JTB Consulting deals with hundreds of clients every year that are planning to start a new business. One of the major headaches most of our clients face is the lack of reliable, up-to-date, and available market research into the industry and market they wish to enter. Fortunately, an integral part of JTB Consulting’s Solution is the provision of detailed market research.
Over the next few months, we will be focusing on providing some Industry Insight into various industries. Our ‘insight’ is based on actual market research projects we completed for some of our past clients. To continue on the previous industry we focused on (Craft Brewery), this month we will focus on the Tourism Industry.
The Impact of Mobile Phones on the Travel Industry:
The travel industry is shrinking. Well, not necessarily the industry per sè – in fact, reports from business groups and publications indicate travel was one of the most burgeoning industries in 2016 – but rather one of the primary ways travel companies interact with customers is getting smaller and smaller, more and more agile, in an effort to reach new customers and markets and maintain diversification and growth in 2017 and beyond.
We’re talking about Mobile Applications and how travel companies are leveraging the devices in your pocket right now to enhance their efficiency and agility in an increasing competitive global marketplace. Smartphones, tablets, laptops, and other mobile devices have not only changed the way customers research and book their travel arrangements, but they’ve also fundamentally shifted the way travel companies view devices as tools for continued interaction and communication with would-be travelers.
It’s no secret today’s traveler exists more and more in a virtual environment via the internet – in a fact, a study released last year by the internet industry company comScore reported mobile devices and related apps were one of the biggest drivers in how the average consumed media on a daily basis, with 88 percent of activity on smartphones and tablets stemming from apps.
With so much of today’s e-commerce dependent upon mobile apps as a way of customer engagement and transaction, travel companies are betting big on providing travelers with responsive, user-friendly applications to serve their booking and travel needs. As you’ll see below, here are 5 important ways travel companies are leveraging mobile apps to create lasting dialogues with customers and position themselves for success in an increasing digitised marketplace.
- Customised Services: Because so much of an individual’s e-commerce, business, social, and leisure life is entwined with mobile devices and apps, travel companies have started using apps as a way of targeting customers with customized services, special offers or promotions, discounts, and other perks. Imagine a business traveler is curious about the weather at his destination. A travel company could provide within their app a weather function in which our business traveler can view current and future weather conditions for his arrival, potentially with links and offers for activities based on the weather forecast. Customized services and integrations like this – be it travel for business, leisure, or a combination – provide travel companies a leg-up on the competition, but also gain valuable insights into the wants, needs, and priorities of their users.
- Increased Communication: One of the greatest challenges for travel companies today – despite the expediency and ease of communication channels – is the ability to create conversations with customers that continue long after the plane touches down and the bags are unpacked. Mobile apps provide travel companies with an instant and intimate way to keep the conversation going with customers before, during, and after a trip. Whether it’s requesting feedback about an activity or excursion a customer booked, offering similar travel packages, or providing key information about trends in tourism and travel in the hopes of sparking interest in exploring new destinations or activities, mobile apps offer travel companies a direct channel with which to nurture current customer relations and potentially expand that customer-base via word of mouth on social media or travel review websites.
- Understanding the Consumer: Utilising detailed data and metrics about where your customer spends his or her time online, what mobile apps they gravitate toward, what their interests are, and their expectations from a travel company or service are key drivers in sourcing the right products and services from suppliers in order meet your customer’s needs. Essentially, travel companies have begun to view mobile apps as a testing ground or controlled environment where they can gain insights into the browsing and purchasing habits of their customers, and then acting on that data to create offers, discounts, promotions, and messaging that best targets a travel company’s demographic.
- Streamlining Transactions: Whether it’s going paperless in providing customers with PDF files, digital receipts or confirmations, or perhaps even passports or other necessary travel documents, travel companies can use apps as a way to streamline transactions and provide travelers with the quick and easy e-commerce experience they’ve come to expect in today’s fast-paced, digital landscape. Not only does a travel company’s capability to provide transactional documents to customers via an app reduce the necessary resources and personnel to complete transactions, it also offers travelers peace of mind in knowing their accommodation information – confirmations, itineraries, boarding passes, etc. – will be housed electronically for easy access in the future.
- Connectivity: While somewhat related to maintaining the conversation with travelers after the purchasing experience – as well as giving customers a sense of satisfaction with how a travel company operates – mobile apps allow customers and companies to remain connected to each other every step of the way – from research to booking to the vacation itself and beyond. With so many channels available to customers to receive information about travel and tourism, the potential for a travel company’s engagement efforts to become ‘white noise’ increases. However, mobile apps, especially those with a focus on the user, provide travel companies a path to cut through that white noise and reach customers in a medium where they’re not only experienced, but spending an increasing majority of their time.
Tourism Mobile apps help users for planning travel, accommodation bookings, ticket bookings, cab booking, route mapping, and more. However, these are just the basic uses of tourism mobile apps, and more tourist services can be delivered like:
- Navigation – GPS services, route planning, and maps
- Social – Travel updates, reviews, picture galleries, free communication etc.
- Mobile Marketing – Contests, discounts, and offer alerts
- Security – Medical, Emergency calling and Information about local and international health agencies
- E-commerce – Ticket booking, overseas banking, reservations, shopping
In fact, the tourism industry is using apps to reach the next level of user engagement and market penetration. Several new trends and tech factors will shape the future of tourism mobile application. For example, cab aggregation has captured the tourists’ imagination. Ride sharing is a prevalent phenomenon. Tourists are also opting for cashless options as a safer means to travel. What are some of the innovations and trends that influence travel mobile app development?
- Real-time tracking: Real-time travel tracking apps are increasingly becoming the norm. Most private modes of transport already offer this service as people can track the motion of their cars, buses etc. Fortunately, this service only gets better as in the future all transport will depend on live tracking. Public transport agencies have started using IoT technology and GPS devices to provide live information about buses, trains etc. Developing a travel-time tracker app is an excellent idea to benefit from this wave.
- Cashless travel: Theft and the hassle of cash is a big security concern for tourists visiting new countries and regions for the first time. The benefit of a digital economy is that now there are several apps that let you travel cashless and facilitate all kinds of payment with a click or a tap.
- Tailor-made travel apps for your needs: With big data and machine learning, tourism apps are bound to be smarter and cleverer. More sophisticated travel apps will now be custom-made for your travel routes, time, budget and means of transport. Using your travel history, preferences, and feedback, these apps will be able to recommend and plan better trips for you.
- Social travel planning: This combines new-age technologies with user recommendations. These apps help users view the suggestions and favorites from friends and family, expert tips and consumer reviews – all combined to make informed decisions about their travel and tourism choices – including destinations, vendors, bookings etc. A review by Adweek shows that social amplification is an important factor for mobile travelers with more than 80 percent preferring recent reviews before they take a call. The integration of social network (APIs) and vendor reviews, tourism companies can offer applications that offer enough social proof to prospective travelers.
- Localisation: Geo-targeted recommendations are very popular across many sectors and tourism industry is no different. Travel apps can enhance the user experience by offering localized suggestions and deals/offers to travelers – based on their location and preferences. For instance, comScore makes great use of mobile location insights and offers value to its users at the same time optimizing the efficiency of planning and user experience. The use of APIs to auto-fill user profiles, purchase history and location information – you can deliver the next level of mobile travel experience.
Millenials are Changing the Face of Global Travel:
Cheapflights recently revealed its Top Millennial Travel Trends report.
Millennials (people born from 1981 onwards) are the largest generation to date, numbering around 79 million globally, so it’s no wonder that this age group, as it enters the workplace and begins to have families of its own, has the most potential influence to effect change these days. They were born in a technological era, surrounded by and adapting to high-tech gadgets and social networks from a young age.
They’re tech savvy, and as it turns out, more adventurous as well; research shows that Millennials are 23% more likely to travel abroad than their older counterparts.
“Millennials are having a tremendous impact on global travel – both in terms of travel for business and leisure – and as their experience and spending power increases, so will their preferences continue to shape travel for decades to come”, believes Andrew Shelton, Managing Director of global travel search platform, Cheapflights.co.za, “There are a number of changes that we have seen influencing the travel industry which have been driven by the following”.
- Tech is king with Millennials: Smartphone ownership topped 2.1 billion globally in 2016, and among Millennials, penetration is almost total in some markets, underpinning a familiarity with and a level of trust in the channel that Cheapflights is itself seeing reflected in its own users: “As the Millennial generation grew up we started noticing a definite uptick in online searches as well as searches conducted via a smartphone or tablet – they’re by far the biggest market for online sites like ours.”, says Shelton. In South Africa alone the Cheapflights app was downloaded by 134,931 people in the last year at an increase of 25%. App sessions have also increased from 1,280,007 visits to 1,577,675 year-on-year (an increase of 23%). Globally, mobile now accounts for over 60% of Cheapflights’ search demand, and more than 40% of its revenue, and increasingly the company has adopted a ‘mobile first’ mindset in both its product and marketing strategies.
- Bleisure: “We’re seeing a lot of Millennials who need to travel for work taking advantage of the opportunity to indulge in a little bleisure (the new trendy term for combining business and leisure), extending their trips to take in the sights” shares Shelton. Millennials aren’t stingy with money – as long as it’s not theirs – for example, BCG has found that Millennials spend 13% more airline tickets than other business travelers. However, it would seem that this group aren’t necessarily extravagant spenders; rather it’s a question of value. Shelton explains that; “We’re noticing that these flyers are becoming increasingly savvy about how to save money and how to choose the “perks” that matter enough to fork out added cash for.”
- A focus on experiences: Research indicates that Millennials prize a meaningful life over possessions or career status. This group is also getting married later in life, leaving them with more disposable income for travelling. “Thanks to the popularity of homestay services like Airbnb, travelers can easily take up residence in a new city or a remote bit of countryside, whether for a few days, weeks, or months. This is giving rise to the search for a more personalised and “authentic” experience. Paired with services like local tour guide matching and at-home dining with locals, it’s far easier to get a full-immersion holiday anywhere in the world. These options add fuel to the growing solo travel market, and make it easier to cut the ties to home, which is key to a digital detox experience. For the growing group of travelers motivated to deep dive into a culture, this holiday style is hard to beat”, believes Shelton. Millennials are also influenced in their travel choices by the fact that a number of ecosystems are under threat (think global warming, rising water levels), driving a sense of urgency for seeing destinations that are endangered and supporting tourism services that sustain vulnerable lands and species. Shelton predicts that Millennials will continue to drive the ‘Experience Economy’ as their spending power increases; “Because of this group’s focus on experiencing life they’re far more likely to book a flight to attend a concert or sports event in person and we’re already seeing an uptick in event /experience related travel”.