Build a resilient travel value chain with harmonious ecosystems
14 MINS READ
Leverage digital avenues for harmony across travel ecosystems
The travel industry is recovering from the shock caused by COVID as countries remove travel restrictions and travelers yearn for the sense of relaxation, rejuvenation, and freedom that travel provides.
The industry has faced a tumultuous time with organizations and workforce impacted alike. Some businesses have acted swiftly, forging partnerships that seemed unlikely in the past, finding innovative ways to improve customer trust, tapping into new avenues underpinned by digital transformations. For example, Singapore Airlines set up a taskforce to look at the customer journey and identified 100 different touchpoints where there is scope to enhance the health and safety of customers and employees to bring back customer confidence in flying1.
While such initiatives help businesses stay afloat and pivot to emerging needs, shaping a resilient and sustainable travel value chain that transcends current industry barriers will become a collective priority for all key stakeholders.
Digital avenues can help orchestrate harmony within and across travel ecosystems, enabling new business and operating models to power resilience and sustainability.
The travel industry's current challenges
Many travel suppliers are focusing on immediate priorities such as health, safety, and resilient operations. However, they are faced with numerous challenges in this endeavor such as:
As a result, travelers face friction at multiple touch points during their journey, unable to enjoy a seamless experience; travel suppliers face detrimental impact on operational efficiency and cost; and the stress levels of front-line employees are elevated. The pandemic has introduced a new set of challenges and imperatives, lending urgency to build a travel industry that is more resilient and sustainable. But the question is: How can the travel value chain pivot to new operating models for resilience and adaptability through harmonious ecosystems and what key digital avenues can enable it?
A network of ecosystems will underpin travel's future value chain
In this connected world, the travel value chain remains largely disconnected especially in providing travelers a seamless experience. Even within an enterprise, individual portfolios operate as disjointed siloes with many weak links in information exchange, unified views, and digital collaboration.
Rapidly evolving traveler behaviors and the need to embrace nimble operations will force major travel businesses to rethink how they operate, collaborate, and provide services or products. For instance, an airport, a last-mile logistics startup, and airlines can come together to offer seamless, door-to-door pickup and delivery of bags and high-value cargo. New business entities will become a part of the value chain.
The future travel value chain will be underpinned by a network of ecosystems comprising travel suppliers, facilitators, intermediaries, original equipment manufacturers (OEMS), healthcare, wellness, and other experience providers. The list will keep growing as new partnerships are forged.
Digital solutions will fast-track the emergence of such ecosystems. As the travel industry thrives on human centricity through, for instance, front-line employees handling customer experiences and operational tasks, helping connect minds and cultures, digital intervention and enablement should be crafted with empathy, powered by a human-centered and inclusive design at every touchpoint and interaction. For instance, a digital companion for the cabin crew would benefit from considering the crew’s working conditions. Lighting conditions may need the app design experience to account for readability in dim-lit conditions and yet ensure it is not too hard on eyes. A healthy and happy crew will ensure elevated experience for travelers onboard. Such human-centric designs to power the digital interactions between the mobile app used by the traveler and the digital companion used by the crew can also ensure personalized experience delivery with minimal physical interactions. These design interventions enhance customer experience and help cabin crew optimize movements between the galley and travelers’ seat.
Harmonizing every aspect—from planning, shopping, purchasing to operations and fulfilment—through ‘empathetic orchestration’ will become the bedrock of future travel. Harmonious ecosystems will lend themselves effectively towards evolving new business and operating models that, in turn, can power resilience and sustainability. For instance, airports can liberate their kitchen/food and beverage capacity to serve customers in the neighborhood and enable customers at the airport have food from restaurants outside delivered at their boarding area. Ecosystems play between OEMs, maintain, repair and overhaul (MROs) and airlines underpinned by harmonious operations can lead to efficient, predictive maintenance and improved aircraft utilization.
Three key digital avenues for orchestrating harmony
Building harmonious operations and ecosystems requires the industry to navigate three key digital avenues:
Connecting silos within an enterprise and across enterprises is at the very heart of digital enablement—this unification is the most critical building block of the whole exercise. As an example, an airline’s operations team, ground handling teams, airports, and air traffic control (ATC) will significantly benefit from a unified platform—the digital spine—built on collaborative decision-making principles. The platform will connect various siloed data and business events, automatically detecting anomalies and surfacing cross-domain intelligence for effective utilization of resources at the airport and enhancing the predictability of aircraft departure. The platform can, for example, bring unified situational awareness about flight delay and its consequences by offering insights to the front-line staff and providing artificial intelligence-machine learning (AI-ML)-based recommendations. It can suggest, for instance, whether to hold the departure of a connecting flight and the preparedness required of every team to operate the revised flight schedule to mitigate passenger inconvenience due to the delayed inbound flight.
This harmonious way of working will enhance customer experience as the connecting flight is not missed, resulting in potential cost savings for the airline. More importantly, the front-line staff feel empowered to take informed decisions based on real-time insights. Leveraging the power of connectedness puts businesses in a better position to innovate on superior customer and employee experiences as well as productivity gains. Singapore Airlines Engineering Company, for instance, has streamlined MRO operations with a one-stop mobile app that provides history of defects of an aircraft, the maintenance manuals for the model and the servicing tools needed—all in one place, reducing the time workers spend on each aircraft. The planes can be put back to use faster, reducing passenger wait times.
With connected data and insights, organizations can bring in a collaborative environment for all stakeholders in the ecosystem using digital tools and applications. Some key considerations must be taken into account to attain this:
Enhanced collaboration within an enterprise leads to enriched customer and employee experience and productivity gains, while extended collaboration across businesses helps create new business and operating models. Digital collaboration between OEMs, equipment/part manufacturers and airlines can lead to many ‘as-a-service’ business models instead of the traditional purchase-maintain-retire models for parts. Leading rideshare platform Lyft, for example, partnered with Sixt, a car rental provider, for mutual benefit. Lyft gets a ready supply of vehicles and Sixt benefits by becoming less dependent on and paying less commissions to online travel agents (OTAs).
The future of travel will be shaped by the ability of individual travel businesses and ecosystems to converge on a larger purpose by building on connectedness and collaboration. This will help unleash great value by harnessing the collective power at the intersections of previously unconnected and disjointed value chain; composite processes transcending individual businesses, supported by robust handshake mechanisms across various technology layers, will become a fundamental construct towards enabling convergence. For example, OEMs and airline engineering portfolio working together can address pain points impacting each other’s KPIs, giving rise to newer business and operating models between these entities. The OEMs can understand the usage statistics of aircraft they are responsible for and provide a solution to improve serviceability, optimize resource utilization and improve operational efficiencies for all entities involved. Booking.com, a global digital travel platform, has partnered with Tripadvisor’s Viator, a leading experiences marketplace, to provide travelers with around 40,000 bookable attractions, tours, and activities. This provides an expansive choice of destination experiences for Booking.com customers, expanding its experience business while also creating value for Viator’s global community of tour operators and providers.
The travel industry will witness more such convergence, serving larger purposes such as seamless customer experience across modes/phases of trips, green travel, community development, improved cash flow, and sustainable financials.
Now is the time for the industry to act
Travel has been second nature for human beings to explore the new. With so much pent-up demand and new expectations in the wake of the pandemic, the timing is right for the industry to lay the foundations for a resilient and sustainable travel value chain in which every stakeholder and ecosystem operates in harmony.
Welcome to the era of purpose-led convergence.