The online travel industry is growing fast. In 2017 alone, it contributed over US$8.3 trillion to the global market. Travellers continue to crave personalised experiences and want to maintain control over their travel plans by using self-service solutions to organise trips that best suit them.
This has led to an explosion in data on traveller behaviour and preferences – a gold mine for travel marketers who want to offer customers the most desirable and timely products and services. Turning this data into meaningful customer experiences can lead to higher conversions, stronger engagement and repeat business.
How can marketers leverage demand and data to win not just short-term gains, but also long-term value?
The data dilemma
Vast amounts of data present challenges as well as opportunities. With information about customers’ travel destinations, preferences, budgets and more, marketers may struggle to identify, unify and analyse data from multiple sources (websites, apps, loyalty programmes, etc).
Travellers are looking for an easy search process that will help them find personalised, timely offers for just the right destination. Even with all this data, there’s a whole element that may be missing from the efforts of many marketers – knowledge about customer interactions across the Internet, such as recent searches and travel content consumed elsewhere online.
The AI answer
This is where AI is a clear solution – it can prove valuable in meeting the needs of customers seeking specific recommendations and customised experiences, all instantaneously and at the right point during their planning process.
An AI-powered marketing automation platform can help you better understand user interest and behaviour to create unique, personalised, relevant messaging and recommendations for each customer. It’s these customised interactions that drive conversions and loyalty.
Here are some of the key AI applications that travel marketers can leverage to create meaningful engagement:
- Understand user intent based on behaviour outside the brand app or website
Sophisticated AI platforms not only analyse internal consumer data, but also seek to understand users’ external interests based on comprehensive data outside your own app or website. These insights can be used to offer hyper-personalised recommendations mapped to individual interests. - Identify the need of first-time visitors before they land
AI also allows you to decipher user preferences before they even engage with your platforms, and so you can personalise content for prospects when they first arrive on your website or app. - Identify the right opportunity
AI can identify exactly what your consumers are looking for, when, and on which device, letting you engage seamlessly with them across multiple screens using the right message and offer. - Effectively scale marketing efforts
By detecting patterns across your most valuable customers, AI can help you effectively scale marketing efforts by segmenting your consumers and creating lookalike audiences based on similar interests and preferences.
As the travel industry changes, one thing will remain the same: customer focus. By leveraging AI, you can connect with customers at a hyper-personalised level and create one-to-one engagement.
With lower fuel prices and strong economic growth, the global airline industry net profit is expected to hit US$35.5 billion in 2019, slightly ahead of the US$32.3 billion expected net profit in 2018 which saw profitability squeezed by rising costs, according to IATA forecasts.
It is expected that 2019 will be the 10th year of profit and the fifth consecutive year for airlines to deliver a return on capital to investors.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer. So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile,” said Alexandre de Juniac, IATA’s director general and CEO.
The 2019 industry outlook is based on an anticipated average oil price of US$65 per barrel, lower than the US$73 recorded in 2018, following the increase in US oil output and rising oil inventories.
Fuel is expected to account for 24.2% of the average airline’s operating costs, an increase from 23.5% forecast for 2018.
Meanwhile, passenger traffic (RPKs) is expected to grow 6% in 2019, outpacing the forecast capacity (ASKs) increase of 5.8%, and remains above the 20-year trend growth rate. This in turn will increase load factors and support a 1.4% increase in yields. Passenger revenues, excluding ancillaries, are expected to reach US$606 billion (up from US$564 billion in 2018).
Asia-Pacific carriers are expected to report a US$10.4 billion net profit in 2019, up from US$9.6 billion in 2018, with net profit per passenger projected to be US$6.15 (3.8% net margin). Lower fuel costs, low levels of fuel hedging and strong regional economic growth are supporting profitability in 2019 in this region, according to IATA.