Comment: Investing in technology
As the travel industry issues an increasing number of profit warnings, Bhupender Singh, CEO of Intelenet Global Services, outlines below the lessons to be learned.
Travel companies were amongst the most likely publically listed UK firms to issue profit warnings in the first quarter of 2017, delivering the sector’s joint highest number of warnings in the post-financial crisis era. According to a report by EY, support services, non-life insurance and travel were the sectors hit the hardest.
Half of the travel companies who filed profit warnings cited pressure on their margins as the main cause, but the sector has shown considerable resilience in the past. The trend for consumers to spend on experiences, even during recessions, has previously helped travel companies to stay in the black, but now changing customer expectations present a new set of challenges.
The report from EY recognised that UK consumers do still intend to keep spending on leisure, and many companies within the travel sector are doing well at attracting these individuals. But there is great emphasis on controlling costs as margins are squeezed.
The added challenge is to capture consumer spending as disposable income diminishes. In this environment, those companies that can intelligently apply next-generation technologies – such as automation, Artificial Intelligence and Big Data Analytics – will reap the greatest rewards.
This will require searching conversations about where travel providers can make the smartest technical investments. Companies may find that they are able to kill the proverbial two birds with one stone, controlling costs whilst simultaneously improving customer experience. The latest tools for operational excellence can help streamline the costs of supporting complaints, for instance.
There are still some big issues when it comes to customer satisfaction. Recent Civil Aviation Authority research, for example, has shown that only 29% of customers are satisfied with how travel providers deal with common issues such as flight delays. When disruption happens, one of the main causes for dissatisfaction is related to how much information flyers are given – but delivering real-time updates to customers is a time-intensive process.
In particular, the growing expectation for multi-channel communication – with information accessible at the touch of a button across website, apps, SMS and social media – has raised the bar, and the price tag, of keeping customers informed. This is where investment in technology tools, many of them based on next-generation developments, can deliver real cost efficiencies alongside improvements in customer care.
By helping customer service agents to pre-empt requests for updates, back-end technology can improve customer experience and streamline the process of managing those delays which are unavoidable. With a degree of wisdom about where to direct attention, the choice to invest in technology tools can be the difference between barely surviving and really thriving in the sector.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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