Time for a Relook at Travel and Tourism

Germ and Human Mettle

Travel and tourism is a palpable element in living a worthy life. Evidently, with the pandemic, it has been jeopardized to its breadth and depth.

With an industry worth more than $ 9.25 trillion, the splinters create a plethora of whammies – stagflation, trade wars, geo-political embargoes, ecological and environmental disturbances, fear psychosis, technology failures and beyond everything else, the hierarchy of need, want, purchasing ability.

Our social genes reassure us that living a diabolical life is not a solution, but coexistence, circumvention are. Our lives are gradually adopting the new normal. Businesses are endeavoring to re-open, medical science is striving to create a vaccine, and people are trying to be back to ‘office’. And so is their intent to travel germinating. A recent find from Pinterest suggests that people are again searching for travel inspiration, even more than the same time last year.

In this article, we will look at how the travel and tourism ecosystem, as we understand, will evolve.

Holistically, there is a lot of ground to cover

While there is no clear definition of what comes under the umbrella of travel and tourism, the prime agents are:

  • Airlines
  • Airports
  • Hotels & Resorts
  • Vacation rentals
  • Restaurants
  • Cruise companies
Untitled Document
  • Car rental companies
  • Railways
  • Buses
  • MICE operators
  • Activities
  • Retail companies

Interestingly enough, their business models or operations do not run in silos today. It is a complex mesh of underlying synergies, disparities and to a good extent, that of cannibalization. Having said that, the way future unfurls for each of these industries, is a function of travel intents. Let us see how for each of the most prominent travel intents, the industry will respond in the imminent future. 

Intent 1: Country roads, take me home…..

This segment of travellers will evolve as local or near location experience buyers. With airlines newly operating to lesser travelled destinations and tier 3 cities/towns, premium hotels and resorts providing hefty discounts, we will see the intrepid traveller club being energized. With respect to local travel at the destination, it will be skewed towards either car rental services or organized taxi operators with increased reinstatement of safety and personal hygiene.

When it comes to the F&B subdomain, in-house restaurants at hotels will see some positive vibes, along with QSRs making a big come back. Otherwise, the F&B sector will continue with this slump for some time as food adventure takes a back seat now.

Local experiences and outdoor visits will gather steam, whereas activities (like theme parks, games, theatres etc.) will continue in this lull. In gist, sustainability will be the mantra, and customer confidence building the steam to drive.

In the midst of all these, retail players will still have their proliferation – whether it’s digital retail or brick and mortar stores. With local experiences being the first choice, travellers will be somewhat skeptical with products and services available there. Hence digital retail, as we visualize, will thrive.

Intent 2: Swaying to the tunes of the oceans and seas

We don’t really see the big-ticket cruise industry picking up anytime soon. When we are barely on the brink of a recession, these are extravagantly indulgent. Very clearly, this industry has been for select few – only about 8% of the US population ever go on a cruise in a lifetime. Now, when the going is tough, we are apprehensive that travellers will splurge on luxury, laid back vacations.

What is important to understand is that the cruise industry acts as a feeder to multiple other travel and tourism agents. Airlines and airports for getting back home, hotels & resorts in case of a multi-location cruise, car rental agencies, trams, trains and buses for local travel, F&B for local dining experiences, activities at destinations or hops, local retails and everyone else under the sun. Concomitantly, they will all be hurt from this channel revenue fading away.

Intent 3: Work is worship, the workplace is a shrine

Zoom, Hangout, WebEx, GoTo Meetings are ubiquitous now. And we opine this will be the future of remote working. Well, but, we only partially agree to it. Plant engineers cannot work on digital twins for operations, lawyers can’t fight every case from a couch, telemedicine has only a narrow scope, and the list continues. There is proof beyond doubt that business travel will have to resume, with ambidextrous values of work and leisure.

However, as we visualize, airlines will have fewer business class seats to sell (thanks to restrictions on corporate spend) and might re-configure the way plane seats are laid out today. Air ticket prices will drop to lure more customers, may be with a re-designed loyalty program that earns you lesser points that what you gain today. You see, effectively the entire top line and bottom line strategies will change.

What happens to the allied industries of hotels, F&B, car rentals, MICE are natural corollaries.

Our best guess is, it might take 3-4 quarters for it to return to stability and predictability and in a reduced capacity, the whole ecosystem will spring back to life.

Intent 4: Two’s company, Three’s a crowd

ITB Berlin, Japan Expo, NAB Show, Indian IPL, Facebook F8, Wimbledon are only handful that have been scrapped or postponed. There are shiploads more. The tune of the economic impact of this is not limited to the travel and tourism industry, but to the balance sheets of nations and states. And as we envisage, 2-3 years is an optimist’s approach of guessing when normalcy would return for the MICE sector. But read it twice; this will also impact airlines, airports, hotels, F&B, retail, car rental, trains and buses, tours and activities, nature parks and every other player you could think of.

What we see could happen are:

a Smaller and medium-sized local players who have been arranging local events, meetings etc. will emerge as a stronger sub-segment. Across cities, towns and suburbs, they would form own chains and snowball.

b. Webinars will increase in numbers – paid or free

c. Local and franchised hotels will offer conferencing capabilities on a wider scale

Intent 5: Union of two or more

This branch could be split into many – people travelling for personal and social reunions and commitments, students who study in universities abroad and their parents, participants in themed marriages, religious congregations, and many more. Most of these will be brushed off, leaving tiny specs alone. These again will take time to recover. There will be a need to monitor demand patterns for these segments. Disposable incomes need to increase, countries need to free up their borders, the number of students flocking universities need to increase and other social prominences have to re-emerge.

Till then, it is a game of watching the bait.

Can technology find an answer to this uplift?

There are a couple of very crucial pieces in the maze that only technology will be able to solve.

1. Designing one trip – We have said this before. This industry is holistic in nature, no salt added. With a design thinking approach, we need to create the real vision of one trip for customers that include all providers and their services. This not alone offers an advantage for customers, but is also the vehicle to understand what data does not tell. Data, at the moment, is not the fuel as it does not exist for such unprecedented times. It can only corroborate.

2. Track and trace – Track customer personas, their non-classical journeys, spending patterns, location preferences, intents and trip activities, active and passive feedback. This is the only way to understand demand and design supply at the moment. And create and train new algorithms. Period.

3. Jack up bandwidth – Tons of things are being done virtually. Obviously, the need for scaled -up systems and infrastructure is needed. It is something that states, policymakers, service providers and travel players all have to work in tandem on. Cloud infrastructure, with its scalability, will become the obvious choice for many.

4. Fire behind the wall – Cyber security will have to become rock solid. With increased online syndication happening, new payment methods being introduced, sensitivity of information being shared (that were never shared before), unscrupulous activities will also increase. And it is natural that we need to protect the ecosystem.

The last note

A huge section of society will not travel again. In recent years, the industry was experiencing a new segment – mature travellers. Some of them had saved for a lifetime for a cruise may be or for a safari in Africa. This new-found liberation will die.

Consultants who prided in living in airplanes will find a new liberation in Workation, being able to spend some time with family and friends.

Intrepid travellers will find a noble way of channelizing their energy in may be creating rich media content, sharing more experiences that would enthuse people to travel.

Sustainability is the only way to get rid of this pandemic’s fear. Till a vaccine is invented, we will have to keep on close syndication amongst ourselves to create value for travel and to ensure we are safe, to return from the lull.

About the author

Sudipto Ghosh is an Associate Director at TCG Digital Solutions Pvt. Ltd. and oversees digital projects for airline/airport clients. He comes with 14+ years of business consulting experience with key airlines and travel solution providers across the globe. As part of his role across multiple organizations and clients, he has led large digital transformation projects, pre-sales and converted multi-million dollar deals with key stress on transformation, business-IT alignment, systems rationalization, PSS, ecommerce, multi modal transportation.

Sudipto holds a Post Graduate Diploma in International Business (Gold Medalist) from Indian Institute of Foreign Trade and an engineering graduate degree in Information Technology (Gold Medalist).

Ensuring Business Continuity in Times of COVID-19

The COVID-19 crisis has brought with it extreme levels of uncertainty and has created a situation that is well beyond the experience of most of the enterprises. Companies are likely to experience a disruption in their operations as employees are forced to work remotely. They may have to deal with short-staffing and low visibility of workflows. Additionally, they require rethinking how to interact with the potential customers, address their changing demands, and prepare for recovery.

As most businesses choose not to reinvest, B2B organizations need an agile shift in engagement and communication channels. The need of the hour is business continuity and disaster recovery plans which will help wade through the challenges. In this primer, we outline a few thoughts on how businesses can improve their early response to the pandemic. From the trends, it is clear that they need to build on resilience and prepare well-in-advance to pull through the tumultuous times.

Ways to cope

Right at the onset, organizations need to accept that it is not business as usual. It is of utmost importance to prioritize what needs to be done immediately for survival in the long run. It is critical to focus on the well-being of employees, ensure their mental health during self-isolation, and give them a sense of belonging while keeping the team momentum going. It works best for businesses in these times to put the health and safety of the employees first. 

They also need to determine how the crisis will affect their budgets, and if former assumptions no longer remain relevant, they should focus on being agile to bring in necessary changes in financial plans. They will have to find out whether the existing business model is resilient enough to reduce both short-term and long-term costs and help in recovery. They may require new models, which assess the potential risks of the crisis and define effective responses.

Importantly business continuity planning (BCP) requires serious attention from senior leaders. While pandemics are inevitable, investing rightly with immediate effect may have a positive impact on the ability to recover. Any strategic business plan crafted previously for this year may not prove effective. 2020 will be a year of regrouping and survival. Not only will it come with new ways of working and fresh responsibilities, but it will also bring in a new management paradigm.

While existing business continuity plans are reviewed, this crisis is a wake-up call for those organizations which have mainly focused on daily operational needs without investing in long-term strategies. At this hour, a shift of technology capacity to digital platforms will help mitigate the adverse impact of the outbreak to an extent. By “digital platforms” we refer to more pervasive, technology-enabled business models that facilitate necessary exchanges between interdependent groups, either two or more. They bring together the end-users and producers, enabling and empowering them to transact with each other.

For seamless operations

Besides, the above organizations need to focus on operational continuity. Two key areas where CTOs/CIOs can increase access and capabilities are –

  1. Digital workplace resources and
  2. Digital technology to address changing customer behavior

The capabilities of the digital workforce can be increased by identifying their workflows, clearly identifying who can work remotely, the tasks they can accomplish, and the systems they will need access to. If required, the technology capabilities will have to be scaled which may involve empowering the workforce with messaging, collaboration and video conferencing tools, and ascertaining the security need to safeguard business data.

For the second aspect, organizations need to look at increasing the capacity for digital sales and self -service while ensuring personalized remote experiences to ensure a positive experience for customers in unfamiliar contexts. Immediately introducing smartphone apps and chatbots will help solve queries and allow the customer service reps to handle more complex issues. New opportunities that emerge in these times can be embraced to create relevant products, not forgetting that agile practices will enable seamless shifting of the necessary digital and physical resources.

Looking at strong leadership

In these unprecedented times, good leadership can act as a silver lining to a business.
Leaders can consider reducing the full-time work to eighty percent, allowing the employees to come to terms with the crisis. They can consider getting creative together and adopting a clear, empathetic, honest approach to communication until the situation evolves. They can also consider capturing success stories of team members overcoming the adversity and continuing to perform unhindered. These stories can be shared for circulation with the human resource team, which in turn will motivate rest of the workforce.

For a sustainable future

Your response today will determine your future tomorrow. A crisis-agnostic plan is what you need. It may involve exploring the different scenarios and how they may affect the business, adopting a well-thought-out agile working program, creating a dedicated team for crisis-management and training them to act on a war footing when required, crafting a strong stakeholder communication strategy, and lastly ensuring collaboration both internally and externally.

While the response window for most businesses affected will last for a few months, we can measure recovery can only in years. Hence, it’s time to take quick action and adopt a long-term perspective which will enable a company to emerge from this crisis stronger and move towards sustainability.

Why Data Science is Integral to an Insurance Business Today?

Did you realize that whether you are riding the Uber, instructing Alexa, wearing fitness trackers or using the smartphone, a vast amount of data is being generated? Interestingly, an estimate by experts reveals that by 2025, the volume of digital data will increase to 163 zettabytes. Today, this data acts as a treasure trove for most companies who consider evaluating it to generate actionable insights. This trend is sector-agnostic, and across domains, we see a similar pattern – be it in manufacturing, life science and healthcare, energy, retail, utilities or BFSI.  The banking and financial services industry is one domain where data generated and handled is significantly enormous. As the electronic records only grow in number the financial services industry is turning to big data analytics to store data, generate actionable insights, and boost scalability. The insurers are not lagging behind, where they have access to rich sources of data and have figured out the right blend of what, why, and how to use the data to thrive in a highly competitive business environment.

A quick look at the challenges which plague today’s insurance companies tells us why harnessing customer data is more than important now. Growing risks, high operational costs, a volatile market, customer renewal, and churn remain major concerns. Data analytics, a significant part of data science helps address these challenges and facilitates claims processing, pricing strategies, and fraud management. Let’s look at some of these use cases in detail:

Risk assessment

Identifying risks and taking steps to mitigate them is a critical responsibility of any insurer, which becomes even more important when underwriting policies. There are cases where policies are written for storefronts and warehouses. In such cases, fixed data sets which include political, geographic, and economic data are analyzed. Furthermore, personal data of customers often prove to be an asset which when efficiently used helps analyze both types of risk— pure and speculative. The matrix model needs mention here which supports accurate risk assessment and facilitates meaningful risk discussions. In this 3×3 model, the event consequences lie along one axis and the event frequency on the other. Each group in the matrix represents risks at some level. The model is dependent on algorithms that detect and combine the data revolving around individual risks which vary in nature, effect, and character. This helps list each risk, rate its likelihood and severity and identify the highest-priority risks which may require immediate remediation.

Claims management

Apart from risk management, claims assessment is another important area where analytics plays a critical role. It is a given that faster and better insights empower insurers to ascertain and interpret what is going on in the claims process. However, data needs to be combined with analytics expertise to not only improve the speed of identifying hidden correlations but also respond to potential challenges timely. Analytics, in particular, helps prioritize claims, settle straightforward claims, tag the complex claims for further inquiry, and reduce the cycle time. Let’s take a case in point. A particular insurer’s data revealed that the claim cycle is abnormally high only in a specific geography. When data was dissected further, it was discovered that claim time for a particular claim in that geography was almost twice, and this was the case in bodily injury claims. This led to the understanding that by addressing the root cause of the cycle time, the insurer could decrease the average cycle time. The use of analytics led the insurer to specific questions such as the number of adjusters available to address bodily injury claims, idle time among adjusters, and so on which when solved expedited the claim cycle time.

Fraud Management

While we already know by now how analytics contributes to risk assessment and claims management, it also helps detect frauds. Handling frauds manually have always proved costly for insurers, more so when high-value frauds go undetected. Three innovative analytics methods in which frauds are detected include:

  • Social Network Analysis (SNA)

In the case of SNA, both structured and unstructured data are fed into the ETL tool (Extract, Transform and Load tool). The analytics team then uses information across sources and calculates the likelihood of fraud based on several factors. Technologies that are integrated into the predictive modelling process for fraud management include text mining, content categorization, sentiment analysis along with social network analysis. 

  • Predictive analytics

The second method is predictive analytics, where text analytics and sentiment analysis are used to look at Big Data for fraud detection. Often the claim reports span across multiple pages leaving very little room for insurers to detect scams. Here analytics comes to use which not only helps sift through unstructured data but also detect possible frauds. Once the fraudulent claims are spotted, it accelerates the payment process of the legitimate claims leading to a higher number of satisfied customers. 

  • Social Customer Relationship Management (SCRM)

Social CRM or social customer relationship management is the third process in which the insurers link social media to the CRM. Insurers Invest in sophisticated analytics tools to verify the validity of claims and detect fraudulent crimes. This enables greater transparency with genuine customers and increases the faith they show in the insurance organization. Introducing social customer relationship management leads to a shift to a customer-centric ecosystem which is again beneficial to the business in the long run.

Final thoughts

As we reach the cusp of a massive data science revolution, the near future will witness insurance companies only increasingly using data science analytics. And why not when it helps optimize marketing strategies, enhance income, improve business and reduce costs. It will not be surprising if the use of data science in insurance makes huge leaps in the near future, and insurance businesses leverage it to the fullest. We may rather believe in this optimistic trend and wait and see what awaits us at the end of the road.

How Artificial Intelligence is Fast Transforming Aviation?

According to forecasts, AI investments in the global
aviation market are expected to reach a  $2,222.5 million by 2025, demonstrating a CAGR
of 46.65% in the
period between 2018 and 2025. This trend is fast disrupting how the players
approach their data streams, operations, and customer-centricity goals. Interestingly,
we can already witness certain AI-specific use cases in aviation which include
baggage-check in, client inquiries, plane fuel enhancement, and facial
recognition. You may wonder why the players are taking resort to AI for facial
recognition — for faster boarding. Kiosks for facial recognition cut down on
boarding time, resulting in greater convenience and a higher number of
satisfied travelers.

Why do airlines need
to board the AI bandwagon?

However, achieving high customer satisfaction
levels may become more challenging as airline traffic doubles up to almost
eight billion in
the next two decades. Most airlines may struggle to keep pace with consumer
demand. Reasons for the robust demand have been identified as strong economic
growth, a growing middle class, and increased spending on services. Here too AI
has a crucial role to play.

With the high proliferation of data, as the
airlines collect a vast amount of customer preference info, scheduling history,
and employee information, developing practical AI solutions becomes easier.
Airlines use the data sets and advanced AI-algorithms to offer superior personalized
services to a larger consumer base and improve employee incentives, ensuring
that services do not deteriorate despite rising consumer demand.

Changes we can witness
already

While the traffic is all set to
increase, the competition too will heighten. In such a scenario, AI is being
leveraged by the aviation industry for autopilot systems, which assists the
pilot in controlling the plane better. They reduce repetitive tasks of the
pilots, manage turbulence and help in weather forecasts determining whether it
is safe to fly. In case of adverse weather, AI engines suggest alternate
routes.

Although auto-pilot remains the most
successful use case of AI, the use of the technology stretches beyond
auto-pilot in multiple ways:

  • AI disentangles the procedure related to
    baggage screening in a few airports. Osaka Airport has introduced an AI
    platform—Syntech One 200, which screens the baggage for multiple passenger
    lanes saving on resources and time. This AI software can also detect knives,
    threats, and weapons both ensuring and bolstering security.
  • Also, AI-based virtual assistants are being
    used to improve client services. These assistants answer basic queries allowing
    the customer service personnel adequate time to take care of more pressing issues.
    A leading airline is already using Alexa to answer common customer queries such
    as the status of a trip, check-in request, and whether wi-fi is accessible on a
    new flight.
  • AI helps detect booking-related problems. It
    analyses past flyer information, historical data and monitors the weather to
    predict which passengers will not show up or may swap to another flight. It
    provides the ground staff with up-to-date information on the number of people
    likely to board the flight.

Use
of AI in fleet and operations management

Besides the above use cases, AI also
finds use in enhancing the fleet and operations management. The Alibaba Group
recently announced that it has provided AI-based solutions to the Beijing
airport where they are using it to help pilots find parking easily. This
AI-system gauges congestion, facilitates flight route optimization, and
analyses real-time data to detect delays.

It would surprise you that besides
flight route optimization, fraud detection in aviation is another area where AI
finds use. Advanced algorithms analyze a customer’s flight and purchase pattern
to detect fraudulent credit card transactions, which saves airlines millions of
dollars, eventually.

Enhancing customer
service for retention

While fleet and operations management
is being well tackled, AI engines also contribute majorly to customer service. It
is for this reason that 52% of
airlines have thought of implementing AI initiatives in their
customer service operations in the next five years. The AI engines adopt
behavior tracking techniques and keep track of purchase history to make
personalized offerings. Intelligent systems carry out sentiment analysis,
evaluating real-time customer reactions to provide actionable insights on how
to improve pre-flight, in-flight, and post-flight service.

Monitoring
the “health” of aircraft

Another interesting
area where AI finds use is predictive maintenance. Airlines are fast embracing
AI to monitor the “health” of aircraft. AI systems predict when a part requires
maintenance, ensuring repairs without delay. Data is fast analyzed, which
enables timely preventive actions. They use AI systems on valves, generators and
brakes which extend the lives of the parts and minimize disruptions.

In case you are
wondering how predictive maintenance is carried out—AI systems make use of Natural
Language Processing (NLP) to scan maintenance logs, predict failure, and
recommend fixes. This saves the maintenance costs of airlines and also keeps
passengers safe. Interestingly, this upgrade to AI has led to a significant
reduction in flight delays owing to malfunctions.

Making the skies friendlier in future

Till now, we
discussed how AI is bringing about changes, but what lies in store for the
future? AI promises to ensure a reduction in the number of bags lost in a
unique way. Using AI, intelligent machines will enable bags to be autonomously
managed from the moment a passenger checks-in to when it arrives at the
destination — all without human intervention. 

Besides, interesting
research is underway in using Fitbit biometric data inflight to offer better
customer care during the journey based on body temperature and heart rate. And, what
more could we ask for, convenience, comfort, and now inflight care based on
biometrics.

As airlines embrace AI, it is us the
end customers who will undeniably stand to benefit the most.