How the travel industry can bounce back from COVID-19

March 26th 2020 - date matters as our paradigms are changing every day.

In less than 4 weeks, we’ve watched COVID-19 transform the world’s health and economic situation. It first hit Asia, then Europe (where it still hasn’t hit its peak). Now, it’s making its way to the United States where it will most likely make a devastating outbreak.

The travel, tourism, and transport industries have been hit hard. Business travels have stopped. Most flights have been canceled. We’re witnessing the closure of airports, hotels, railways, travel agencies, and more. The whole sector is frozen.

With such a gloomy picture, what can we expect and how should we prepare for the end of the crisis?

Spoiler: It will eventually get better ;-)

Survival mode

As a direct consequence of the drop in travel activity, travel companies have been forced to lay off their staff. As a reminder, we’re talking about an industry that accounts for 10% of the world’s GDP and employs nearly 320 million people. Forced to drastically reduce their costs to survive the next few months, travel companies are keeping only essential workers that will ensure their business can continue running while waiting for people to start traveling again.

In recent weeks, we’ve seen many companies lay off 90% of their employees (or plan on doing so), end consulting contracts, pause all but essential projects, and cut budgets. Right now, we’re talking about SURVIVAL. Without these drastic measures, these companies would no longer exist in a few months. Even with these steps, we know some weaker travel companies won’t survive.

The most optimistic forecasts suggest a gradual restart of travel activity over the summer. However, even if the world has overcome the first wave of the epidemic, travel will not go back to normal overnight. In times of economic insecurity, and all the more so after a global health crisis, travel can take months or even years to return to existing levels.

Emergency customer support

We’ve observed a gradual shutdown of customer service centers over the past 4 weeks. These support teams are less and less able to manage the mountain of cancellation, reimbursement, and booking modification requests. For some companies, we’re talking about thousands of requests, almost all from travelers who had planned a trip within the next 3 months. Customers can wait for hours without reaching the support they look for in the end. It also means that these companies need to reimburse a massive amount of money in a very short period. This is something never seen before at this scale.

The customer service teams are facing the biggest challenge in their history. They didn’t have much time to prepare for it and are often equipped with fewer resources than they need. Most support departments are designed to handle normal situations with some occasional peaks of activity. A situation like this had never been planned for: a huge drop in travel activity + less staff + an explosion in demand. Boom.

A great solution that we’ve seen amongst our customers is the use of voucher systems. They allow travelers to retain the value of their booking while allowing the company to avoid reimbursements. This helps keep travelers for a few months and helps travel companies avoid massive cash outflows. However, none of this is automated and requests must be dealt with one by one.

Preparing the future - introducing the One-door Strategy

Once the emergency is controlled and travel activity has stabilized, it will be time for restructuring plans to prepare for the post-crisis world and the resumption of most efficient operations.

The leaders who early prepared to shift back to more regular operations and have managed to retain customers during the crisis are the ones who will most likely succeed in the post-COVID-19 world. The demand for travel will not return to its former levels. That said, the current explosion of support requests will stay at a high level in the coming months. And it will cost companies tens of millions to manage them.

The best way to manage and prioritize the most urgent requests is following what we call at Mindsay the One-door Strategy. The One-door Strategy is the idea that you should only give users a single entry process (or door) to your customer service agents, whatever the channel. Whether it be on the web, in an app, or on your social networks, a user should follow the same process that systematically qualifies the request before allowing them to get to a customer service agent. Importantly, this does not mean forcing your customers to wait for 15-30 minutes (and often more) before getting a response.

The One-door Strategy consists of 4 simple levels:

• Level 1 : Respond as quickly as possible through automation and content to customers whose questions can be resolved without an agent. The user needs to feel the answer was specifically tailored to his question even though it’s not.
• Level 2 : Automate as many repetitive processes as possible (like booking cancellation, modification, and refund vouchers, for example) to reduce the load of standard requests on customer service agents.
• Level 3 : Prequalify urgent or highly specific requests, prioritized by urgency and gathering all client infos necessary to help agents resolve them faster.
• Overall : Provide a consistent customer experience throughout the whole process. At any point, it should reflect the company’s brand and values even through digital interactions.

The side door mistake: if you let just a tiny side door, such as an email address or phone number somewhere on your website, you will see all your efforts destroyed by this flaw in your strategy. 

Tier 1 customers exception: VIP/Premium customers can of course get a special treatment with a fast lane to a dedicated customer service. Just make sure they are logged in as top tier customers before providing the contact information!

At Mindsay we’ve advised our customers to structure their customer service using the one-door strategy. Those who have properly applied this approach have seen an 80% reduction in requests that make it through to their agents and a 33% drop in handling time.

Any crisis is also an opportunity for industries to renew and reinvent themselves. The sooner these deep structural changes are made within companies, the faster they will be able to recover from this current crisis.