In an interview with Dr. Sanjay Joshi , Mike Abell, Senior Vice President of Travel, Transportation & Hospitality talks about some of the key industry trends, the critical play of hype-personalization, role of intermediaries, significance of retail opportunities, AI, ML, NLP in shaping customer interactions and looming talent crisis, and the road ahead for mid-tier IT services firms.
Coforge: The Travel and Transportation sector is growing exponentially around the world. There is strong evidence of a burgeoning middle class that is making it possible for more people to travel than ever before. What do you believe is the role of technology in enabling the Travel and Transportation sector to keep up with the increasing number of passengers and their expectations? Could you indicate a few specific challenges and trends that you foresee on this journey?
Mike Abell: With air traffic expected to double over the next twenty years and a doubling of passenger traffic. This will mean severe congestion and capacity constraints at the top 100 airports. In order to handle this load, airline and airports need to adapt to handle this tremendous growth in demand and customer expectations and in particular be able to deal with the inevitable disruptions that will impact baggage, crew, flight operations and customers. It is imperative that they leverage Digitization and Emerging Technologies in order to transform their processes. Travel companies will need to embrace Digital Commerce, Artificial Intelligence/ Machine Learning, Predictive Analytics, IoT, and Intelligent Automation for a smooth transition.
Beyond addressing dynamic customer expectations and disruptive technologies, travel companies need to be more agile and nimble in order to be a step ahead of intense competition. They should be ready to scale up quickly by adapting Cloud technologies and proven agile and automation practices.
Intelligent Automation using AI/ML, cognitive computing, and NLP is helping the travel industry automate routine tasks, enable better decision-making and improve operations. It’s an exciting time to be in the Travel and Transportation sector!
Coforge: Digital transformation is transforming the world as we know it and its impact on the travel industry is being widely felt. How is digital transformation enabling better customer service and a more seamless travel experience at the same time? What is your view on the perspective that digital technologies will strengthen brand stickiness through better personalization?
Mike Abell: Travel companies that are truly customer-centric need to ensure that they can deliver hyper-personalized and seamless experiences along the entire journey to their customers. Every customer interaction, be it though the website/mobile/call center/employees, needs to be consistent, contextual and personalized to ensure a high level of customer service and a seamless customer journey. Personalization plays a huge role in making the brand conversation and recall more natural and lasting. This is directly driving the travel industry to adopt a more digital approach to maximizing ancillary revenue as well by offering the right product and service to the customer at the right time.
Emerging technologies and initiatives such as IoT, Biometrics, One ID, Blockchain, Smart Airport, and Business Process Simplification are enabling the vision of a more seamless customer journey and experience for the passengers at the airports. Identity Management will ensure that the end-to-end journey of the customer is made absolutely seamless through smoother check-in, security, and immigration processing.
Coforge: With growing innovation in the Travel and Transportation industry, what role do intermediaries play? How do you foresee that evolving in the next few years?
Mike Abell: The way the world searches, plans, and buys travel products online is changing dramatically as digital technologies and a dynamic commercial environment spur product innovation to new heights. The traditional intermediaries like GDS, travel management companies, and travel agencies are all undergoing evolutionary changes.
New Distribution Capability (NDC) and One Order are at the heart of changing the overall distribution landscape. NDC enables distribution of rich content and also has the ability to personalize the content based on user profiles, thus catering to the overall need for offering personalized services to end consumers. While One Order enables more efficient order management and fulfilment, NDC and One Order will together significantly drive down the overall cost of distribution.
Coforge: According to IdeaWorks for 2017, the top 10 airlines generated USD 29.7 Billion in ancillary revenue, up from USD 2.7 Billion in 2007. Has the Travel industry embraced the ‘retail’ model and have airlines become good ‘retailers’ now?
Mike Abell: In a study conducted by Coforge, we found a strong correlation between airline profitability and revenue generated through ancillaries. It is imperative for Airlines to focus on ancillaries to be profitable. Ancillaries’ sell requires significant personalization and contextualization. In today’s competitive environment where there is a sea change in passenger expectations and growing emphasis on ‘experiences,’ airlines have to ensure that they can provide ‘Digital Retailing’ through intelligent and integrated platforms. Retailing is increasingly conducted through a consistent omni-channel experience that can effectively supplement the brand. Ancillary revenue is being generated through a plethora of products and services with a la carte model being the most popular. Different travel-related products are on offer like baggage, seat assignment, cabin upgrades, food, and so on. Airlines are also getting into third party products like hotels, car rentals, and insurance. Frequent flyer programs are also big revenue generators.
With a huge focus on flexibility and convenience, airlines are now offering branded fares along with various innovative a la carte services. The opportunities for selling products and services do not end with the booking flow anymore; there are opportunities all along the complete customer journey. There are retail opportunities in the airport as well as in inflight retail. It has become important for airlines to utilize the immense treasure trove of passenger data available with them to provide the
most relevant offers, products, and services to them. Using data, intelligent analysis, and digital integration to enable better merchandising, airlines can take their ‘retail’ model to the next level in future.
Coforge: The Travel and Transportation industry is constantly trying to enhance customer service while providing their customers with seamless customer journeys. How can Cognitive Computing effectively help the industry deal with ever-increasing number of passengers and improve the customer journey experience?
Mike Abell: AI along with Machine Learning, NLP, Deep Learning, Neural Networks and Sentiment Analysis is paving the way for new types of customer interactions in the travel industry. Voice Interactions, Virtual Assistants, and Chatbots are starting to alter the customer service landscape through Alexa, Echo, Siri, and Cortana etc. Cognitive Computing has the potential to help the travel industry optimize resources, improve service and safety, reduce costs, and improve disruption handling. Cognitive Computing is being deployed in the areas of facial recognition/biometrics/passenger identification, check-in, screening, security, prediction of delays/disruption management, and customer service interactions. Airlines and airports alike are focusing on how they can leverage the passenger and operational data available with them for predictive analysis using machine learning to create more intuitive and seamless business processes for their passengers.
Coforge: The global market size for Blockchain technology is expected to reach USD 7.59 Billion by 2024, by registering a 37.2% CAGR during 2018-2024. How will Blockchain transform the Travel and Transportation sector? Which areas do you expect to be positively impacted?
Mike Abell: Travel industry have abundant passenger and operational data with them, but it is generally present in silos. The primary reason is the presence of multiple disparate IT systems and players that enable numerous day to day operations. Multiple systems, processes, and intermediaries end up making most core processes to be non-homogenous and rigid with undue reliance on outdated technology. Lack of transparency is another unfortunate outcome of such a confluence of factors.
Blockchain will streamline multiple processes by eliminating or minimizing the role of intermediaries with more direct control to the airlines, its customers and suppliers. It will enable the Airline Industry to configure and implement more streamlined, efficient and cost-effective ways of doing business by improving existing processes.
Blockchain with its inherent advantages and benefits could be potentially utilized in multiple business areas such as accounts reconciliation, cargo, loyalty, operations, baggage handling, identity management and passenger compensation. Blockchain when combined with other emerging technologies like IoT and industry initiatives like NDC and ONE Order can bring about unprecedented efficiencies.
Coforge: Thank you for your insights on the trends sweeping the Travel and Transportation sector and the role of disruptive technologies in them. You have a unique perspective as you work with many airline companies around the world. What, in your view, is going to be critical for mid-tier IT majors like Coforge in the next 3 years?
Mike Abell: It is important to be agile, nimble, and quick to respond to changes happening on both business as well as technological fronts. Customer-centricity along with agility is what mid-tier firms need to focus on. Mid-tier firms focusing on Travel and Transportation are uniquely positioned to address this market and deliver creative solutions to the customer. Such firms are not usually heavily burdened with protecting their legacy investments and ongoing revenues and hence, can serve the best interest of the customer by focusing on emerging technologies. These firms are going to be more likely digital disruptors, business enhancers, and the ones to watch.