Tech: Preparing the hospitality industry for recovery through digital transformation

This article first appeared in The Edge Malaysia Weekly, on October 5, 2020 - October 11, 2020.

Companies watching for hints of change are going to be the most prepared for the recovery stage. (Photo by Abdul Ghani Ismail/The Edge)

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THE Covid-19 pandemic has battered Malaysia’s travel and hospitality industry so severely that even businesses that had been around for decades have had to close their doors. In the first half of 2020, the number of tourist arrivals plunged 68.2% to a mere 4.25 million, from 13.35 million a year ago, with the hotel industry racking up estimated losses of RM3.29 billion in total. Up to 30% of hotels are projected to shut down temporarily or permanently.

The pandemic has also hastened digital transformation, though. A recent study by Facebook and Bain & Co, titled “Digital Consumers of Tomorrow, Here Today”, found that Southeast Asia achieved five years of digital transformation (forecast until 2025) in just one year (2020) and that Malaysia now has the highest percentage of digital consumers in the region, with 83% of its population (aged 15 years and above) counted as digital consumers.

How can digital transformation help struggling hospitality businesses recover?

Adobe’s managing director for Southeast Asia Simon Dale tells The Edge in a recent interview that the pandemic has accelerated digital transformation across industries, forcing businesses to adopt digital technologies to sustain and survive.

He says the way businesses operate, especially those in the travel, hospitality, retail and dining industries, has drastically changed. “Covid-19 has forced an inflection point as it relates to interfacing digitally first with customers and employees, and only using physical interactions to augment where appropriate,” he explains.

To get back on the road to recovery, Dale says travel and hospitality companies have to rethink their offerings and the experiences they provide. And this is where Adobe can help businesses adapt and transform digitally — from understanding what customers are looking for, creating dynamic and personalised content, and delivering it to the right people at the right time.

For many of us, Adobe is usually associated with its application software Adobe Acrobat for viewing, creating and printing files in PDF, or Portable Document Format. But brand owner Adobe Inc also has another growing segment called Adobe Experience Cloud, which focuses on businesses.

Adobe Experience Cloud offers artificial intelligence (AI)-driven solutions for marketing, analytics, advertising and commerce through a comprehensive set of customer experience applications and services.

Basically a one-stop shop for customer experience built on a single, flexible foundation, the products work seamlessly together, allowing for shared real-time data, simplified content and engagement work flows, and true personalisation at scale. The platform also allows users to leverage cutting-edge technology, such as AI and machine learning, through Adobe Sensei, to help businesses meet the respective needs of their customers.

“For travel and hospitality brands, providing good experiences starts long before their customers’ trip begins. Consumers today are relying more on digital channels and platforms for all their travel needs, from researching to booking. Businesses need to consider what they can offer from every perspective and how to make it more meaningful, exciting, helpful or pleasant for their customers,” Dale points out.

He says Adobe can provide the tools to guide consumers along an ideal journey with the brand and keep them coming back for more. “By leaning into data and offering personalised digital experiences in real time, airlines, hoteliers, cruise liners, travel agents and restaurants can contribute to serve their customers, earn trust and loyalty, and recover faster.

“Adobe has innovations to help travel brands create compelling content, deliver personalised experiences for customers and measure the impact.

“We help businesses integrate their content, data and personalisation efforts to transform their digital infrastructure into an intelligent, real-time customer experience powerhouse — giving businesses the tools and technology to provide personalised customer experiences at scale.”

Dale says Adobe also has a strong legacy in the travel and hospitality industry, with nine of the 10 biggest hotel chains and seven of the 10 largest airlines leveraging Adobe Experience Cloud to craft their customer experiences.

In Asia, Adobe is supporting APAC travel and hospitality brands such as Malaysia Airlines Bhd (MAS), the Singapore Tourism Board (STB) and Cathay Pacific’s frequent flyer programme called Asia Miles.

Sharing how Adobe supports MAS in different areas, Dale says, “The airline customer journey is a fragmented one, delivered by many different service providers — from ground handlers to airport operators and lounge operators.” MAS combines transaction data from Amadeus (customer’s digital portfolio, check-in, mobile app) with Adobe Experience Cloud marketing stack to personalise the customer journey using Adobe Experience Manager for content management, Adobe Campaign for direct marketing and push notifications, and Adobe Audience Manager for data management platform.

“By marrying the front-end and the back-end data behind the scenes, it helps MAS connect the dots and build better context of the customer throughout the airline’s customer lifecycle.”

This helps deliver relevant content and offers at the right time through the airline web page, digital interactions and advertisements. For a passenger who has purchased a flight, instead of offering other flight promotions, airlines can offer upgrades for extra legroom or extra baggage for a better experience.

Adobe is also working with STB to connect creativity and data — where emotional quotient meets AI — to leverage data to inform decisions, and technology to support creativity and marketing efforts. STB, he says, has launched several initiatives, including the Tourism Information & Services Hub, Smart Itinerary Planners and Singapore Tourism Analytics Network.

The Asia Miles frequent-flyer programme, meanwhile, leverages Adobe’s technology platform to enable its team to have a view of the complete profile of each customer and reward them with incentives customised to their unique interests.

Dale says it is now more crucial than ever for marketing to be both relevant and respectful of customers when consumer optimism and spending is low.

On the local front, tourism receipts have traditionally been the third-highest contributor to Malaysia’s foreign exchange earnings after manufacturing and commodities. Over the past four years, tourism receipts have totalled RM80 billion annually.

With the cancellation of Visit Malaysia 2020, the focus has shifted to driving the tourism industry with the support of locals.

Nevertheless, the industry as a whole will need to prepare for the eventual re-opening of the country’s borders.

Turning crisis into opportunity

“Brands in the travel and hospitality industry must get ready to turn chaos into opportunity,” Dale says. “Sooner or later, the industry will return to a state of relative normalcy, and when it does, brands need to be ready to promote destinations and services.”

And this can be done by intelligently managing and communicating operational changes, cancellation policies and safety plans. Companies can also make adjustments to their loyalty programmes and provide more flexibility.

“Customer insights are particularly helpful here, as they can help businesses understand what individual travellers are more interested in, be they swap-and-replace offerings or full, fast refunds.

“Be proactive, not just reactive. The ones watching for hints of change are going to be the most prepared for the recovery stage.”

He suggests that brands should be ready to orchestrate new kinds of customer journeys and spot shifting trends. “Savvy companies will use data to understand who has a higher likelihood of rebooking, what appropriate substitutes could be if inventory changes and what support staff is needed to manage this new type of audience,” he adds.

As customers begin to resume travel, travel brands will need to reassess the end-to-end experience to accommodate shifts in customer expectations. For example, airlines will need to work more closely with hotels, tour operators and others in the travel ecosystem to connect these touchpoints and deliver a seamless experience while ensuring customer safety.

Dale says providing exceptional experiences starts with stitching together the first-party data the travel brand owns with third-party data gathered from other sites and platforms, so brands can know more about their customers.

“It is more important now than ever for brands to practise flexibility, good communication and a lot of empathy. While technology supports digital transformation, it is customer-centricity that should drive the strategies. Understanding the customer’s context is critical to serving them,” he adds.

Does digital transformation scare you? Pivoting to the new normal does not have to involve massive organisational shifts, according to Dale.

Start with small but effective changes, especially a focus on customer experience and convenience, such as digital forms and e-signatures.

Apart from the hospitality industry, Adobe also works with customers in other sectors such as education, media and entertainment, as well as financial services. In Malaysia, Taylor’s University is an example of an education-based client.

 

 

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