By Ankur Thakuria, Regional Director, APAC & ME at Tiqets
While most businesses suffered during COVID-19 lockdowns, online companies saw an unprecedented growth. For the tourism industry, the shift to online pretty much became mandatory due to capacity restrictions and social distancing.
What started as the need of the hour is slowly taking the shift towards customer convenience and better resource management. Though already quite prevalent in the pre-COVID-19 times, the shift to online presence accelerated tremendously during and post pandemic. Today, new business can open sales online overnight with fewer resources.
As we transition towards endemic COVID-19 and businesses in most parts of the world are recovering and set for growth, online penetration is only going to increase and we will see an even stronger adaptation in travel with OTAs leading the way. It is a reality that people are adapted to doing things online now, and we are looking at customers who are expecting such an ease of doing things online as they plan their travel.
The Move Towards Digitisation
The story of the tourism industry during the pandemic was one of great struggles, great challenges and also great rises and great triumphs. Over the past months, most of us have questioned how the industry would continue to unfold and transform, how it would go back to pre-pandemic levels, and how COVID-19 may have left a lasting change in the industry.
Some might argue the move towards digitisation or online adaptation is nothing new as we have been booking travel online for over a decade. They are right, but the point is: COVID-19 has accelerated this change unlike anything before.
When travel resumed after the first global lockdowns, booking online had pretty much become the norm that comes with significant advantages.
While the industry dealt with mass layoffs during the early days of the pandemic, companies now are short of resources to be able to service their customers. This is where online platforms come to aid tour operators and venues by improving efficiency.
Online platforms including OTAs and booking engines have helped manage availability, as well as automate and streamline the sales process from quotations to payments. This increases the overall efficiency of companies and enable them to run the operations with a much leaner team size.
Online platforms have also helped operators stay current with new rules and regulations like capacity management and contact tracing of customers. For instance, with tour operators going online, customers would no longer have to wait for that second and third emails for confirming their bookings since they are able to book the real-time availability. From the operators side, this eliminates the risk of losing customers as operators do not have to block out seats for 24-48 hours waiting for customer payments.
With improved efficiency comes lower operational costs as businesses are able to get more done with far fewer resources than before.
Offline booking models tend to have quite a few touch points, which increase the cost of operation. These handling costs might seem trivial for individual orders but they snowball into a substantial amount when the collective total is taken into account. With online platforms providing unparalleled visibility, businesses can further refine customer booking journeys and therefore increase the scope of margins on bookings. Online platforms provide in-depth insights into each order, thus helping foster a cost-conscious culture in the organisation.
For many organisations, this also meant paving ways towards permanently moving some tasks to automation such as payments, live availability or generating tickets/vouchers.
One of the most common examples we see are venues that have completely done away with offline ticket sales and have moved 100% of their ticketing online. So you now see no admission window, no reservation agents and in many cases no physical tickets as well—all of which incurred significant costs in the past.
The move towards online adaptation of businesses also has largely to do with customer expectations. COVID-19 saw a major behavioural shift in end consumers. With the global lockdowns, people were forced to arrange a significant part of their lives online—from food deliveries to groceries and even education.
This means we are looking at a far more tech-savvy customer base than before and with that comes the expectation of easy online access, speedy operations and being able to get things done on their phones.
OTAs and online booking engines make all of that possible and in most cases without breaking the banks. To be competitive, businesses are having to adapt rapidly as the demand continues to climb.
Another big reason for the steady move towards online platforms has to with data. Specifically, businesses want to understand their customers better and be able to influence them more than ever before. Legacy online brands have successfully shown for years that you can influence customers’ buying behaviours if you are able to understand and predict their needs and interests better. This allows for companies to offer personalisation at scale that works towards higher conversions and more retentions.
If you consider this in simpler terms, think of any popular tourist attraction getting hundreds of thousands of visitors each year, with tickets priced the same throughout the year. In a traditional scenario, it takes quite a considerable amount of time and resources to go through all of the customer data to work out even simple insights like what are your peak seasons, what are the customer demographics looking like, etc. However, online booking platforms make these insights pretty much instantaneously available. This in turn opens up possibilities of optimisation in areas of dynamic pricing, geo-fenced targeting and much more.
As the customers’ understanding grows, it allows for better offering to the customers as well as influencing buying patterns to increase average spend on-site via add-ons and upsells.
OTAs and online booking engines today have the capacity to crunch data quite easily and this takes away the need for additional resources on the operators’ or venues’ side. When we talk about data in tourism businesses, it goes well beyond just having a better understanding of the customer. Intelligent reports can go a long way towards further streamlining operations, better supplier deals and the list goes on.
Before I come to the conclusion, I would like to share a recent example of how a new venue benefitted from adapting online technology right from the opening.
The Mohammed Bin Rashid Library is the largest library in the Gulf Cooperation Council (GCC) region and it has been popular since the launch in late Q2 of 2022.
Using a booking engine, the venue decided to move the entire ticketing online. Here are four ways the online booking engine helped them.
1. Real-time Capacity Management
Given that COVID-19 restrictions were still in place to some extent, capacity restrictions had to be followed. However, rules were changing ever so often that managing capacity offline would be a difficult task.
The venue decided that admission tickets would be available online only and that no on-site tickets would be issued; this allowed them to set-up capacities and admission timeslots. Better yet, they could make any changes in real-time and that would take effect immediately.
2. Quickly Identifying Peak Period and Planning
In addition to managing capacity online, online booking engine allowed the venue to get access to visitor insights and quickly draw reports around peak and off-peak periods that helped them better plan their offline resources. For instance, if Saturdays and Mondays were the busiest, additional hands on ground would be arranged for those days. And any change to this trend was easy to identify as the data was available in real- time.
3. Reduce Operational Cost (Front Office)
Having the entire ticketing set up online also helped the venue reduce some direct costs on-ground; like setting up ticketing stations and hiring resources. By doing away with any kind of offline ticketing, the venue was able to not only cut these costs but also greatly improve customer experience as guests were able to just scan their QR codes and walk in.
4. Access to Real-time Customer Insights
Having access to a whole host of customer insights does go a long way besides just working out the peak and off-peak periods. Understanding the customer demographics, their languages, regions where they are coming from and their buying patterns allows the venue to be able to target them more effectively either direct or through their OTA partners.
The list of pros pointing towards why businesses are embracing the change is far longer than what I have shared today. Yet I think one piece is clear that COVID-19 has acted as a catalyst to this change and we will see a lot of tourism businesses adapt to online platforms in months to come.