In this blog, I take a look at the challenges of digital disruption and where I think opportunities lie, with a particular focus on the travel industry. I’ve long believed that technology has to be central to driving change in organisations, and this is what I’ve been primarily focused on over the past 18 months.
As far as the technology itself is concerned, I am a bit of a sceptic and luddite on a personal level. For example, I’ve never owned a games console, still don’t own a tablet, only recently took to Facebook and don’t have Alexa listening to my every dull utterance at home. I have always been fascinated by the possibilities of technology in a business environment though.
Back in 1999 I built a system for tracking and reporting on client correspondence at Crystal Holidays. Shortly after that I got developers to integrate it with scanning software for all of the guest letters that were coming in. Perhaps inevitably it wasn’t long after that that everyone started emailing in their complaints and the system was completely obsolete — there’s a lesson in there somewhere.
At the tour operator I ran I was constantly looking at ways that technology could drive productivity and support our growth. Everywhere I looked there were opportunities … although bear in mind that when I joined we advertised in the (then print only) Times, took in bookings via paper forms, plotted those bookings on a white board and faxed guest details to resort. There was fertile ground for change!
Now technology is hard wired into the travel industry and they have been inseparable for some time. I really hope that Reps for camping firms no longer stand in drafty phone boxes across Europe with a sharpened pencil plotting bookings directly on to graph paper as I did in the early 90s.
Why the rush and why now?
“At least 40% of all businesses will die in the next 10 years … if they don’t figure out how to change their entire company to accommodate new technologies.”
John Chambers — Former Executive Chairman and CEO, Cisco Systems
The business landscape is changing at a very rapid pace. Almost all firms are competing with new and very different entrants to their markets. As a result firms in multiple sectors are quite simply being left behind. Not keeping up will, for some, prove fatal.
Whilst we in the UK currently have very visible (but hopefully short term) term challenges caused by coronavirus, digital disruption is an ongoing global trend. You need to engage with it and make that engagement a business priority.
Looking at the above quote from John Chambers, there are two important elements:
“Entire company”
“Accommodate new technologies”
The Entire Company
This for me highlights that the adoption of technologies cannot be a piecemeal approach. It needs to involve all elements of the business and be driven from the top.
I’ll come back to this, but as a starting point you can’t appoint a random bod to do the tech and then carry on doing everything else as normal — you are going to need an all encompassing approach.
Accommodate New Technologies
It’s about “accommodating” technologies not being ruled by them. Any new technology that is brought in needs to be relevant to the business and solve real problems for its clients and employees.
Tech for the sake of tech is a waste of everyone’s time. It is too easy to get sucked into buying or building the latest shiny thing but there must be a return on investment. The technology needs to answer a genuine problem.
This isn’t about becoming Airbnb
In travel an obvious example of a new digital model is Airbnb; it seems a very short time ago that it was a vaguely interesting new model; now Airbnb is vast and there are a number of firms, such as HomeAway, that have a broadly similar approach.
Airbnb has:
6m+ listings
Over 100,000 destinations with Airbnb listings
And on average 2m people a night are staying in an Airbnb property
It is valued at $35bn+ …
The Airbnb shift is not just disrupting an industry but reshaping the whole local economy in some destinations. Not always for the better.
However, it can become almost overwhelming to look at a tech led business like Airbnb when thinking about digital transformation. You are not going to become Airbnb; at least probably not. There are things you can take from their success though.
In May 2015 I wrote a piece on LinkedIn called “The Tour Operator who booked with Airbnb …” I recently looked back at that article to see what it is that I’d written and whether I felt it remained relevant. Crucially none of my takeaways were about the technology itself. Airbnb is a great example of technology as a facilitator. They have built a robust scalable and simple to use platform for things that are important to end users — in this case travellers.
Can you do the same things in a travel business and add in a few others beside (such as financial security and dedicated support on the ground)? Almost certainly.
Tech isn’t the driver, it is what makes things possible.
This quote gets to the nub of what we are looking at:
“Digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver.”
Greg Verdino
What the travel industry now needs to do is move from using tech to sort out back office systems to focusing on what travellers want and using technology, where appropriate, to solve their problems. Travellers are after personalisation, tailored products and services and seamless interactions across all channels.
What do you need to do?
There is no one-size-fits-all strategy of how a company can undergo digital transformation; it will look different for every business but I believe it will always have a similar aim — to deliver new and advanced value to customers.
Big firms with big budgets will create whole departments investigating opportunities in Artificial Intelligence, Big Data, the Internet of Things, and Virtual or Augmented Reality in order to find solutions for business improvements. This can mean a complete structural shift for an organisation as well as a change in strategy. If you are up for this then great, but the reality for most SME owners or managers is that they don’t have the time or budgets to take a business apart and rebuild it.
You’ll probably need to find a way of evolving into a finely tuned digital travel machine over time, rather than do it all in one hit. Just remember that customer experience has to be central to any moves in digital transformation, rather than crushed in the dash to some notional digital finish line.
If I were to advise a starting point it would, for travel businesses, be to look at your rebooking rates
This is something of a personal obsession. When running a tour operator I had a constant stream of digital marketing agencies telling me how many more visitors they could get to our website. I didn’t care!
I wanted an agency to tell me how to get better engagement from the thousands of people that were already visiting, to come up with ideas for improving rebooking rates and referrals, to show me how to focus on the people that I already knew existed and (rather bluntly!) get them to give me their money.
By way of example, I think the best time for travel brands to convince holidaymakers to book their next trip is when they’re travelling back from the current one. The cruise industry has done this really well, but few others do, which is surprising. Very simple tech can take advantage of the post holiday feel good factor.
With so much tech automation available now, this easily could be routine for operators and agents, but even brands like Airbnb don’t do much about it. I can’t think of many holidays I’ve booked over the past few years, with the notable exception of Centre Parcs, where I have been prompted to rebook very soon after a trip.
You’re probably going to need some help
Few SMEs can be expected to have the necessary skill set to do everything required in-house; help is needed. With a shortage of digital talent in the UK market, partnering with a technology business that has a well developed and broad range of skills already on tap is going to be far more efficient than a DIY approach.
So the brief pitch (it was always going to come) is that as part of our service we will give an informed assessment of the opportunities that exist within your organisation. We will then help you adopt or build the right platforms to keep you ahead of the game.
In summary
Digital transformation is not about having a well staffed IT department stuffed with boffins. It relies on business leaders understanding the potential costs and benefits of technological change when looking at all elements of their operations and offerings.
Leadership is key — you can’t delegate digital transformation. You can take gradual steps but don’t cherry pick new things that excite you and shove them into existing structures.
As ever, the customer is king. Consumers are used to accessing whatever they want whenever they want it. Their expectations will be no different when it comes to engaging with a travel business.
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