Why Travel and Hospitality Must Embrace DTC

Direct-to-Consumer|6 Minute Read

Why Travel and Hospitality Must Embrace DTC

COVID upended many industries. Arguably none more so than travel and hospitality.

And yet, car rental agencies, hotel chains, major airlines, and tourism entities in the United States and across the globe endured the harsh business conditions caused by the pandemic.

In fact, many of these organizations even flourished in 2020. How? By transforming into direct-to-consumer (DTC) companies.

And they did so by taking control of their customer data. That is, these businesses began collecting and utilizing first-party data. Doing so has enabled the companies to:

  • 1) No longer rely on third parties (e.g., travel-booking websites) to share relevant and timely data and insights
  • 2) Market and sell directly to consumers (both target individuals and segments) and improve their long-term customer experience (CX) management strategies

However, unifying this data in just any tool isn’t enough to execute a DTC model.

Rather, leading travel and hospitality companies now invest in pure-play customer data platforms (CDPs) like BlueConic: a solution that helps them develop new sales channels, refine their marketing efforts, gain more loyal customers — and embrace a DTC approach.

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DTC business model: A perfect fit for today’s travel and hospitality companies

Adopting a DTC model was an afterthought for some travel and hospitality companies in pre-pandemic times. Particularly those focused on staying afloat, not long-term growth.

But many recognized the need for business transformation to stay competitive in an evolving environment. And that a DTC model could aid their efforts to transform.

In fact, 80% of travel industry executives said continuing their business transformation initiatives has become essential amid the pandemic, according to a 2020 Skift survey.

A key to their transformation efforts? Collecting, unifying, and activating first-party data — and relying less on getting data from partners like online travel agencies (OTAs).

These OTAs control travel and hospitality businesses’ customer data, since they directly book travelers and, thus, own transaction and engagement data from their sites and apps.

That means when travel and hospitality companies want to better understand their customers and, in turn, use that data to enhance their interactions with them (e.g., deliver more bespoke, cross-channel experiences), they have to secure that data directly from OTAs.

And, more often than not, these agents aren’t willing to share that data.

This deters travel and hospitality companies from gaining a single customer view and discovering what drives travelers’ engagement efforts and purchases.

The solution to eliminating dependence on OTAs (and similar partners) for this data access?

Invest in a modern single source of truth in which travel and hospitality companies can assemble and unify consented first-party data. Specifically, a CDP like BlueConic.

With a CDP the growth-focused teams at these organizations (i.e., those responsible for interacting with customers and/or driving business growth, like marketing, ecommerce, and analytics) can turn their attention to the DTC approach that puts the customer at the center.

Travel and hospitality companies that use BlueConic can share custom-tailored deals on travel, lodging, and/or experiences to specific prospects and customers based on engagement, interest, and/or behavioral data stored in their persistent profiles.

In other words, they don’t have to wait for OTAs to hand off data (which can take days or weeks, if it’s handed off at all) and, instead, can activate their constantly refreshed first-party data whenever and wherever they need across systems, channels, and touchpoints.

Some of these businesses fail on this front. As Publicis Sapient’s Sooho Choi told Skift.

[T]ravel brands activate their first-party data and additional data opportunities not as well as they think that they do,” said Choi.

Yet others — like BlueConic customer Advantage Rent A Car — have upped their game.

Syncing its first-party customer data from across its technology stack in our CDP has enabled the company to transform into a thriving direct-to-consumer brand:

  • The challenge: Advantage Rent A Car wanted to better compete with online travel agents by increasing direct bookings from its website. But a lack of first-party data and, in turn, limited customer insights prevented the company from better understanding and engaging with visitors.
  • The solution: Invest in their DTC strategy. Advantage relies on BlueConic to unify visitors’ demographic, behavioral, and interest-based attributes in persistent profiles — enabling the rich segmentation required to deliver bespoke experiences to both known and anonymous visitors.
  • The results: Advantage Rent A Car now dynamically personalizes the homepage experience for each visitor based on their interests and past browsing behavior (e.g., city they research). Three months after onboarding BlueConic, the business saw a 25% lift in direct bookings.

Unifying its customer data in and setting up one-to-one dialogues with BlueConic set Advantage up for personalization success. But, more importantly, it now has a sustainable DTC model in place to drive more revenue and modernize its business.

dtc business model

First-party data and a CDP: The key ingredients to DTC diversification

Whether C-suites want to democratize their customer data, orchestrate lifecycle messaging, or diversify their revenue streams — like, say, through, a DTC model — a pure-play CDP is the technology they need to transform their businesses.

For instance, growth-focused teams at travel and hospitality companies that use BlueConic can access their dynamically-updated-in-real-time data with ease to change the nature of the way they engage with customers:

  • Marketing can deliver bespoke, one-to-one experiences, including on-site dialogues, emails, and ads geared toward individual prospects and customers, to entice them to complete bookings (e.g., remind them of travel tickets left in their carts).
  • Customer service can use the single customer view BlueConic provides, in conjunction with their support software, to determine how to best resolve issues with customers and, therefore, streamline their day-to-day operations.
  • Analytics and data science can evaluate business trends. Specifically, they can deploy predictive models to calculate customer scores (e.g., lifetime value) and forecast behavior (e.g., when certain segments will buy or churn in the future).
  • And ecommerce can develop a DTC strategy. For instance, they can A/B test different, personalized dialogues on various site pages to see which lead to more conversions. Moreover, they can individualize page experiences to specific visitors (i.e., custom-created content based on profile data points, like past bookings).

There are many growth initiatives worth tackling today. But, as BlueConic COO Cory Munchbach noted for CMSWire, investing in a DTC model is an ideal one to prioritize:

  • “DTC diversification will not only create additional revenue streams, but will also help … companies improve their ability to attract, convert, and retain customers through the collection and use of first-party data.”

COVID changed the commerce landscape. This has forced companies across industries to adjust not just their people, processes, and tech, but also their business models.

And that includes travel and hospitality.

And BlueConic is the advanced technology numerous travel and hospitality companies use to uncover actionable insights that contribute to greater customer acquisition, retention, and loyalty — and, in turn, navigate the uncertain business environment.

Simply put, our CDP can empower you to build a DTC business that boosts your bottom line in the short term (2021) and the long term (long after the current business climate ends).

Schedule a BlueConic demo today to learn how unifying your first-party data in our CDP can help you embrace the DTC business model and accelerate growth.

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