Experimentation strategies for the travel industry post COVID-19

Author:

Alek Toumert

It would be tough to argue that any other industry has been hit harder by the COVID-19 pandemic than the travel industry. The good news is that while the world is doing its part to safely allow more human interaction among mass vaccination efforts, the travel industry is a major focus for consumers as they assess where to spend their leisure time. A recent survey by McKinsey outlined that Travel & Vacation was the second most popular leisure category that people want to “revenge spend on” only behind Dining Out.

One area of travel that is less certain is business travel. In the same report, McKinsey noted that “a survey of business-travel managers found that they expect business-travel spending in 2021 will only be half that of 2019.” So, while we may continue to see an overall increase in travel across the world, this will primarily be driven by leisure and less by business needs in 2021.

In March of last year, my teammate Jil Maassen, highlighted some key strategies that travel companies should keep in mind as the pandemic worsened. Some of those strategies still ring true as we look forward to the rest of 2021. Here are the two from Jil that should continue to be a focus for travel companies as we navigate the second year of the pandemic:

Make customer service the star

  • With my travel customers at Optimizely, the majority of their initial focus during the spring of last year was reducing the burden of their customer service team. As Jil noted, “you could put more emphasis on your self-serve section, chat widgets, FAQs or try to preempt what the customer may be seeking, such as changing flights, and make this section the first one upon landing.”
  • With experimentation, we often think of the value of increasing incremental revenue with our winners. But reducing cost is as valuable to profit. Continuing to experiment by anticipating what your customers’ needs are should still be a top focus for travel experimentation programs.

Think positive, think ahead

  • As Jil wrote, “How can you help your users ‘dream’ of their next adventure? How can you explore ways to help users with easy planning features? Focus on the ‘dream’ and ‘plan’ phase of your user journey.”
  • Though indications are that people are inclined to spend on leisure travel again, it won’t be feasible for everyone right away. Experimenting with easier ways to save searches or travel plans will create a bookmark for the user, as they save for that moment when they can travel again.
  • There are also competing and ambiguous messages about when people will be able to travel to certain destinations that may be interesting to them (I know I canceled internal travel plans for 2020 that I am looking to revive). Expressing related messaging with these details in the booking process can ease concern for the user.

But there are some other strategies that travel companies can focus on exploring through experimentation, as leisure travel continues to increase month-over-month.

Optimize for the moment

  • Travel companies (like most businesses) have had to employ more promotions and discounts in order to lure people to act on taking that trip they have been thinking about. As these promotions are debated internally, stop the debate!
  • Optimizely’s Multiarmed Bandit capability allows your users to make the choice for you on which promotion is best for that day, week or month. Try testing out as many variations as you can dream of to maximize your traffic for that time period. A few hundred additional clicks on a promotional banner can turn into much more for bookings revenue.

Reinforce your new status quo

  • One major change travel companies have had to make relates to their loyalty programs. As business and leisure travelers stayed home, almost none were able to work on maintaining their loyalty status for the following year. Luckily, (for the consumer) many companies have persisted loyalty program statuses for at least a year.
  • As your company is debating what to do for 2022 while travel still lulls, experiment on this: Use a small set of your loyalty program as a testing ground for messaging and provide an additional extension to provide clear data on the long-term financial impact without the extension. Key metrics would be retention (i.e., average day cohorts of your users) and the frequency of bookings for users who are provided the information that their loyalty program status will extend yet again.

Worry about cross sell / upsell later

  • A leisure traveler is looking for a great moment. A great memory. A great experience. Booking a trip is an even larger decision than before. But there is a balance between asking for everything and trying to capitalize on a user’s current intent today. Focus on getting them closer to the experience today and the rest later.
  • Experimentation can be valuable to learn what strategies increase average booking value. Those strategies are often at odds with gaining that booking conversion. Experiment with the balance on where, when and how often you cross sell or upsell for a new user who is returning to make their first purchase with you in a long time.

Leverage social proof again

  • The world is definitely one of FOMO, especially for younger generations. Social proof has always been a great strategy for all experimentation programs but with travel, there are even more opportunities to leverage this than other industries.
  • Experimenting with a bigger feature can provide social proof at your top destinations and validate what influences the tipping point.

Use behaviors to guide return journeys

  • This strategy is not only related to the second year of the pandemic but should always be considered for travel companies. Since bookings can often be a longtail decision for users as they explore different destinations, prices, etc., there is an opportunity to make the next and other subsequent visits easier to navigate for a return user.
  • Some winning behavioral experiments for travel customers I’ve observed include:
    • Pre-populating prior searches and their related criteria
    • Using marketing collateral to reinforce those last searches
    • Suggesting lower priced or similar types of searches
    • Creating an easier way for a user to “hop back in” where they left off
    • Removing distractions on a page where a user was focused on one call to action (CTA)

Though life seems to be headed back to what we deemed normal before, the travel industry is still one that will need innovation to better acquire and retain customers. The increase in the desire to leisure travel presents a ripe opportunity to maximize experimentation in the short term, while building better customer service and personalization capabilities for the future.

What are some of the ways your travel company is using experimentation to capitalize on this increase in leisure travel? Or as a consumer, what strategies have worked for you?

If you want to learn more, please download our latest ebook: COVID-19: Returning to a new normal