Despite rising costs, travel spending has taken off
Consumers’ desire to travel has caused travel bookings to spike with 80% of UK airlines and hotels saying direct bookings have increased over the last 12 months. That’s according to a new travel benchmark report series of airlines and hotels from Quantum Metric, the continuous product design platform for customer-driven digital experiences, that combined anonymised platform data and executive survey responses to uncover this year’s travel booking trends.
Despite economic uncertainty, traffic rates for travel sites are the highest seen since before COVID, with volumes for Q1 2023 37% higher than what was seen in Q1 2022. And the trend has the capacity to continue, with 54% of hotel and airline leaders expecting to see an increase in booking rates throughout the rest of the year. Additionally, almost every travel leader surveyed (97%) anticipates consumers will be willing to pay higher prices for travel this year.
One potential driver is Britons planning leisure trips with time for work, tapping into the ability to work more flexibly, from anywhere. In fact, 71% of UK hotel leaders are offering business services/upgrades to attract business travellers and remote workers. Business reservations reflect this with the majority of travel brands (79%) seeing a 25% increase in the last twelve months.
“Travel experiences are emotionally driven and with today’s climbing demand comes even higher expectations for what the booking and travel management journey should look like,” said Danielle Harvey, VP, Travel & Hospitality Strategy, Quantum Metric. “For airlines and hotels, it’s important that the digital experience not only be effortless but personalised to their customers’ needs. Those brands that can deliver a differentiated experience by truly understanding and empathising with their customers have a better chance at earning their lifetime loyalty.”
Additional findings from Quantum Metric’s travel benchmark report series include:
Mobile is critical to the booking experience. Like retail and other industries, travel has seen mobile adoption skyrocket. Today, mobile makes up 80% of monthly traffic and 47% of airline sales. Mobile sales for Q1 2023 were even 34% higher YoY. Added to this, 62% of UK digital travel leaders are spending more on app features to support retention.
The power of luxury to win loyalty: Customers are seeking a luxurious experience - be it personalised ancillary services or an effortless booking. Almost every airline leader surveyed has or plans to introduce new luxury services in 2023. 63% in the UK are offering personalised ancillary services or all-inclusive offerings and 37% are building luxury services that ease the check-in process and offer more flexibility in rebooking flights.
Customers are still seeking support: As digital teams cut costs, customer support services are on the chopping block and reduced investments could negatively impact bookings. In fact, 40% of leaders worry that limited digital investments will either send customers back to OTA or hurt their long-term retention. To combat this, 80% of UK airlines have invested in new backend tech to support the employee experience. More than 93% plan to implement generative AI into their booking experience, and 57% of hotel leaders will use it to enhance self-service.
Findings for the travel benchmarks report series are based on anonymised platform data and survey responses from 1,000 digital leaders at the VP level or above, working for airlines and hotels in the U.S. and UK. The data was collected between April 27th-April 28th, 2023. For more information and to read the full report visit: here.