Data analytics is disrupting industries left right and centre and travel is no exception. A whole new world of customer insight and information is being opened up for an industry with a notoriously challenging purchase cycle. Only those traditional travel agents with the most accurate information and digital nous will continue to thrive.
The truth is that in the UK our holiday and travel shopping habits are changing.
Technology is at the centre of this shift, taking the customer out of the travel agent and into cyberspace on their laptop or smart device. A recent nationwide survey of 2000 Brits revealed that 66% of us still visit a travel agent, but there is an increasing reliance on price comparison websites, which 50% of holiday makers ultimately use to book their trips.
Contrary to Ryanair’s Michael O’Leary’s view that price comparison websites shouldn’t exist, half of us rely on these sites to book holidays for the best price and package. This is a universal truth, no matter what age, gender or area you are from in the UK.
This makes the market that much more competitive, meaning traditional travel agents need to find a way to remain relevant in the digital age.
If you are smart you can get the same product or service, or get to the same destination, for a reduced price. 1 in 4 of us spend more than two hours looking for the best holiday deal. This highlights that customers are now aware that spending that little bit of extra time researching pays off.
Interestingly, millennials are more accepting of increased flight and travel prices during the summer period: a quarter are more accommodating of price increases compared to just a 5% of over 55s.
Younger generations – growing up in the age of Uber, Ebay and Amazon, are more accepting of changes in prices, benefitting customers in the long run and actually giving them control. What they are willing to pay is the new standard in pricing.
Anlayse and optimize
The travel industry has been at the forefront of dynamic pricing, with price flexibility based on certain variables, including demand, the time of year and public / school holidays. This model is accepted by younger consumers, and is shaping how we shop around for the best deal.
The ability of travel companies to react, in real-time, to the market and consumer desire is a crucial issue for the travel industry in the digital world today; dynamic pricing helps increase revenue and profits. By also using predictive analytics, travel businesses can ensure they have enough availability to cover demand during peak periods.
It also shows the importance of optimizing your online pricing and continuously analyzing your customer behaviour and the competition to remain a player in the market. If you out-price your flights, your customer will simply go to another competitor.
What does this mean for the future of travel?
Pricing models are evolving as technology advances in line with consumer habits. Travel booking habits are evolving as access to bookings becomes easier on the Internet.
Holiday and travel companies need to fully understand the shifting dynamics and utilise the technology available in the digital age.
The travel industry needs to become more data centric and it is increasingly important for traditional travel agents to absorb the digital offerings available to not fall into second place behind online travel booking companies and comparison websites.