Arnie Weissmann
Last week, two announcements and an article in the Wall Street Journal seemed to signal both boom times to come and a reminder that nothing positive is free of unintended consequences.
On Wednesday morning, American Express presented details of a campaign to celebrate its first 100 years in travel, and it's based on a wonderful concept: Shine a light on people in the industry who help travelers solve problems, who go above and beyond to make a trip memorable or who turn a vacation into an inspiring, life-changing activity.
Travelers can recognize outstanding service providers, whether related to an Amex-generated trip or not, on JourneyMakers.com. And they can do more than share stories. They can generate a note of appreciation that will be delivered not only to the person they're praising but to that person's supervisor. (Amex is confident that, using partner TripAdvisor's application programming interface, all it needs is the employee's first name, the employing company and the location.)
Amex contracted the consulting firm The Futures Company to put some stats behind the presumption that travelers like personal service. Not surprisingly, the Future of Travel survey confirmed that, yes, for general consumers from the U.S., the U.K., Mexico and China, service and personalization are important.
Statistics of note:
- 85% of respondents expect to travel the same amount or more in 2020 and believe that spending money on travel is a worthwhile investment.
- 63% favor allowing travel brands to use previously gathered personal data to deliver a more personalized experience. (This varies by age, with an astonishing 83% of millennials in favor of liberal use of personal data vs. only 38% of matures.)
- By similar margins, millennials expressed a stronger desire for service than their elders.
- 85% of all respondents prefer a personalized itinerary vs. a prepackaged itinerary.
- Service is important, but so is technology: 64% rely on websites and mobile apps to enhance the travel experience while on the road, and 88% believe that a combination of mobile booking options, supported by live travel service professionals, will be more or equally important in five years.
The following day, the United Nations World Tourism Organization (UNWTO) provided real-time evidence supporting the survey's predictions that travel is gaining in importance: The first quarter of 2015 showed a 4% year-over-year jump in international overnight visitors, rising to 332 million arrivals.
The UNWTO predicted almost 500 million people will have traveled internationally in the second quarter.
The rise in demand and desire for service would seem to bode well for the industry, but their simultaneous ascension could itself pose a new challenge, one that could become a barrier to growth.
On the same day that Amex underscored travelers' desire for a high-tech/high-touch world, Wall Street Journal travel editor Scott McCartney detailed a case in which service levels were determined solely by the booking method.
He recounted the story of a couple who had booked a room at the Hilton Wilmington/Christiana in Newark, Del., through Expedia, eight months in advance of their daughter's graduation from college. They contacted the hotel two months prior to their stay to reconfirm the reservation.
Two days before check-in, Expedia notified them via email that the hotel was canceling.
Expedia told the Journal it had been informed an existing group at the hotel wanted to lengthen its stay; the property's general manager said an existing group "grew in size." The bumped guest reported that, "In a moment of candor, the hotel told us that our reservation is less secure when we book a reservation through a third-party payer like Expedia."
In a statement, Hilton said that it had the right to favor direct bookings because "it is easier for the hotel to communicate directly to the guest if they had booked directly through Hilton."
"Since hotels have to pay commissions for agency bookings, they try to push customers to book directly," McCartney wrote.
"The bottom line," he concluded: "Airlines, resorts, cruises, hotels and car-rental firms can dump you for a better offer, regardless of how your booking was made."
So, we have rising demand for travel, coupled with increased desire for service, up against suppliers who feel it's acceptable to auction away promised service if someone comes in with a higher (or direct) bid.
It appears that elements within the travel industry itself engage in activity that could discourage travelers for whom service is important. Hilton might have felt justified in bumping a guest who had been holding a reservation for eight months, but the intended message -- "Book with us direct for best service!" -- could well have been perceived as "We don't respect reservations -- just imagine how good our personalized service is!"
Airbnb couldn't ask for better PR.
But there is an additional takeaway for the industry. Despite Expedia's ultimate importance as the largest seller of travel (it's No. 1 in Travel Weekly's 2015 Power List), suppliers perceive it as a low-margin channel. Travel advisers are the highest margin intermediary, but the Journal story is a signal to travel agencies and agency groups that they need to make it clear they will not work with a supplier who doesn't treat their clients as honored guests.
Every hotel overbooks, and each has its own formula to determine who will sleep and who will be walked. In light of the UNWTO report on demand, the Amex survey on service and the Journal article on lack of reservation integrity, if an agency can't get a guarantee from a property that their clients are automatically placed on a do-not-walk list, they may want to seek alternative choices for their clients.
This article has been updated to reflect that the American Express/Journeymakers survey commissioned with The Futures Company polled general consumers,
not Amex cardmembers. A previous version of this article included incorrect information.