The D’Astolfo Report · •10.9% of website traffic to travel and hospitality sites came from...

The D’Astolfo Report Social, Mobile, Personalization, and the Tech

Trends that Will Impact Travel in 2014

January 8, 2014 Wisconsin Business Travel Association

Presented by: Tony D’Astolfo

Managing Director

PhoCusWright

7 © 2013 PhoCusWright Inc. All Rights Reserved.

Agenda

• The Signs of Change Are Everywhere

• Tracking the Tech and Innovation Trends

• Piecing It All Together

• Questions


In the Good Old Days of Managed Travel

Source: PhoCusWright Inc.

It was all about the 3 C’s

• Cost

• Control

• Convenience

Today, suppliers are actively taking steps to do the same thing,

often in conflict with their distribution system


…and the Travel Manager is holding on for dear life!

Fast Forward to Today……


While Profits Soar, Running an Airline Is Still Tough


• Projected 2013 Airline Industry Revenue: $700B

•2013 Ancillary Revenues (est.): $42.6B

• Projected 2013 Airline Industry Profit: $12.9B

•Profit Margin: 1.8%

• Revenue Per Ticket: $228.26

• Cost Per Ticket: $225.70

•Profit Per Ticket: $2.56

Bottom Line: Airlines will continue to do everything they can to generate revenue and manage expense


NDC: Industry Standard or Content Armageddon?


Concerns Abound


New Challenges Arise!


Gaining Momentum?


Will Younger Travelers Have an Impact?


Compliance in Crisis?

“While this could be explained by a lack of education and inexperience, many industry observers have commented on a crisis in compliance as restrictive legacy tools and processes clash with the mobile and social technology habits and consumer service standards that are second-nature to a new generation of business travelers.”


Data Grows at an enormous pace!

Every Minute:


571 NEW WEBSITES.


47K APPS.


100K TWEETS.


680K SHARED.

Share


2M SEARCH.


250M EMAILS.


Big Data or Big Mess?

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=8MZztPAO86-B0M&tbnid=osCQPp_HJJaIrM:&ved=0CAUQjRw&url=http://www.idioplatform.com/personalization-an-antidote-to-the-cult-of-busyness/&ei=ul9hUqGsJMXK4APohoGQCw&bvm=bv.54176721,d.dmg&psig=AFQjCNGttEHkbXMqiIp5whpaczDNvSdP-w&ust=1382199538781124

Tech & Innovation Trends Social: Mobile: Personal


Where are People Hanging Out? The Impact of Social Media

Source: comScore Media Matrix USA panel-only data


• Facebook has roughly 1 billion users • Social media reaches 84.4% of Internet users • Average of 336.9 minutes/visitor/month


What was #1 Social Networking site in 2007?

34


Social Networks and Travel


According to Abhilit Pal, Sr. Director Global Strategic Accounts at Expedia

• Facebook passed TripAdvisor to become the #1 referral source

for Hotel bookings at Expedia

• Visitors to Expedia were twice as likely to convert if they engaged in both Social Media sites and Expedia’s Web pages

Star Alliance CEO Customer Forum on Facebook

As part of its 15th Anniversary celebration and In line with its

growing presence in social media, Star Alliance held a live customer forum on Facebook, featuring CEO Mark Schwab, responding to customers' feedback, comments and suggestions on the Star Alliance Facebook page.


Social Media Impact on Hotel


From Cornell Center for Hospitality Report, November, 2012

• Study confirmed what hospitality operators have

long suspected—social media reviews drive hotel reservations

• An analysis of transactional data from Travelocity illustrated that a 1-point increase on Travelocity's 5-point scale, allows the hotel to increase its price by 11.2% and still maintain the same occupancy or market share.


Social Care


• 47% of social media users engage in social care, reaching out to brands via social channels to resolve issues.

• One in 3 social media users prefer to resolve customer service issues over social rather than by phone. The younger you are, the more likely you are to prefer this.

• The top channel used to access social care:

•29% Facebook (Company's Page)

•28% Facebook (User's Personal Page)


Social Care

• Qantas is testing technology that monitors digital conversations on social-media sites

• The technology allows corporate clients to search by GPS coordinates

• “If a customer posts a picture on Instagram from a Qantas airport lounge, the customer care team is alerted (by location), and can immediately resolve the problem," says Jo Boundy, head of digital communication at Qantas.


Social Activities


Social media users participate in one of these activities at least monthly:

• 70% Hear others' experiences

• 65% Learn more about brands/products/services

• 53% Compliment brands

• 50% Express concerns/complaints about brands/services

• 47% Share money incentives


Embassy Suites Study of Business Travelers……


• 85% of business travelers would follow a hotel or other travel brand on social media to learn about travel deals, reviews, and the brand’s latest news

• More than 75% of respondents said that online travel reviews are critical to their travel decisions

• Respondents also said online reviews can help avoid hazards in the destination city, such as hotels in high crime areas

• Travelers ask their networks for help in finding restaurants or places of interest, and use location-based social networks to see where others in their network have been


The Impact of Mobile

41

When is the inflection point?


Travel Search: Tablets and Smartphones Explode


• Google U.S. hotel searches up 24% in 2013 •68% uptick in searches from mobile devices •180% increase in searches from tablets •Against a 4% decrease in desktop queries

According to an Adobe Study done in March, 2013 • 10.9% of website traffic to travel and hospitality sites came from

smartphones, making the travel industry the second highest industry (Retail was first)

• Travel had the highest percentage of internet traffic from tablets at 11.2%, and was the only industry with more tablet than smartphone traffic.

http://www.google.com/


Time to Take a Different Tact?


Make Your Travel Offering……..

•per·son·al • belonging or relating to a particular person

• made or designed to be used by one person

“Personalization is the effective use of customer data to gain loyalty without intrusion”


Personalization as the Holy Grail!


Road to Personalization Started Long Ago

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=85U8zI6X63GrvM&tbnid=Yu28a2Qr4K1bAM:&ved=0CAUQjRw&url=https://www.pulaskibank.com/personal-banking.aspx&ei=VkBgUtmHLJe-4APv4IHICw&bvm=bv.54176721,d.eWU&psig=AFQjCNGMSZ9Z8Lg62HF8POJkR27CBokoAA&ust=1382126015757435


Personal Trainer

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=ArJzLzoZttr8XM&tbnid=bFRxj5cuZkvtvM:&ved=0CAUQjRw&url=http://www.bodybuilding.com/fun/personal-trainer-of-the-month-john-lee.html&ei=znddUqWGC5Kp4AODxoDoBg&psig=AFQjCNExE5BMo36vC6M6ulqM5RrgeHgIQQ&ust=1381943380563135


Extreme Personalization

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=DwNUV3kj9fLWhM&tbnid=87-dp4V1A2PpDM:&ved=0CAUQjRw&url=http://www.decoratorforaday.biz/personal-shopper-service&ei=sHZdUoLsC5Ki4APz7IG4AQ&psig=AFQjCNGY-LmbqQ9uAI4KmTGild016VqlOA&ust=1381943007257680


My Personal Favorite!

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=ogRNsDiHp4dxtM&tbnid=xKYgK7dKlbrHfM:&ved=0CAUQjRw&url=http://www.heiseexpeditions.com/PizzaParlor/PizzaParlor.htm&ei=YHldUvu6IfK84AOL74Aw&psig=AFQjCNG3H4qn28DNapgRwRrjv5dYNLWQYQ&ust=1381944001446506


Amazon Does Personal Really Well


Travelers Okay with Personalization Shift

*According to the Futures Company study on Traveler behavior, April 2013

56

47% of travelers overall are willing to provide more personal data


Personal Is OK, but Only If It’s Relevant Please!


Travelers want choice but only those that make sense!

According to the Futures Company study on travelers:

• 49% say they lack enough relevant information to make good travel decisions

• 58% say they don’t know if they got a good deal on travel

• 47% say they lack sufficient time to research options

PhoCusWright Trends


Trend 1: New Patterns of Content Challenge Distribution

Online real-time reach, provides access

Internet of Things challenges status-quo

Aggregation occuring without a GDS

Direct Connect/Open Booking


Trend 1: Examples New Patterns of Content Challenge Distribution


• Concur Open Booking changes the TMC dynamic

• Internet of Things opens up new information sources

• “Free” booking tools (Innhand, Dashbell)

for small tvl suppliers

• NDC 787 offers many challenges


Trend 2: Too Much Choice Means Less Is Better

Relevance is trumping quantity of alternatives

Smaller devices require filtered content

Customer segmentation getting more sophisticated


Trend 2: Examples Too Much Choice Means Less Is Better


• Sojern collects 100 million anonymous data points on travelers

• The foundation of NDC787 is Personalization

• Sabre Custom Offers

Trend 3: Social Technologies Change the Shape of Travel

Value creation

Aggressive suppliers

Facebook reach

Travel distribution companies lag


Trend 3: Examples Social Technologies Change the Shape of Travel


• Travel POSs’ attitude toward social media

• Nasair success

• Air New Zealand

• Westjet Kargo Kids


Trend 4: Intermediaries Require Fresh Approaches Throughout the Travel Cycle

Digital transformation and cross-platform access

Proliferation of information

Social networking

Changing business models and disintermediation

Business analytics


Trend 4: Examples Intermediaries Require Fresh Approaches Throughout the Travel Cycle


• Using OTA OneTravel Caracas to Sao Paulo

•Selected Avianca

•Offered single fare

• Avianca(with branded fares)

•4 Options

•Complex comparisons


Trend 5: Big Data Makes Travel Smarter

Conversion cause and effect

Call center metrics

Website performance

Multichannel performance


Trend 5: Examples Big Data Makes Travel Smarter


• Costco Travel

• Choice Hotels Using big data, Google analytics and a fluid purchase process, Costco Travel has identified many areas of opportunity to deliver better customer value, resulting in a substantial increase in vacation package sales as well as overall conversion rates

Using big data Choice Hotels developed an enhanced loyalty program that delivers $1 out of every $3 in revenue earned by the Choice Hotel Group.


Distribution Channel Intelligence


• Look to book ratio

• Customer engagement

time

• Abandonment

• Traffic patterns

• Booking patterns

So Now What?


Before – planning phase • Plan, book, share, prepare During • At the airport - issues • On board the plane – connected? • At destination – extend & explore After • Social media, ratings • Expense reports

Dissecting the Anatomy of a Trip

Each phase is unique and requires different information, sent to different devices, and timed for greatest impact


Recommendations…… • Time to ramp up the filters and turn down the noise! • Take a closer look at your program and ask yourself

•Does everything it is makes sense? •How can I filter out the distractions?

• Flex your policy to consider the context (ex: Car service absolutely makes sense in some cases)

• Profiles need to be enhanced to become more personal • Develop a questionnaire that targets personal

behavior(add an implicit component to explicit profile) • Profiles then need to be used more often; and in a more

informed manner


……..More Recommendations

• Remember, there is an expectation of a seamless travel experience, across all channels and devices

• Create service offerings based on what stage of the process your travelers are in

• Know what devices they have, when they use each, and what they use them for

• Timing is critical…push what’s important, when it’s important, over the optimal medium/device!

• Make your travel suppliers part of the solution, and push your technology partners to help

• For Suppliers, contextual experience drives brand awareness

• Look for new ways to provide business value


In Closing… Affinity to you or your program and not the transaction, should be the ultimate end game, so start thinking that way!!

Thank You!

The D’Astolfo Report · •10.9% of website traffic to travel and hospitality sites came from...

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