Travel Brands Seek New Ways to Retain Customers Amid Increased Competition

Travel brands are facing increased competition and disruption from various sources, including geopolitical tensions and climate events, which can lead to decreased demand for their services. In response to these challenges, airlines, hotels, tour operators, and destination management companies are seeking new ways to retain customers without relying solely on broad discounts.

One potential solution is real-time personalization, which involves understanding what matters to each individual traveler and providing them with relevant experiences that meet their needs. This approach requires brands to put preference data to use quickly and deliver an experience that matches the marketing promise made to travelers.

At a recent executive roundtable discussion, Graham Smith from Bloomreach emphasized the importance of proving to travelers that a brand understands their preferences and engagement habits. By doing so, brands can strengthen loyalty and convert preference data into tangible value for customers.

The discussion highlighted the limitations of relying on broad discounts alone to retain customers. European travel groups are increasingly investing in loyalty programs as an alternative approach, seeking to shed their mass-market, discount-led models and instead focus on building meaningful relationships with travelers.

In the face of intensifying competition, travel brands must adapt and innovate if they hope to succeed. Real-time personalization offers a promising avenue for earning customer loyalty without sacrificing profitability, but it requires a deep understanding of individual preferences and timely engagement strategies to be effective.

To effectively personalize experiences for travelers, brands must engage with them long before a transaction takes place. This means not sending messages that ignore previous stays, known destinations, or demonstrated interests to returning guests.

A connected digital journey is key to staying relevant until the traveler is ready to act. European businesses such as Haven and On the Beach are at the forefront of this approach, offering personalized experiences for their customers. Meanwhile, many North American travel and hospitality brands are only just beginning to catch up.

Different parts of the value chain have different use cases when it comes to personalization. Airlines often focus on tailoring pricing, baggage allowances, seats, and priority benefits to individual passengers, yet may still miss important details that matter to them. Hotels, on the other hand, have more opportunities to personalize services such as dining, messaging, and activities for their guests.

When it comes to collecting traveler preferences, brands must strike a balance between gathering information and respecting their customers' boundaries. Asking questions gradually, making participation optional, and showing value quickly can help build trust with travelers and encourage them to share more about themselves.

Travelers are more likely to engage with messages that reflect what they have already shared with the brand. By taking a thoughtful approach to personalization, brands can create meaningful connections with their customers and stay top of mind until the moment they are ready to book.

Collecting customer data without using it effectively can be counterproductive and even irritating for travelers. Brands must ensure that they utilize the information they gather to create meaningful connections with their customers.

Reviews of a stay can also play a crucial role in personalization. By analyzing feedback from promoters and detractors, hotels and resorts can tailor follow-up communications to meet each guest's preferences. This targeted approach can be especially useful for encouraging repeat bookings.

When building direct relationships with guests, brands must tread carefully. Displaying a QR code at check-in or sending a nonaggressive prompt via email can encourage guests who booked through an online travel agency to opt in to a direct relationship. However, operators must balance their desire for direct connections with the limitations of platforms like Airbnb.

Ultimately, personalization requires a thoughtful and data-driven approach that prioritizes customer preferences above all else. By doing so, brands can create lasting relationships with travelers that extend far beyond a single stay.