Rebuilding the Travel Industry Post COVID

Rebuilding the Travel Industry Post COVID, Responding to New Customer Preferences, and Protecting Against Market Volatility

It’s fair to say that the global COVID-19 crisis has had a profound impact on the travel business.

For almost two years, international travel was effectively shut down and many brands operating within the industry have had to make difficult decisions in order to ensure their survival throughout the pandemic.

Now the worst of the crisis has [hopefully] passed, the travel business is faced with the daunting task of rebuilding and making itself more resilient in the face of ongoing volatility, while simultaneously responding to a seismic shift in customer preferences.

The Road to Recovery

While there are still many challenges still to overcome on the road to recovery from the pandemic, there is still cause for celebration.

According to research by McKinsey, despite being around 35% down from pre-pandemic levels, industry performance from 2021 shows considerable improvement. The travel industry boom currently being experienced in summer 2022 also suggests this pattern is likely to continue throughout this year.

A trend we have seen across multiple industries is the way in which the COVID-19 pandemic has accelerated what customers expect from brands in terms of digitally supported experiences, personalisation, self-service options, and more. However, while brands in other industries have been able to evolve to meet these expectations during the pandemic, travel has essentially been on pause – leaving the business ecosystem in situation where it’s forced to play catch-up.

Shifting Customer Preferences

One example of how customer preferences have transformed becomes evident when we look at travel accommodation.

Due to ongoing – and possibly permanent concerns – regarding disease transmission, we are seeing a marked increase in customer interest in short-term rentals – such as holiday villas – and hotels with a capacity of 50 rooms or fewer. According to STR, traveller interest in short-term rentals sit at 12% over pre-pandemic levels, and hostels – likely due to their reliance on shared rooms and communal facilities – are seeing negative 61% interest as of November 2021.

30% of travellers have also stated a preference for holidays to rural locations due to ongoing concerns about the transmission potential of larger urban environments or resorts.

This goes to show how the pandemic and behaviours travellers have adopted during the crisis are having a lasting effect on customer preferences and what they look for in a vacation. Travel brands should be aware of these changes and ensure they are adapting packages and customer experience to meet them.

Building Resilience

From an increased investment in digital tools designed to streamline many aspects of the customer experience such as booking tickets, checking in, and purchasing additional holiday experiences, to a drive to quickly replenish staff levels at key travel related locations, such as Heathrow Airport, we are seeing a pattern of travel industry companies taking steps to ensure they are better equipped to handle any future issues.

Being able to quickly pivot to alternative carriers and communication channels, and by automating key customer-facing touchpoints, travel brands make sure that staff shortages – caused by the talent crisis or an outbreak – have as minimal an effect as possible on the holiday experiences of customers ready to start enjoying their hard-earned vacation time again.

This is particularly evident in the increase in investment we are seeing from travel brands into their data analytics capabilities. With access to better and more complete data and the ability to leverage AI and cloud computing to draw the greatest insights from it, businesses in the space can build more accurate predictive models which enable them to become more agile in the face of disruption and avoid passing those problems onto customers where possible.

Final Thoughts

While the challenges of the COVID-19 crisis are certainly not over, it is encouraging to see the industry on the road to recovery and making investment to meet the transforming preferences of post-pandemic customers and protecting itself from future disruptions.

Post-COVID recovery will be part of the conversation at Digital Travel 2022, being held in November, at The Tower Hotel, London.

Download the brochure today for more information and insights.