by Vijaylakshmi
The travel, tourism and hospitality industry in the country has been on a steady upswing since the reopening of travel after the global health crisis, Covid-19. The quarterly, half-yearly and annual financial performance report of major companies in the hospitality business underscores this unprecedented recovery and revival of companies in the last couple of years. However, industry watchers indicate that the double-digit revenue growth that the industry has been experiencing so far, is going to soften considering both global and domestic factors over the next 18 to 24 months. Sharing the important findings of the study report compiled by the company by taking inputs from over 300 top leaders of the travel industry, Jitender Mohan, business unit head -Travel and Hospitality, WNS, said that these interactions validated these concerns in the industry. On the B2C side, the rising inflationary pressure globally as well as rising lending rate in the developed world is going to impact travel spending. On the B2B side the increasing ESG awareness and compliances would force corporate companies to cut down travel budgets or at least reduce unnecessary travel.
“Corporate travel is still at 75 percent of the pre-covid levels. B2C leisure travel will also normalise now. Growth is not going to be double digit any more,” Mohan said.
While the margins are expected to be moderate, the travel companies have to invest in achieving digital maturity to remain competitive. The customer needs and expectations toward personalisation and seamless experiences are driving digital maturity, operating model changes, and rapid product and service innovation developments, Mohan said, sharing the key findings of the market study.
Around 41 percent of the CXOs participated in the survey indicating moderation in returns while greater than 50 percent assigned priority to investments geared toward cost containment and efficiency as part of the slowdown. More than one-fifth of all T&H firms also assigned a greater than 50 percent priority to becoming innovation-driven.
While margins are expected to be in the range of 5 to 6 percent, the tech investments required would be in the range of 13 to 14 percent. “The pressure to attain cost efficiency will mount for T&H companies,” Mohan informs.
As per the survey, only 10 to 12 percent of the companies have reported that they are already at a very high level of digital maturity. These companies are largely online travel companies, Mohan said.
On the consumer side, the WNS report says that the greatest shift that will be influencing the travel and hospitality industry would be ‘expectation of personalisation’ (31 percent) followed by ‘expectation of safety and wellness’ (29 percent).
A sizable chunk (31 percent) of T&H firms believe they are very near to attaining full digital maturity, followed by 27 percent that think they have achieved full digital maturity. However, only 41 percent of T&H firms still believe they are only moderately mature and near the halfway mark when it comes to digitising their operations.
T&H firms have reached relatively higher maturity in IT, contact centre operations, and order management. However, corporate functions, including Sales and Marketing, Procurement, and HR, fall under the “in progress” stage.
As per the report, the order of priorities for CXOs when it comes to investing in digital maturity are in making the purchase experience seamless (56 percent), followed by better personalisation in marketing and sales (44 percent) and more seamless in-person experiences (41 percent).
On the technology side, Mohan said that generative AI (GenAI) is a huge opportunity before the travel and hospitality industry, and can transform every process associated with the industry. Travel and hospitality firms are largely in their early days of experimenting with generative AI (GenAI), with a primary focus on agent productivity and curated travel itineraries as a value proposition. However, they recognize that there are many different areas where GenAI can be used such as personalised guest experiences with chatbots, recommendation engines, agent- assist, multi-lingual support, and many more by bundling traditional AI and GenAI.
Many travel and hospitality firms are evaluating the vendor ecosystem of software and service providers to learn how they can leverage existing technology, versus reinventing the wheel, the report says.
Mohan said that it is an opportunity for hotels and airlines which are still part of the legacy GDS systems to invest so that they can win back the business which they are losing out to OTAs.
Responding to concerns of machines replacing human beings in the T&H industry, Mohan said that rather than eliminating anything, the tech investments should be looked at from the perspective of enhancing the processes and making them more smarter. In areas like corporate travel, where a travel advisor has to examine so many aspects like companies travel policies, eligibility, compliances, etc before recommending an airline, hotel, etc, a user AI enabled system can make the whole process faster and flawless.
Talking about WNS, Mohan said that their endeavour is to handhold travel, hospitality companies to achieve digital maturity using their domain expertise, technology and analytics offerings. He talked about various cutting-edge solutions including end to end booking experience platform, commission contract automation solution; omnichannel GenAI co-pilot for advisor assistance; automated fare audit solution; comprehensive solution for finance and accounting, etc. which helps stakeholders not only achieve cost efficiencies but at the same time improve revenue generation capabilities.
