While the pandemic has ravaged the global hospitality industry, it has also presented a once-in-a-lifetime opportunity for smaller players to wrestle market share from the big boys. This is the conviction of Mike Tansey, managing director for travel and growth markets in Accenture, a Fortune Global 500 professional services company.
With two decades of management consulting experience, including 15 years specialising in the travel industry, Singapore-based Tansey has his finger on the pulse. He leads Accenture’s travel industry team across multiple markets and has worked with organisations such as Singapore Airlines, InterContinental Hotels Group, Cathay Pacific, Marriott International and Qantas. So, Tansey understands the challenges companies face in transforming online and offline customer experiences.
“What Covid-19 has done is reset everybody’s market share effectively to zero. Before, the smaller independent chains might have found it hard to compete against the big guys. Now suddenly, all of us are back at the starting line. We’re talking to several hotel clients on how they can take this once-in-a-lifetime opportunity to grab market share because loads of people will want to travel.”
The traditional approach is to spend millions on mass media campaigns. However, brands now recognise that this is ineffective and unaffordable, says Tansey, and are trying different approaches. He gives the example of Banyan Tree. With the hotel group, Tansey helps them to identify unique guest behaviour and profiles filtered by property and source markets.
This approach is not new, but it was not popular until the pandemic. Tansey cites another example: Thai Smile Airways. The airline appointed Accenture before Covid as it wanted to tap on its data analytics expertise. It worked. Despite the pandemic, the company gained domestic market share, rising from 9.23 per cent in 2019 to 11.5 per cent in 2020.
He says: “It’s difficult for people to understand that the critical difference is the really detailed data analytics that goes behind it. Most people would think that 10 or even 30 data fields are sufficient.” Accenture captures data in 170 fields.
“For example, we create a customer analytic record for every person who has stayed in a particular hotel for the last five years. We apply trend analysis against the data collected to identify specific behaviours of those guests. Then we use that information to create digital marketing campaigns, most of which is done through social media such as Facebook, where the content you see changes dynamically (depending on your profile). This precise targeting is what will drive an ‘unfair’ share of the market.”
Another gap that hospitality players need to plug is customer service infrastructure. It needs to be robust enough to handle the massive volume of upcoming itinerary changes.
Tansey recalls being frustrated recently at being put on hold for two hours before he could speak to a representative of “a major airline” on refunding a cancelled ticket.
“Online travel agents found it particularly difficult at the beginning of Covid-19 because they set up the business model to be from light to no touch. If I suddenly need to cancel my flights, and everyone’s doing the same, they just don’t have the infrastructure to cope with that volume of calls. That’s going to continue because there’s still going to be volatility in the travel business in the next year, Tansey warns.
“We can solve a lot of these digitally. But the problem is that the businesses, particularly the smaller ones, don’t have the money to do it. However, as revenues pick up, they will invest in those types of technologies to future-proof themselves.”
In the meantime, staying ready for change and being constantly aware of what’s happening around the world is vital. Tansey says: “We will not go from where we are now to everything being back to normal. There’s going to be a period of transition. We need to remain adaptable and adjust quickly to changes both in this region and our source markets.”