It’s not just consumers craving a trip after months of lockdowns, restrictions and economic hardship, airlines dream for travel of all forms to resume.
The aviation industry has been hit hard over the past year, losing a projected $157 billion, according to IATA. Passenger numbers have evaporated, and airlines are now desperate for the pandemic to turn a corner and have government restrictions lifted.
The resounding agreement across the industry is that pent up demand for leisure travel is at an all-time high. The desire for a return to somewhat "normality" within the industry is there but for a successful recovery, the plan must start where airlines have the most visibility, digital.
A recent report from McKinsey outlined that leisure travel will be critical in the financial recovery of airlines during COVID-19, and it's right.
After a year of cancelled vacations, there will almost certainly be a reaction from consumers who are looking to re-capture the travel bug. However, while this might ring in as great news for airlines, there will undoubtedly be a large hole to fill in their revenue from decreased business travel.
Though some carriers like Delta are bullish on their outlook, many experts are sceptical. With remote working proving that business can be done without travel, the general sentiment is that it will be a long time before business travel reaches the highs it once reached, if at all.
So, whilst capabilities that power digital selling, such as seamless mobile apps and airline booking sites, were once nice to have, in today’s market they have become imperative.
Appealing to travelers will be increasingly important and a digital strategy built around customers and where, how and when they want to engage, will be the key to successfully gaining the loyalty and trust of customers.
Here are four ways to nail leisure travel in airline recovery efforts:
1. Accurate revenue forecasting relies on data and AI
Despite many predictions of limited travel, forecasting and optimisation of prices and revenue will be key in managing offers and adjusting capacity in real-time.
Whilst definitive answers on when or even how much travel will be allowed continue to look hazy, there will be a return of demand at some point in the coming months.
Other industries, such as retail, have proven that utilising shopping data, for example, can be a key predictor of demand and when and where businesses need to be focusing their efforts. Similar data can help airlines nail down when people will be booking, likely closer to departure than before, and also the length of trips they take.
The beauty of artificial intelligence in this puzzle is that it can take data, learn in real-time, and map out models to prepare airlines for the various scenarios that they may be presented with.
It can help model pricing based on the number of predicted bookings or help forecast where extra revenue can be made in added-on value items. Using such modelling can help give back time to airline sales teams to focus on real-time strategy and optimization, whilst the technology number crunches in the background.
2. Understanding demand and repackaging deals to appeal to travelers
Rather than focusing on frequent flyers as was historically the case for airline deals, travelers will be a more reliable demand source. Ensuring there is clear and data-driven bundling to present travelers with the products they want, will help convert lookers into bookers.
The frequency of travel is likely to remain low for the foreseeable future, but the desire to jet-set around the world is certainly there for consumers who have been stuck inside for so long.
Travelers will now need support in making their booking decisions. Uncertainty is likely to be a key factor in any indecision, so understanding where the demand lies and packaging flexible, personalized deals to match this will help ensure trust between airline and traveler.
This was true before the pandemic, but the increase in flexibility and transparency is no doubt more important to passengers now.
3. Rethinking the role of the customer journey
To lead the recovery efforts, airlines must re-think their digital retailing strategy and utilize as much help as possible to create a seamless shopping, booking, and trip management process for their customers.
Rethinking the role of the customer journey will be key in this new landscape. Airlines have a unique opportunity during this time to revisit how the customer interacts with and purchases a trip and all associated products and services with that airline and third parties.
By diving deep into each interaction, airlines can utilize technology to streamline that shopping and booking journey and ensure transparency so that customers feel comfortable booking a trip again.
There are airlines around the world, including Etihad, already taking the required steps, putting innovation and digital transformation at the core of their upcoming focus.
And in optimising their strategy with digital selling tools, airlines taking this step are preparing themselves for the likely volatile demand and can deliver optimized offers to travelers in an ever-changing marketplace.
4. Getting the most out of data
Despite their best efforts, it is clear that no one can lead the recovery efforts alone – and right now, as resources are thin, it’s important to lean on technology partners to allow airlines to continue to innovate and weather the storm.
Handling data, creating forecasting models and even attempting to predict future demand manually takes up valuable time and resources. Collaboration will be key to understanding the challenges ahead and using experts in tech and data to provide insight into digital selling.
Technology such as AI is complex to understand but when implemented correctly, it can support the workforce and provide added insight to ensure airlines have sure-fire strategies and product packages ready for the recovery fight ahead.
Conclusions
Working with technology providers and third parties is not just a nice-to-have anymore, it’s a necessity to survival.
After nearly a full year of lockdown, restrictions and economic hardship, airlines look desperately towards the road to recovery.
However, it remains clear that those who build their digital strategies around customers to meet their looking and booking needs, will not only survive but thrive in the new landscape of travel.