How Tourism Brands Can Turn Chaos Into Opportunity
Summer vacations are going to look a little different this year than in years past. Instead of visiting exotic locations, travelers may stay closer to home. Boarding at airports will include routine health checks, and social distancing will be in place even at 30,000 feet.
Like retail, healthcare, and financial services, the travel and hospitality (T&H) industry is facing unprecedented challenges due to COVID-19. According to one eMarketer study, $355 billion is predicted to be lost by T&H brands alone in 2020, as rental car agencies, hotels, airlines, and others adapt to this new way of life.
It’s more important than ever for travel brands to practice flexibility, good communication, and a lot of empathy. Those who are able to treat uncertainty as an opportunity to improve their marketing strategies will ultimately be the most resilient — ready to ride through this stretch and carry on afterward.
Though they may be facing a very different experience in the short term, here’s how a nimble response strategy will ensure loyal, engaged customers when trips are rescheduled and life gets back to normal.
Be quick and strategic
To survive — and even thrive — in volatile times, travel and hospitality brands must navigate through three phases:
Respond with urgency
As social distancing rules vacillate and travel regulations pivot, reaching out accordingly to customers with a coordinated ongoing health response is critical. Brands need to intelligently manage and communicate operational changes, cancellation policies, safety plans, and call center volumes, which require a strong digital foundation — one that helps employees be agile and quickly resolve problems.
TravelPerk shifted its sales team to customer support in order to efficiently address increased customer inquiries. Other brands, such as Expedia and Cathay Pacific, have optimized their websites with UX features that make cancelling and rescheduling easy, helping consumers help themselves.
Delta Air Lines has done a great job of keeping staff safe in order to serve customers during this time. Working with JLL, the airline relocated call center staff to the hangar at its on-campus museum, allowing them to handle urgent customer needs while also adhering to social distancing policies.
Once public health measures and economic interventions begin to take hold, brands can start being more flexible — for example, by adjusting loyalty programs. Customer insights are particularly helpful here, as they can help T&H businesses understand what individual travelers are most interested in, whether it’s swap-and-replace offerings or full, fast refunds. Research from GlobalWebIndex shows that Gen Z travelers in the U.S. and U.K. are more likely to book travel during COVID-19 when a company offers comprehensive travel insurance (76%) or when they can speak to an agent (60%).
During a time like this, it’s important for T&H brands to be flexible with their policies and rewards programs, and we’ve already seen several businesses adapt: Four Seasons waived cancellation fees through the end of April at its properties, Amtrak removed rescheduling costs for its customers, and Vail Resorts offered credits for next season’s ski passes.
Recover and move forward
T&H brands are navigating unusual circumstances, but the good news is that this reality won’t last forever. Sooner or later, the industry will return to a state of relative normalcy — and when it does, brands need to be ready to promote destinations and services.
Hong Kong is a great example to learn from once global trips are safe again — its government devoted $1 billion to rebuilding the image of the city after the SARS outbreak and it paid off, with tourism bouncing back to normal after just six months. Personalized experiences and campaigns give brands an opportunity to show they understand customers’ mindsets, and enable them to adapt to the current travel landscape.
Be proactive, not just reactive
Being able to react swiftly can help every brand during volatile times, but being proactive is equally important. Especially now, when the COVID-19 pandemic keeps everyone at home, it’s never been more important to use data and customer intelligence in order to spot and understand trends in behavior. Digitally adaptive brands excel at three things: hyperawareness, informed decision-making, and real-time action. Hyperawareness is focused on the macro trends around sanitation and health while traveling and the micro trends as millions of travelers develop new choices on where to travel this summer.
In order for T&H brands to recover, they have to be ready for whatever’s coming next — and while there’s no way to know for sure when customers will once again book flights, hotels, or rental cars, there are clues that suggest when the tides will turn.
Currently, different demographics have a different propensity to travel. While two-thirds of Americans say they won’t travel again for at least three months, others are buying tickets and crossing their fingers that restrictions will be lifted by their date of departure. And according to one eMarketer study, 52% of Americans are eager to travel for leisure once the pandemic has passed.
Brands with digital foundations and customer intelligence initiatives in place — the ones watching for hints of change — are going to be the most prepared for the recovery stage. Airlines, for example, are leaning into data and looking at consumer shopping behavior to inform flight schedules. Staycations and domestic trips will be especially popular, as the aforementioned eMarketer study found that 36% of travelers are likely to choose destinations that are close to home.
Think of data as the canary in the coal mine — an early warning. For instance, occupancy at Hyatt hotels in China and South Korea began to increase when the daily number of coronavirus cases dropped below 100. Not only can those with strong data know the right time to start marketing again, those with furloughed employees will also know when to bring people back — before the hotel lobby is packed.
Keep customers close, however far apart
Travel and hospitality brands have had to sacrifice a lot to maintain the health and safety of their staff and customers. The question now is, how can these companies keep audiences close while physically keeping them away? It comes down to how sensitively these businesses can handle crises — and how they communicate around them.
MGM Resorts and Caesars Entertainment closed for the first time in 20 years, losing operating budgets and furloughing hundreds of thousands of employees. But they effectively communicated changes (and plans to reopen) to travelers, ensuring updates are easy to find.
Right now, brands need to strike a delicate balance between promoting safety and promoting travel, as many cohorts are still interested in booking vacations at discounted prices. Older people who may be more anxious about travel will need to be addressed differently than Gen Z, for example. That’s why A/B testing and personalization are so critical to deliver a message the recipient wants (or needs) to hear.
It may feel like chaos right now, but the dust will settle. And when it does, tourism will likely be in high demand. It’s similar to how the industry recovered in the wake of SARS, MERS, and Ebola — though these global health scares hurt tourism in the short term, the economy bounced back.
Brands need to be ready to orchestrate new kinds of customer journeys. Managing and segmenting audiences will be critical, as will analytics to spot shifting trends. Savvy companies will use data to understand who has a higher likelihood of rebooking, what appropriate substitutes could be if inventory changes, and what support staff is needed to manage this new type of audience.
When the world reopens for business, things may look different — buyouts and acquisitions are likely to happen, flight inventory and routes may change. But overall, customer sentiment toward travel is the same: after months spent at home, they’ll be excited to take a short trip or extended vacation.
With a proper digital foundation in place and a thoughtful approach to customer experience, a disruption doesn’t have to be a disaster. Clear, targeted communication and a strategic informed plan for the future turns everyday T&H brands into heroes.
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