What gets people in the mood to book a holiday?

26/07/2018

Online holiday bookings may offer convenience, but removing a physical travel agent can make the process overwhelming. Our research partner, Canvas8 sat down with Johann Rozario, e-commerce product owner at Booking.com to understand how behavioural science can be harnessed to give people a better experience.

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Scope
The way we book holidays has transformed. The high-street travel agent is no longer people’s first port of call. In 2017, 83% of Brits booked their holiday online. [1] One platform that has been part of this transformation is Booking.com. Since its establishment in 1996 in Amsterdam, the platform has become one of the largest travel e-commerce companies in the world, with more than 28,600,000 listings, from apartments to five-star hotels. Every day, more than 1,500,000 rooms are reserved on the platform. [2]

People booking online generally don’t have a travel agent to chat to in person and hold their hand along the way. Booking.com harnesses insights from behavioural science to better understand holidaymakers, keep them engaged in the process and improve the customer experience. “When developing a product, we need to think about both enhancing its features and convincing people to use it,” says Booking.com e-commerce product owner Johann Rozario. “That is where behavioural science has the biggest part to play.” [3]

So what do people want from a booking site? And how can platforms help to guide their journey, making it as smooth as possible? Canvas8 spoke with Rozario to understand what mindsets people have when they are looking to book a trip, and how behavioural science can be used to give them a better customer experience.

Beyond demographics
“It is important to develop a process that allows you to capture people’s needs in a more concrete way,” says Rozario. “Effectively going from segmentation to real person. Rather than tearing apart segments of users, like families and people who want to go on a ski holiday, people want things actually tailored to their individual needs. They want to be asked what they want. To give a true feeling of personalisation, we want to be the online platform that is as good as, if not better than, the travel agent the user would talk to over the counter.” [3]

This is something that resonates with leisure holidaymakers – 50% of global travellers say personalised suggestions for destinations and things to do on holiday encourages them to book a trip. Online booking platforms could be poised to take on a more personal, supportive role. While 29% of travellers say they are comfortable letting a computer plan their trip based on data from their previous travel history, 50% don’t mind if they deal with a real person or computer, so long as they get answers to their questions. [4]

Risky decisions
Going on holiday or booking a trip is exciting, but it also involves risk, especially if you are travelling to a new destination – 13% of Brits worry about holidays living up to their expectations. These concerns are higher among younger generations, with 51% of younger holidaymakers worrying about whether or not the holiday resort will live up to what they are expecting. [5] And considering that almost six out of 10 people say their holiday is the most expensive purchase they have made online, it’s not surprising that people want to reduce risk when booking. It's why 75% of Americans research destinations online before booking. [6]

But booking platforms can tap into this and offer more of a sense of security. “We use social proof a lot, such as guest reviews about their stays and experiences, and making sure other users can see these,” says Rozario. Considering that 80% of Americans already read 6 to 12 reviews on average before booking, making these accessible can only improve their experience. [6] This can be anything from a review score of a property, facilities or destinations, to asking whether or not it met their expectations, and communicating that to users.” [3] In fact, 64% of global travellers say they would like to ‘try before they buy’ with a virtual-reality preview. [4]

It’s also important to note that people place more trust in some reviews than others. “We've done a few research labs in various countries and there are some very different cultural differences,” says Rozario. “People are really strongly advocating reviews and opinions of other who share their own values and are similar to them. I call it ‘similarity bias’.” [3]

The value of scarcity
Booking a holiday can feel like a big deal – 27% of Brits say the planning, booking and preparation is a source of great stress. [5] A natural reaction is to keep putting it off; 48% of people say they’ll avoid making decisions in the hope that someone else will do it for them. [7]But tapping into behavioural science – such as the value people place on scarcity – can help to tackle this. “Scarcity is quite effective in terms of motivating users to make decisions,” says Rozario. “From the user’s perspective, it’s a fear of missing out – especially when availability is low and they have a high intent to book. It’s why lots of travel companies show how many rooms are left or the availability of rooms on their site.” [3]

This relates to the scarcity principle – a cognitive bias that describes how people's perceived value of something increases if it is in low supply or scarce. So when people see that there is only one room left for a hotel they were considering, they place a higher value on that particular hotel. One study looked at travel promotions at a three-day travel event and found a significant relationship between time pressure and the value people placed on a product. [8]

People also have a fear of missing out on great deals or bookings – they don’t want to regret their decision in the future. “If you need accommodation for tomorrow, you’ll probably have a high intent to book,” says Rozario. “Knowing that properties on a site are 99% unavailable or booked suggests that you should decide now rather than later, because you can miss out.” [3]But decision-making can also be driven by constant exposure to other people's trips on social media, putting holidays front of mind; 52% of Facebook users say they dream about holidays when on the platform, even when they aren’t planning a specific trip. This can lead to feelings that they have missed out on great experiences by not going away – 66% of Gen Yers say they regretted not taking a last-minute trip in 2014. [9]

Insights and opportunities
“With more product offerings and high customer expectations, getting it right is becoming more important,” says Rozario. ”Every day, users are bombarded with more content, more distractions.” [3] From emails filling up inboxes, countless options to choose from on comparison sites and different platforms vying for their attention, it’s no wonder that 79% of people feel overwhelmed by the amount of information they get online before booking a holiday. [10] “So behavioural science is becoming more important than ever to get people engaged, keep them in that right frame of mind and allow them to get what they want done,” adds Rozario. [3]

Understanding customers’ mindsets is key – it helps make their journey on a platform better and can even give insight into when is best to reach them. For example, having the post-holiday blues often spurs people on to plan their next trip. On average, Brits book their next holiday just 37 days after arriving home from their previous one. In fact, the desire to jet off again kicks in at around 17 days after arriving home. Meanwhile, one in four Britons say they know they need a break away when they find themselves watching travel programmes on TV. [11] There is an opportunity to reach people when they are in this mindset, and holiday adverts will be relevant or even welcomed.

The devices people are using can even be indicative of their frame of mind. Rozario explains: “People tend to be in a more last-minute mindset when on mobile. They already have a destination in mind and are just looking for a place to stay as quickly as possible. Whereas people on a desktop want to book a bit further in advance – they are looking for more inspiration about where to go and what to do in the area.” [3] Desktop browsing is generally considered less restrictive and more leisurely, which could be why 74% of Brits use their computer to search for inspiration for their next trip. [12]

 

Scarcity is quite effective.. it’s a fear of missing out – especially when availability is low and they have a high intent to book

Johann Rozario, e-Commerce product owner at Booking.com

 

Booking.com sees moving people from a future-based mindset to a present mindset as key. People can be reluctant to take the plunge – 81% of travel shopping baskets are abandoned, compared to 68% of baskets in other retail. [6] Be it due to a constant desire to do more research, concerns that a better deal may come along, or simply not wanting to book in advance, people often hold off booking their trips. This means that brands need to work harder to encourage customers to commit and provide something that outweighs the risks.

A popular option is to offer free cancellations, so that people feel they can back out if they want to. But this also has negative effects. “Partners such as hotels or airlines get really hurt, as you're taking away availability from them only to have people cancel,” says Rozario. “In the end, it's actually the user who suffers from this because sites, travel agents and so on are just interested in getting as many people booking and using the products as much as possible without really thinking of the potential consequences on properties having to deal with cancellations and bad reviews, taking away available properties from other customers.” [3]

Instead, Booking.com harnesses other insight from behavioural science to highlight how booking right now can be the more valuable option. “As the industry becomes more competitive, the current game of shifting value to users is going to be more and more unsustainable with market forces,” says Rozario. [3] And when competition is high – regardless of which industry a brand is in – behavioural science and a focus on mindsets can be a powerful tool to leapfrog such barriers and stand out, making customers happier in the process.

Sources
1. 'Holiday Habits Report 2017', ABTA (2017)
2. 'About', Booking.com (2018)
3. Interview with Johann Rozario conducted by the author
4. 'Eight Travel Predictions for 2018, as Revealed by Booking.com', Booking.com (October, 2017)
5. 'Survey reveals more than a quarter of Brits find holiday planning stressful', Travel Bulletin
6. 'Why people abandon a travel booking online', Tnooz (January, 2015)
7. 'You Choose! The science of delegation', Canvas8 (March, 2018)
8. 'Analysis of Time Pressure and Value Perception: An Exploratory Study of Consumer Travel Fair', Journal of Travel and Tourism Marketing (July, 2013)
9. 'Millennial Travel Trends: A Look at the Largest Generations’ Habits', Internet Marketing Inc. (April, 2016)
10. 'Kuoni to launch online booking technology for tailor-made holidays', Travel Mole (February, 2018)
11. 'People in the UK manage only 37 days at home before booking next holiday, study finds', The Independent (April, 2018)
12. 'Mobile Travel Report 2016', Kayak (May, 2016)

This article was first published on the Canvas8 website 

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