How Travel & Hospitality Companies Can Accelerate Amid Adversity

Where there is challenge, there is possibility. In leaner times, organizations must be nimbler to seize opportunities to innovate for customers, embrace new trends and take risks. As organizations grow over time, they build processes and bureaucracy that slow their ability to deliver value to customers. Startups, however, live or die based on their speed to value, and this persists in their organizational culture and in how they work. By acting as a startup, businesses will avoid a return to old practices and be able to thrive after the crisis.

Before COVID-19, the travel industry had already been shifting toward digital business transformation (DBT) as customers shift their inspiration and booking behaviors online. COVID-19 has sparked the ignition for transformation in other industries such as retail or quick service restaurants (QSR) that are ahead of the recovery curve. As we consider the travel industry post COVID-19, embracing digital and startup principles are critical in addressing:

Urgent health and safety requirements: The pandemic has shifted health and safety from a buying preference to mandatory requirement. Travelers will demand and drive their loyalty to companies that provide health assurances and new contactless options.
Speed of agility: QSRs, by nature of their businesses, are used to a quicker pace of working that helps them move swiftly to innovate and address customer needs. QSRs have seen new patterns of speed where there has been a move towards bolstering mobile ordering, introducing lightweight contactless solutions throughout the payment and fulfillment processes and standing up new services such as markets and meal kits.
New players and business models: There will be winners and losers. We will see consolidation of players and new business models emerge. We have already seen bankruptcies from companies like Hertz and LATAM airlines and a prolonged pandemic will create further strain. Routes will change as more airlines declare bankruptcy, and cruising will re-evaluate its high-volume models.

In uncertain times, where historical data is not a predictor of future need, a startup approach enables rapid and continuous product innovation to address new customer needs while capturing value. For travel organizations, this means plan around guest journeys focused on extracting value (with products and services) from micro moments vs. designing by channel or function.

COVID-19 and the DBT Jumpstart

The travel industry has experienced more than a decade of growth, and many travel companies have grown their organizations in the wake of this prosperity. In 2019, 70 percent of businesses surveyed said they have been working on their digital transformation program, according to a survey from Tech Pro Research that covered multiple industries. Executives said the top benefits of digital transformation are improved operational efficiency (40 percent), faster time to market (36 percent) and the ability to meet customer expectations (35 percent). However, only 28 percent succeeded at evolving the people/culture, process and technology required to transform.

Here are three Publicis Sapient accelerators to further fuel this transformation:

Identify and focus on value: Organizations must optimize the value throughout the system to get new products deployed incrementally with a lean, startup manner and then turn towards build and scale. Publicis Sapient used an enterprise startup model to help a major retailer reboot a program designed to bring a new product to market after they spent months planning without a clear vision or having made measurable progress. A 130-person program with more than 15 teams and as many leaders moved into a 40-person startup with multidisciplinary, end-to-end product-engineering teams, fully empowered with decision rights and accountable for business results. The results were immediate: they went live within seven months and immediately became a top 10 app.
Rapid Response Teams: Organizations cannot afford to wait to innovate and must go from idea to production and from concept to customer as fast as possible by continually hypothesizing, building, measuring and learning. Work proceeds, to the extent possible, in small, integrated, autonomous, multidisciplinary teams that include product, design, engineering, and operations. Amazon uses a "two-pizza" teams rule: teams must be small enough that they need only two pizzas for dinner. These small teams organize around the customer or business while outcomes, creating capabilities, and micro-services are shared and adapted elsewhere in the startup. For an airline challenged to significantly cut costs, for example, in just 160 hours nimble rapid response teams go from post-its to proof of concept that enable us to diagnose processes and seek opportunities where automation and digital can drive efficiency and cost-effective scaling.
Assess engineering maturity and implement strategic technology agility enablers: Engineering transformation is a pathway to resilience. The pandemic has put pressure on firms to scale up IT services like call centers, ramp up capacity (in the case of grocery/retail), digitize new products and services such as CRM programs and marketing automation capabilities (ongoing customer engagement) – this is just the beginning.

Firms must address the value chain from hypothesis to launch, identifying the impediments and interventions that improve velocity and flow and focus on incremental improvement and deployment of agility enablers – such as cloud migration, services, feature-based development and DevOps processes. There is urgency to accelerate data platform exercises focusing on critical use cases and bringing online the capabilities and data views that enable these valuable services. This helps customize messaging to engage a variety of customers for different travel reasons such as business or leisure. Re-engaging customers effectively, stimulating demand, and rapid product and service innovation can give the insights that drive efficiency and effectiveness in spend.

Transformation road ahead

The travel industry has innovated before in times of crisis. Hotels developed their asset-light business model following the Gulf War in the early 1990s and Airbnb was born in the 2008-2009 financial crisis. There’s no doubt that COVID-19 will ignite more transformation across the industry that brings forth new products and services that will continue to shake up how the world travels for years to come. As businesses begin their recovery-planning processes they must choose to drive deeper down the transformation path. Hotels, airlines and cruise lines can disrupt themselves by beginning to think like a travel startup and deploying lean, small and fast-working teams that won’t just make travelers feel comfortable about flying or checking-in again. They’ll show travelers how a post-COVID-19 world is one where travel is safer, hyper digital and enjoyable.

How Travel & Hospitality Companies Can Accelerate Amid Adversity | Publicis Sapient