Why the travel industry is moving to hosted IT solutions

In the run-up to this year’s Travel Technology Europe exhibition at Olympia this week, it’s worth exploring  how developing technology and changing consumer behavior are rapidly changing the industry, and what travel companies need to do in order to keep up.

Although people don’t necessarily think of travel as a technology-driven industry, the fact is that IT has long been a key differentiator in travel and tourism. At its heart the travel industry is about delivering complex intangible services, largely via real-time global networks, many of which have been in operation with relatively little change since the 1960’s (airline reservations systems and currency exchanges are just two examples of these kinds of systems).

By and large, the travel industry still delivers the same core experience of foreign or domestic travel, albeit to a more sophisticated, better-traveled consumer nowadays. However, as is the case in many industries, developing technology is having a huge influence on how travel companies do business. Changes in the IT landscape have far-reaching consequences not only for the way in which such services are delivered but also in terms of how customers purchase and consume them.

Mobile technology is transforming consumer behavior

The web and mobile technology have transformed the way consumers interact with providers. It’s not just about online information and reservations, but about a growing expectation of ‘anytime, anyhow, anywhere’ communication through an ever-growing range of channels. Increasingly consumers are expecting to access and talk to travel providers via smartphones and tablets, as well as through web chats and social media, in addition to voice (and the now-old-fashioned e-mail). Skype, Google hangouts and Facetime have transformed how people communicate in their private lives and there’s no reason to suppose that video chat won’t begin to do the same to customer/company communication in due course too.

Smartphones and tablets last year accounted for 21% of all hotel bookings, and recent research from GfK shows that 90% of all travel bookings now involve going online, compared to just 50%  2006. Even those consumers who end up buying their tickets offline will have spent an average of three and a half hours doing research online before they make their purchase. So we ignore mobile and the web at our peril.

Multi-channel communication is becoming the norm

More and more consumers are taking web-based platforms such  as Facebook and Skype for granted in their private lives and naturally extends this into their buying behavior and consumption. And if standards aren’t delivered, consumer feedback via other web services such as Tripadvisor, Feefo and Twitter quickly alerts the market to any shortcomings too.

So travel organizations which don’t embrace these channels are not heard above the noise in this 21st century web bazaar and risk elimination. To keep up with consumers (and competitors) it’s vital that traditional call centers be transformed into much more consumer-centric contact centers, or even ‘customer hangouts’ as one call center manager suggested in the Cloud Gazing white paper that we recently published, offering a range of different channels through which customers can communicate with the company and keeping track of communications across them all.

Cloud-based, hosted providers are the way forward

Traditionally travel companies have focused on building their businesses through cost-efficiency and an emphasis on transactions, but that’s not enough any more. It’s all about multi-channel, 24/7 consumer relationships now,  And with this ‘new generation’ shift to the web, it’s only natural that a lot of focus at this year’s travel industry IT exhibitions will also be on cloud service and hosted providers who can really help companies deliver in this ever-evolving, dynamic web and mobile-based marketplace.

Traditional and legacy premise-based systems now tend to be too cumbersome for travel and tourism companies in this new web-connected world.  Not only are they CAPEX/equipment heavy and slow to evolve beyond the initial installation, they can be difficult to integrate with each other and interface with other modern web-served or cloud solutions. Whereas traditionally a company’s booking, admin and and call center systems would all tend to be run on in-house servers and maintained on site, companies looking to to be more agile and connected are now moving to cloud solutions, hosted and supported remotely.  The key benefits are that these hosted, managed services are low on CAPEX and charged as an operational (OPEX) cost;  they are quick to install and as they are usually multi-tenanted, keep developing with the market; and most importantly as they are web-based, all that is needed is internet connectivity to integrate multi-site operations in real-time as well as support multi-channel connectivity with customers.

Syntec is exhibiting at Travel Tech Europe 2015 at Olympia, 25th – 26th February Stand no. T112 (opposite ‘Disrupt’) and presenting at two seminars on 25th Feb:

13.30-14.30   Contact center 2020       

16.00-17.00   Future of payments

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