Webhelp.com | Articles | Travel is recovering, but the industry now needs a renewed focus on customer experience

In our new travel blog series, we’re going to be looking at the state of the travel industry after a few of the most turbulent years in its history, and why customer experience’s role has never been more important.

Today we’ll be hearing CX & Technology Analyst, Mark Hillary’s views on where the travel industry is today and where it needs to be. 

In May 2020 the travel research company Skift started publishing their Travel Health Index. This created a baseline of the travel industry in May 2019 with a score of 100 so the present recovery from Covid-19 can be easily rated against pre-Covid industry. The most recent update was for June 2022, with a score of 82.

This sounds like an almost complete recovery, but the situation is more complex because the industry and consumer behavior has changed since 2019. Many airlines have faced an uphill struggle back to normality in 2022 as passenger numbers have recovered before the companies could return employee numbers back to normal levels.

At the Australian flag carrier Qantas this has led to a request from the management for all executives and office-based employees to volunteer for three months of baggage-handling duty. Some airlines are blaming the chaotic recovery on airport operations. When Heathrow airport in London started restricting passenger arrivals in July 2022, Emirates issued a strongly worded response suggesting that if the airlines were all getting ready for a recovery then why were the airports not doing the same? In one section the statement reads: “The bottom-line is, the LHR management team are cavalier about travelers and their airline customers. All the signals of a strong travel rebound were there, and for months.”

The International Air Transport Association (IATA) has issued data indicating that the airline industry as a whole will make a loss in 2022, but nowhere near as bad as was expected even as recently as Q4 2021. Willie Walsh, IATA’s Director General said: “Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty. Losses will be cut to $9.7 billion this year and profitability is on the horizon for 2023. It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets.”

The data from IATA and Skift suggests that a strong recovery is underway, but it is clear that the travel industry has had to adjust. For example, a gap remains between the leisure and business travel recovery. Leisure travel has rebounded quickly because people have faced two years without holiday time or visits to overseas friends and family. Many businesses have learned the value of video conferencing and tools that allow remote management with less business travel. Business travel for sales or networking will recover, but it is likely that less urgent routine visits will migrate online.

However, the airline booking system Sabre has reported some recovery in business bookings from important sectors that are heavy users of business travel. Sabre CEO Sean Menke said on their 2022 Q1 earnings call: “Although still below the total recovery of most other sectors, the financial, consulting and IT sectors, which are historically heavy travelers, ended Q1 accelerating rapidly, faster than at any point since the pandemic started. These sectors also ended the quarter at their highest levels of overall recovery since the pandemic began.”

McKinsey research indicates that the US travel sector is enjoying a strong recovery. Hotel rates are now 15% above 2019 levels and 68% of American consumers told McKinsey that regardless of any other economic factors, their summer 2022 leisure travel is going to happen – no matter what. This suggests that hotel and accommodation companies should look again at their customer experience and loyalty strategies. The broader economy does not feel very positive for most consumers at present, but they are convinced that their time off is non-negotiable, so trusted brands are more likely than ever to be chosen for a guaranteed experience.

Talking to me directly, Chris Gillen, CEO of A Closer Look, a market intelligence company based in Atlanta, said: “The customer service providers focused on travel need to focus on two things – an effective workforce planning and monitoring program (more and more are failing at this) and better tools to equip their staff to properly and accurately respond to the customer. Issues are multiplied when the customer gets the wrong answer from a contact center agent, or worse, one without empathy.  Customers can be calmed by the agent who responds quickly, has the right answer, and is empathetic. Customers are looking for a much higher level of service these days. Service providers need to be able to manage that.”

Chris also owns Burning Mountain Adventures, a tour firm focused on bespoke tours of Yellowstone National Park, so in addition to his knowledge of customer service he also personally runs a travel business.

A strong recovery is taking place in travel, but as another McKinsey publication suggests, the real challenge for the travel industry is not just recovery, but the ability to reclaim the magic of travel. Travel was extremely difficult throughout the pandemic and many consumers simply avoided it completely. Hotels, car rental providers, and airlines that want to succeed now must look beyond the absolute numbers from 2019 and forward into a customer experience that did not exist before the pandemic.

Mark Hillary

CX & Technology Analyst, CX Files Podcast Host

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