The Next Generation of Technological Innovation in the Travel Sector
By ITB Community and Dana Dunne, CEO at eDreams ODIGEO
With customers now expecting a personalised travel experience at their fingertips, it is essential that the travel sector takes a tech-first approach. Following the pandemic, developing tech to improve the customer journey and offer more choice to consumers will be essential for success. eDreams ODIGEO CEO, Dana Dunne, had a conversation with ITB Community to give his take on how tech innovation is shaping the travel industry. Throughout the interview the travel leader explains his views on how machine learning and Artificial Intelligence (AI) are enhancing the customer experience and driving bespoke travel offerings for customers.
What is AI’s role in providing a more bespoke travel experience to customers?
Research shows that 72% of customers only engage with bespoke, personalised messaging. This is a clear example of how fundamental personalisation is in the customer experience space and where AI can offer huge value.
When analysing our customers’ biggest concerns when booking travel, they go to things like the time taken to research the best price, the time taken to research the best route and aligning flight and accommodation options.
These are all matters that can be solved through AI, which makes it possible to provide customers with bespoke options in line with their personal preferences. This saves a significant amount of time—potentially taking days or weeks of trip research right down to minutes or seconds. All of this is made possible by reliable data, AI simply can’t work without this key component.
AI is the technology that makes it possible for us to meet consumer demand for personalised content. AI touches all elements of the trip research and booking flow.
This goes beyond the initial touchpoint with customers and flows throughout the entire customer journey. Our chatbots are able to analyse thousands of consumer enquiries, track recurring issues, and therefore enable us to better programme responses to standard enquiries—meaning many of our customers do not need to wait in line to speak to agents to receive a resolution.
At the same time, AI is informing our understanding of the customer, and then playing back to them bespoke options based on a deep understanding of their travel preferences. To quote another stunning statistic: AI makes it possible to provide billions of bespoke travel plans in just seconds. This is possible, not just because AI is constantly scanning for trends in aggregated customer data, but because you can constantly improve the algorithm.
Overall, it is a beautiful, virtuous circle. AI fuels personalisation to meet demand for this functionality, and as this engages more and more customers, that catalyses ongoing development and growth of AI.
One other major and crucial area where AI is supporting the business is through our subscription service, which offers even more fares and flight routes. AI allows us to harness that extra content and bring it back to the customer in the form of personalised travel suggestions and offers.
How does tech innovation increase consumer choice in the travel sector?
Humans are always going to be essential to the travel experience—there is no substitute for human creativity, leadership, innovation and ingenuity. But we have to recognise where we are less able.
Technology and AI can process larger data sets, at a speed than could never be possible by humans. Tech has a single-minded focus on the task at hand and that enables it to process and analyse millions of options and provide rational, personalised advice to customers. All of that facilitates customer choice by ensuring we have the ability to manage much bigger data sets and distil these options in a rational way to our customers.
That is important because businesses that are primed for success are those that can facilitate the greatest choice for their customers. Research tells us over and over again that choice is integral. In 2021, we have seen studies that suggest customers are now 47% more likely to seek out a much greater range of flight options than they might have done pre-pandemic. That is where a key focus outside of the tech sphere is broadening our collaborations with carriers and hotel partners.
We are constantly reaching agreements with top airline carriers, with Easyjet being one of the latest ones, to bring even more pricing options and routes to our customers. These kinds of collaborations rely on a tech-first approach to integrating millions of different flight routes, fares, accommodation options and ancillaries into the booking flow.
However, there is no point in providing a plethora of choices, if you cannot communicate them to customers in a meaningful way. This is where AI acts as the facilitator of customer choice.
AI and other technological solutions underpin our entire content platform, allowing our customers to access over 9 billion flight itineraries and over 2.1 million hotels. Customer appetite for choice is set to continue to grow so industry players in the travel sector will need to consider how to continue to grow the range of options available on our platforms and innovate in terms of how we manage that data through AI.
Attracting talent is essential and bringing leading tech experts into the travel sector from other industries to share their knowledge must be a priority.
A tech-first approach to facilitating choice and continuing to innovate through AI will be key determining factors in which companies are most successfully following the pandemic.
What tech trends are the future for the travel industry post COVID-19?
The opportunity on offer from technological innovation is really staggering, not just from a customer experience standpoint, but from a commercial standpoint too.
While we continue to improve the experience for our customers, we have not forgotten our bottom line and responsibility to our shareholders.
A study from Boston Consulting Group found that personalising the consumer experience led to a 25% revenue lift. So, we are very much focussed on that from a financial perspective as we grow the business.
There are three key trends that I see at the core of future tech innovation.
The first is the continued rapid development of AI. A McKinsey study highlights the global travel industry stands to gain over $400 billion per year in efficiency gains alone through the adoption of AI.
At the same time, a report from PwC estimates $15.7 tr will be contributed to the global economy by AI by 2030 and that there will be a 26% increase in GDP for economies as AI becomes more prevalent.
The same report states that 45% of total economic gain by 2030 will come from product enhancement that stimulate consumer demand. This is because AI will drive greater product variety, with increased personalisation, attractiveness and affordability over time.
So, AI is only going to increase in importance, not just for businesses in all sectors, but for the global economy and the development of society over the coming decades.
The next step in the development of AI technology is already underway and that is moving from an aggregated data model, which analyses customer behaviour in groups, to an individual analysis model, which will be able to provide a far more bespoke, personalised experience to customers.
Therein lies the second major trend for the next ten years and beyond. I have mentioned previously that over 70% of consumers only engage with personalised messaging. Expect this trend to continue to rise.
Personalisation and choice will continue to rise as the pillars driving consumer decision making, so the travel and ecommerce sectors must be alive to this and drive innovation to keep pace with consumer preferences.
The third massive trend that will define the coming decades is the use of mobile technology for purchases, research and bookings. According to marketing insight firm Awin, over $120bn was spent via apps in 2020. At the same time, the number of connected devices per person has consistently increased—going from 1.84 in 2010 to 6.58 in 2020.
Being able to engage and manage multiple touch points with customers across devices is going to be so important. People spend approximately four hours a day on their smartphones, over 80% of which is spent on apps. And over 70% of online minutes are now spent on smartphones.
We have made sure we are alive to this trend and this is generating results. We are close to 60% of all bookings taking place on a mobile device now and again we expect that to rise. Facilitating smooth, personalised interaction through mobile devices is absolutely essential.
These will be the key factors which determine our ability to capture customer demand going forward—mobile interfaces, personalisation and choice, and, underpinning it all, AI innovation.
As we move beyond the worst of the pandemic, these are our key areas of focus in terms of investment into the business and will continue to be so for the years to come. This is how to create an excellent experience for the modern traveller. Businesses that are alive to these developments will be best placed to capture demand for travel now and for the future.