Technology disrupting global, local travel industry
Nigerians from all walks of life love to travel. Like folks elsewhere, they feel deeply emotional about travelling. Although they may chit-chat about banking, shopping and similar experiences, discussions about their favorite airlines, miles, discounts, upgrades and boarding privileges also strike a deep cord with them. Regardless of social status, we all seem to be united by two things: our aspirational lifestyle and our individual and collective urge for excellent service delivery. Embracing digital innovation (technology) would help fast track the attainment of these social and economic realities.
While travelers around the world may differ in their hospitality tastes and preferences, the Internet has helped to flatten the world. Commercialization of the Internet has also introduced digital innovation into the travel and tourism industries, bringing with it a raft of new products, services and experiences. The digital influence is daily transforming the entire value chain of the hospitality sector, and this digital disruption is being embraced by travelers and operators alike. Take online checking in and self-service terminals at airports, for instance.
What about software which allows travelers to select destinations, flights and airlines, hotels, car hire companies and concierge services from the comfort of their laptops or hand-held devices? 20 years, you would have needed to visit or place a phone call to an airline or travel agent to access these sorts of services.
In hospitality establishments across the country and even around Africa, innovative technology is gradually bringing disruption to business models and customer expectations. Digital innovation is creating new challenges and opportunities for the travel industry. As with other industries, travel services customers have grown accustomed to individualized arrangements.
Whilst service quality levels may not be optimal in the fast-developing economies of the world, travelers in these regions are also not shy of demanding more comprehensive and consistent experiences and are becoming less tolerant of both inconsistency and imposition. Travel customers now expect streamlined processes, convenient self-service options and one-of-a-kind experiences. They are willing to quickly shift buying behaviors and preferences if they do not get what they are seeking.
This is the way it should be. However, this is not always how things have been over the last 20 years or so for members of the public who need to patronize airlines, hotels, transportation providers and other service providers in the business or leisure travel value chain. While hospitality industry analysts have called for increased public sector investments in the sector and in some cases, sectoral reforms which will galvanize domestic and foreign direct investments, there is also the need to realize that the entire hospitality landscape is undergoing disruption, as new entrants continue to leapfrog established travel businesses by applying digital technologies in innovative ways, whether it’s businesses that rent private homes to strangers or provide one-way car services.
Executives in the industry recognize the ongoing disruption and the impact of digital innovation on their industry. In 2016, an IBM Institute for Business Value’s Global Ecosystem Survey, conducted in collaboration with the Economist Intelligence Unit, consulted the opinions of more than 2,000 cross-industry leaders. Study findings include:
63 percent of the surveyed travel industry executives report that traditional value chains are being replaced with new value models.
Half of the surveyed travel industry executives indicate that boundaries between their industry and others are blurring.
57 percent of surveyed travel industry executives say that competition from new and unexpected sources is beginning to impact their businesses.
According to another report from the IBM Institute for Business Value, the global travel industry can sustain its momentum by meeting and hopefully, exceeding travelers’ personal expectations by embracing the philosophy of a Digital Reinvention.™ There is a three-step process, which includes:
1) Digitization improves efficiency by applying technology to individual resources or processes. Within the context of travel, digitization involves setting up digital systems that support processes such as online ticketing, but has evolved into online services where customers book directly with providers rather than through traditional travel agents.
2) Digital transformation involves the integration of digital functions or processes across an organization. By combining a set of systems and processes, digitally transformed travel businesses can offer their customers individualized experiences. An example of increasing importance is the ability of travel providers to combine data collected through travel booking sites, as well as customers’ personal social media channels, to deliver highly customized vacations.
3) Digital Reinvention of travel goes even further. Digitally reinvented travel involves a fundamental re-imagining of the way an organization operates and engages with customers and other stakeholders. Digital Reinvention at its most fundamental puts the customer first in all of the organization’s dealings to deliver travel experiences that are personalized for individual customers.
Digital Reinvention combines multiple digital technologies, including cloud, blockchain, mobile and the Internet of Things (IoT), to transform customer and partner relationships and to create new business ecosystems. Often, the most successful digitally reinvented businesses establish a platform of engagement for their customers and partners.
These are the steps, the benchmarks if you like, that many Africa-based travel industry operators need to adopt to take their game to the next level. Digital disruption is a reality of the global travel industry. The earlier and faster we embrace digital disruption locally, the more efficient our travel and hospitality systems will be.
Aruwayo-Obe is IBM’s One Channel Executive for West Africa.
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