could help companies manage staffing challenges and deliver the ‘always on’ service that customers expect.
New demand requires new levels of agility.
There’s hope for the year ahead – but knowing where demand is coming from and reacting quickly with appropriate messaging will be critical for growth and recovery in 2021. This is made even more challenging by new, emerging consumer behaviours. Companies are seeing trends towards longer research periods prior to booking, but much shorter gaps between booking and departure to avoid sudden changes in travel restrictions. The mass shift to remote working is also changing how people think about their holidays and could lead to a rise in “flexcations” – extended stays away from home that combine holiday with work. Despite the many challenges the industry has already faced, we also found that a massive 90% of those we surveyed are generally excited about their job. This shows that optimism in the industry is still high.
Our top recommendation for 2021:
While industry leaders expect travel behaviours to return to a pre-2020 normal in the long-term, the recovery will look different for different countries and for different demographics, driven by economic factors and attitudes to risk.
Three areas that are holding companies back.
of travel and hospitality companies expect a significant cut (more than 10% reduction) in their marketing budget, making personalisation even harder.
said that tackling their martech stack couldn’t come too soon, with many companies admitting that legacy systems are a major barrier in their marketing.
said that growing their traveller or guest base by addressing customer concerns and minimising physical contact is the single biggest priority for 2021.
Download the report to plan ahead.
