The State Of Personalization In Travel

The State of

Personalization in Travel

Budget Traveler

Luxury Traveler

Business Traveler

Contents

Introduction What is personalization? Types of personalization Personalization in other industries Personalization in the Travel Industry The Future of Personalization in Travel Conclusion Sources

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© 2015, OLSET Inc, Inc. All rights reserved.

Introduction There is no doubt that personalization is a hot topic in the digital world as a whole. Having said that, nowhere is it being thrown around more than in the travel industry. We’ve seen a dearth of innovation focused on improving conversions in travel for nearly two decades. Whether it’s in a quarterly report from a big OTA, a report from a major GDS or a startup boasting a game-changing new application, we constantly hear about the future of what true personalization can do to improve the experience for millions of travelers around the world. In this white paper we will discuss the past and present forms of personalization to help paint a picture of the future of personalization in our industry.

What is personalization? Besides being a tech buzzword in the 21st century, personalization is pretty self-explanatory, right? For products and services, it means the art of catering and curating according to an individual consumer’s preferences. The concept of personalized service itself is anything but new. In the “good old days” whenever someone wanted to travel, all they needed to do was pay a visit to their local travel agent who already knew their preferences and handled all their bookings for them. All customers needed to do was provide the dates and sometimes a destination and let the agent work their wizardry. Fast-forward to today, and many industries offer similar feelings of personalization online, yet we have not been able to offer such services in travel. Before we expand on that, here are a few examples of terms synonymous with personalization:

One-to-one marketing

Customer segmentation and precision marketing

Loyalty programs with personalized offers

Dynamic pricing

Targeted coupons and promotions

Online product recommendations

Dynamic content in digital channels

© 2015, OLSET Inc, Inc. All rights reserved. 2

Before we dive deeper into exactly what personalization is, let’s explore why personalization is so important What is personalization According to AgileOne, a predictive marketing agency, over 70% of consumers in the US and close to 80% in the UK expect at least some level of personalization while interacting with businesses these days. This didn’t just happen overnight though. Consumers are becoming more and more demanding of this “1-to-1” service from brands because we’re seeing it in more and more industries every year. In today’s modern age of high-tech surveillance, intelligent companies are making billion-dollar strategic investments by tapping into the troves of personal data that consumers are accustomed to providing. These companies plan to cash in by offering customers what they want, when they want it and perhaps before they even realize they want it. Yahoo claims that through the use of a sophisticated algorithm, its content personalization platform “shapes more than 100 million individual home pages each month, driving up time spent online and overall satisfaction.” Brand Keys, a research firm that studies customer loyalty, found that today personalization makes up 30 percent of what draws a consumer to a brand, a 500 percent increase from 6 percent in 1997. Even beyond the customization of home pages and emails, the e-commerce world has been on the personalization bandwagon for many years. According to an Econsultancy report, “94 percent of in-house marketers agree that website personalization is critical to current and future success.” This belief extends far beyond marketers because customers also favor a personalized Web experience. Personalization is becoming a vital part of the user experience. If done correctly, we all know it can limit the frustration of users by melding volumes of content and data into concise and easily consumable targeted messages. Eliminating irrelevant information and making the customer experience more pleasant results in higher return visits, more brand loyalty and massive increases to any company’s bottom line. Amazon uses personalization, Facebook does too and Google does it to the tune of billions in ad revenue each quarter. So, why is it that even though most experts agree that personalization is without a doubt important, examples of actual personalized solutions are still few and far between in the travel industry? Before we answer this question, let us first look at the main types of online personalization.


74% of online consumers get frustrated with websites when content (like offers, ads, promotions) appears that has nothing to do with their interests and this number has risen every year.

(According to a 2013 Study by Janrain)

Types of personalization Over the last 15 years several online industries have taken great strides toward personalization as users have become more comfortable with sharing their personal information. Today’s online personalization offerings can be broken into three main categories (remember back to the mid-1990s when it was hard for Amazon to even get credit card info from people?):


User Driven Personalization (Implied personalization) personalization based on the data that users give freely and store in profiles, accounts, bios, pages etc. An extension of User Driven Personalization is Collaborative Filtering which also includes the individual’s purchase history. Companies like Amazon and Netflix have proven this to be a very effective personalization technique. If you bought this book about organic farming, you’ll most likely like this book on organic cooking. If you’ve watched 3 horror movies in the past month, we can suggest horror films that you’ll most likely enjoy. You fill out detailed preferences and tell the company what you want to see, and it curates your experience based on the data you made available.

Community Driven Personalization (Social Personalization) the deepest form of personalization and a 2-sided matching engine. On one hand, it uses user-focused data, and companies analyze users’ visit histories, browsing patterns, specific device types etc. On the other hand, the inventory (movies, books, hotels etc.) is analyzed and categorized. Once both sides are understood to a very deep level, the recommendation algorithm can provide the best options for a specific user and customize the offering provided to them. This provides users with the best-tailored service possible and is most likely the true future of personalization. OLSET and our partners use machine learning, utilizing both implied and inferred data in various forms to offer new and superior levels of personalization to users. We will go deeper into this in the coming sections of the white paper.

Experiential Adaptive Personalization (knowledge system personalization) the process of using a users’ social media data (inferred data) to offer them personalized recommendations and experiences. To use a famous travel industry example of this level of personalization, think back to the last time you visited TripAdvisor; were you signed in? Probably not, right? Did you still get a fully customized social visit? Yep, you bet you did. Through its partnership with Facebook, TripAdvisor curates its home page in real time to show you the trips, reviews, likes and forum posts of your immediate circle.

If any of the above strategies seem out of reach for your company, think of making a first foray into personalization with a very easy and very rewarding first step. This may seem obvious to some who read this, but many have yet to try even the easiest first step in personalizing the user experience: differentiating between your new and existing customers. Even this small step of changing the user’s experience based on the simple segmentation of differentiating a first-time visitor from a returning one, and curating the content to match, will improve the user experience and make returning visitors feel more at home. Another option is to change the default destinations shown to travelers on the Determining the type of personalization users are most comfortable with is hard because most of the time users are oblivious to the technical workings behind the scenes. Having said that, in a recent international poll, more than half of users (58%) said they want personalization based only on user information they proactively provide, while 38% indicated that they are happy to specify their individual interests so that the site can personalize content for them.

Beyond this, it’s difficult to tell whether users would truly appreciate the superior shopping experience over their utmost privacy. What we do know is that the average user’s willingness to divulge information is greatly on the rise, as is their dependence on better recommendations. We also know that loyal and returning users are interested in the personalized experience. Along with the multiple types of personalization, it is also worth noting that there are companies that offer solutions for personalization as a service (including www.olset.com, if you’re in the travel industry) in the form of licensed APIs to existing brands. So if the task feels daunting or you do not have the correct resources in place, there are alternatives to building an in-house personalization team. These companies enable you to focus on what you do best and outsource the personalization aspects.

Personalization in other industries We’ve already discussed the most famous examples of personalization on the Web today, with the likes of Netflix, Amazon and Google, but how are some other online industries benefiting from personalization? Let’s quickly examine the sports industry. The online arm of the National Football League does an amazing job of customizing its users’ experience. An example we noticed while researching this paper is that if you are a signed-in user on NFL.com, not only does the site address you by name, but it also shows you your favorite team’s jerseys with your last name on the back of them as you browse. This is more than just e-commerce; this is helping the user feel comfortable, wanted and like the company knows who they are, just like if you walked into your own favorite sports shop and the store owner you regularly talked to showed you the new jerseys they just got in from your favorite team. The personalization we now see in the online music industry is much more ubiquitous. Music streaming services such as Pandora and Spotify would literally be nothing without complex personalization algorithms to deliver customized content recommendations to millions of users every day.


Other elite, global brands, like Nike, Coca-Cola and Oakley Sunglasses, have also led the charge toward personalization. By providing customization options, brands not only boost conversions and revenue, but they also raise loyalty at a time when it’s more important than ever. In a recent Bain survey of more than 1,200 global executives across a range of industries, 67% of respondents believed their customers are becoming less loyal to their brand. Personalization also helps companies reach specific customer segments that are less well known, like millennials.


Personalization also helps companies reach specific

customers, such as the seemingly less predictable

millennial generation.


Personalization In the Travel Industry Up to this point we discussed the history of online personalization and its prevalence in a myriad of other industries, but what about the travel industry? Earlier we posed the questions: Why has personalization in travel focused on advertising, and why hasn’t travel caught up to other similarly sized online industries when it comes to actual product offerings? To start off with, travel is one of the most logistically complex and data-heavy consumer-facing industries in the world. It may seem like a simple transaction to those outside the industry. A customer on Expedia or Priceline finds a flight or hotel, enters their info and checks out. But on the backend there’s a complex network of agreements, suppliers, clients, brick-and-mortar businesses and often even international players involved. An additional reason for the travel industry’s lagging behind is that travel companies continue to generate significant revenue without being forced to innovate. Brian Harniman, former VP of marketing at Priceline and current partner at Brand New Matter, encapsulated this by saying, “larger sites have shied away from personalization for so long because it’s hard to do well, and they’ve gravitated to easier projects—the big yellow button project always wins. Consumers deserve this functionality, but the slow adoption is because of the incumbents lack of action.” Many travel brands have indicated the quantity of data they have as a barrier toward increasing the levels of personalization they offer. With the recent advent of big data technologies making the management of this data much more feasible, there should no longer be a barrier to accessing their data “treasure trove.” Whether travel companies get there themselves or use 3rd-party personalization solutions like OLSET, brands that use their data for personalizing the experience for every traveler will be significantly more successful than others, who will be left behind. This problem is clearly summarized in recent research by Kissmetrics, as shown below:

[ * Image courtesy of kissmetrics.com]


We at OLSET believe that the best way to start

personalizing your users’ experiences is by unleashing the

power of the travel data you already possess. Online travel

agencies and travel management companies have large

quantities of data about past searches, filters and

bookings, but this information is currently extremely

underutilized.

The points raised above don’t mean there aren’t some

early indications of personalization in the travel industry.

One good example of a travel industry leader making

strides is Sabre Corporation, a leading technology provider

to the global travel and tourism industry. Sabre recently

announced the launch of three new data-driven

personalization solutions. The three new solutions, Sabre’s

Customer Data Hub, Customer Experience Manager and

industry-first Dynamic Retailer, source insights on

customers from multiple touch points and then use that

data to create personalized, meaningful engagements

with travelers. The offerings are very new, but we expect

Sabre to share more information about its successes in

the coming quarter.

Amadeus IT Group, another industry giant, has started creating set

traveler types with the hopes of pushing the industry toward mass

personalization. Our favorite traveler type to cater to (and the one

we built www.hotelmatch.me for) is the “simplicity searchers,” who

Amadeus says “value above everything else transparency and

seamless travel in their planning and holiday-making and are

willing to outsource their decision-making to trusted parties.

Simplicity Searchers will prefer to do as little as possible when

planning a holiday and choose to pass on that responsibility to

third parties.” This categorization of the different types of travelers

beyond just the simple criteria of age and budget is the first step to

personalizing travel booking. Flight search is a clear candidate for

disruption, and the recent Amadeus IT Group announcement of

delivering branded fares is a good step in this direction. With the

introduction of NDC, travel sellers could offer their customers the

ability to precisely customize their search with preferred optional

services and preferred destinations for preferred seasons. The

travel industry was one of the first to offer solutions online and

harness the power of real-time connectivity to the Internet, and

travel agents, tour operators, aggregators and airlines introduced

dynamic packaging and made it fast and simple for people to

custom-build their very own vacation. But travel sellers can go

further with personalization.

What could they do?


The future of personalization in Travel

Everyone has their own ideas for the future of the travel industry, but anyone in the know should agree that the next few years will be pivotal. OLSET founder and CEO Gadi Bashvitz, who in ten years of managing business development in the corporate software world traveled more than 2 million miles, also believes booking travel will be very different in the future. In a recent interview he said,

We have a long way to go in personalizing travel. Whether you are traveling for business

or for leisure, brands will soon start using all the data they have about you to automate the

booking process for you.

You will no longer have to sift through hundreds of options that are not relevant for you, and

do all that boring research, but instead will only see flights, hotels and other travel services

that match your preferences along with an explanation why each offer is provided to you. This

will enable you, as a traveler, to make more informed and quick decisions

Other major industry players echo these sentiments. When posed with the question about his beliefs about the future of travel at PhocusWright a few years ago, Brad Gerstner, a travel industry insider and investor, said, “The next ten years will be about more of the artificial intelligence that is going to predicatively help understand what I want, and instead of me having to spend so much time shopping, booking, researching etc., it’s going to know in my calendar, I’m going here it’s going to search all the sites for me and book it on my behalf.”

Amadeus IT group summed up a recent white paper in one succinct point that we definitely agree with: “Tomorrow’s travelers will want to travel the world in just one way—their own way.” Think of personalization, the travel industry’s biggest “buzzword,” as a tube of toothpaste; once you let the toothpaste out, there is no going back. Travelers will never want to go back to being anonymous after several bookings. They already rave about Netflix’s suggestions and Amazon’s choices for their purchases. As brands push more and more toothpaste out of the proverbial tube, users grow more accustomed to personalized experiences and demand personalization everywhere. Because of this, users are already beginning to expect brands to offer custom recommendations and exponentially more so when you ask them to divulge personal information or ask them to log in/sign up using a social media profile.

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Most travel sites offer a social login and automatically store a user’s past trips, hotel stays, flight bookings and other experiences, but what about the ability to anticipate someone’s need to travel before they initiate a booking? In the future, we won’t have to prompt booking solutions. They will recognize our need to travel the moment the need arises. This data can be a great source for travel preference information, yielding information on the customer’s demographics, preferences and choice patterns. All of this could be used to generate increasingly more accurate personalized recommendations for future travel options. Sending custom emails is not the future; travel brands should already be doing this. Including personalized offers of vacation bundles in emails is pretty standard, but what about going beyond this?

Tomorrow’s travelers will want to travel the world in just one way – their own way

” “

What about travel apps that, upon opening them, could

recognize your geo-location and source the nearest airport

while simultaneously pulling up your travel history to suggest

recent locations without you doing a thing? What if an app,

over time, realized you normally only book 3 kinds of trips,

romantic personal trips, business meeting trips and family

fun trips, and could instantly ask you which type of trip this is

or even go further and infer what trip you are going on based

on the data provided? Imagine accepting a meeting invite in

another city and instantly getting a recommended itinerary

in your inbox for those dates in that city, complete with flight,

hotel, ground transportation and restaurant bookings. OLSET

has created APIs based on big data, NLP and

recommendation engines that instantly inject this level of

personalization into any TMC or OTA. We’ve found that our

customers’ travelers are delighted by the simple fact of being

remembered. For too long travelers with many past bookings

on their favorite OTA have been (mis)treated to the same

content as a brand new visitor, and we believe that the future

of travel includes rewarding brand loyalty though a superior

user experience each and every time the visitor returns.

© 2015, OLSET Inc, Inc. All rights reserved.

Conclusion

As business travel shifts for millions more people from a once-a-year investment to a frequent necessity, and as the world becomes more connected, the need for better, more intelligent travel services is greater than ever. Billions of data points are readily available, and many other industries have already capitalized on savvy online users’ willingness to divulge the information they need to save them time and money.

Since the travel industry in the past has always been at the forefront of innovation, it’s high time that we all invest in personalization, and companies like OLSET are here to make the transition less painful for TMCs and OTAs around the globe. Through licensing personalization APIs, a TMC or an OTA can save years launching a solution and millions of dollars on development costs by utilizing the existing technologies of specialized personalization firms. These established companies should continue to focus on their core business while injecting more intelligent recommendations through partnerships with companies that specialize in offering those services to other businesses. Personalization is a buzzword, without a doubt, but it is truly the future of the Web.

11 © 2015, OLSET Inc, Inc. All rights reserved.

Sources

http://www.tnooz.com/article/personalization-can-define-future-travel-industry/

http://skift.com/2014/09/16/free-skift-report-the-future-of-personalized-marketing-in-travel/

http://www.clickz.com/clickz/column/2374653/the-importance-of-personalization

http://www.forbes.com/sites/barbarathau/2014/01/24/why-the-smart-use-of-big-data-will-transform-the-retail-industry/

http://www.slideshare.net/write2vin?utm_campaign=profiletracking&utm_medium=sssite&utm_source=ssslideview

http://www.coca-colacompany.com/stories/summer-of-sharing-share-a-coke-campaign-rolls-out-in-the-us

http://www.revinate.com/blog/2014/11/hotels-need-personalize-guest-experience/

http://www.digitalclaritygroup.com/highly-effective-personalization/

http://www.agilone.com/blog/types-of-personalization-consumers-actually-want-infographic/

http://blog.dudamobile.com/different-types-website-personalization/

https://blog.kissmetrics.com/online-personalization/

http://www.bain.com/publications/articles/making-it-personal-rules-for-success-in-product-customization.aspx

https://hbr.org/2014/09/pushing-the-limits-of-personalization

https://advertising.yahoo.com/Insights/BALANCING-ACT.html

https://www.dynamicyield.com/2014/06/10-web-personalization-stats/

http://www.seobythesea.com/2006/07/an-early-personalized-recommendation-system-firefly/

http://insights.wired.com/profiles/blogs/how-personalization-will-change-the-energy-industry#axzz3e5zykeKL

http://insights-on-business.com/retail/the-art-and-science-of-personalization/

http://www.sabre.com/newsroom/sabre-launches-three-new-data-driven-personalization-solutions-including-dynamic-travel-offers-

to-revitalize-airline-operations/


Written by:

Andrew Lee Miller

Marketing Director

OLSET Inc.

[email protected]

About OLSET: OLSET Inc. is a personalization technology provider focused on disrupting the multi-billion dollar

travel industry by helping online travel agencies (OTAs) and travel manage-ment companies (TMCs) personalize

and automate more intelligent travel bookings. OLSET’s big data technology enables travel providers to improve

conversion rates and drive hotel attach-rates by offering higher levels of personalization.

For more information email visit www.olset.com or email [email protected]

© 2015, OLSET Inc, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is

based on best available resources and the opinions of the OLSET team. Hotel-match.me is also a registered

product of OLSET Inc. All other trademarks are the property of their companies.