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Fixing Travel

Retailing

Travel's back, baby

Borders are opening. Bags are packed. Planes are full of excited travelers and hotels are bustling. It’s official: travel is recovering.

By the end of 2021, the global travel industry recovered more than 50% of its gross activity compared to pre-pandemic levels. And, if recovery continues along the same trajectory, it could reach 85% by the end of 2022. Compare that to things just two years ago, when travel went from an all-time high to an all-time low of only 5% of expected volumes overnight. Not bad.

But as travel returns, the way it’s sold is also back under the microscope. Because after two years of doing almost everything online, consumers expect better. We asked 2,000 people from around the world how buying travel compares to buying goods, services, and experiences in other industries. This is what they told us.

People want to travel more than anything

Travel is the most eagerly anticipated thing to do in 2022. More than getting fresh kicks. More than going for pizza with friends. More than rocking out at Glastonbury.

People will do almost anything it takes to get away. You’d be surprised at what they’re willing to sacrifice for a holiday.

But buying travel is not so fun

There’s a word for someone who doesn’t like going on vacation. No, not that word (it’s “homebody”). They’re pretty rare though because our research shows that 93% of travelers find traveling either enjoyable or very enjoyable.

Although almost everyone likes being on holiday, the travel shopping experience itself is not sparking joy. And when you hone in on the US — the world’s biggest travel region — the data paints a stark picture. Almost half (43%) of US travelers do not enjoy booking travel. If 43% of the world’s largest travel region are unhappy, the industry has a major problem.

0%
of Americans don't enjoy booking travel

There's a wide experience gap

The experience gap between shopping for travel and actually traveling is noticeably wide. Elsewhere, consumers find the buying experience closer to the joy of what they’re actually getting, like physical goods, electronics, and clothing.

And don't just blame the boomers

It’s easy to assume only tech-wary generations fear booking travel. Unfortunately not. Lots of different age brackets and traveler types aren’t enjoying it. Even digital natives Gen Z, who are the most tech-savvy and comfortable buying everything and anything online.

0%
of gen z do not enjoy booking travel

Travel
Retailing
Is

Broken

Shopping should be easier

People aren’t enjoying travel shopping because it’s too complicated. Especially when compared to other items they book or buy every day.

Travel isn’t making it into the top three easiest buying experiences:

  1. Booking a restaurant online
  2. Buying clothes online
  3. Browsing and buying electronic/physical goods online
  4. Travel

Even travel agencies agree

Our travel agency customers agree that selling travel should be a lot simpler, and that modernizing travel retailing will help them sell more.

Three-quarters (74%) of agents we surveyed agree that buying and selling could be simplified. And 86% of agents agree that modernizing will help them sell more.

It has become so time-consuming that I am having to turn new business away. Right now, I’m their doctor, therapist, attorney and insurance agent along with their travel advisor.

Holly Lombardo, of Holly Lombardo Travel in Atlanta on selling travel in a pandemic

Source: travelweekly.com

Comparison is complex

The lack of transparency when comparing offers is driving complexity in travel. Sure, travel has price comparison sites just like any other industry. But choosing the right deal is about so much more than price, and that’s what makes it harder.

Families (the largest cohort of respondents, at 42%) find comparing offers especially complex. And let’s face it, they have enough on their hands.

One-third of families find it difficult and time-consuming to compare offers when searching and booking flights and hotels. So it’s no wonder that a quarter (23%) of families don’t enjoy looking for and booking trips.

1/3

Of families find comparing offers difficult and time consuming

Other industries make it easier

Retailing greats like Amazon help customers make decisions by showing products in a like-for-like way. They aren’t afraid to give them all the information, and let them choose.

Comparing travel products is unfortunately seen more akin to evaluating mortgage or car insurance options. And who wants to be known for being time-consuming, stressful, and bamboozling consumers? That’s why, on average, travelers visit a whopping 38 sites before booking a trip.

The verdict is: nontransparent = more complicated = less fun. Poor comparison options also add to the feeling of ‘hidden costs’, which erodes trust — and 60% of customers think travel isn’t up front enough.

Fashion proves one size doesn't fit all

People think the travel industry is poor at remembering their preferences and sending personalized offers based on their booking history.

Some retailers know their customers inside out. And they know how to target them too. Major fashion retailers like Shein, Zara, or ASOS reject the one-size-fits-all approach, and instead tailor ads and use hyper-personalization to capture customers by preferences, buying history, and individual style. But travel isn’t measuring up to that standard.

The digital experience needs an update

Other industries have steamed ahead of travel in terms of simplicity and innovation. Customer expectations have changed, and they’re getting more sophisticated every day. The travel industry, on the other hand, has even slipped behind banking in how people perceive its innovation. Yep, even less innovative than banking.

Customers are putting up with bad retailing experiences, because they love being on vacation. That’s a risky situation. All it takes is one disruptor to move in on travel’s blind spot to pose a real threat to the industry. Just look at how banking and finance have had to scramble to react to new competitors like Revolut and Venmo.

Booking business travel is behind leisure

Business travelers are still travelers. They expect the same experience when booking corporate travel as booking a vacation. But they aren’t getting it. 87% say booking business travel should be as easy as booking a holiday. But 42% say it’s actually more difficult.

Our travel agency customers recognize that change is needed, and agree that retailing standards should be similar across both leisure and corporate travel. 82% of corporate travel agents say modern digital retailing and customer experience applies to business travel as well as leisure travel.

0%
BELIEVE BOOKING BUSINESS TRAVEL SHOULD BE* AS EASY AS BOOKING A VACATION

(*Emphasis on the ‘should be’. 42% say it’s actually more difficult)

Only
Agencies
Can Fix
Retailing

Travel retailing is broken, but the good news is, it can be fixed. But who’s going to do the fixing? Our view is: travel agencies are the only players in the market that are truly capable of delivering the modern retailing standards that other industries thrive on. And here’s why.

Convenience is crucial

People want a travel shopping experience where they can search and book everything in one place. That’s why agencies are best placed to be the drivers of innovation in our industry, and become truly modern travel retailers.

45% of respondents would prefer to book an entire trip through one website, one that offers choice of airlines, hotels, car hire companies, and extras. In particular, the youngest generation of travelers want agencies to step up their retailing game. 50% of Gen Z would prefer to book an entire trip through one website.

0%
Prefer to book flights, hotels , car hire, and extras through one website

Choice beats price

Customers don’t want the cheapest option. Their main concern is seeing everything on offer. And the truth is, only travel agencies have the breadth of choice to deliver real retailing. They can offer more than any one airline or hotel website can.

0%
Only 13% would book the cheapest option if it limited their choice

Ready to retail

Travel agencies know their unique value in the retailing challenge. And they’re ready to build on that value by modernizing the way they sell.

0%
Are in favour of modern digital retailing to improve the customer experience

Three building blocks for modern retailing

Wider breadth of choice

Travelers fear not seeing everything on offer. They want options, lots of options. The way to reassure them they’re not being duped is to have the breadth of content needed to build trust.

That’s not just the cheapest fares, it’s the best fares, the most suitable fares, the most convenient fares, and the ones people will actually buy, all in one place. In travel retailing, choice is everything.

Modernized merchandising

Matching the right product to the right consumer quickly, easily, and transparently means redesigning merchandising. Travel must move beyond tweaking every screen to earn an extra cent, and sell at the right time with booking tools that are simpler than the standard, confusing series of forms and tables.

The most successful retailers sell the sizzle, not the steak. Travel can drive an emotional lift with visuals like reuniting with family, meeting colleagues face-to-face, or sipping a piña colada by the pool.

Customer centricity

Repeat business depends on making customers happy. But travel brands tend to specialize in one step of the journey, rather than delivering across the full trip. That means missed opportunities to improve the experience pre-trip, in-trip, and post-trip.

You don’t need a points-based loyalty program — it’s about finding ways to connect, inspire, and impress. Optimizing and automating with self-service, data, and insights can both reduce costs and improve customer experience — but avoid trade-offs between those goals.

The reward for retailing

The benchmark of successful modern retailing is true loyalty and repeat business. By restoring clarity, confidence, and fun to travel shopping, we can grow trust and improve the way travel is perceived compared to other industries.

Whether looking at better content, modern merchandising, or more customer centricity, the focus must be on delivering lifetime value. This is the path to better, longer-term relationships with customers and breaking the cycle of re-acquisition which plagues the entire travel industry.

The industry was once seen as a retailing pioneer — in fact, flight tickets were the first items to be sold online. And travel can be a leader once again. But we need to learn from outside our comfort zone and take lessons from retailing greats in other industries. And we need to sell to customers in the way they want and expect.

Retailing elsewhere is constantly advancing. If travel businesses that don’t follow suit, we’ll be left behind for good. We’ve got a unique opportunity in having the dream product to sell, and people who are desperate to buy it. So, let’s get out of our own way, and sell it right.

Methodology

This research was undertaken in conjunction with Toluna Corporate Insights, to investigate traveler sentiment around the ease of travel shopping compared to other industries. We surveyed over 2000 people from different demographics across seven different countries including the US, UK, Australia, Hong Kong, India, Singapore, and the United Arab Emirates.

Travel agency sentiment was also measured through Travelport’s Customer Voice portal.
Travel recovery data and predictions are based on MIDT data.

App store reviews are taken from various travel brands’ apps on the iOS App Store and anonymized for this report.

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