As like most industries, it is fundamental for the tourism industry to adapt to the digital age in order to be competitive and remain successful. It is therefore essential to look at which digital marketing trends impacted the tourism industry in 2018 and to implement them into your 2019 marketing strategy if you have not done so previously. So, as you head into 2019, what trends should you be thinking about and which tools and approaches should be considered for travel and hospitality marketers?
1. The importance of technology in travel
The tourism industry continually adapts to new technologies and it is difficult to advance in the sector without a digital connection. According to Pepijn Rijvers, Chief Marketing Officer at Booking.com 'with technological advancements, an ever more connected world and a continuously growing consumer appetite for the best travel experiences, we’re poised for ground-breaking developments, taking travel to unexplored heights'.
In a study published by Trekk Soft, as of December 2018, there were 4,156,932,140 internet users in the world – that’s over half the population of Earth. It is clear to see why this statistic impacts the tourism industry, as internet usage drives over half (57%) of consumer bookings (Statistic Brain, 2018), with 148.3 million travel bookings made on the internet in 2018 (Trekk Soft, 2018). Moreover In a recent report by Adobe Digital Insights, it was found that 41% of business and 60% of leisure travel arrangements are made online, with around two-third of worldwide travellers, regardless of generations, booking accommodation via online channels (Springer, 2018). Taking a closer look at the US market, in a report by eMarketer it was revealed that digital travel reached $189.6 billion in 2018 with over $218 billion expected in 2021.
These statistics are highly relevant, suggesting that most businesses need digital marketing to thrive. For hotels, the need is imperative as the Internet drives the majority of bookings. You should therefore develop your own progressive digital strategy to make the most in the market. Being aware and making use of the new technologies will allow you to implement innovations into the services that you offer. From integrating artificial intelligence to offering personalised experiences, 2019 promises to be an enthralling year for travel.
2. Impact of GDPR on the tourism industry
The European Union’s new General Data Protection Regulation, also known as GDPR, is the is the most important change in data privacy regulation in over 20 years. The regulation came into effect on May 25, 2018 and is aimed to reshape the way in which data is handled across every sector, making it critical for the businesses to capture and manage customer data in an entirely new way. GDPR requires businesses to interact with consumers according to very specific and time-consuming requirements which are sensitive to their privacy rights. Moreover, regardless of where your business is headquartered, organisations with EU-based customers must comply. In addition, in some circumstances, a representative within the organisation could be appointed to fulfil GDPR’s many requirements.
As the travel industry rely and works with the information of consumers, GDPR became a high priority in 2018. Whether storing the personal information or consumer habits, industry experts said that in the long-run the new regulation will be a big opportunity for companies to create business value by increasing trust between organisations and the consumers they service (Gartner, 2018). But where exactly are we as an industry in terms of GDPR compliance and how do consumers feel about the new regulations?
- 59% of brand respondents and 40% of agency respondents said that their organisations have either appointed or are planning to appoint a data protection officer (Econsultancy, 2018)
- 60% of respondents said GDPR has significantly changed their organisations’ workflows for collecting, using, and protecting personal information (McDermott, Will & Emery, 2018)
- Marketers who were asked about their top three priorities ahead of the legislation’s enforcement cited reviewing their consent mechanisms for collecting and processing data (86% of brand marketers and 77% of agency-side respondents) (Econsultancy, 2018)
- 17% of respondents plan to introduce a new solution to manage consent (Deloitte, 2018)
- 61% of respondents said they believe that GDPR has its benefits beyond just implementation. Of those, 21% expect significant benefits, including competitive advantage, improved reputation, and business enablement (Deloitte, 2018)
- By the end of 2018, the percentage of survey respondents expecting to be GDPR-compliant (including those companies already compliant) will be 76% in the EU and 68% U.S (TrustArc, 2018)
- 93% of businesses are expected to be fully compliant by the end of 2019. (TrustArc, 2018)
- 43% of U.K. consumers said they want companies that don’t follow GDPR regulations to be penalised (ITPro, 2018)
While the financial and reputational risks are indisputably punishing, collaborating with experienced specialists can help ensure that the overall expense is surprisingly affordable and adds significant value. Well-informed advisors can help you to successfully implement and understand the nuances of GDPR as well as connecting issues like cybersecurity and technology systems design.
3. The role of artificial intelligence
Since GDPR came into effect in May 2018, never before has it been so important for hotels to ensure their communication with the guest is relevant and the data they store about a guest is compliant with these new regulations. From developing personalised guest experiences to identifying revemcnue opportunities, Artificial Intelligence empowers innovation and growth by segmenting information to generate better hotel bookings and ROI. In 2018, numerous businesses in the tourism sector saw how crucial it was to include this contemporary digital marketing technology to attain revenue and growth. In fact, the global AI market is expected to be worth approximately 7,35 billion U.S. dollars, with the digital technology now an integral part of a hotelier’s life. (Statista, 2018)
Understanding the capabilities of artificial intelligence (AI) can positively affect the interaction between the guest experience and the hotel. The focus for technology companies serving the hospitality industry is to enable hotels to communicate more effectively with their guests so that they are able to deliver the right message to the right person, at the right time through the right channel.
According to Skift, personalisation is currently ‘the name of the game when it comes to travel customer experience’ (Skift, 2018). Moreover, in a recent interview with GetYourGuide CEO Johannes Reck it was expressed that ‘true success in the future of travel comes down to personalisation.’ We now have so much data on our customers as they go through the various touch points of our website, booking process, rebooking and reviews. This data allows not only to determine buyer personas, but also reveals how to target them based on their personal requirements. Studies show that customers prefer personalisation as a time-saving tool. According to Google Research 2018, 57% of travellers feel that brands should tailor their information based on personal preferences or past behaviours. The same research also confirmed that ‘if a travel brand tailored its information and overall trip experience based on personal preferences or past behaviour, 36% would be likely to pay more for their services.
Artificial intelligence does not mean robots alone and can also be used for the purposes of customer support, which is realised via chatbots. It’s estimated that 40% of large business brands will adopt the technology by 2020 (Forbes, 2018). Chatbots have the ability to accurately and continuously sort through data and to deliver rapid responses to the problems or queries. As a form of AI, chatbots are able to draw conclusions based on customer feedback and behaviour. Moreover, AI is able to learn from interactions, which means the more it works, the smarter it is.
4. CRM: The benefits of personalisation
As illustrated, a key focus in 2018 was personalisation with the tourism industry working closely on the relationship between the hotel and their guests. With the integration between AI and a Customer relationship management (CRM) system, data is not just a tool for the sales and marketing departments, but also benefits operations, revenue management, and distribution departments. Because of this, hotels are looking to integrate CRM with their other technology, bringing various data sources into one central place to create a single profile of the guest. For example, integrating a CRM to a revenue management system has enabled customers to receive personalised pricing based on their profile which can include the recency, frequency and monetary value that the guest has to the hotel.
For this reason, it is fundamental for businesses to implement a flexible and well-designed CRM system. At the end of 2018, CRM software revenues overtook database management systems to become the largest of all software markets (Gartner, 2018). With revenues expected to reach over $80 billion by 2025, it’s no surprise that CRM is the fastest growing software market in the world (Superoffice, 2018). Each year, 70% of businesses state they plan to increase spending on technology, with the figure remaining the same for 2019 (eConsultancy, 2018). This year on year investment is seen necessary by most businesses in order to keep up to date with the fast-changing digital technology industry, with the trend is unlikely to change as companies invest more in CRM to become GDPR compliant.
5. Impact of cyber security
With the volume of processed personal and credit card information being handed over to hotels on a daily basis, the hotel industry is currently one of the most vulnerable to data breaches (2018 Data Breach Investigation Report, Verizon). Researchers support that the hospitality industry is the most susceptible to cyberattacks and in a study which analysed logs from November 2017 to March 2018, it was found that fake accounts and intrusions via botnets increased on hotel, airline, cruise, and travel websites increase year on year. Out of the 112 billion bot requests and 3.9 billion malicious login attempts on the targeted sites analysed, almost 40% of the attacks came from browser impersonators or known fraud sources (Akamai, 2018).
Although GDPR is designed to prevent the misuse of an individual’s personal information and to protect the individual’s rights by limiting how that information is used, it does not exclude the hotel from protecting the guest information it acquires. With an increased improvement and dependence on technology comes a greater need to protect that aspect of our business. Let’s look at some supporting statistics:
- In 2018, 54% of companies experienced one or more successful attacks that compromised data and/or infrastructure (Ponemon Institute, 2018)
- 69% of organisations believe that they need to implement more than just an antivirus system (Ponemon Institute, 2018)
- The average cost of a malware attack on a company is $2.4 million (Accenture, 2018)
- On 30 November 2018, Marriot International released a statement stating that hackers had attempted to access its Starwood Hotels & Resorts Worldwide guest reservation database on 8 September. Further investigation revealed unauthorized access to the system as far back as 2014 (HotelNewsNow, 2018)
Travel sites are a lucrative source of income for organised crime groups because of the personally identifiable information (PII) stored and processed by these establishments. From credit card data to proofs of identity required by local laws, stolen PII can be sold to rack up fraudulent purchases. Moreover, hotels and airlines also provide customer incentive systems that hackers can abuse. It is therefore fundamental to implement a good cyber security software to ensure that data and assets are protected from third parties for profit, affecting vital infrastructure or compromising consumer privacy.
