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Creating a Smarter Travel Experience

Creating a Smarter Travel Experience

Reinforcing the Value of Superior Services by Expanding Scope of Mobile Itineraries

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Creating a Smarter Travel Experience

Abstract

The exponential growth of mobility has been the catalyst for a fundamental change in how business is done today. The way we pay our bills, connect with people, explore, book movie tickets, plan holidays and travel has changed forever. The travel industry, especially, has a lot to gain from this dramatic transformation. Travel companies must no longer limit their focus to just planning, booking, and ticketing. They need to leverage mobility to provide services throughout the trip to enhance the customer experience—an essential component of the travel sector.

The Rise of the Global, Connected Traveler

Today’s traveler is well-informed, smart, and on top of his game. Over 75% of frequent business travelers own a smartphone. These powerful computing devices present a new platform to connect with the traveler on the road. Travelers not only access their email on their mobile device, but through location-sensitive applications are exploring local merchant services. They are in constant contact with their social network through applications such as Facebook or Twitter.

For most travelers, checking their mobile device is the first thing they do when the plane lands. With many airlines now providing in-flight Wi-Fi facility, we have truly reached a unique level of connectivity, ushering in the era of the “always-connected” traveler. This mobile, social connection is essential to understand as it can influence purchasing decisions and provide a forum for unhappy travelers to voice their concerns to a wide global audience, impacting your brand and business.

We are also at the dawn of a new era of merchandizing. Consumers will become accustomed to interacting with their mobile devices in shopping malls managing a variety of opt-in marketing messages. This same merchandizing phenomenon will surface in airports and will be used by suppliers to sell ancillary services to frequent travelers. Considering the correlation between frequent business travelers and mobile device adoption, how can a Travel Management Company (TMC) leverage mobile technology for additional revenues, while ensuring the traveler complies with corporate travel policy? Can TMCs truly become merchandisers? This whitepaper discusses how TMCs can use an integrated mobile itinerary as a platform to offer goods and services to their customers.

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Flying High: En-route Merchandizing Takes Off

Many TMCs and corporate travel buyers are unclear about how suppliers will use mobile technology to promote services directly to frequent travelers. With the current battle between the airlines and distributors over ancillary airline services, carriers across the globe are recognizing the value of providing opt-in offers to travelers to expand the use of both ancillary airline services and related travel components. This mobile effort mirrors the overall transformation of airlines into merchandizers and travel retailers, as many carriers have incorporated third-party services such hotels, car rentals and holiday activities into their Web offering.

Hoteliers are seeing the value of merchandizing on-property services and promoting local merchants by providing a mobile concierge application to their guests. A joint Amadeus-Forrester white paper, ‘Cross-Sell Your Way to Profit’, states that supplier-based third-party ancillary service sales are expected to increase by 30% over the next five years. But the opportunity for merchandizing is not limited to suppliers as the entire value chain will be looking to expand the sale of ancillary services at every point of the travel experience.

Many TMCs view customer service as their key differentiator, but this advantage can no longer be confined to interaction with the call center. An enhanced customer experience must evolve to include services provided to frequent business travelers while they are on their trip. TMCs are uniquely positioned to provide policy compliant services to frequent travelers, enhancing their trip experience and leveraging opportunities for additional revenue. Those TMCs that do not implement a mobile merchandizing strategy will find themselves in an uncompetitive position against other TMC and supplier efforts. In addition, providing services re-positions TMCs to extend the service theme across all aspects of the trip.

Getting Up Close and Personal: Customization is Key to TMC Growth

Research confirms that frequent travelers are early adopters of new technology, especially emerging mobile technology. The frequent business traveler was quick to embrace the smartphone and is welcoming tablets and e-readers with open arms. With 24X7 connectivity now a reality, these travelers depend on mobile devices to provide location-based, personalized and contextually relevant information in real-time.

The always-connected traveler has not gone unnoticed by the travel value chain. As suppliers become retailers, their desire to benefit from merchandizing ancillary products and services is clear. A major driver of the American Airlines direct connection strategy is gaining additional customer insight to tailor its products to customer needs based on overall value. Mobile marketing provides an excellent platform to extend this effort directly to the traveler. Online Travel Agents (OTAs) have successfully launched mobile apps to provide itinerary management and extend services to their best customers.

On a parallel path, consumers are embracing location-based social networking applications such as Foursquare (with 45 million active users) and Facebook Places that pair check-in with specific offers. With Facebook Places, over 1.59 billion monthly active users of this social media powerhouse also receive customized offers on their smartphones. Google is also expanding local offerings connected to their already dominant mobile search engine. The phenomenal growth of Groupon and Living Social has proven that merchandizing local business through group buying is a major revenue opportunity.

Mobile Itinerary: Expanding the Merchandizing Footprint

Travel companies have a unique advantage over general market merchandizing efforts by virtue of owning the travel itinerary. TripIt, for instance, set the standard for an integrated itinerary that consolidates disparate trip elements and provided real-time updates to frequent travelers. It is important to note that TripIt first emerged as a consumer tool, then was quickly embraced by frequent business travelers.

It is now part of a solution of a major software provider in the managed travel space, demonstrating how a consolidated dynamic itinerary is well-suited for business travelers.

A key element missing from TripIt or similar itinerary tools is ensuring that ancillary offers are policy compliant and approved by the corporation. Maintaining policy compliance will be increasingly difficult as more suppliers embrace merchandizing. TMCs need to implement itinerary consolidation technology that both assists the traveler with location sensitive information, and also provides a platform for policy-compliant merchandizing.

Traditional Global Distribution System (GDS) Web-based itineraries are no longer a sufficient solution as they tend to simply publish the PNR elements. With Sabre bringing together Virtually There with TripCase, the opportunity for TMC agents to use an expanded itinerary exists, but these tools still lack merchandizing capabilities and policy control elements.

Given that all merchandizing offers will need to be opt-in, frequent travelers will decide what offers to accept based on their preference. The three variables that dictate acceptance are:

  • Location: By nature, mobile technology is location-sensitive. Providing an offer based on location is a core component of all merchandizing efforts.
  • Personalization: Understanding personal preferences of customers is a bit trickier. Historically, in a travel context, personal preferences have been limited to airline seat choice and loyalty information. All players in the travel value chain will need to extend this definition to include implicit and explicit traveler preferences. Given that the cornerstone of TMC offerings is service, knowledge of a business traveler’s preferences must be incorporated into any policy compliant merchandizing effort.
  • Contextual Relevance: The difference between an offer being viewed as spam versus one that offers value is all about the relevance of the message matching the specific context of the traveler. For example, a traveler who is trying to navigate an unfamiliar city may perceive a limo or taxi offer as an important value.

Mobile technology provides an unprecedented platform to implement the coveted “one-to-one marketing” theme. TMCs and corporate travel managers have long struggled with how best to connect with frequent travelers. The one-to-one marketing theme can be realized even in a managed travel context as long as these three variables are met. Research indicates that frequent business travelers would consider offers provided that the services meet their specific needs.

The TMC Merchandizing Opportunity: Providing the Missing Link

So how can a TMC embrace merchandizing? After gaining support from the corporate client, the TMC must identify key ancillary services that could be provided as mobile offers to the frequent traveler. A logical place to start is in the area of ground transportation. By providing their own consolidated mobile itinerary application, the offer can be inserted into the itinerary flow based on location and preferences. With the increased penetration of group buying services such as Groupon, TMCs could explore ways to offer restaurant and other service discounts. TMCs can provide that missing link between locally promoted services and the frequent business traveler.

Depending on the corporate policies of the client, offers could also be extended to event tickets and other local activities. This can be a significant service to customers who travel on a combined business-leisure trip, often with their spouse accompanying them. This transformation into a merchandizer will require TMCs to re-evaluate their local presence. Allowing a TMC representative to approach a local merchant with an offer to deliver business travelers in exchange for a discount and referral fee, may require additional staffing or retraining of existing staff.

To be truly effective, any TMC-based merchandizing solution must be fully integrated into all of the TMC’s technology. Itinerary elements need to be captured from the GDS, but integration with middle-office QA and back-office accounting is of equal importance. The integrated solution betters the opportunity to merchandize offers and increase revenues for the TMC.

Implementing a TMC merchandizing strategy ensures that the TMC can leverage the current systems model and can get ready to extend this functionality. TMC systems are highly dependent on GDS technology and leverages itinerary and data.

The strategy can be evaluated in a couple of steps:

  • Evaluate the changes that need to be made to the Point of Sales tool. The majority of traditional TMC tools are geared to work with a GDS. This includes the capturing of non-GDS bookings as passive segments.
  • To ensure the merchandizing option can be enabled, connectivity to direct suppliers needs to be leveraged. This should also enable the travel counselors to up-sell merchandizing options and add commissions. Many leisure travel companies have enabled counselors with these tools today.
  • In order to leverage the Itinerary, TMCs need to build a central data repository outside of GDS to integrate front-, middle-, and back-office. This will enable TMCs to:
    • Consolidate travel booking data
    • Integrate and deliver information and services such as itinerary details, security advice and travel policy reminders to travelers via mobile phone
    • Undertake advanced analytical reporting of consolidated travel data

The data can be shared with the merchants and across applications to power additional services to travelers. For example, the data can be shared with the local cab companies and based on the departure date the traveler can receive notifications. Based on the data travelers can also receive advance notifications that impact their travel plans.

An example of a corporate travel solution already in use is ConTgo. Their travel agents use the Mobile Travel Assistant to promote local preferred suppliers such as taxis and restaurants, and even to arrange group transport to and from the airport. The Mobile Travel Assistant increases the safety of corporate travelers significantly by providing a warning to select travelers.

NIIT

The NIIT Technologies Thought Board:

Creating a Smarter Travel Experience

The Road Ahead

With decreased margins and economic pressure on financial incentives, TMCs must evolve their services to encompass the concept of dynamic travel management. Simply put, this extends the role of the TMC to assist the corporation in managing compliance and extending services during travel. TMCs need to work closely with their corporate clients facilitating a frank discussion around the emergence of general and supplier-specific merchandizing. The discussion should also outline the role that TMCs can play in providing compliant ancillary services to increase traveler efficiency and maintain control over expenses. Without this discussion, travelers will decide what services and offers are valuable to them without a focus on what is best for the corporation.

The time is now for TMCs to embrace mobile itineraries and merchandizing. TMCs that continue to provide static itineraries for their corporate travelers will quickly discover that in this era of the always-connected traveler, control is in the hands of the customer. Without an integrated solution, travelers will download apps and respond to mobile offers outside of the managed travel programs TMCs support. By being proactive with deploying a consolidated itinerary and merchandizing effort, TMCs can position themselves as an active partner in the travel plan, reinforcing the value of superior service, and extending that theme throughout the trip.

About the Author

Norm Rose is President at Travel Tech Consulting, INC, and is world renowned for his travel technology expertise, particularly his analysis on the impact of emerging trends such as mobile and social media. From 1982-1988, he held sales and marketing management positions at United Airlines. Between 1989-1995, Norm was corporate travel manager for Sun Microsystems. At Sun, he worked with a number of third-party developers creating client/server software for the business travel market. This included early prototypes of self-booking tools and expense management systems. He is also the author of numerous publications and articles including ‘Mobile: The Next Platform for Travel’ (March 2009) ‘Corporate Travel Technology Today and Tomorrow’ (Fall 2007), ‘Selling Complex Leisure Travel Online: Focus on Dynamic Packaging Technology’ (December 2004), ‘Emerging Trends in Wireless Technology and The Global Travel Industry’ (October 2003) and ‘Corporate Travel: Technology Trends and Market Analysis’ (Spring 2002).

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