The experience economy is emerging as a key trend in the travel and tourism industry, as hotels, activity providers, and airlines strive to match customer demand for unique experiences. Businesses must adapt to changing tastes to optimize the opportunities available.
According to GlobalData’s Experience Economy in Travel and Tourism report, social media has accelerated the emergence of special interest travel, with holidaymakers, particularly millennials, valuing access to experiences when planning a vacation.
For example, in the US, spending on tourist experiences has increased fourfold in recent years, with millennials using their considerable purchasing power to pay for activities and alternative accommodations rather than on more mainstream options.
This trend of ‘experience over souvenirs’ presents an opportunity for hospitality providers to anticipate and provide more personalized experiences. A key enabling factor within this evolving landscape is the cloud.
How the cloud can help enhance customer experiences in hospitality
GlobalData predicts that total online travel sales will reach just over half a trillion dollars by 2027 [i]. Cloud technologies are at the core of this sea-change. Cloud investment by travel and leisure companies is predicted to reach $21.87bn in 2028, up from $6.33bn in 2019.
Companies with strong cloud architectures can smoothly adjust to changing circumstances, scaling back operations when demand is low and rapidly developing new products to capitalize on new market possibilities. Cloud computing also streamlines operational processes and service delivery while enhancing customer convenience.
By analyzing vast amounts of data, businesses can gain insights into customer preferences, behavior patterns, and journey touchpoints, as well as implement dynamic pricing and personalization for individuals.
Cloud-based analytics tools allow for real-time analysis, enabling targeted promotions and personalized recommendations for guests. At the same time, relationship management systems track interactions across channels. Meanwhile, real-time communication and collaboration tools – such as apps – encourage customer engagement to enhance the overall guest experience.
Enabling hospitality businesses to adapt to changing customer demands
Digital technology and social media have significantly influenced travel planning and booking. Innovations such as interactive maps, destination advertising, and specialized travel apps have changed the buyer-seller dynamic in the travel industry.
Furthermore, self-service portals allow travelers to manage bookings, check-in for flights, and access travel information from any device. Businesses have much to gain if they can accommodate these changing needs while providing new services.
Jerod Ng is the global hospitality lead at SAP, which offers software and services for the hospitality sector. “As consumer expectations evolve, hotels that can leverage technologies that operate based on personalized services, offering targeted marketing, will have a competitive edge,” he says.
Jerrod explains that SAP has five key strategic priorities for hospitality, which are: customer experience, operational agility and scalability, achieving financial excellence for sustainable growth, workforce management, and harmonizing data for a single source of truth.
With the right cloud-based solutions, hotels can centralize their data to facilitate better collaboration among hotel teams and external partners while ensuring alignment with broader marketing objectives and brand values.
By efficiently managing large volumes of content across social networks, compiling social media analytics, and monitoring guest interactions, cloud platforms enhance responsiveness, provide guest feedback in real-time, and boost customer satisfaction by building stronger relationships.
Download the document below to learn more about how AI and automation unlock efficiencies for hospitality businesses.
[i] Cloud Computing in Travel and Tourism – Thematic Intelligence – GlobalData, https://www.globaldata.com/store/report/cloud-computing-in-travel-and-tourism-theme-analysis.
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