Focusing on People and AI
The difference between travel industry leaders and laggards is particularly acute in two areas:
Differentiated People Advantage. Travel industry leaders have an edge in upskilling existing personnel and attracting and retaining new talent, which allows them to offer customers a better experience booking travel or taking a trip. Leaders in the hospitality sector of the travel business, for example, improve hiring and retention through continuous benchmarking to ensure that compensation is equal to or above that for comparable jobs in other industries, and by offering flexible schedules. Hospitality leaders also support diversity and inclusion. They also target messaging, outreach programs, and other actions to appeal to specific groups of current, past, and prospective employees.
AI. Travel industry leaders deploy advanced analytics and AI throughout the travel value chain. By optimizing their supply chain and offering hyper-personalization, these bionic companies successfully combine human and advanced technology capabilities, gaining a competitive advantage that can take a variety of forms. During severe weather, airlines use these capabilities to minimize customer travel disruptions by selecting the next best flight schedules. Cruise lines use their combined people and advanced technology capabilities to fine-tune pricing during cruise booking periods to maximize occupancy and revenue.
How Travel Industry Incumbents Can Catch Up
To become future-built travel businesses, companies might consider the following moves to foster the six winning attributes we’ve identified:
Aligned Leadership and Purpose. Leadership is central to becoming future-built. Companies in industries of all types with a systematic and well-supported approach to activate leaders see transformation success rates that are three times higher than those of their competitors. Leaders at these companies reimagine and reinvent the business to serve all stakeholders, inspire and enrich the human experience, and execute and innovate through supercharged teams.
Differentiated People Advantage. Combine people and machines for a new model of customer service excellence. Use generative AI’s (GenAI) emerging power to equip frontline staff with behavioral nudges and as support for personalized customer interactions.
Agile Operating Model. Build a minimum viable operating model to support innovation and establish an innovation flywheel. Such a learning loop increases a company’s chances of building the next game-changing product or service and decreases the time needed to bring digital products to market.
Innovation-Driven Culture. Create an innovation-focused culture that embraces risk, fosters collaboration, and grants autonomy to internal teams. Then, use that culture to put customer experience at the heart of everything you do.
Modern Technology Platforms. Ensure that efforts to establish data platforms and modernize core systems start at the top, in the executive suite. Guide modernization initiatives with a rigorous focus on business outcomes. Work backward from the outcome you want to achieve, analyzing the data that has to be liberated and the systems that have to change to accomplish your goals.
AI. Use the excitement generated by GenAI to invigorate AI transformation programs, especially for managing revenue, managing operations, and personalizing customer interactions.
Call it the Instagram effect. People influenced by what they see on social media have higher expectations for travel and the services they get from the travel companies they work with. By cultivating superior people practices and an innovation-based culture, travel laggards can catch up with industry leaders and provide the services that customers want.