AWS for Industries
Travel’s “Next Normal”: Why Customer Engagement Is Essential to the Future of Travel and Hospitality
This is a guest post by Ido Bar Oz, Global Strategic Alliance Director at Braze. Braze is an AWS Travel and Hospitality Competency Partner.
After a year in which hotel rooms sat unused and flights were grounded around the globe, rising vacation rates suggest some travelers are ready to explore the world again. However, because a full recovery is not expected until 2024, travel brands are facing major challenges—and opportunities—as they work to re-engage customers and build new user relationships.
For leading travel and hospitality brands around the globe, customer engagement is no longer nice to have, but essential. Done right, customer engagement allows companies to cultivate competitive advantage and prioritize and extend relationships with customers in between flights, stays, and experiences. Done wrong, the challenging landscape for travel brands only gets more challenging.
How can travel brands prepare? A good place to start is with new findings from a recently released report conducted by Braze, Apptopia, Skyscanner, and Wakefield Research. The report reveals where we are and what’s at stake by showcasing industry benchmarks from the start of the pandemic, early signs of recovery, the true cost of overlooking customer engagement, and how to meet customers’ current expectations for messaging.
Here’s what you need to know.
The State of Customer Engagement in the Travel and Hospitality Industry
1. The travel and hospitality sector experienced one of the biggest declines in customer engagement across all industries as a result of COVID-19
It’s no surprise that the widespread quarantines and lockdown orders that spread across the world last year resulted in drops in the number of people who wanted to travel, but the scale and length of that impact is striking. Braze data shows that the number of monthly active users (MAU) on booking sites and travel/local apps began falling sharply in March 2020, in response to the spread of the pandemic. That month-over-month decline of 63% wasn’t a one-off, either; data shows that the drop was a sustained one, lingering into summer 2020.
2. As vaccinations increased, so did traveler engagement
While vaccine availability and vaccination rates grew this spring (particularly in the US), travelers began to engage with travel brands on digital platforms like mobile apps and the web. In particular, bookings and travel/local brands experienced a 12% increase in average MAU between February 2021 and March 2021. These higher engagement levels held steady between March and April 2021.
This increase is part of a larger recovery trend that’s been building over the past year. All told, we’ve seen a 72.4% increase in MAU year over year for this vertical since the so-called “COVID Valley” of April 2020, when engagement bottomed out.
3. Customer loyalty is dependent on relevant customer messaging
Regardless of industry, few brands can succeed over the long haul without a loyal customer base. Building that loyalty can take a significant time and focus, but undermining it can happen in the blink of an eye. When brands don’t prioritize an ongoing understanding of their customers’ needs and wants, they run the risk of providing an experience that doesn’t just frustrate users—it alienates them.
Although the pre-pandemic travel industry relied heavily on traffic third parties to reach their business goals, we’re beginning to see major travel brands pull back. In some cases, they are even pulling their listings from popular travel marketplaces. Their new focus? Driving direct traffic by using effective customer engagement methods—including thoughtful messaging and onboarding—to drive sustainable customer loyalty.
This approach can really make a difference when travel brands make a point of providing connected experiences through personalized travel updates. It’s always been important for travel brands to convey important information and updates to consumers in a timely manner, but the public health emergency of the last year has made this responsibility a do-or-die one in the travel sector. In fact, more than one-third (34%) of global travelers said they would consider booking with a different company if they did not receive the communication they expected from a travel company, particularly related to COVID and safety.
4. Travelers expect to receive updates through their preferred channels
To build and maintain strong relationships in today’s fast-moving landscape, travel brands need to communicate in ways that resonate with each recipient. Every messaging channel (from email and SMS to push notifications and in-app messages) serves a different communication need and when it comes to how they’re engaged, every customer has their own preferences.
There are some clear trends when it comes to travelers and their messaging preferences. When asked how they wanted travel brands to share information with them, a plurality of respondents identified email as their primary messaging channel of choice, followed by phone calls and text or direct messages. The upshot? If travel brands are unsure about the best way to communicate with a customer, email is a smart place to start.
5. Cross-channel messaging has the greatest impact on traveler engagement
There’s no doubt that single-channel customer engagement through popular channels like email can be an incredibly powerful tool for travel brands who want to engage and strengthen bonds with their customers. However, Braze research shows that when it comes to the travel sector, a single-channel approach significantly underperforms against a messaging strategy that uses multiple channels.
Travel brands see stronger results if they pair email with other complementary messaging channels, such as push notifications, SMS campaigns, and more. The most successful brands adopt a hybrid cross-channel approach, one that pairs in-product messages (such as in-app messages, in-browser messages, and in-app inboxes or feeds) with out-of-product messages (such as email, push, and SMS). By bringing together these different message types, travel brands can capture the attention of even disengaged customers and lead them through a seamless messaging experience that encourages more loyalty, retention, and purchases.
Three Things Travel Brands Can Do to Keep Travelers Engaged During the Pandemic Recovery and Beyond
1. Incentivize users to buy, even if they’ve been less active since joining
Although inactivity for months at a time isn’t generally a sign that customers are likely to convert, Braze data suggests that the past year might be a bit of an outlier when it comes to traveler behavior. We found that users who first engaged with booking and travel/local brands in February 2020 took a particularly long time (105 days on average) to make their first purchase, but were 59% more likely to purchase than users who first engaged in the surrounding months. That means that users who joined right before COVID-19 hit worldwide really only began making purchases during summer 2020, possibly as a result of rescheduled trips or travel brand promotions.
Even long gaps in engagement might not be reason to give up hope. By using the communications tools at their disposal to communicate key information, build trust, and incentivize purchases, travel brands can see new purchases, even among users who haven’t engaged recently.
2. Make sure campaigns include a clear call to purchase
Although the struggles and lessons of the last year are still with us emotionally, time has passed and the landscape has shifted—and continues to shift. To speak effectively to customers now, travel brands need to understand what’s changed.
One key shift? Buying and browsing behavior. Back in April 2020, customers hardly browsed travel websites or apps. However, those who were browsing were buying. Now, during this period of reopening, we’re seeing more browsers than buyers.
With this information at their fingertips, travel brands can use customer engagement tools to craft messages that help lead browsing-focused customers toward purchases and other conversions. In particular, in-app messages paired with dynamic segmentation and deep linking offer an extremely effective way to encourage users to go from browsing to conversions. They allow marketers to make their case in low-stakes, relevant ways, without alienating the customers who see these messages.
3. Send the right outreach more often
Up against a 99% drop in activity at the start of the pandemic, the team at Braze client and travel booking service, GetYourGuide, realized they needed to adapt their engagement strategy quickly and figure out how to message more effectively.
They recalibrated their cross-channel marketing mix, using email and push notifications to inform customers of new promotions. They also took advantage of dynamic personalization and action-based campaigns to drive their open rates by 45% and unique click-through rates by 100%
For travel brands who are looking for ways to send messages that deliver more impact and customer engagement, here are three tools for messaging campaigns:
- Customer action-based emails, which perform 10.8 times better than time-based emails when it comes to driving purchases. These emails are triggered and sent based on some user action. They can be used, for example, to deliver flight alerts related to a customer’s recent searches.
- Dynamic message personalization, which can increase purchases by 3.3 times, compared to emails that don’t use this tool. To get started, try using Braze Connected Content or other dynamic personalization tools to securely insert weather updates or personalized recommendations into your travel update emails or other notifications.
- Liquid personalization, which is the feature currently in use in 99% of travel emails to customize messages for recipients. To take things to the next level, try using Liquid to move beyond simple name-based use cases and embrace loops or if/else blocks to create an even more tailored experience.
Get Ahead in the “Next Normal” of Travel
Check out Ready for Takeoff: 2021 Travel Industry Trends, Insights, and Strategies to see how the shifts in the industry are affecting customer engagement and how travel brands can move the needle on long-term relationship building.
One smart way that brands in the travel space can get ahead? Investing in technology solutions like the Braze cross-channel customer engagement platform, which is built on the AWS Cloud and supported by streaming data. Blaze helps brands bring modern, stream-processing, and data-science frameworks to their engagement strategies.