impact of data and digital ecosystems on smart destinations | Alvarez & Marsal | Management consulting

This article originally appeared in the June edition of Computer News Middle East.

In the luxury travel and hospitality industry, travelers expect an exceptional level of customer service and exceptional personalized experiences. Knowing and respecting guest preferences – favorite foods, hotel suite layouts, favorite activities, the list goes on – while balancing the desired level of automation and self-service is essential for travel destinations determined to hold the line. promise of a luxury experience.

Layer the mobile age and new consumer expectations for ubiquitous connectivity and online conveniences, and the stakes to get it right are high. Many travelers have had exceptional experiences, but in today’s digital and socially connected world, consumers often take things for granted and have long memories with vocal responses when disruptions occur.

How do you deliver a cohesive and seamless travel experience that reflects the bespoke, tactile approach to the digital world? How can developers continue to deliver great customer service and meet modern expectations?

It’s a challenge that several countries in the Middle East are trying to untangle. A trillion dollars is pouring into Saudi Arabia alone for versatile travel destinations, such as Neom and Qiddiya, aiming to win more than 100 million tourists a year and diversify a regional economy heavily dependent on the oil sector.

Great potential, but with challenges

Developers in the Middle East face similar obstacles to many other industries that interact directly with the consumer. They create digital capabilities where partners, vendors, and vendors must all operate pervasively in a single ecosystem. At the heart of this is how data is collected, shared and activated in a consistent and transparent manner.

According to the Red Sea Project Master Plan, “When completed in 2030, the Red Sea Project will comprise some 50 resorts, offering up to 8,000 hotel rooms and over 1,000 residential properties across 22 resorts. island, mountain refuges and desert refuges. The destination will include luxury marinas, golf courses, entertainment and leisure facilities. Imagine the data complexity of having all participants from different sub-sectors and brands both competing for the customer while serving the overall experience the destination must enable. They must mutually use multiple technologies and data capabilities such as:

  • Data sensors – to collect the data needed to support customers and optimize operations
  • Customer Profiles – to map activity data, captured through real-time transactions
  • Predictive technology – to make accurate and timely recommendations to consumers
  • Conversational AI – to automate and accelerate meeting customer needs

Even with the tools and technology providers in hand to improve the customer experience, there are still failures along the way. While companies that succeed in building digital ecosystems can experience growth and profits 23-32% above industry averages, 85% fail within seven years according to a study by Gartner. Chances are there will be far more misses than hits if companies don’t spend the time designing how data will be used in the ecosystem architecture before building the infrastructure.

Disney World in Orlando Florida uses smart technology. It follows guests from the airport to the on-site hotel and restaurants, park, and through activities during the stay. Their system is manageable in part because they control most stages of the customer’s journey with direct engagement with the required external partners.

Developers of new destinations in the Middle East face orders of magnitude more complex. They have many service partners, each with their own technology, processes and standards – restaurants, hotels, airlines, leisure providers, retail stores, sports venues, etc. through various multinational brands. How can developers create and maintain a smoother customer experience? Is it even possible?

Focus on digital ecosystem design, not just tools

Developers naturally focus on infrastructure – the physical construction – but how data will be enabled is often an afterthought – at which point the debate often turns to the best platform, architecture or solution. cloud.

In fact, how you design your digital ecosystem is vitally important and can allow for versatility and scalability for future needs and tools. In a multi-use environment, many parties are constantly being added to the data ecosystem, and each will have its own technological footprint. Whether these entities know it or not, they all depend on each other’s technology to deliver a differentiated customer experience at destination.

Of course, this does not mean that the selection of tools and the definition of the architecture are not important. However, having an open application programming interface (API) foundation is essential to allow different entities to connect with each other in the ecosystem. This allows organizations to extend integration not only across their own silos, but also quickly with trading partners through established standards. The result of planning ahead is that new capabilities dependent on mounds of rich data can be implemented quickly.

Concretely, this helps smooth out experiences so that a consumer enjoys the same fantastic interaction in a restaurant as in the hotel where they stay.

Developers should focus on consistency

Two organizations that have successfully capitalized on an API-first architecture are Uber and Amazon. Uber has successfully leveraged ecosystem integration to
a variety of features – mapping and routing, payments, receipts, customer messaging, etc. – all made possible through their mobile app. Amazon’s entire business model relies on this integration, not just for external integration, but for virtually all transactions within their own walls.

Bringing this approach to life in a full version of Smart Destination, developers have a tough decision to make. Given the cost and time required to develop comprehensive capabilities across a large ecosystem of partners who ultimately interact with the customer, the question “Deep vs. Wide” is perhaps unavoidable. Although the right architecture foundation can support both scenarios, our recommendation would be to focus on consistency.

Since the Smart Destination experience depends on the lowest common denominator of capacity, the ecosystem must be designed to bring to life a consistent experience for consumers. Truly “intelligent” systems are defined by the intelligent use of data to provide consistent capabilities to improve the customer experience. To that end, start with a broad base standard and add new features quickly and incrementally. Otherwise, there is the risk that the integrated experience will break down between providers or stages of the journey, resulting in a significantly diminished experience.

So what’s the next step?

The database is at the heart of all modern development, both to enable intelligent capabilities and to bring differentiated experiences to life. Given its importance and the many players that contribute to the destination, now is the time to review and assess whether a development is in the design phase, under construction or in the operating phase. Getting input from objective partners with common interests, including speed and value underpinned by data and an architecture unencumbered by a predisposition to a specific technology vendor, is essential.

Stay tuned for the next article on smart destinations, including data privacy, ESG and regulatory considerations in the region.