As the travel and hospitality industry continues to upgrade its digital capabilities, personalization is on the rise. A report by Future Market Insights states personalization in the global travel market is growing rapidly and is anticipated to reach $620.71 million by 2023. From helping guests plan their trips, to providing a richer experience, CX in the travel industry is an extension of hospitality, now made easier through technology.
What is personalization in the travel and hospitality industry?
Personalization is the process of tailoring a product, service or experience to meet the needs and preferences of individual customers. When it comes to customer experience, personalization is the new frontier. It has been a major trend for quite some time and is growing in popularity as brands move away from a one-size-fits-all approach to providing a more tailored experience.
Personalization encompasses daily operations such as ticket bookings, check-ins, room service, housekeeping and even concierge services which are now often available directly through smartphones. Brands seek to provide guests with hassle-free services and experiences, using personalization as a value proposition.
Personalization is changing the way customers interact with every brand and its impact is significant for travel & hospitality brands. The ability for businesses to tailor their products, services and experiences to individuals, then collect the resulting data on a mass scale has a huge impact.
In addition to offering customers better experiences through personalized solutions, businesses are also increasing their revenue by implementing personalization. According to a survey by SiteMinder, brands that used data and cutting-edge technologies to customize their experiences reported a revenue increase of between 6% and 10%.
What are the benefits of personalization in travel and hospitality?
Personalization is a key element in the travel and hospitality industry, enabling brands to retain their customers by providing them with unforgettable experiences and improving customer satisfaction, loyalty and engagement.
The benefits of personalization:
- Enhances travel experience
Through personalization, companies provide a unique travel experience for each customer. By collecting data on their preferences, businesses will tailor their offerings to meet the needs of each customer. This includes everything from preferred airline seats, recommended activities and restaurants to customized room features and other amenities. By offering a personalized experience, brands create an outstanding customer experience, helping them stay ahead of their competitors.
- Maximizes ancillary revenue
By offering personalized recommendations, businesses increase average spending per customer. Upselling by recommending personalized add-ons such as spa treatments or tours makes it more engaging for travelers to browse through content, driving engagement.
- Builds customer loyalty
Personalization improves customer loyalty. Customers are more likely to return to a business that provides them with a personalized experience. By offering a personalized experience, businesses create a strong emotional connection with customers. This emotional connection leads to increased loyalty and repeat business. According to Zendesk, 81% of customers say a positive experience with a brand increases their likelihood of making another purchase with them.
- Improves marketing ROI
Personalization leads to better-targeted marketing campaigns. By collecting data on customer preferences and behaviors, businesses deploy better-targeted activity. Hotels and travel companies can send personalized content to customers with recommendations for upcoming events and promotions that align with their interests. By tailoring these messages to the needs and interests of each customer, businesses increase the effectiveness and relevancy of their marketing efforts and generate more revenue.
- Improves customer feedback
In the past, hoteliers and travel companies relied on guest feedback to gauge the quality of their services and facilities. With the rise of digital technology, guest feedback has become even more important. On average, customers share a positive experience with a brand with nine other people but tell sixteen people about a negative experience. Customer feedback will improve the overall experience and provide better personalization in the future. This is done through surveys, social media interactions or personal conversations with customers.
Hence, hotels and travel brands must use personalization to ensure each guest has an excellent experience. By tailoring a trip's itinerary around guest’s interests and needs, travelers feel more welcomed and appreciated and they will be more likely to share their positive experiences with friends and family members.
As competition in the industry continues to intensify, businesses that embrace personalization are well-positioned to differentiate themselves and succeed in the marketplace. It is not surprising that 80% of customers say they are more likely to do business with a company if it offers personalized experiences.
Overcoming challenges and concerns related to travel and hospitality personalization
- Privacy and data security considerations
These are legitimate concerns whenever personal details are shared. With people subject to online scams and identity theft, it is perfectly reasonable to pause before sharing information with travel and hospitality providers. The sector is among the most targeted for cyber-attacks. But smart vendors address these fears by explicitly asking customers’ permission — and providing a clear and unambiguous opt-out, if desired — then committing not to share the information with third parties.
- Striking the right balance between personalization and intrusion
Here’s where common sense and good manners are important. Avoid any personalization that goes beyond what is sensible and in good taste. It’s fine, for example, to record a customer's beverage preference (coffee, tea, milk, juice, etc.). Only personalize where it adds value. Excessive use of a customer’s name, for example, where it feels out of place or unnecessary can drive dissatisfaction. Bottom line: respect personal boundaries and err on the side of caution.
- Ensuring transparency and consent in data collection and usage
State your policy clearly, including any privacy laws or organizational guidelines you’ve accepted and are abiding by. Ensure your customers consent to the data collection and can opt out, if desired.
Startek has been supporting leading travel and hospitality brands across the globe for more than 30 years. To learn more about how personalization can be leveraged to enhance your CX delivery, contact us.