• Industry Trends

The role of CX in revitalizing the travel & hospitality industries

by Franny Harold | Apr 08, 2021

The COVID-19 pandemic ruined many plans to travel, celebrate milestones and holidays in-person, and so much more. This meant grounded flights and canceled trips, forcing the travel and hospitality industries to serve an onslaught of disappointed customers who needed assistance while businesses were also reeling from lost revenue.

One of the most significant ways in which 2020 forced travel and hospitality brands to change was in how they communicated with and engaged customers, not only to support their customer service needs, but also to attract new customers. A consistent shift towards investing in digital CX became an immediate necessity.

While it might be a bit soon to talk about a post-COVID-19 world, we’re undoubtedly moving in that direction as vaccines become more accessible to the general public. By reflecting on how the past year impacted brands in the travel and hospitality space, we can glean useful insights regarding the values of strengthening CX, as well as solutions for the challenges brands might face in the process.

COVID-19 halted the travel industry’s decades-long growth

Before we can explore how the travel and hospitality industries can adjust their efforts for a strong CX strategy that meets people where they are now--considering all the changes this past year has brought--it’s valuable to understand what led us here in the first place.

At the beginning of 2020, the global spread of COVID-19 halted a decade of consistent, major growth for the travel and tourism industry, impacting a range of subsectors, such as air travel, accommodations, and restaurants. According to United Nations World Tourism Organization (UNWTO), in 2019, the sector drove 59% growth over the previous decade in international tourists’ arrivals, increasing from 880 million in 2009 to 1.5 billion in 2019. As of January 2020, tourism was considered a leading and resilient economic sector, one that was responsible for one in 10 jobs globally, equaling 330 million jobs.

Yet, in spring 2020, when a large swath of countries grounded planes and put travel restrictions in place, the travel and tourism industry was quickly one of the most affected sectors of the global economy. By April 2020, according to Pew Research Center, at least 91% of the global population resided in countries with COVID-related restrictions that limited their movement. As a result, international tourism decreased by 22% in Q1, and then by 65% in Q2 compared to 2019 figures, as reported by UNWTO.

By the end of 2020, an analysis by Tourism Economics revealed that travel spending in the U.S. totaled just $679 billion, a 42% annual decline from 2019. Though international travel suffered the sharpest declines, with spending decreasing 76% year-over-year, spending for domestic (-34%), business (-70%), and leisure (-27%) travel also experienced significant dips.

Providing some glimmer of improvement, U.S. travel spending did improve as 2020 went on, but it never fully recovered. The aforementioned Tourism Economics analysis showed that travel spending increased from a low of just $17 billion in April 2020 (an 81% year-over-year decrease) to a pandemic high of $62 billion by August 2020, though it was still down by 39% year-over-year. December 2020 travel spending was also down 39% year-over-year, reaching $57 billion.

Yet, as vaccine distribution ramps up, travel is on the verge of a major resurgence

The CDC recently provided guidance for people who’ve been fully vaccinated, saying that they can safely get together without wearing masks and don’t need to get tested if they’ve been exposed to the virus. While it’s certainly not “back to normal,” this offers vaccinated individuals more movement than they’ve experienced in at least a year, if not longer. And people are hungry to get out of their bubbles.

A recent report from Tripadvisor revealed that 47% of travelers plan to travel internationally in 2021, and one in 10 have already booked an international trip for this year. Even more so, 77% of travelers said they’d be more likely to travel internationally once they’ve been vaccinated. As many states begin expanding eligibility for the vaccine, the percentage of the population that will be fully vaccinated is on the verge of growing at significant rates.

While this is great news for subsectors of the travel industry and travelers alike, it’s prudent to also recognize the potential, somewhat inevitable pain points of people returning to travel in droves: overcrowded flights, increased call volumes, and frustrated customers dealing with delays and difficulty reaching over-allocated customer service agents. Unlike at the beginning of the pandemic, the travel industry is in a unique position to gear up for these major changes -- but the window of opportunity to be proactive is short.

Customer experience holds the key to the travel and tourism industry moving forward

We’ve seen that people want to travel and will be inclined to do so once they’re fully vaccinated. But we also know that a poor customer experience will all but ruin the chances of customer loyalty, and can even be a detriment to a brand moving forward. Essentially, brands are on the brink of either capturing customer loyalty or losing it.

According to PWC, one in three customers will walk away even from a brand they love after just one bad experience. And many brands are not meeting customer expectations, with 54% of consumers saying that most companies need to improve their customer experience. Most brands seem to understand this, as well. A survey conducted by SuperOffice found that 45.9% of business professionals said that customer experience is the top priority for their brand in the next five years, even more so than efforts related to pricing (20.5%) or product (33.6%).

For travel and hospitality brands, this means building adaptable and resilient processes that lay the foundation for efficient customer experience management. This includes providing customers with a way to interact with a brand from anywhere at any time, while still facilitating a human experience (even if the interaction isn’t in person). “Anywhere” interactions now happen in a multitude of digital spaces, be that social media channels, traditional contact centers, or online brand communities.

Air travel

While it’s safe to operate under the assumption that the airline industry will experience increased demand throughout the year, it’s not going to happen overnight. In January, the number of scheduled flights worldwide was still down by 43.5% compared to the same period in 2020, according to Statista. Despite people’s desire for movement and travel, the recovery period for airlines will likely be longer since people are overall less confident to travel than in the past.

For airlines, this poses the challenge of helping customers to feel comfortable and safe traveling, especially since it will have been so long for many people since their last flights. And as we saw when the pandemic first began, airlines should prepare themselves for an increased number of inquiries throughout the year, as more people are vaccinated. Customer service agents and customer experience teams should be equipped to support high volumes of customers reaching out for info about cashing in travel vouchers they received in 2020, questions regarding safety protocols, etc.

This is where taking that time to be proactive vs. reactive really comes into play, setting up customer service agents for success by supporting as many customers as possible via proactive customer experience measures. Online brand communities, for instance, provide an interactive space for customers to ask detailed questions for other travelers that aren't going to be present in older reviews. Questions like, were they strict with safety measures like social distancing, sanitizing, and masks?

When customers do reach out to customer service teams, those agents should provide consistent and transparent communication across all channels. Given the heightened anxiety around traveling during this time, having one customer agent give you information regarding safety measures that differs from another agent’s, there’s bound to be confusion and concern. Arming customer service agents with an efficient and easy-to-use platform to manage inquiries across multiple channels will help to maintain this consistency. Hawaiian Airlines, for instance, leveraged Khoros to decreased customer service response times by 60%, all while increasing the volume of requests that are responded to by 45%.

Hotels

Hotels were among the businesses hit hardest by COVID-19, experiencing high vacancies throughout the past year. The American Hotel & Lodging Association (AHLA) reported that 71% of hotels won’t stay in business for another six months without further federal assistance. To add further injury, AHLA projected that 77% of hotels will be forced to lay off more workers.

For many months, the government and health agencies have urged people to not stray far from their homes, much less travel and stay at hotels. We haven’t even begun to unpack the ways in which this is going to influence behavior as we begin to step out. But one thing that’s certain is that people have gotten relatively used to operating virtually, be that opting for a telehealth appointment rather than visiting a doctor’s office, or hosting a Zoom birthday party rather than gathering people together in-person.

As travel increases, hotels will be challenged to provide convenient and personal interactions without necessarily being near humans. And according to a Hotel News Resource article published in early 2021, this is what customers prefer. In fact, 80% of consumers say they would be willing to download a hotel app that would enable them to check-in and out virtually, and get any pertinent information about the hotel. Meanwhile, 60% of consumers said they’d actually prefer to check-in and out via an app vs. in person. And to top it off, 20% of consumers said they’d feel more comfortable at a hotel if there were a digital messaging service they could use to avoid physical contact with staff.

Digital customer engagement platforms like Khoros can help hotels provide great customer service while reducing in-person interactions. For instance, our digital messaging can be used to connect hotel guests with a concierge for everything from ordering room service to getting recommendations for things to do nearby.

Restaurants

Over the past year, restaurants have been pushed to think outside of the box. From converting parking lots into outdoor dining areas to creating individual, heated bubbles for people to enjoy food safely in freezing temperatures, restaurants have had to totally rethink how they serve diners. For many restaurants, this has involved maneuvering finances to stay profitable even when only providing takeaway service, a now-vital aspect to almost any healthy restaurant brand. While it’s inevitable that more people will dine out as they become vaccinated, growth appears to be relatively slow. Statista found, for instance, that seated diners in U.S. restaurants were still down by 48.45% year-over-year in February 2021.

To survive, many restaurants have had to overhaul their carryout systems to provide contactless pickup. Though it varies drastically from restaurant to restaurant, it’s not unusual for a restaurant to have an immature or stitched together system for guiding customers on how, where, and when to pick up their food in accordance with the restaurant’s processes. Poor ordering UX, flooded phone lines, and a general lack of communication -- things that weren’t always a deal-breaker for restaurants before COVID-19 -- now all spell disaster for a restaurant’s customer experience. And just because more people will be dining out moving forward, it doesn’t mean that carry out will slow down. This is something that people have become extremely accustomed to.

Fortunately, there are technologies that restaurants can adopt to ensure a solid customer experience for diners, regardless of whether they’re dining at the restaurant to taking their orders away. One example of this is the use of QR codes, which customers can scan either when they take their seats, enabling them to order via their phones, or when they arrive at the restaurant, starting the process of notifying a restaurant that a customer is ready to pick up their order.

For good measure, when a restaurant digitally books reservations, it would be wise to share digital resources, be that via email or social, that clearly communicate safety procedures and precautions so that diners know what the restaurant is doing to make a visit as safe as possible.

Get your finger on the pulse of your brand’s customer experience

Without the right tools, it can be somewhat difficult to gauge how customers feel about your brand’s customer experience as a whole. CX Insights from Khoros provides brands with an actionable view of their customers, empowering them to create world-class customer experiences. Request a demo to learn more about customer experience analytics, and your brand, today.


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