When a startup is focused on value creation, backed by human touch and all the benefits that comes from rapid learning through artificial intelligence, it has several reasons to redefine a unique segment in the market without the need for aggressive price reductions. Reservations.com is a technology-driven travel platform that will likely disrupt the market with a very unique concept.
After hearing about this exciting new concept – and knowing personally how powerful a fresh technology driven approach can be to improve the way in which people do business online, I took a closer look at what Reservations.com is all about.
Prevailing in a fiercely competitive market where price reductions tend to be the way to market for most giant platforms, may sound difficult, but there are several reasons why Reservations.com will be able to prevail in the market:
The travel industry is changing, rapidly. Hotels are no longer commoditized beds. Travel is no longer transaction and the market has already seen a shift towards experiential traveling. The need for a better experience extends naturally into the booking process as well.
The industry started with travel agencies providing high value service to a small base of customers and then switched to online travel agencies providing minimal service to a huge base of customers. Service is treated as a cost-center and is not a core focus for OTAs today. The concept of providing high-touch service, at scale, is missing in the travel space despite evidence of other companies following this to much success to other verticals (banking, apparel, etc.). Competing on price is no longer a viable strategy in the mid-long range. The service level in today’s online travel industry is inconsistent with any other similarly situated consumer purchase. There are very few instances in other industries where a consumer spends $350-$500 and is offered no service. Currents OTAs offer customers no meaningful choice. Existing players are so rooted in the basic model of fighting on price and conversion that it’s a high cost of shifting from that focus.
The traveler psyche, however, still conforms to conventional marketing wisdom. People feel elevated by high touch service. People want to feel special. People want to feel like they are one step above the social ladder they belong to today. Marketing geared towards providing the feeling of elevated social climb is a time-tested technique. Consumer thinking of measuring happiness and wealth is not all about income. Travel has become a prime component of measuring how well people have lived their lives. Exposure to travel, food, culture, knowledge and experience is collectively becoming an integral part of how today’s consumers define themselves. Nobody in the market today is catering to this need – the desire to feel special. Creating a special booking experience is the first step in the right direction to a stellar customer journey. For example, a bad experience at an airport will sully any potential joy of a great flight. By making travelers’ pre and post journey special, Reservations.com will elevate overall loyalty and this creates a sense of belonging.
Reservations.com will redefine the booking and travel planning experience for today’s travelers by providing personalized services, at scale.
Any new disruptive success-full model exist today in e-commerce is all about customer centric approach, provide value and not price. As a collective offering, these companies always comes out ahead of just price/ discount game. For example, companies such as Zappos, JetBlue, Starbucks, and AmEx have differentiated themselves by offering high-touch service, at scale. Reservations.com will achieve similar results by continuing to leverage on a unique combination of technology, process, and people.
5 Ways in which a high-touch model will be sustained:
- Utilize AI to train our travel advisors to provide superior personalized services at scale.
- Create a new category class of employment – experience advisors. There are so many passionate millennials and Gen Z’ers today who will love the job of an experience advisor. Culture is always ahead of strategy. When we create an environment where service/experience is a core value, our advisors will excel at what they do because we fuel their passion.
- Unified CRM strategy that deliver quality support, content, and guidance to not only augment the experiential travel needs arising out of the current booking but also to improve stickiness for future bookings.
- Supplier relationships that focus on providing thoughtful value to travelers through room upgrades, perks, special amenities, etc. The friction between hotel chains and OTAs is centered around price and cost pressure. There is no alignment on what the mutual synergy should be – driving customer and subsequently enterprise value by providing travelers with a better experience. Hotel relationships that based on enhancing customer value is the path forward.
- Call center sales channel and loyalty programs also allows us to sale CUG ( close user groups ) rates which is huge price benefit to the consumer.
Everyday we see smart startups grab considerable proportions of conventional businesses – many without lowering price. Those who leverage AI and technology in such a way that it delivers exceptional value alongside human differentiation, without lowering cost – are surely on a winning track.
What Yatin Patel, the CEO of Reservations.com is doing in the travel industry, is something nobody has tried yet: to take on industry giants – and bring back the human touch to an industry that has become rather impersonal. This is a development to watch very closely, given his hugely successful track record in the travel and e-commerce industries.