The travel industry is in a process of massive change – prices levels remain dynamic, and customers are overwhelmed by choices; while operational complexities for most travel companies are increasing. Learn here from our Simon-Kucher Elevate experts how to navigate these challenges – by utilizing the newest AI trends.
If we break down the current and most pressing challenges for the travel industry, we can identify five core challenges that every travel agent and tourist company needs to address – the sooner, the better:
- Hyper-personalization imperative: Customers demand relevance! 33% already expect individually tailored communication, and delivering it commands up to a 20% price premium. A global survey by Hilton also revealed that over 80% of travelers seek personalization during their experiences and interactions with travel companies
- Sustainability as a new standard: Ecological travel is now a core expectation. 76% of travelers aim for more sustainable choices to reduce their carbon footprint, impacting brand perception and booking decisions
- Data & commercial tech integration: Smart use of customer data is essential. Hotels utilizing SaaS solutions for CRM and guest management have experienced a 20% increase in customer satisfaction and a 15% reduction in operational costs
- Shortage of skilled workforce: The talent gap persists. The WTTC estimated a 7% job shortfall (412,000 unfilled roles) in the US travel sector at its peak in 2022, demanding smarter resource allocation
- AI setting new trends for customer journeys: 46% of travelers use search engines as their primary resource for travel guidance. The question of topical authority is becoming increasingly relevant here. Companies not only need to focus on search engine optimization (SEO) but must also master generative AI optimization (GEO) to stay relevant in an era where AI dictates the newest trends
The fact remains: It required a full five years for customers to reach a travel frequency of pre-pandemic levels, and many of the most pressing challenges are just beginning. Consequently, travel and tourism companies are looking for ways of sustainable growth – and we know the right solution for you.
The AI opportunity: Transforming your customer journey
Artificial intelligence (AI) provides a powerful tool to navigate these developments and create outstanding personalized experiences. It’s a key lever to deal with even the most pressing challenges of the current travel landscape.
AI algorithms and machine learning (ML) can optimize interactions across the entire customer journey utilizing a sophisticated data strategy. At all four stages of the traveler’s journey, AI can effectively nudge your customers in the right direction:
- Dreaming: Use AI to move beyond generic marketing efforts, delivering tailored marketing messages that truly resonate with your audience. Sentiment analysis, for example, can precisely segment your customers and address their sustainable travel needs as well as hyper-personalization demands. Additionally, actively manage your brand's topical authority to become the primary source for AI when answering prompts from potential customers
- Booking: Transform complexity into clarity with optimized results, smart price comparisons, and perfectly timed product recommendations and discounts
- Experiencing: Leverage AI for seamless support, contextual information (like an AI travel companion), and efficient disruption management during any trip. Advanced CRM techniques can open a new playing field for customer satisfaction and also cover staff shortages for tour operators
- Remembering: Build lasting customer loyalty with AI-powered CRM, dynamic loyalty programs, and personalized re-engagement prompts based on sophisticated customer data analysis
This is how you personalize your customer journeys to make booking easy and build lasting customer relationships. Actively collect customer feedback within this process – taking this seriously allows you to continuously refine and improve your sales process. The aim is to create a truly data-driven customer journey.
Finding the right data-driven levers to create more engagement in the customer journey
Unlocking value: Simon-Kucher's five levers for AI commercial excellence
Our Simon-Kucher Elevate experts utilize a proven framework focusing on five key value levers, activated by targeted AI solutions with demonstrable ROI that you can put into practice directly to enhance your business opportunities:
Strategic long-term growth: We help you align your core business offerings and long-term strategic view using AI-driven insights to keep your customers satisfied
AI solution example: GenAI market intelligence provides automated insights into the newest market trends, boosting margin >2-4% and steering you in the right strategic direction
Enhanced market responsiveness: We employ AI to help you rapidly adapt pricing, offers, and your marketing strategy to new competitive dynamics, better tailoring your products and services to your customer base
AI solution example: Next-best action recommendations for your customers drive engagement and ancillary sales using real-time data and purchase histories, lifting revenue >5-15%
High-precision forecasts for smarter revenue management: Our highly accurate AI models provide proactive insights, supporting smarter decisions to maximize profitability in a dynamic market environment
AI solution example: AI-based revenue and capacity management (incl. fleet & crew) optimizes pricing, yield, and resource allocation using ML, increasing revenue >5-20%
Personalized customer experiences: Our solutions enable you to personalize your offering by analyzing customer data and tailoring your customer experience based on these insights to optimize engagement and sales
AI solution example: GenAI content creation enables you to create personalized marketing campaigns and personalized emails faster (reacting to current events and trends) and allows you to become a true “topical authority” – lifting revenue >2-6%
Advanced customer base optimization: Our solutions enhance customer base management by predicting churn, optimizing CLV strategies, and integrating advanced loyalty programs using AI and machine learning algorithm models to build long-term relationships
AI solution example: Customer churn prediction can reduce your churn rate by 15-25% and CLTV can be increased by 20-30% through targeted marketing actions, improved customer service, and retention strategies
Combining all these five levers gives you a key edge in the competitive travel industry by creating a better customer feel and an effective resource allocation. Our Simon-Kucher Elevate experts can strategically align your business demands with your target and help you find exactly the solution that you need.
Our Simon-Kucher Elevate approach: experts driving your success
Implementing AI effectively demands more than just software; it requires strategic insight and expert execution. At Simon-Kucher Elevate, our experts partner with your teams to guide you through the entire strategic process of integrating AI into your workflows:
- Define the data foundation: We align AI goals with your core business objectives and establish strong, ethical data collection practices that are in accordance with regional regulations (e.g., EU data act)
- Develop & validate custom models: Our experts build detailed AI and ML models tailored to your unique situation, rigorously tested for impact and ROI growth
- Integrate for impact: We ensure seamless integration into your existing systems (CRM, booking engines) and operational workflows
- Enable & optimize: With enhanced dashboards and visualizations, our Simon-Kucher Elevate experts empower your marketing and sales teams and establish processes for continuous improvement – ensuring you gain long-term value.
Now is the time to command the power of AI in the travel industry! Move decisively beyond traditional personalization. Implement hyper-personalization alongside advanced revenue management and customer retention strategies – build customer loyalty programs, optimize your profitability, and secure your competitive leadership. Be at the forefront of this change – utilizing the full potential of AI and machine learning.
Ready to transform your customer engagement and unlock significant growth? Learn more from our experts at Simon-Kucher Elevate
Because no other consultancy knows more about growth than we do. We live, breathe, and drive tangible growth, running over 1,500 projects every year.
Within our digital practice, Simon-Kucher Elevate, we have true digital practitioners who leverage data, technology, and design to build your ideal customer journey. With our experts, you will always find the AI strategy that you need …
- Data-driven approaches: We accelerate projects with a high impact on reduced time horizons, delivering a high ROI through customized hyper-personalization and advanced AI strategies
- Experience of over 100 digital strategy and use case implementation projects with positive EBITDA impact
- Combination of industry expertise and data know-how to tailor use cases for an increased business impact
- Database with a longlist of use cases and KPIs with categorization, especially for the travel and tourism sector
- Translation of strategic business goals into data-related KPIs to monitor progress and the impact of the data strategy implementation
Want to know more? Contact us today to learn how we can elevate your strategy. It's time to join the tech revolution!
