You are now leaving this site and you'll be redirected to the Interbrand Global website.

Afloat on a Sea of Data

Chris Nurko

While technology can’t yet take your holiday for you, it can affect every other aspect of the experience. The cruise industry is at the forefront of what this means for the travel sector and how it treats its clients.

Every industry and sector have been transformed by the advances of digital technology and the increasing expectations and demands of customers for greater ease, convenience, personalisation and self-empowerment afforded by digitally-enabled user experiences. Perhaps the most challenging category of travel and tourism is the cruise industry, where all aspects of hospitality are put to the test across travel, security, logistics, accommodation, food & beverage, guest services, entertainment and retailing simultaneously – and all the while in transit at sea aboard a floating hotel resort and casino, and globally for some cruise lines. Essentially, a cruise ship represents a microcosm example of a smart-enabled  daily experience that is benchmarked by guests across multiple touchpoints relating to how they spend their leisure time and money to choose, shop, pay, connect and share. Although product improvements and customer experience are primary drivers of satisfaction and brand strength for any sector, in travel and hospitality no other business faces as complex and challenging aspects to both logistics and delivery.

However, by adapting and implementing a connected and seamless experience at sea the cruise industry is driving new growth as more people choose cruising as a preferred way to relax and enjoy their leisure time. The cruise business is booming with new investments in ships and onboard experiences being made to meet growing interest and demand. In 2018, the industry sailed 28.5 million guests on cruises worldwide which was an increase of 7% on 2017. In 2019 this is expected to be 30 million guests. Of the key markets, 14.2m are expected to be from North America, 7.17m from Europe and 5.7m from Asia-Pacific regions, which underscores the global nature of the cruise industry. Out of a total global estimate of 1.4 billion travelers across the entire travel industry, this leaves significant room for growth in a sector worth $134bn, according to the Cruise Lines International Association State of Industry Report 2019. Growth across the world in cruise vacations reflects the desire for more personalised experiences with the utmost convenience, choice and hasslefree planning, travel and accommodation.

The average number of days a person has for paid holiday or vacation averages out at 10 days in the USA, 25 days across the EU and 10-15 days in Asia. These three key markets are driving growth in travel as more consumers seek to maximise their leisure time with foreign travel. As leisure time away from ‘work’ is precious and often limited, a cruise vacation offers unparalleled ways to see and explore the world in an efficient and effective manner. It enables multiple destinations to be visited while travelling with ease, comfort and convenience. A cruise offers the ability to have immersive and unique experiences of food, drink, culture, relaxation, entertainment and retailing, both on-board and via exciting off-board excursions at ports-of-call.

New investments in shipbuilding construction and design reflect the trend towards the ship itself being a theme-park-like shopping, dining and casino entertainment complex. As smart technology and connectivity becomes the pervasive norm for people’s daily lives, the expectation is for this functionality to be available and state-of-the-art at sea as well. And this applies across budget and luxury experiences for improved comfort, convenience and customization as a baseline requirement.

A SEA CHANGE AS SECTORS CONVERGE

All sectors of travel, hospitality, retailing and entertainment have to meet the needs of ever more discerning and demanding customers. Thanks to the availability of information, choice and direct purchase through on-line access, brands have never before been more challenged to compete for business. At the same time, the pressure on profits requires greater operational efficiencies and infrastructure management to meet and exceed customer expectations. The world’s most successful brands are those that have placed customer-centricity and digital transformation at the heart of their strategy and innovation.

Many of these companies and brands have transcended being defined by a single product or category and have instead focussed on providing customer-driven solutions and connectivity. Companies such as Apple, Microsoft, Alibaba, Amazon, Ten Cent and Google have pioneered the digital transformation of society in a way that makes it easier for consumers to find, choose, buy, enjoy and share their pursuit of leisure time and brand experiences. The blurred lines of ‘sector’ or ‘category’ competency and capabilities has seen the likes of these same brands offering integrated services and solutions to meet the consumer’s lifestyle needs. The cornerstone of a digital and data-driven age is the ability to use Artificial Intelligence combined with the ubiquity of smart device interfaces to understand, predict and reshape customer experiences and, as such, expectations and offers.

The emergence of digital ecosystems demands a capability to marry customer-centric data and understanding with the operational efficiency to provide value across integrated product, service and experiences. Consumers now expect integrated end-to-end experiences that are highly personalized. Companies that invest in platforms to deliver this will be those that win in the future. The more a company knows about its customers; how effectively to reach them and engage with them to anticipate and deliver value; and understands how to deliver solutions in an integrated and seamless manner the more successful that company will be in fostering a deeper level of customer trust, responsiveness and advocacy.

CUSTOMER-CENTRIC, DIGITALLY-ENABLED SERVICES

For successful organisations and brands, the commercial challenge has always been to provide more personalised and differentiated customer experiences while at the same time doing so at scale with operational efficiency. Today, however this requires a more digitally enabled enterprise approach. It requires an infrastructure and guest-facing operations that when combined acknowledge and places the customer at the heart of the business operations. It requires the integration of data and transactional capabilities in real-time with a seamless efficiency that places the customer in control.

For brands, the ability to leverage a deeper customer understanding and relationship is directly tied to the brand’s ability to predict and serve a competitive value proposition. As Blockchain technology begins to be deployed, the increased level of secure data transmission and storage enables a higher degree of confidence and security. In conjunction with cloud-based data management, Blockchain is one method offers the travel industry a more effective means to securely share transactional and customer-relevant data across multiple service providers and networks. The increased need for security and integrity of data has been in part fuelled by travel security and identity needs. The rise of biometrics in identify recognition such as with both government issued passport controls, or private sector security systems such as CLEAR, heralds a new era for the process of an expedited customer journey. Identity recognition and security, in particular when combined with financial transactions allows for simpler, secure and trusted payments.

Applied across a typical travel scenario, it enables a secure ‘chain’ of data sharing from booking, to payments, to identity recognition and security and even to luggage tracking visible to the customer as well as the travel provider. The more secure, the greater the brand trust, thus reinforcing brand loyalty and potential future preference. The rise of new community platform technologies of inventory management (such as Uber and AirBnB) in combination with the benefits of Blockchain offer even greater security and payment transaction protection. Therefore, as these core tenets of a digital enabled customer experience are integrated into the innovation and investment strategiesof brands, we will see new competitive advantages and capabilities emerge. Carnival Corporation and its Princess Cruises brand has been pioneering and rapidly scaling this approach which has manifested in some of the most innovative solutions to enable a more customer centric approach through technologies. Simplified, personalized, and elevated customer experience is the reason why the likes of the Princess Cruises OCEAN (One Cruise Experience Access Network) platform and the OceanMedallion wearable device are notable and ground-breaking innovations.

As these technologies power their MedallionClass ships the customer experience becomes the sharp focus and ‘hero’ of the platform from a guest perspective, and it also drives an even higher degree of service experience delivery by its crew. Across the entire guest journey, the technology enables the guest to choose, select and direct their experiences in real-time while enabling the cruise lines’ operational capabilities to be deployed with both efficiency and effectiveness. One example is a common ‘friction point’ on a large cruise ship – where are my kids on this floating hotel resort? Princess Cruises instantly removes that friction, and worry via large interactive portals throughout the ship or via its app on a phone; whereby a customer can geo-locate their “shipmates” on an interactive map and get turn-by-turn directions like Waze on a ship to go meet them. As an integral part of the brand’s offer – the ‘medallion’ represents both the physical object of identity and recognition as well as the platform for a seamless travel experience that is digitally enabled. In aggregate analysis, the overall offer and customer experience of something like MedallionClass can be evaluated and used to identify trends, determine opportunities for enhanced value and competitive points of differentiation.

As an operational platform, it also allows for the business to manage resources and enhance the vacation experience with new levels of accuracy and efficiency. In the travel and hospitality industry, the greater the ability of the customer to personalise and customise the greater the satisfaction, the greater the positive word of mouth, and the greater the revenue opportunity. The greater the ability to manage the efficiency of the customer experience, the more enhanced the experience and greater margin of profitability. If the experience creates preference and can be leveraged to generate future demand, the investment pays off as a driver of future loyalty and revenue. It is this smart-enabled investment that transforms a brand and organisation and reinforces its competitive advantages.

New partnerships and innovations in the travel sector have emerged that reflect the priority for developing new ecosystems and collaboration centred-around digital transformation. For example, Marriott International has partnered with Alibaba’s travel division, Fliggy as a new Direct to Consumer mobile portal and secure payment system.

VALUE IS CREATED WHERE VALUE IS EXPERIENCED

By focusing on the customer, and how the customer defines value today’s most successful firms are those that are at the vanguard of investing in digital technology to create integrated ecosystems. By focusing on customer demand drivers and integrating learnings and collaboration from across sectors, brand led strategies for experience are enabling customers to customize and control the value proposition.

Supported by the trust and confidence of technology that is cyber secure, data integration and service delivery can be more efficiently coordinated. As ecosystems and partnerships re-define traditional sectors or categories, new value propositions and experiences will emerge that redefine companies and their competitive positions.

In travel and hospitality, these changes are supporting market growth and expansion. No more so than in the Cruise industry which is seeing demand increase along with innovative investments in new cruise ship capacity and experiences.

DOWNLOAD THE FULL TRAVEL REPORT

Chief Innovation Officer, Interbrand Group
Get in touch