A voyage to the center of customer resilience

It’s been a couple of years since the travel industry has seen genuinely positive news. After the combined effects of a pandemic and a major war, the industry really needed a standout metric to show that things were turning around. That’s why I was genuinely excited when our research team briefed us on the results of our latest Consumer Pulse Survey: Travel has come roaring back, and customers are voyaging far and wide—even with continued uncertainty in their lives.

This last point is significant. In the face of adversity, something remarkable is happening—consumers are proving surprisingly resilient. While we’d expect consumers to tighten their belts and cut back in tough times, Accenture’s research shows consumers plan to spend more (or pull back less) compared to last year. And while a portion of these consumers are travelling more economically, they are still choosing luxury options as they travel.

It’s easy to see how companies can be bewildered by this kind of ‘unpredictable’ consumer behavior. But when we look at the series of consumer mindsets uncovered by our survey, it becomes much clearer that consumers and their preferences can no longer be measured by traditional metrics, and why demand in unexpected places makes sense.

For example, consumers we characterize as having a living in the moment mindset are focused on enjoying life in the present. For these people, big-ticket, one-off purchases and spend on leisure travel are rising, despite having a lack of control over their current circumstances. On the other hand, consumers characterized as getting focused see difficult times ahead, and are willing to forgo big-ticket and luxury product purchases. Yet they still see leisure travel as essential and are willing to keep spending in this area.

Travel companies that are able to recognize this, and understand the factors behind it, are going to be able to seize the moment in this new travel reality.

Luxury in the face of uncertainty

Conventional consumer analyses (based on factors like age and income levels) used to be a reliable metric for showing how consumers approached premium brands. But our research shows us that many consumers—especially those living in the moment—are opting for luxury instead of the basics, including luxury travel and the amenities that go along with it. In fact, 43% of those living in the moment have booked luxury trips for within the next 12 months.

Premiumization is the key for travel companies that want to understand true consumer preferences and cater to consumers that are willing to spend more. By employing data-driven pricing strategies and marketing programs, travel companies can make premium travel options more relevant to consumers. More importantly, by applying a life-centric lens, these companies can deeply connect with traveler needs and more accurately determine the consumers that are willing to trade up and seek out luxury travel.

Human connectivity against all odds

There’s no doubt that the pandemic took an enormous toll on people’s mental well-being. But the major resurgence of international travel hasn’t just been about people wanting to escape on a vacation. Rather, people are seeking meaningful trips—especially once-in-a-lifetime trips that are personally enriching.¹

Travelers are seeking out specific offers and experiences, beyond simple vacations. For example, Millennials are more likely to search for specific travel experiences that they can shape and manage themselves, especially off-the-beaten path adventures that are both memorable and authentic.² Our survey revealed 42% of Gen Zers and 38% of Millennials are booking a luxury trip within the next 12 months. For these travelers, the destination also goes hand-in-hand with technology: According to the survey, 1 in 5 Gen Z consumers are creating more digital content than before the pandemic (including social media, videos and blogging). It’s easy to see in these regards why Instagram is as essential to the vacation as room service.

Travel companies can’t just assume that the vacation is the destination. Connecting with consumers to provide rich, unique and omnichannel experiences (even ‘virtual vacation’ experiences in the metaverse) can help build relationships with consumers in new and dynamic ways. At the same time, uncovering the ways in which consumers want to shape their vacation options can differentiate leading travel companies from those simply providing consumers with basic travel packages, and make travelers feel like they are being understood and appreciated.

Caring for the planet in an uncertain world

Of all of the trends in Accenture’s report, sustainability is perhaps the most interesting. After all, if travelers don’t have the money to spend, why should we expect them to prioritize green options on vacation? Yet, with our research revealing that twenty-seven percent of them say making an environmentally-conscious choice is their top motivation, it’s pretty evident that the intersection of sustainability and travel is a critical consideration for travel companies. It’s important to note as well that as our research shows travelers are less likely to choose sustainable travel options if they cost more, travel companies should develop options for their customers that are flexible and accessible.

Take the example of one leading global online travel provider. More than 80% of the accommodation partners surveyed consider sustainability a vitally important issue. And 78% of travelers intend to stay in sustainable accommodation at least once in the coming year. That’s why it set out to create internal targets for a new “travel sustainable” program, which designates sustainable travel options and nudges customers and providers alike toward more sustainable choices.

And while many travel companies see sustainability as an important aspect of their approach toward both responsible business and customer service, it’s important for these companies to meet travelers where they are and deliver travelers the options to choose and shape sustainable travel the way they want.

Life forces and life choices combined

So what are the keys to making use of all these trends? 

First, travel companies have to reframe their understanding of consumers. Travel companies should center on unique needs and lives rather than on industry lines, categories and sweeping demographic segments. Understanding people’s multifaceted lives is key, and by analyzing critical data, travel companies can get closer to consumers, and better understand their fast-changing needs and preferences.

Secondly, travel companies need to break down the barriers and redefine the boundaries to put the traveler first. By adopting a life-centric understanding of consumers, travel companies can traverse category and product boundaries. And they can develop powerful relationships with travelers—regardless of whether they’re looking for a no expenses spared luxury vacation, or a simple trip to the big city.

Finally, to navigate all the disruption around them, travel companies need to adopt a strategy of Total Enterprise Reinvention which puts the traveler at the center and sees travel companies create a deeply connected organization with a strong digital core which can implement continuous and dynamic change across its entire business.

Ultimately, companies need to foster closer connections to their customers by embracing life centricity and understanding people as complex, multi-dimensional beings. By doing this, then adopting Total Enterprise Reinvention to continually reinvent their operations, they’ll be able to respond to rapidly shifting human needs and preferences.