How business process services companies can help the travel industry

• For business process services companies servicing clients in the travel industry, the need of the hour is to leverage their capabilities and customer relationship to warrant minimal ramp downs and continued revenue yielding projects. Customers now demand personalized experiences which can be promoted by the emerging technology. Some of the areas which may spike a renewed interest and growth opportunities include:
• Customer service – With travelers seeking more flexible travel options in terms of ticket changes, refunds etc., there is scope to offer comprehensive, superior and hybrid model of customer experience to cover end to end services
• Marketing campaigns / Airline ancillary sales - Airline ancillary revenue is essentially the revenue from sales that are made beyond the core product, any additional special service request (SSR) that can be requested to enhance a flight journey. However, the key to increasing ancillary sales effectively without damaging your relationship with customers is real-time personalization and using AI to increase upselling and cross-selling opportunities.
• Cargo services – With the global air cargo market projected to grow at a CAGR of 10.25% by 2025, the surge in cargo business is an area to be capitalized. With ecommerce on the rise, air cargo operations could definitely help to build a more resilient aviation industry.
• More sustainable solutions focused on reductions in greenhouse-gas emissions - Sustainability is the future; it’s about myriad initiatives and projects, across every location or site, and in any number of places beyond the office and factory walls. A study in April 2020 found that global carbon dioxide emissions fell 10 to 30% during the pandemic as the world sheltered in place and businesses operated at a reduced capacity.
• Extensive digital transformation offerings in the automation and transformation space - Profound changes in the way customers research and purchase travel products and services digitally have long been under way but the recent trends are implying an increasing shift to mobile and digital. Even companies with traditional business models are increasingly shifting to an automation-driven value chain. A Mckinsey survey conducted just before the pandemic found that two-thirds of organizations are at least piloting the automation of business processes in one or more business units or functions, compared with 57% two years ago.
• Increase in IT investment

A relook at support services, especially contact center and loyalty management services: Move away from traditional channels and focus on resilient self-service and collaboration driven models.
Global Distribution System (GDS) cost reduction via direct inventory management: Adopt a holistic approach that addresses leakages in the booking system, inventory abuse, and complements revenue integrity and revenue managements systems, so as to reduce costs and optimize revenue.
Data privacy as well as service obligations have become high priority: With work from home during the pandemic, clients had to make rapid decisions on highly important and sensitive topics such as security, data privacy as well as service obligations, without having full visibility of the impact of these decisions. With things slowly getting back to normal, outsourcing partners must provide transparency on the mitigation of cybersecurity and data privacy risks in future remote working solutions.

New areas of diversification 

To stay relevant and competitive in the market it is important to invest in digital transformation of the existing and new processes. Adapting to the new technological trends will help companies to not only be resilient but battle out the competitors and swim through this red ocean and create the new blue ocean. With an aim to maximize returns by investing in different areas that would react differently to changes in market conditions, here’s a list of suggested diversification areas to reflect upon -

• Innovative payment models - Models such as ‘outcome-based support’ or ‘as-a-service’ offering the flexibility needed in uncertain times. This would involve redesigning the innovation schedule whereby obligations are tracked and measured, with financial penalties for non-compliance and business outcomes that are contractually linked to pricing and the transformation roadmap.
• Online Travel Agencies (OTAs) and Travel Management Companies (TMCs) - While online travel agencies globally have faced several challenges, this sector is faring better than other travel segments, given its variable cost structure, which allows them to respond quickly to market downturns and preserve profitability better than other industries. According to a report by McKinsey, major OTAs such as Expedia Group and Booking Holdings have grown to become two of the most valuable companies in the travel industry.
• Low cost language locations – better language capabilities and flexible delivery models
• Shared offshore delivery centers (ODCs) as a cost saving approach
• Inorganic growth by acquiring domain capability

These areas of diversification will yield faster results as compared to organic growth resulting from expanded assets from purchasing another business, adding a location, increased market presence in existing or new markets, increased market share etc.

The future…

Travel is expected to gradually and slowly pick up pace with all the right measures in place that have now become the norm - reduced personal contact, enhanced sanitization, temperature checks, and social distancing. The emerging trends and technologies can help support long-term strategies for travel companies to improve overall resilience and competitiveness.

Ultimately, there are two trends that have been on the anvil for a while which are likely to speed up. One is seamless travel, where your face and body are your passport. The other is the idea of a decentralized identity - the individual is in possession of and controls their identity attributes. When combined, these trends will ensure travel is enjoyable, efficient and safe in the new normal!

Shaila Fernandes
Practice Manager – Consumer Business Unit, Digital Operations & Platforms – iCORE, Wipro Limited

Shaila has over 16 years of experience in the BPO industry handling service delivery and operations for major airlines. Over the last 2 years, she has been extensively working in travel and hospitality presales efforts and GTM activities for pipeline creation.