MIT SMR Connections
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Travel and Technology: Experiences Abound
The return of travel and tourism following the global pandemic, spurred by pent-up demand and mass vaccine rollouts, has fueled optimism in the leisure travel industry. Likewise, the longing for authentic human connection, driven by months of remote working and video calls, has many business travelers eager to resume face-to-face communications and genuinely reconnect with their teams and customers.
Thanks to the promise of emerging technology-driven opportunities, the travel industry is poised for a healthy rebound, and all indications point to a faster recovery — well under the four- to five-year mark that was previously estimated. As borders reopen, the world will witness several refreshing changes in travel.
Technology will democratize travel retailing and the shopping experience for travelers. Travelers are far less willing now than in the past to spend hours scouring the internet for appealing vacation and other travel options. What was once a luxury for affluent consumers who could hire specialists to curate travel experiences is quickly becoming a technology-driven industry standard. In addition, new technologies will also facilitate more robust collaborations across the industry to provide travelers with rich and highly personalized travel options.
Global distribution systems (GDSs) — which link airlines, hotels, and car rental agencies to online booking sites and travel agents — first emerged in the 1960s to handle travel-related transactions. As the aviation and travel industries continued evolving, so did the need for digital tools and technologies that automate the work of airlines and reservation systems, connecting travel industry suppliers with buyers looking to purchase transportation and accommodations.
Decades later, the traditional role of GDS has also evolved. For instance, Travelport recently unveiled Travelport+, a next-generation platform that creates a simplified, capability-rich marketplace for travel retailing. This Amazon-akin marketplace connects buyers and individual sellers from the largest, well-known airlines, hotels, car rental agencies, and other suppliers to the smaller new market entrants.
With modern travelers seeking experiences beyond the basics — not just a hotel room or an airline seat — they will inevitably turn to companies that can provide what they want. Travel commerce companies such as Travelport are well poised to anchor the new market dynamics through their relationships with thousands of travel providers and by having the infrastructure needed to manage the massive data sets of traveler choices and behaviors. Travelport has built an accessible platform that will help industry players gain deeper insights into their customers and provide simplified access to a host of travel retailing products, compelling multisourced content, and ancillaries that drive upselling and increased spending.
In this Executive Conversation, Sowmya Rajagopalan, vice president and head—Americas for the Travel, Transportation, and Hospitality Business Unit at Tata Consultancy Services, delves into the evolving landscape and the pillars that a changing travel industry will rest on. Bates Turpen, global chief information officer of Travelport, shares his company’s experiences in preparing for a post-pandemic era of travel and how innovation intended to simplify the industry’s complexities has become the central focus for Travelport’s new global strategy.
Changing Priorities: Capturing What Matters to the Future Traveler
An executive viewpoint by Sowmya Rajagopalan, Vice President and Head–Americas, Travel, Transportation, and Hospitality Business Unit, Tata Consultancy Services
Understanding the future of travel has never been more significant. The reason to travel will extend beyond simply seeking an escape. On top of wanting assurance from governments and expecting end-to-end safety measures from the travel industry, travelers will be conscious about their journeys and more mindful and appreciative of their surroundings.
Leisure travel is where we expect the most potent growth. Pent-up wanderlust and cabin fever will increase demand for everything from weekend getaways to long “workcations” to exotic locales. In addition, travelers will be more inclined (and able) to take longer and more frequent trips because of flexible and remote working, which will give a whole new spin to leisure travel.
But contrary to popular opinion, we believe purely for-business travel will also rebound. While communication technologies sustained businesses for close to a year, it will just be a matter of time before in-person meetings resurface and take precedence.
The post-pandemic opportunity is for the travel industry to come together to provide highly personalized offers, as well as convenient and compelling shopping experiences for customers. However, finding the perfect itineraries, lodgings, and add-ons can be complex and time-consuming. By taking on the industry’s need to simplify the way buyers and sellers connect, Travelport, a worldwide leader in travel retail technology, aims to eliminate the complexities to improve the experience for travelers.
For instance, the worldwide travel retailing platform is already working with groups in various markets to display attributes to improve inclusion of certain groups, such as LGBTQ+-friendly destinations and activities, and to offer personalized options, such as vegan-friendly hotels or Muslim/Halal-friendly travel choices. The company also supports initiatives to provide better experiences for travelers with disabilities or special needs, such as the United Nations’ call for “promoting accessible tourism for all.”
In September 2020, Travelport reached a milestone for sustainable travel with this same approach to increase visibility of key attributes, enabling agents to search specifically for offers that have been certified as sustainable by an independent body. With this new initiative, tour operators, travel agencies, and consumers began getting, for the first time, a comprehensive and reliable overview of the sustainable holiday offers available in Austria, Switzerland, Germany, Hungary, the Czech Republic, Slovakia, and Slovenia.
Casting Old Players in New Roles
After decades of challenges with friction-filled workflows, travel agents may find themselves in the catbird seat. While travelers will appreciate the freedom to craft their holiday experiences, expert help will be essential to navigate the plethora of options as well as varying restrictions. Travel agents will play a significant role post-COVID-19, helping travelers with finite details and allaying fears about travel destinations.
A study conducted by our client Travelport found that more than 80% of travelers plan to use travel agents in the future, and more than 30% will use them more than they have in the past. Among millennials (those now in their 20s and 30s), the latter percentage jumps to 43%. Agent insights, knowledge, and various tools and products provided by travel commerce platforms are the primary drivers of a renewed, increasing value of travel service professionals.
Both buyers and sellers of travel services will work more closely with travel retail technologies to leverage data-driven intelligence, industry relationships, and transaction capabilities to fuel highly personalized offerings. That will allow them to build on three primary pillars of capabilities: multisource content, retailing excellence, and maximizing the value of each trip.
Strengthening the Three Pillars of Capabilities
Meeting traveler needs will require providing multisource content and offerings from across the board, including low-cost carriers, international carriers, rail services, and car rental agencies. Equally important, the process will also require providing options from new ancillary providers that might range from valet services to private showings at museums. But such offerings can’t be generic. They must speak to the customer.
Contemporary travelers want complete offerings, including options they may not have initially considered, such as adventurous day trips. Although these needs are constantly changing, some major trends have come into focus. For instance, consumers want personalized shopping experiences that make them feel like the companies involved truly know them. In addition, when taking vacations to places where they have not traveled before, they will seek a complete, easy-to-use collection of options to create end-to-end itineraries.
To move forward in retailing excellence, travel industry companies can take their cues from the retail banking industry. Electronic wallets, for example, are proliferating, and loyalty programs are putting banks at the marketing hub of everything from restaurants to electronics.
While global travel content distributors such as Travelport have the technology platforms to bundle an entire trip, today’s travel agencies and travel management companies want to deliver better retailing experiences. To do so, they need access to all product offerings, along with the ability to view real-time fares and related information from suppliers for all bundled offers. This streamlines an agent or travel manager’s ability to quickly make informed decisions regarding which personalized options to compare and pick and present based on their travelers’ needs. Going forward, key revenue drivers in travel will include the ability to bundle contents, compare price points, offer unique features and additional products, and provide rich content.
Maximizing the value of the trip comes from the successful sale of the ideas discussed above. By using customer data and high-level personalization, travel industry players can increase both the “look-to-book” ratio and the amount of spend, all within a simplified shopping experience for the traveler.
Exploring New Technology Standards Underpinning the Endeavor
In addition to capitalizing on new technologies, the travel industry needs stronger standards for data exchange and interoperability. The airline industry has taken the lead in this regard. The International Air Transport Association (IATA) has developed the New Content Distribution (NDC) program, a new industry data-transmission standard that goes beyond software previously limited to providing fares and schedules.
NDC supports many other options, such as checked baggage, priority boarding, seat choices, and more. The additional data can help differentiate products by providing a richer set of information, including restrictions on changing or canceling a reservation. Eventually, an NDC-like standard could be adopted and integrated across hospitality and ground transportation industries in order for a bundled offer to include everything from hotels and rental cars to restaurants and museums. However, as the various transportation and hospitality industries across the travel ecosystem implement their own standards toward improvement, Travelport’s role in the center helps to facilitate the connection between agents and a number of suppliers so that they may piece together the end-to-end trip based on the individual supplier offerings a traveler selects from agents’ digital storefronts.
Artificial intelligence applications will be consequential. AI, including automation and predictive analytics, will be seminal for gleaning market insights from billions of data points and help suppliers better understand customer behavior. The applications will also help create personalized offerings quickly, including upsell opportunities with the highest likelihood of success.
Blockchain can potentially add significant value to travel processes by keeping data secure and automating processes for greater efficiency and accuracy. For example, according to research by Travelport, the commission reconciliation process is a major obstacle for travel agents. For instance, extended stays, room upgrades, no-shows, early checkouts, and complimentary nights often create inaccurate payments for both agents and the hotels while also making it harder for them to budget and produce financial forecasts. A blockchain solution would ensure that payments are made more accurately and quickly by tracking the life cycle of a booking through a distributed ledger, offering a single source of truth about its progress and the amount of the payment.
The Digital Traveler Wallet, for instance, jointly created by Travelport and TCS, can securely store and transact blockchain-based and non-blockchain-based reservations, and the Digital Traveler Wallet mobile app allows travelers to securely manage, transfer, redeem, and modify their travel bookings, regardless of the source.
In light of post-pandemic travel and the recent launch of digital “passports” to provide proof of travelers’ immunization, blockchain can offer immediate value to mitigate imminent data security and confidentiality risks. The technology would offer a superior data storage system for vaccination records. A decentralized, immutable, and transparent ledger can ensure that anonymity is protected and that access is granted only with private key or authorized biometrics.
Each of these solutions driven by emerging technologies is best suited for a worldwide travel retailing platform like Travelport to anchor in, simplifying real industry challenges. That’s why Travelport works with strategic technology partners like TCS to apply the right technology capabilities in areas where friction remains an everyday challenge for travel providers.
On the Ground: A Technology Company Simplifying Complexities for Travel Retailing Worldwide
An executive viewpoint by Bates Turpen, Chief Information Officer, Travelport
Travelport is a global technology company with a significant role in the travel industry, connecting the world’s travel suppliers — airlines, hotels, rail, and car rental companies to travel providers — including online and offline travel agencies, corporate travel management companies, and mobile applications built exclusively for shopping and booking travel. As travel distribution has evolved, retrofitting new types of distribution into existing platforms has led to increased complexity across the industry, slowing progress. Through overlaying our data-led intelligence at Travelport, we are creating a simplified, capability-rich marketplace for travel retailing with the launch of Travelport+, an extensive next-generation platform.
Travelport has been at the forefront of global travel technology for some time. We have developed the apps that many consumers use to shop for travel on sites such as Priceline. In 2019, however, we started to pursue new industry opportunities to help industry providers get deeper into customer behaviors and spur them to buy more by personalizing offers. The industry needed a platform that could connect travel providers with sellers while, at the same time, providing deep insights into their customers to create highly personalized offerings.
Airlines, hotels, car rental companies, and others in the industry were investing heavily in direct relationships with their customers and achieving success. While many suppliers focused on their direct channels, promoting loyalty programs to increase bookings, there was less focus on the value of indirect channels. Indirect channels create the opportunity for suppliers to compete and join in an entire trip that travelers are looking to shop, compare, and book, all in one place and within one search. To reach the next level and unlock higher value from indirect channels, travel retailers and agents require easy access to ancillaries or additional offers from travel suppliers. As it stands today, a travel provider wanting to expand its array of offerings faces a herculean task. Providers would have to form countless partnerships and invest heavily in the ability to process transactions from multiple industries and companies.
Travelport identified a critical need that its GDS origins could fulfill by simplifying the complexities that exist within distribution and making it easier for buyers and sellers of travel to connect and share information. Our company already had thousands of relationships with providers, sophisticated analytics capabilities, and the ability to respond to search requests, book, bill, and ticket — and help agents manage ticket exchanges. Taken together, these allow us to offer the industry a new path forward through recovery as travel reemerges stronger than ever from the pandemic.
The goal of our strategy is to become a partner with companies across the industry. If you think about end consumers struggling to find what they want, and providers wanting an increased share of the pie, a central up-to-date platform could be of great use to businesses across the sector to intelligently increase what they offer based on one central need for simplification. With simplified connections between buyers and sellers of travel and hospitality, airlines could turn to us to complement flights with tours at a customer’s destination. Hotels could personalize bookings with dining options, and travel agents acting as retailers could put together better-detailed itineraries and sell complete trips.
Ultimately, Travelport+ will make travel retailing and the consumption and distribution of travel content much easier and fluid. We will offer, in essence, the equivalent of virtual retail shelves along with the content available from any source to fill these shelves so that travel industry players can display their wares, experiment quickly, and discover what options work the best and with whom.
Using Technology to Remove Friction for Travelers
Adding a restaurant reservation to a hotel booking that is aligned with the arrival time from a flight is a straightforward marketing innovation. But accessing the content from the restaurant, hotel, and flight suppliers to ensure availability and alignment, along with processing the actual sale, is a sizeable technological feat that the travel industry must rally around. One of our first moves in Travelport’s digital transformation journey was to adopt IATA’s New Content Distribution (NDC) standard, which will underpin travel companies’ ability to integrate more tightly with each other and expand their offerings. Travelport has, in fact, been a leading force in NDC’s adoption as the first distribution company to reach the highest levels of NDC certification from IATA. As NDC progresses, we are now helping our agency customers become better retailers and helping airlines to provide better, more relevant offers.
Essentially, NDC is a new XML-based data standard to make data transfers between airlines and travel agents simpler and more robust. The new standard will help industry suppliers and airlines meet agency and corporate travel customer needs for a more personal approach and richer selection of offerings. It’s still in the early days of adoption, but airlines are exploring how they can more readily retail ancillaries and products to consumers, travel agents, and shoppers.
Travelport is also developing AI and automation applications. With advanced analytics, we can compile powerful insights about customers and push — or help our partners push — intelligent and hyper-personalized offerings to them.
Algorithms are a prime example. Their use in the travel industry goes back to the days of the first reservation systems. Today, however, we have more advanced capabilities and also far more data sources along with infrastructure to analyze “behind the screen” and create optimal results for all of our users, such as increasingly faster response times for search requests.
We’re also using our insights to provide companies with greater market intelligence. The more advanced a company becomes with data, the better it can predict the most common needs for different types of customers. For instance, travelers going between New York and Los Angeles may want to book rides with Uber when they arrive. They may want a hotel at or near the airport. Armed with this type of knowledge, travel companies can start to predict these products and add them to their offerings for specific travelers based on the persona groups they fit.
Developing a New Breed of Talent
Digital transformation is a long journey, and it requires continually developing new sets of skills. Organizations steering significant changes for the industries they serve will need employees with specific technical abilities. But they will also need managers and professionals skilled and adaptive to innovative approaches, such as agile development and user-centric design.
Top digital talent is scarce, and many companies, including Travelport, have to develop talent in-house or through strategic partnerships. Considering specific technology skills, for example, we often hire individuals without travel industry experience and provide ongoing training on the commercial side of our industry. Development opportunities for our technology talent also include internal and external training sessions as well as job shadowing, where early career professionals spend time with more experienced peers. We also partner with universities and consulting firms such as TCS to identify new talent early in their academic and professional careers.
Maintaining a reputation as a technology innovator is critical. At Travelport, we can recruit skilled technologists with track records of innovation success who want to come here and try new approaches hands-on, tackling real-world problems with new solutions. As a legacy travel technology company, we recently launched an end-to-end rebrand to rid ourselves of the industry reputation Travelport once held and put our bold, innovation-driven culture front and center for the market (and potential new hires) to better understand our culture shift from the Travelport of the 1990s.
Boosting Confidence and Trust in Travel Retail
Regardless of which new offerings and services the industry offers the traveling public, the most critical order of business is restoring consumer confidence in travel. Airlines, hotels, rail, and car rental companies can each take steps to assure travelers that their products are safe. But equally important, the industry needs to get the word out.
Our 2020 global travel industry study found distinct commonalities about what makes travelers feel safe in this pandemic environment. Some 70% of travelers, for example, stress the need for hand sanitizers and enhanced cleaning and disinfecting onboard planes, in hotel rooms, and in rental cars.
In addition to supplying this type of information directly to their customers, travel providers need to ensure that travel agents are fully apprised on a frequent basis of what the company is doing to ensure safety and fulfill change requests or flexibility with bookings; in fact, 65% of travelers say they are turning to agents for the latest safety information and any changes.
Travelers will become much more intuitive about what they want, which will raise their expectations around the options offered to them. As that happens, travel agents and online travel companies will have to meet — or, better, exceed — these expectations. Their ability to do so will depend on the technology capabilities they have developed or can access. The travel industry will have to provide spot-on options nearly instantaneously, which is why at Travelport, we pride ourselves on being agile enough to adapt to market needs. Ultimately, speed and enriched content will drive the winners going forward.
Working with strategic partners like TCS enables us to simplify the complexities that exist in travel so that we may operate independently and double-down on technology investments that support our primary focus: to simplify and improve travel retailing. Our resources from TCS allowed us to focus on building Travelport+, a platform designed to empower agents, corporate travel managers, online travel agencies, and booking apps worldwide with access to the multisource content and tools they need to operate as retailers of travel — all within a single next-generation environment.
Strategic technology partners like TCS have helped us to accelerate these bold changes and ignite simplicity for our entire industry so that Travelport can be the partner of choice for travel’s game-changers.