Which comes first – the channel or the content? And who cares?
Technology and artificial intelligence are revolutionizing travel booking channels with more and more chatbots talking to people, which creates greater time for trained personnel to focus on core, repeat travel customers. However, what traveler buyers really want is inventory access, friction-free booking and actionable data – regardless of the channel or latest whizbang tool. On the other hand, while much is being made of omnichannel, cross-channel and direct channel bookings, from the perspective of travel managers, the means is far less important than the end.
For those who think omnichannel has something to do with TV reception, you’ve dialed into the wrong station. To cut through the static, Business Travel Executive tuned into travel industry experts to clear the air.
John Morhous, chief experience officer at Flight Centre Travel Group-Corporate Brands, says he both agrees and disagrees with the stated reasons given for which marketing strategy is of greater importance to travel buyers. “While I think there has been way too much focus applied to the ins and outs of distribution channels, if you don’t give your travelers access to a wide range of inventory, the travel program loses trust, and people will go outside of it. Even the most well managed programs still have significant leakage,” Morhous says. “So, while you don’t want to focus too much on one aspect, do make sure you’re providing the right content through the right channels. I would necessarily say that the means are less important than the end – and not far less. They are both important”
Coming to Terms
Omnichannel customer engagement can be boiled down to the Four C’s: Customer experience, context, content and collaboration. All told, it is regarded as a customer experience strategy that creates connected and consistent customer interactions across channels and touchpoints.
The key idea focuses on providing a seamless and unified experience for customers, regardless of which channel they use, for example, website, app, social media or in-store. In one scenario, a customer initiates a purchase using their phone, continues to do so on their computer, and then completes it in-store. In each step of the transaction, a same level of personalization and information is present. The goal is to enhance customer satisfaction and loyalty by making interactions convenient and personalized.
Cross Channel marketing involves using multiple channels to communicate with customers, but these channels are connected and can share data. The strategy allows for a more coordinated customer experience by enabling data sharing between channels, like a customer’s purchase history or preferences. A working example is a customer who browses a product on a website and then receives an e-mail about a related offer. The goal is to improve customer engagement and drive conversions by providing a more cohesive experience across different channels.
More specific to the travel industry, Direct Channel refers to customers making purchases or reservations directly with an airline or hotel rather than through a third-party platform like an online travel booking tool. The impetus behind it is that it allows suppliers to maintain control over the customer experience and build stronger relationships with their customers. In this scenario, a customer books a hotel room directly through the hotel’s website or calls the hotel directly. The end goal is to increase revenue, reduce costs of distribution and gain valuable customer data.
Change the Channel
That brings us back to the discussion of which is of greater importance, customer experience or the distribution channel. Shelly Younger, managing director of airline retailing at ARC, says that in the airline industry, “customer experience drives technology changes. Airlines focus on providing personalized content.” Their focus reflects a recognition that customer experience is “vital to their businesses,” she adds. “Omnichannel is an important strategy for airlines because it’s intended to give travel managers and passengers consistent customer experience across any channel where they purchase air content.”
Steve Reynolds, chief strategy officer at Emburse, a spend management platform, is responsible for leading the company’s initiative to integrate and innovate across end-to-end T&E. Reynolds says a “key driver” behind the changes being seen is the termination of rate parity agreements with airlines and new technology which enables supplier direct purchases that are compliant. “TMC incentives and costs are increasing, causing buyers and suppliers to question the value of the channel,” he says.
Taking a different tack, Charlie Sultan, president of Concur Travel at SAP, says he “largely agrees” that what travel buyers prioritize as important is not the same as travelers, who care less about the channels and more about the results. Still, he believes the productivity component should be clarified or amplified.
“While emerging technologies like AI and AI copilots could transform how bookings are made and support is provided, at the end of the day, travel buyers are focused on productivity: Access to the right content, seamless experiences, and data they can use, not just for travel, but managing the experience from planning through expensing and later reporting.”
According to the SAP Concur Global Business Travel Annual Survey, nearly “all travel managers experience disconnects between the tasks their company expects them to perform and the tools, support and budget provided. Managers are asked to demonstrate ROI, but don’t have the right data and tools to accomplish this.”
The survey goes on to state that the evolution of booking channels and options is foundational to delivering the outcomes sought by the organization. Thus, technologies like AI and automation, along with omnichannel strategies enable more frictionless booking, smarter inventory management and better data analysis, ultimately yielding more efficient decision-making and delivering greater value across the organization. “So, while the method may seem secondary, it plays a critical role in shaping the experience and value delivered,” the report concludes.
Adapting to AI
As in the timeless children’s book, Mike Mulligan and His Steam Shovel, published in 1939, the angst of how people perceive and adapt to technological change, how workers deal with automation, and how “human versus machine” changes jobs, is a teachable lesson about adaptation and strengths and weaknesses.
“From a technological standpoint,” says Sultan, “AI-driven solutions offer significant strengths such as increased efficiency, real-time data processing, and personalized user experiences.” He explains that the integration of SAP Concur’s generative AI copilot Joule into their solutions aims to “automate T&E processes to reduce manual effort and enhance accuracy.”
Furthermore, he says, “It’s critical that AI-powered processes are user friendly and align with the specific needs of travel buyers. Over-reliance on automation without a cohesive strategy could lead to fragmented experience that lacks the human touch.”
By contrast, he says that on the buyer and customer side, “the emphasis on access to inventory and actionable data is a strength that drives us to continually refine our solutions to meet these expectations.” Despite a strong appetite for AI, he says some buyers are hesitant to adopt new technologies due to concerns about data security or the learning curve that comes with new systems.
According to Younger, “Travel buyers want access to content in an efficient and user-friendly way. Technology changes that have already happened, and that will happen in the future, are essential to making that a reality. Travel buyers’ needs and wants are satisfied through an airline’s strategy and the technology that enables it.”
Closely following the latest distribution changes requires providing the widest range of content, Morhous says, which in turn “builds trust with travelers who use the program.” But doing so can be “costly and time consuming because every supplier is doing things differently,” he cautions.
“You could argue that we’ll never get back to a place of true parity because of the influence of loyalty programs and suppliers choosing to not offer some products through indirect channels. Instead of trying to decide which approach is best, I would just assess what matters the most to your company and program and focus your energies on what has the best impact,” Morhous advises.
Let the Best Channel Win
Reynolds says trying to unravel the strengths and weaknesses of the differing approaches used by travel buyers to serve their customers is “a lot to unpack” in a few sentences. Perhaps bypassing the means and getting to the heart of the issue, Reynolds asks, “Do travel managers lose control and the ability to shift share if they allow travelers to go direct? Do costs increase or decrease?” Several companies, he says, have implemented supplier direct programs providing the traveler choice. “You can either book direct with approved suppliers or book thru the TMC. Let the best channel win.”
No marketing discussion is complete without “real world” case narratives. “The technology to create a chatbot that captures your origin and destinations has existed for over a decade,” says Sultan. “The revolutionary part is being able to integrate data from multiple systems to create solutions for the traveler and travel manager without needing them to piece together trip details. The data and the rigor to which you apply the models to the data is the secret sauce.”
With natively connected systems like SAP Business Suite, data can “work seamlessly” across multiple platforms and offer actionable results in familiar formats and reports, he says. “If a traveler would like to add a few personal days onto a business trip, the system could see if the employee still has vacation time, request that time off, and modify his reservation.”
According to Morhous, “Everyone thinks this is a travel industry problem, but you see the same changes happening elsewhere.” To illustrate, he says he used to be able to buy cable TV and get access to hundreds of pieces of content through a single interface. To access the same number of content pieces now, he needs to buy four to six different streaming services, all with their own interfaces. “It’s just as confusing trying to remember which one is where. Technology is just advancing very quickly, and empowering organizations of all types and sizes to provide more tailored services to their customers at a scale that was unimaginable just a few years ago. You won’t be able to change these forces. You just need to adapt your program to support it.”
Younger shares a bigger picture. “Collaboration across the industry is key to meeting customers’ needs, like what ARC is doing through its NDC Advancement Working Group and Buyers Council. These groups bring industry partners together to determine the most important topics and work toward best practices that benefit the entire ecosystem.”
