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AI in travel: 3 ways to build customer loyalty

Categories: AI, Travel

Online travel agencies (OTAs) have endured disruption in the digital age as much as any business niche. With Google targeting travel bookings and the rise of booking apps like Skyscanner and Hotels.com, forward-thinking companies are coming up with clever ways to use AI in travel to increase bookings and customer loyalty.

1. Targeting travel habits as they evolve

In July, PhocusWire’s published a study entitled Can AI Help OTAs Earn Customer Loyalty? (PDF). In the report, Pauline Lemaire, Industry Director, Travel and Classified at Criteo explains how AI can help OTAs reach specific audiences, increase bookings and, ultimately, earn more customer loyalty.

This starts with big data and using AI to target evolving travel habits as they change.

“AI can be used to not only understand individual customers better but also look at travel patterns,” Lemaire explains.

For example, families with children might only travel during school holidays and start planning months in advance to try and get the best deal. Target these family members too late and they’ll book elsewhere, while failing to target them with campaigns for school break deals ignores their key interest.

AI allows online travel agencies to tap into worldwide, real-time data to spot these booking habits and deliver the right message, in the right place, at the right time. Going one step further, OTAs can build their own algorithms to crunch in-house data and discover how their target audiences differ from the global averages.

2. Layering segmented audiences to pinpoint user interests

Audience segments are crucial to any effective marketing campaign, but real-world user interests are far more complex than a single segmented list can address. This is a key issue Pauline Lemaire points out in the PhocusWire study:

“From a marketing perspective it’s useful to place travelers into segments; whether it’s families, couples, millennials, or people traveling for business. But it’s also important to realise that people can fit into all of these segments and more, depending on the occasion and reason for travel,” she says.

For example, millennials might become more traditional when it comes to booking a honeymoon than last year’s backpacking adventure. Likewise, the age of people using social media to find travel inspiration is getting older every year and the notion that Baby Boomers are less tech-savvy doesn’t always apply.

Basic audience segmentation leaves you open to making assumptions.

As Michael Brenner writes for Marketing Insider Group, artificial intelligence removes the limitations of static segmentation in the following ways:

  • Removes human bias
  • Finds hidden patterns in data
  • Automatically updates segments as interests change
  • Unlimited number and size of segments
  • Enables a higher level of personalisation

With AI, you can overlap any number of segmented lists to target highly-specific audience interests. However, the real power in this technology is the ability to automatically change the list segments that are applied to users, as their interests and actions change.

The good news is, this becomes increasingly easier once you get the first booking from new customers, giving you access to one-to-one data so you can personalise follow-up messages and increase customer loyalty.

3. Claiming the omnichannel booking process

One of the other major challenges online travel brands face is the increasingly omnichannel journey travellers take before making a booking. Research can start months in advance, spanning search engines, social media sessions, ad clicks, website visits, mobile app sessions, videos and offline actions.

In fact, insights from TripAdvisor suggest travellers visit anywhere between 10 and 34 different websites alone before making a booking.

PhocusWire stats tell us the following:

  • 43% of travellers prefer to book flights and hotels on mobile as it’s more convenient.
  • 33% say travel apps make it easier to complete bookings
  • 29% say they complete most online actions on their smartphone
travel stats from PhocusWire
Stats from PhocusWire

None of those stats represents a 50%+ majority, which highlights how complex booking journeys are across the spectrum. “Some people prefer to browse the web, but then actually transact the booking either by phone or in person,” Pauline Lemaire explains.

As booking preferences become more diverse and the number of touchpoints increases, brands need a reliable way to track user actions every step of the way. Crunching hoards of data isn’t the only role AI can play here. Give your algorithms time to determine patterns and you’ll be able to predict the journey different users will take along the booking process and which messages they’re most likely to respond to.

Today’s travel brands need to see how their target audiences are really progressing along the travel planning and booking process if they want to be seen at the vital moment.

‘Being there is everything’

As the PhocusWire study summarises, “being there is everything” in an industry as competitive as travel. Artificial intelligence is starting to level the playing field in terms of big data and audience insights though, meaning brands of any size can determine when and where their message needs to be seen.

A lot is being said about the power of AI in travel to help brands discover new audiences and keep up with the latest booking trends – two very important use cases. However, online travel brands also need to understand what AI can do in terms of customer retention and loyalty, which keeps travellers coming back for future bookings.

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Chris Pitt is Operations Director at Vertical Leap and has over 20 years’ experience in sales and marketing, previously holding senior roles in tax and financial companies, working with customers such as Ernst & Young, Deloitte, KPMG and Groupama. A regular at exhibitions and events across the country, Chris has presented at all the major industry exhibitions as well as providing educational talks at Google’s London HQ.

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