How to Prevent Customer Churn in the Travel Industry

Feb 14, 2023 11:00:00 AM
9 min read

Travel is one of the leading service industries in the world. But since the start of the COVID-19 pandemic in 2020 it’s suffered a colossal setback, losing $935 billion in revenue worldwide in the first 10 months. That’s a lot of zeros (nine, in case you were counting) that the transportation, food and beverage, accommodation, and other travel sectors lost out on.

Rocket Blasting OffFortunately, the travel industry has undergone a steady return since COVID restrictions have been lifted, with global tourism estimated to return to between 80 to 95 percent of pre-pandemic levels. While this is good news, the cost of travel is rising. This year, travelers will spend at least 25% more than they did at this time last year. And with consumers already changing their spending habits due to current economic uncertainties, scaling down customer churn is essential.

Customer retention is all about attracting shoppers, converting them into repeat customers, and maintaining a loyal customer base. The best way the travel industry can achieve this is by keeping customers engaged and providing them with memorable experiences. However, this is easier said than done, especially since 66% of travelers feel less than positive about their experiences with travel brands.

In such a competitive industry, it may seem impossible to not only stand out, but meet the growing demands of travelers. While losing some customers may be viewed as unavoidable, there are ways airlines, hotels, and other travel businesses can keep their customers happy and prevent customer churn.

How? Let’s dive in and find out!

7 Ways Travel Companies Can Prevent Customer Churn

1. Exceptional Customer Service

Providing outstanding customer service is vital for preventing churn in any business. Delight your customers, and they’ll be more likely to remain loyal. But even one bad experience can increase your chance of losing them dramatically. In fact, 60% of travelers state they will switch travel brands after experiencing 1-2 poor customer service experiences. To prevent this from happening, here are some basic customer service tips every travel business should follow:

Be responsive.

Two hands shakingWhen customers need something, nothing can feel more infuriating than feeling ignored. Providing quick customer assistance is one of the most effective ways to retain customers. Whether you’re a tour operator, boutique hotel, or car rental service, it’s pivotal you respond to customer needs, requests or complaints, and work to resolve them in a timely manner.

Tip: A 24 hour live-chat is great if your customers are contacting you from a variety of locales. If that’s not feasible given your current infrastructure, an AI enhanced chat feature can help ensure you’re still responding at any hour of the day. 

Communicate clearly.

Cartoon woman with arms crossed looking satisfiedThis is two-fold. The first approach to communicating well is giving your customers the information they need. If you don’t know the answer, be honest, but make sure to find someone who does right away. The second component ties directly to this: transparency. Always notify customers of any changes to their travel plans, like flight delays or cancellations.

While this may seem like a waste of time (who’s happy to hear that their flight was canceled, right?), 74% of customers are lenient about blunders after receiving excellent customer support.

Tip: Voice-of-Customer research to identify language preferences can help you make sure you’re providing services in the primary language(s) of your consumers.

Provide easily accessible channels.

Travel companies should always have multiple methods for customers to contact them, such as phone, email, chatbots, and live chat. This will allow them to reach out with any questions or concerns, and ensure their needs are addressed quickly and efficiently. 

Tip: Detailed product sheets and FAQ pages are great resources for digital channels , though they should never replace human contact—just enhance it.

2. Convenience & Flexibility

Most airlines, hotels, and tourist guide companies already offer expedient online booking and check-in options that let customers book and manage their travel plans. But convenience goes beyond these travel services, extending to a digital platform’s performance and overall functionality.

Cartoon man and woman having a conversationTo ensure the highest level of accessibility, your website or mobile app should offer user-friendly navigation that makes it easy for users to find what they’re looking for. Your website should also be optimized for mobile devices, which account for 44% of all online travel purchases, and you should make it as easy as possible for shoppers to checkout by offering a wide range of payment options.

In addition to providing these convenient features, it’s important to remember that plans can change—something those in the travel industry know all too well. Because of this, providing flexible options that allow customers to manage their travel plans has become increasingly essential. For example, hotels can offer easy rescheduling or cancellations without any additional fees.

3. Innovative Technology

Technology is always evolving and continues to play a major role in improving the customer experience. Advanced technology like facial recognition, travel management system software, and artificial intelligence and machine learning (like Granify!) is helping travel companies streamline booking processes and provide personalized travel recommendations. Chatbots, for example, were used by 10% of tourists during their most recent holiday (Source: Digital Innovation Observatory). This may not sound like a lot, but with over 900 million tourists traveling internationally in 2022, that number quickly becomes quite substantial.

Cartoon woman with glasses using magnifying glass

To prevent customer churn, travel companies need to embrace the latest technologies and trends to offer customers modern solutions that meet their growing needs. So don’t be afraid! Welcome new technology to give your customers the best experience possible.

4. Personalization

Customers fancy being recognized by businesses because it makes them feel special (which they are).

Personalization feeds this desire by delivering tailored messages and offers directly to them. Unfortunately, a study done by Epsilon found that only 64% of consumers believe current websites and apps are delivering travel personalization well.

How can travel brands fix this to retain more customers? To start, personalization can be used to encourage customers to keep using your travel services by ensuring they feel appreciated. This can be achieved through the use of technology (like Granify!) that analyzes nuanced customer data to identify customer preferences. The data can then be used to generate personalized travel experiences that meet the needs of each individual customer.

For example, hotels can use customer data to personalize the booking journey for each individual guest, including room preferences, check-in and check-out times, and any special requests.

Another popular way to utilize personalization is through tailored product recommendations. Besides being proven to retain customers (over 90% of consumers would return for a repeat purchase if offered personalized recommendations), this type of communication can be used by any travel company with a website—making it a no-brainer for anyone wanting to increase their customer loyalty.

Cartoon woman giving thumbs up to computer, and computer giving thumbs up back

Travel companies can also use customer data, like previous bookings and recent browsing activities, to create hyper-personalized email and on-site campaigns that offer recommendations and deals on flights, accommodations, or attractions that appeal to each customer.

5. Loyalty/Rewards Programs

Rewards programs give customers a reason to keep coming back, especially since they offer something of value. By offering customers incentives for repeat business, travel companies can encourage customers to continue using their services, rather than moving on to a competitor.

Levitating present with lid off

Loyalty programs can be modified to meet the needs of each individual customer and can be used to collect valuable data about consumers and their preferences, which can then be used to create personalized travel experiences. They also help build stronger relationships with customers. For example, online travel agencies can offer priority access to promotions or provide updates on the latest travel trends and destinations, based on the data that they’ve collected about each shopper.

How can you reward customers for their loyalty?

  • Build loyalty by giving first-time customers thank-you discounts and other special offers.
  • Give customers loyalty points that can be redeemed as discounts while booking flights, booking hotels, and planning trips.
  • Reward loyal members for referrals and encourage them to share your brand with their friends and family.
  • Partner up with other brands from different, related industries to increase the quantity and quality of discounts available to your customers.
  • Offer VIP points or special offers to those who spend more on travel.

Did you know: Loyalty programs aren’t just effective for retaining customers? A study by Collision Group found that customers who participate in travel loyalty programs spend 67% more than non-members. That’s a lot of extra financial cargo each year!

6. Social Media

Here’s a fun fact or two: 60% of Gen Zs and 40% of millennials turn to social media for travel purposes, and on Tik Tok alone, #travel has whopping 74.4 billion views!

A strong social media presence can engage customers in a way other marketing strategies can’t. Browse popular platforms like Tik Tok, Instagram, and Facebook, and you’ll find plenty of travel enthusiasts sharing travel videos and pictures—and liking, and following other like-minded individuals and brands. 

Cartoon smartphone levitatingKeeping your customers engaged through social media is essential in keeping your brand top-of-mind until their next trip. Travel-related companies can use social media platforms to keep in touch with their customers in a number of ways – from sharing travel-related content to running exclusive contests or promotions, to sending thank-you messages to customers who leave positive comments. 

Just make sure to post content regularly to keep your potential and existing customers engaged, and monitor how they’re interacting with your social channels through hashtags, mentions, and direct posts.Making it a priority to acknowledge customers who share positive things about your travel brand, will ensure they continue to feel valued and remain loyal.

Tip: A well-implemented CDP or CXP can ensure you have a holistic, omni-channel understanding of your customers, connecting data from sources such as social media, your website, and rewards management programs.

7. Continuous improvement

Finally, all of the above will go to waste if you’re not persistent in progressing the way you do business.  This step isn’t just necessary because of higher customer expectations, but also because of the ever-changing landscape of the travel industry.

In order to set yourself up for success, you need to start by upholding high standards and then preparing your business for how those standards (including customer expectations) may change. This can be measured through regular quality assurance checkups that evaluate your company’s performance. 

Another way to determine customer satisfaction levels is by asking your customers how they feel directly. Feedback and reviews are valuable forms of social proof because they can be used not only to better the customer experience but also to ensure your products and/or services remain competitive.

Help Your Customer Retention Take Flight

Retaining customers can be a lot harder than it sounds. After a pandemic-induced travel hiatus, the travel industry continues to face significant challenges in preventing customer churn. But hope is not lost. By implementing the strategies provided, hotels, airlines, and other travel-dependent businesses can improve the customer experience, leading to long-term satisfaction and loyalty.

Rocketship going around Saturn

Whatever part of the travel sector your business falls under, remember to keep your focus on delivering an excellent customer experience each and every time. It could be the difference between taking your travel brand to new heights, or being left on standby.

Take Your Customers On A Personalized Journey

Man running with coffee and computer in handGranify can personalize the travel experience for each customer by providing tailored product and service recommendations specific to each individual. Our real-time data offers valuable insights that can be used to deliver digital delight for each customer—leading to long-term success and increased customer loyalty.

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