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Expectations vs. Reality: How to Better Serve the Connected TravelerA travel survey commissioned by Mindtree

Introducing the Mindtree Connected Traveler Survey ReportIn a world of personalization, travel companies still have a long way to go to achieve a true, single view of their customer. This leads to fragmented, partial efforts toward personalization and a gap between expectations and reality, which we refer to as “the personalization gap.” Loyalty programs are not rewarding enough, and customer service can leave travelers dissatisfied. Moreover, the travel experience offered to the connected traveler is still disjointed and significant revenue opportunities are being missed.

The idea of the customer experience is important as a differentiator. However, the challenge is that it is still not completely fulfilling the promise that it holds. The changing landscape of technology and customer demands mandates that organizations relook at their customer experience, loyalty, and service delivery to win over the connected traveler.

The underlying challenge in bridging the personalization gap is that travel brands are burdened with significant investments in legacy systems. Silos of data still exist, and there is no unified means for reservation and distribution channels to consume data and build that elusive customer persona. We ran this survey to check our hypothesis. By analyzing the finer details and uncovering the root causes, this data can lead to new solutions within the industry.

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Demographics: Business and Leisure TravelersBetween January and March 2018, Mindtree interviewed 2,000 US adult travelers who traveled for business and/or leisure.

There was an even split in gender; 51% female and 49% male.

Respondent ages ranged from 18to 65+ with 25-54 year-olds

making up 56% of the group.

49% of respondents are employed full-time and 23% are

employed part-time.

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Demographics: Income and Location

$81,229is the average household income of respondents.

WESTERN

MIDWEST

SOUTHERN

NORTHEAST23%18%

35%

24%

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Areas of Focus for Travel Brands

Discover

Convert

Yield

Advocate

LOYA

LTY

LOOP

%

SECTION 1 | TRAVEL HABITS

05

SECTION 2 | OFFERS FROM TRAVEL PROVIDERS

07

SECTION 3 | TRAVEL PURCHASING HABITS

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SECTION 5 | POST-TRAVEL

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SECTION 4 | TRAVEL BEHAVIOR, EXPECTATIONS AND UPGRADES

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The Who and How of Traveling

68% agree technology is the key to a better travel

experience— especially those in the 18 to 44 age group, and

increasingly males.

Over a third (36%) always travel with other people. Only the

minority (9%) of respondents always travel solo.

• Spent 9 nights in a hotel or vacation rental

• Rented a car 4 times• Traveled by train 7 times• Flew 4 times

The average traveler:


Bleisure is a Massive Trend and Untapped Opportunity

Customers in the 25-34 and 35-44 age groups contain the most business

travelers (as compared to other age groups) when around three in ten

(31% and 29% respectively) travel predominantly for business purposes.

Almost all (92%) of respondents who travel for business include leisure

activities in their business trips.

Our ObservationA substantial number of respondents are mixing leisure with business travel, which points to a trend in Bleisure travel. Leisure activities, and the mindspace they provide, are seen as an integral part of business travel for most – opening up further opportunities for travel providers to offer relevant services. Should Travel Management Companies focus on this opportunity?

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Travel Research: Are Travel Providers Offering Enough?The top reason respondents don’t redeem travel offers is because the offers lack timeliness and value.

Of those who receive travel offers, 31% of respondents report

using them every time or most of the time.


The Personalization Gap

Timeliness: Of those who do not always use the offers that they receive,

the most common reasons are thatthey don’t arrive at the right time (45%

respondents say so), expire too soon or don’t offer enough saving (35%

respondents say so).

Offers do not take preference into account: Of those who receive

offers from travel providers, only 23% rate them as excellent,

in terms of being based on the traveler’s specified preferences, leaving a lot of scope to grow.

The digital marketing efforts are

not integrated across channels. This

makes it impossible to pick up the

clues of traveler preferences and

needs, to serve them with those

tempting offers in time.

The promise of personalization was to

market to the “segment of one,” and

it needs to take the traveler’s context

and life stage into account. However,

it has not delivered the delight that

it was expected to offer, neither has

it delivered the expected revenue

uptick for the travel brands.

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Our Observation


Is Personalization as Good as it Could Be?

About one third of those who receive travel offers describe all or most of the offers that they receive as personalized,

from providers such as hotels/vacation rentals (32%), online travel agents (32%) or airlines (29%).

The amount and quality of personalization in travel offers is a key improvement area, particularly given its growing importance and the loyalty that it can inspire in customers.

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Personalization Offers Need Improvement

Of those who receive travel offers, only the minority rate such offers as excellent when based on specified preferences (23%) and previous purchases (21%), or based on how timely (20%) or proactive (18%) the offer is.

Offer personalization is rated high for those who travel at least 50% of the time for business. Though business travelers are a core market area for travel brands, there is also room for improving offer personalization for leisure travelers.

The vast majority agree that they are more loyal to travel providers that give more relevant offers (88%) while eight in ten (80%) say that this is becoming more important to them. Personalization is seen as key across most travel types and is now an expectation among travelers.

Our Observation

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Personalization Based on Age GroupOn the other hand, the 25 to 44 age group seems to be receiving better personalized offers when compared with the other age groups. Also, there is a sharp decline in the ratings from the 45 and above age groups that possess higher discretionary spend capabilities. Are travel brands missing out on this large segment of possibilities?

Business travelers are pleased with the

personalization efforts of travel providers. A majority

of them rated the offers and deals they received

as excellent.


Our ObservationIt isn’t too late for improvements; travel

brands can benefit due to the immense

growth opportunity that is offered. New

mobile-supporting technology — like

augmented reality/virtual reality —

can be used to augment the research

process. Imagine being able to virtually

experience a view of the Northern

Lights from a glass igloo in Finland or

the actual ‘Lord Of The Rings’ locations

in New Zealand. The immersive, almost

real experiences of AR can tip the

decision in favor of a particular offering.

Omnichannel experiences are also

important to break the barriers between

devices/channels so that the experience

is connected, decision-making is

accelerated, and drop-offs are eliminated.

Digital Channels Dominate but still Show a Disjointed Customer JourneyApps are lagging behind when it comes to travel research.

Travel research prior to making a purchase is equally spread between provider sites (65%) and 3rd party Aggregator sites (58%).

Mobile apps do a poor job of enabling user travel research — just over one in seven use the app of the online travel agent/comparison site (16%) and/or the app of the travel provider (15%).

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Streamlining the Travel Experience with Partnerships

77% agree when it comes to the ideal travel experience, a travel provider that can offer an entire travel product line in one place would encourage them to purchase.

Of those who have been offered options for partners by travel providers, only the minority (22%) report that travel partners always recognize them as a past customer. More than 60% believe that airlines should partner with hotels/vacation rentals (67%) and/or car rentals (62%) to provide a better travel experience.

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AIRLINE TICKETS + FREE CAR RENTAL

Travel product packaging:

Opportunity for Partnerships:

The ability for a single partner to provide dynamic offers at each step of the travel experience will encourage purchases. Sharing of preference data across partners of travel providers is limited. However, there is a clear desire from the customer to have a more streamlined and connected ecosystem. An API-first approach can be applied to realize this connected ecosystem. Industry standards — like IATAs New

Distribution Capability (NDC) — can enable these customer aspirations.

Our Observation

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Travel Purchasing Habits: When Personalization Meets Premiums Respondents are willing to pay a premium with the increased expectation of personalization.

Respondents are willing to pay up to a fifth more to upgrade: Of the travel types they use, they are willing to pay about 18% extra for flight upgrades,

about 21% extra in trains, about 17% extra in rental cars and about 18% extra

in hotel/vacation rentals on average.

Expectations for personalization have increased: The vast majority agree that they are more loyal to travel providers that offer more

relevant offers (88%) and/or that this is becoming more important to

them (80%).

Respondents are willing to spend more to access better services:

68% of respondents have purchased extra offers proposed by the travel providers that they use.


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Relevant Travel Offers and Deals?While 55% of those who only travel for business have paid a premium and would do so again, this drops down to just 8% among those who travel only for leisure.

Business travelers are willing to pay a premium

for better offers and deals, compared to

leisure travelers.


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The average percentage increase that respondents are willing to pay is higher

across male travelers.

High income households and business travelers are willing to pay up to ~30% extra, while low

income groups are also willing to pay up to 13% extra for better service.

Who’s Paying More for Better Services?


Across income groups, most (79%) respondents report price as the most common top 3 travel purchase criteria,* yet patterns do exist.

90% of the respondents making under $50,000 selected price in their top 3 priorities and just 57% of those making over $150,000 rated it among their top 3.

This shows that customers are looking for things beyond price in some cases. Almost a quarter (22%) of respondents rate relevant offers/deals customized to them in their top 3 travel purchasing criteria.

Travelers are Looking for Things Beyond PriceBeyond more traditional price and customer service considerations, other criteria are influencing travel purchasing decisions and opening up areas for providers to compete and differentiate. Customers across income brackets are willing to pay premium for a better experience. A provider’s ability to create a contextual connection across touchpoints will help them drive to the right experience by sending the right offer/deal to the right person at the right time.

Our Observation

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* Other travel purchase criteria rated by respondents in the top 3 considerations were customer service (42%), provider reputation (31%), ratings/reviews (31%), customized relevant offers/deals (22%), amount of loyalty points available (13%), in-transit services (7%) etc.


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Price Importance Based on Age and Gender

Female travelers are more value conscious than males, especially among the 18-44 old

age group.


Price importance varies by the age group and gender of the respondents.

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Travel Behavior: Expectations and Ancillary SalesUpgrades and extra purchases can be made possible by unbundling their own and partner inventory to cross sell/up sell.

On average, those that use extra purchases are willing to pay up to a fifth more to upgrade for flights (17%), trains (21%),

rental cars (17%) and hotel/vacation rentals (18%).

The majority (68%) have purchased extra offers proposed by travel providers. The most common purchases are cheaper hotel rates (37%) and cheaper transport options (36%).

SECTION 4 | TRAVEL BEHAVIOR EXPECTATIONS AND UPGRADES

Similar to their feelings around personalization, respondents are willing to spend more to access better services.

Ancillary Services for Business and Leisure

Immersive experiences: Trips/excursions are one of the highest reasons for additional service/ancillary purchases (66%).

Of those who travel for both business and leisure, respondents are more likely to purchase upgraded travel class (29%), priority baggage (21%) and/or priority boarding (20%) on business travel.

On leisure travel, respondents are more likely to purchase trips/excursions (32%), meal/drinks vouchers (24%) and more leg room (21%).

Since customers are willing to pay more, providers should invest in technology for better customer profiling and create that extra layer of immersive experiences on top of the basic product they sell, like Airbnb trips or Trip4real.

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Our Observation


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The Exchange Value of Loyalty Points is Appreciated by Travelers

When purchasing upgrades, respondents (38%) most commonly

prefer to pay using a mixture of money and

loyalty points.


Who Should Travel Brands Target with Upgrade Offers?

The majority (68%) have purchased extra offers/ancillary services proposed by the travel providers that they use. This includes restaurant vouchers, excursion vouchers, additional insurance coverage, etc. This reinforces many respondents’ willingness to spend more money in order to enhance their travel experience.

Male travelers are more likely to upgrade their travel class compared to female travelers, for similar age groups on business travel.

Customers are ready to pay a premium for

upgrades and ancillary services. A travel

brand’s ability to meticulously unbundle

their own and partner inventory, and

effectively personalize and target offers,

will help them grab that extra premium

from the customer’s wallet. Leveraging

standards, like IATAs New Distribution

Capability (NDC), will allow travel brands

— especially airlines — to do just that.

NDC addresses the current distribution

limitations that plague the reutilization

of air travel products across corporations,

business as well as leisure travelers.

These limitations, in and around product

differentiation and time-to-market, give

access to full and rich air content, and a

transparent shopping experience. 1

47% of male travelers between 35-44 years old have purchased additional services

when traveling.

Our Observation

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1 https://www.iata.org/whatwedo/airline-distribution/ndc/Pages/default.aspx


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The connection between loyalty and personalization.

Post-Travel: Reviewing the Travel Experience

When it comes to travel, loyalty remains strong to providers who earn it: Of those who always or mostly use

the same travel provider, being a member of the loyalty program is the main reason why respondents use the same airline (47%), hotel/vacation rental provider (38%), trains

(34%) and rental cars (34%).

Loyalty & personalization are linked when it comes to the ideal travel experience. About nine in ten (88%)

agree that they are more loyal to a travel provider that offers them more relevant offers/deals tailored and

customized for them.


In most cases, those who travel purely for business seem to be using the same travel provider more often compared to those who travel purely for leisure.

The Connection Between Loyalty and Personalization

The entire loyalty accrual and redemption process “earn & burn” needs to be frictionless, with the ability to cross-utilize points across partners so that it is more flexible and rewarding. This will push travelers to stick to the same travel brand across their business and personal lives. This data point indicates that travelers are more loyal to a travel brand for business travel than they are on leisure travel.

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Our Observation


Rectifying a Poor Travel Experience

Failure to improve could have significant consequences for travel providers:More than three quarters (77%) of respondents have had a bad experience with a travel provider. As a result, over a quarter (27%) never booked with that travel provider again.

Redeeming your brand: Of those who have had a bad experience with a travel provider, the majority (74%) report that the travel provider tried to redeem themselves. A majority (85%) say that the attempts helped to restore their trust in the brand.

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Providers that try to redeem themselves after a bad experience win back customer trust and repeat business. This can be augmented by AI-powered bots, which can parse through unstructured data and use natural language processing to respond appropriately to customer concerns on digital channels.

Our Observation


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Out of 1,546 respondents, pure leisure travelers (vs pure business

travelers) more often go through a bad travel experience which is not

followed up with any action by the travel provider.

Not All Travel Providers Try to Redeem ThemselvesA customer’s trust can be won back by offering compensation (cash or in-kind) for the inconvenience or sometimes even a genuine apology for the error.


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About this SurveyIn early 2018, Mindtree commissioned independent market research firm Vanson Bourne to interview 2,000 adult travelers in the US. Respondents had to consume travel services of any airline, train operator, rental car service or hotel/vacation rental for business and/or leisure at least once a year, on average, in order to qualify for the survey. An even spread of responses were collected across gender, age and geographical location.

expectations vs. reality: how to better serve the connected travelerpossible.mindtree.com › ......

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