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Skift Tech Forum 2018

During the inaugural Skift Tech Forum on June 12 in Santa Clara, California, executives gathered to discuss key trends and disruptions that impact revenue and drive the e-commerce and technology strategies in travel.

Prior to the event, Skift editors and research analysts dove into some of these topics to provide a catalyst for the conversations at Skift Tech Forum. They also explored the tension between the push for personalization by travel companies and the desire among consumers for privacy. This magazine is the result.

Read on for executive insights and data-driven reporting on topics that include the future of personalization, the mobile payments transformation, Europe’s new General Data Protection Regulation, and the problem with digital assistants.

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The Editor's Letter:
Travel Tech in an Age of Tech Backlash

Thank you

Thank you for joining us at our inaugural Skift Tech Forum. We're laser-focused on key trends and disruptions that impact revenue and drive the e-commerce and technology strategies that power retailing, distribution, and merchandising decisions in travel.

We're thrilled and humbled that you joined us here in Silicon Valley. We promise to respect your time by running a relevant, single-track, one-day event that you'll prof it f rom and that we'll support heavily with exclusive primary research and analysis from Skift Research.

Customer centricity will be the connecting thread that runs through everything at Skift Tech Forum. In other words, all of us are travelers in our own lives. So no matter where each of us fits into the travel ecosystem, a customer-first approach is a universal lens we can all relate to when we dive into segment details. Customer-first thinking can also be a beacon to follow as you navigate technology's disruptions.

This package, The Personalization Dilemma, is an editorial effort from the Skift reporting and research teams. In the months leading up to Skift Tech Forum, a long-simmering debate about the use and misuse of personal information heated up worldwide. A broader backlash against Big Tech threatens to sweep up travel companies — even as they collect more information to better understand their customers’ needs and provide relevant recommendations, customized offers, and tailored experiences.

Our reporters and analysts fanned out across industry segments to hear how the travel industry is responding to this cultural moment. Across several articles, you'll get the latest insights on the industry's cutting-edge response to these issues.

Today you'll hear from the chief commercial officers and the digital and e-commerce heads of travel’s biggest consumer brands, the CEOs of industry giants like Sabre and Travelport — plus the entrepreneurs and investors spying for opportunities to disrupt incumbents. We need your voice to be part of the conversation, so please ask your questions via our mobile app, which will relay them to the moderators on stage. Take advantage of the workshops and networking opportunities, too.

We've poured our hearts into this. Let us know how we can improve by taking the post-event survey. We promise that every response will be read by more than one person at Skift. Like the travel tech sector, our ambition is to iterate our way to customer-centric greatness.

Executives Weigh In on Personalization

From hotels to booking sites to social media, executives are thinking about the ways personalization can help them reach — and sell to — customers more effectively.

Arne Sorenson, CEO, Marriott International
May 9, 2018

“Behind the scenes, we recently launched a new customer recognition platform, which will allow Marriott associates globally, both on and off property, to deliver better service. Integrated with our mobile app and chat functions, our associates will be able to access guest portfolios, preferences and history to ensure every guest anywhere in the world can receive truly personalized service. This is another use of technology to drive guest satisfaction.”

Glenn Fogel, CEO, Booking Holdings
May 9, 2018

“I always give the analogy of that old-time human travel agent, who knew everything about you because they knew the things you’ve done in the past. And they knew your income, they knew what you liked. They know what kind of trip you should have, what kind of restaurants you should go to, what kind of attractions you should go to, what kind of experiences you should have. ... That’s what [artificial intelligence] needs to recreate so that when people come to us, we are able to provide them what really is the perfect trip and make their lives easier.”

Glen Hauenstein, President, Delta Air Lines
April 12, 2018

“We believe that strong customer satisfaction is directly tied to our sustained revenue premiums. One of our major initiatives is to further improve the customer experience through our digital transformation. By taking a customer-centric approach to this major technology investment, we can give our employees the data they need to deliver a more personalized level of service.”

Gordon Wilson, CEO, Travelport
May 3, 2018

“At the root of our growing success in the marketplace is our continued leadership in airline content distribution, including personalization and merchandising, whereby we now have over 260 airlines live on our platform with the ability to show and sell their fare families, their ancillaries and other merchandise propositions.”

James Liang, Co-Founder & Executive Chairman, Ctrip
March 14, 2018

“Even though we’ve become the largest online travel service provider in China, we’re only at the beginning of our journey. The future opportunities for us are enormous both in China and globally, and we’ll make significant investments in technology in order to bring our users the most advanced, personalized and seamless customer experience.”

Sheryl Sandberg, Chief Operating Officer, Facebook
April 25, 2018

“We rolled out a more personalized shopping experience in News Feed. Now when people click on a Collection ad, they’ll see a full-screen catalog organized according to their interests. We also introduced a new way to reach people before they’ve shown interest in making a specific purchase.”

Travel Companies Face a Reckoning Over Privacy

A long-simmering debate about the use and misuse of personal information has recently heated up worldwide. The unauthorized application of Facebook data by Cambridge Analytica, a political campaign consultancy, sparked questions about e-commerce practices generally. Data breaches continued to compromise consumer information. A new data protection law went into effect last month to offer safeguards across the European Union. And a broader backlash threatens to sweep up travel companies even as they collect more information to better understand their customers’ needs.

With that larger conversation in mind, Skift wanted to know how travelers feel about giving up information in exchange for more personal service — and how travel companies use and protect that data.

In May, Skift Research took the pulse of U.S. travelers to ask whether they were willing to share personal information such as age, gender, and address, in exchange for personalized travel offerings. A majority said no.

Skift Research also surveyed travel companies worldwide to gauge how they’re using personalization techniques in their marketing efforts. A majority of respondents said they were experimenting with at least some personalization. But only a minority were finding significant success, with a consumer resistance to sharing data being a key complicating factor.

The tech backlash risks halting travel companies’ momentum. Travel is second only to retail, thanks to Amazon, as a sector that has invested heavily in pioneering personalization techniques. Today, online travel sellers are adjusting their search results to show properties or flights they say are more relevant based on a shopper’s online behavior. Some theme parks, cruise companies, and destination marketers have begun to track traveler movements to improve the experience. Hotels are installing in guest rooms voice-activated internet devices like Amazon Echo and Google Home, which could be perceived by guests as being always-on microphones.

When consumers worry about personalization run amok, that can cause problems for travel companies. In China, some consumers used social media to accuse online travel giant Ctrip of presenting higher prices to its logged-in, loyal users than to its first-time visitors. Ctrip denied doing this. But the consumer reaction was symptomatic of a broader backlash.

Until now, many travel executives believed that the key to personalizing the guest experience while observing good privacy practices was simple: All you need to do is ask. But that approach may stumble if consumers lose trust.

Countless data breaches at major hotel operators, airlines, ride-hailing apps, and travel technology providers have inevitably shaken consumer trust. While many executives may see payment-card security standards as a separate issue from the privacy-versus-personalization debate, some consumers may link the issues.

A survey of British adults about their confidence in the safety of their data by Ofcom, the UK communications regulator, found that 41 percent were “not happy” about companies collecting and using their personal information. Third-party polls done across Europe echoed this general sensitivity to privacy issues.

Skift Research Finds Room For Improvement

Skift Research surveyed both consumers and travel companies to take the pulse of sentiment and behavior on both sides of the equation.

Our survey pinpointed U.S. consumers who had seen personalized messages online f rom travel companies. Then we asked whether they thought that the messages were relevant. Only 40 percent said yes. And a mere 10 percent said the personalized messages affected their purchase decisions.

When Skift Research surveyed travel companies around the world about their use of personalization techniques, a majority of respondents said they were experimenting with at least some level of personalization.

But the effectiveness of the efforts seemed unclear. Among the experimenting companies, about one in three said their tracking had shown that personalized tactics generated significantly higher returns on investment. But the others surveyed by Skift Research were either not finding significant success or were not measuring returns on investment. About a quarter of the companies in Skift’s small sampling said they had no processes in place regarding data security and consumer privacy.

Consumers do not appear to widely feel that personalization offers meaningful benefits. A majority of U.S. consumers told Skift Research in a survey that it was not important to them to receive personalized offerings from travel companies that are based on knowledge of what they might like.

Online Sellers Tread Carefully

Many consumers think trip planning is exhausting. Online players are responding by trying to ease the research burden by more quickly promoting offers that a consumer may find relevant.

Speaking at Skift Forum Europe in Berlin this year, Chief Marketing Off icer Pepijn Rijvers said his company aims to customize search results and offer consumers the most appealing type of property at the most appropriate time.

Rijvers said the task is a complex one for the industry to tackle at the specific level of an individual. A customer might be a business traveler flying solo on a Tuesday but a parent traveling with kids for a family vacation a few days later.

As a workaround, the online travel giant and other players believe they can get close enough in providing relevance by using contextual clues about consumer behavior without needing to access what the industry calls personally identifiable information.

One workaround to the privacy issue is to analyze a customer’s behavior — such as how and where they typically click on a website — and infer the user’s intent from those actions.

“A lot of personalization can be generated based on high-level details like your location or the time of day you’re searching and other contextual clues like your browsing behavior, rather than specifically about ‘I am this person,’” said Filip Filipov, vice president of product management at travel price-comparison service Skyscanner.

Businesses make these educated guesses by comparing a user’s behavior with what other customers have done, similar to how services like Netflix make movie or TV recommendations.

TripAdvisor is a case in point. If a customer shows interest in a hotel that might be fully occupied on their travel dates, and if the customer instead opts to book a vacation home, TripAdvisor will be inclined to show that user alternative lodging choices more frequently when the customer visits the next time.

Skyscanner takes a similar stab at making searching simpler and faster. “If you have exhibited preferences for a particular airline in your past searches, we might suggest an easier way for you to find that airline in your future searches,” said Filipov.

Destinations Pay Attention, But Not Too Much

Visit Austin, the organization that promotes Austin, Texas, doesn’t want to get too granular with any personal data it uses, said President and CEO Tom Noonan. But it does need to collect some data about how consumers behave while visiting the destination.

Austin wants to know where visitors went around town while attending conventions. It uses the data as a metric of satisfaction to market itself to meeting planners. To help with data collection, it hired Arrivalist, a location analytics company that analyzes how travelers move around a destination and why they visit.

Arrivalist only tracks travelers who enable location- sharing on their devices. It doesn’t get any personal information about them, such as name, age, or gender — other than where they live. In other words, it collects data that describes the behavior of groups anonymously rather than of individuals personally.

Another arm’s length approach to personalization is one being trialed by tour operator GoAhead Tours, which partnered with, the family history and DNA data company, to lead heritage tours to countries like Ireland, Italy, and Germany. GoAhead isn’t collecting the DNA or handling that information. But it still can create a tour product that travelers will perceive as personalized to their genealogies.

Hotels Think Direct

For their part, hoteliers may need to do more work to justify why their guests should share more of their personal information. “The hotel industry could communicate to consumers the value of personalization much better than it has,” said Balaji Krishnamurthy, vice president of global strategy, corporate development, and business intelligence for Sabre Hospitality Solutions, an enterprise software provider.

To be persuaded to share information, consumers need to hear why doing so can help them unlock benefits, such as the greater likelihood of automatically receiving the type of room they prefer on repeat stays.

A study of hotel-branded mobile apps by researchers at the University of Houston found that the most effective way to help consumers overcome privacy concerns was to involve them in an app in ways that demonstrate the benefits of personalization. Practical examples included offering users rewards when they find promotional offers that aren’t obvious to spot — hidden a bit like in a video game.

Theme Parks Lead the Way While Cruise Lines Make Gains

The world’s largest theme park operator is leading the way in selling the promise of personalization. In recent years, The Walt Disney Company took tech-enabled personalization to a new level with its MagicBand electronic bracelets and related behind-the-scenes infrastructure. Guests at Walt Disney World Resort in Florida use the bands for various actions, such as getting into parks, entering hotel rooms, paying for purchases, and even tapping on a sensor to save that photo of everyone screaming on a roller coaster. Those photos, by the way, will be emailed later with an option to buy. As importantly, the system called MyMagic+ and the associated app allow customers to plan every aspect of their trip, from the rides and character interactions that they care most about to where they’ll eat. MagicBands provides the access once those decisions are locked in.

The bands feed data back to Disney, so the theme park operator has better ideas of what guests want and how they’re experiencing the parks, prompting the tech news publication Gizmodo to call the resort “the most magical surveillance state on Earth.” But the company is a model of earning the trust of customers and of making the advantages of sharing personal data obvious to customers.

Disney’s work has not got unnoticed by the world’s largest cruise operators, including Royal Caribbean Cruises and Carnival Corp. For Royal Caribbean, the digital push to personalize takes the shape of facial recognition technology for boarding and a mobile app that lets servers find passengers to, say, deliver drinks wherever they are.

Carnival has created what it calls the Ocean Medallion, wearable tech that allows users to get into their staterooms, navigate the ship, and make purchases and reservations while providing the company with a flow of information about passenger preferences. Carnival Corp. CEO Arnold Donald has said he wants passengers to feel like they have “a constant personal concierge with them every second” because their needs are being anticipated and met so intuitively.

Still, the slow rollout of the gadget signals the complexity of making personalization work in a non-spooky yet effective way: Ocean Medallion has been adopted in phases aboard just one ship of the operator’s more than 100 since it was announced in January 2017.

Getting Personalization Right Is Key

As Skift Research showed, only 40 percent of respondents thought personalized messages they received f rom travel companies were relevant. So clearly there’s significant room for improvement.

“We’re not seeing big cohorts of customers be creeped out by levels of personalization as much as we see frustration at a perceived lack of effective personalization,” said Geoff Ryskamp, global head of hospitality, travel, and leisure at Medallia, a company that collects consumer satisfaction feedback for travel giants like Airbnb, Marriott, and United.

“The lack of effective personalization is a turn-off, given all the data that consumers feel they’ve already forked over,” said Ryskamp.

The travel industry may be able to bridge this gap by doing a better job of demonstrating the practical benefits consumers can get by sharing some personal information.

“We routinely see examples of consumers worldwide being willing to share their personal information after they’ve been successfully shown the benefits they’ll get in return, like relevant recommendations and service,” said Julie Hoffmann, head of industry strategy and marketing for travel at Adobe, a consultancy that has helped companies like Carnival and MGM Resorts stitch together customer data.

Enduring Relevance

Perhaps the tech backlash will turn out to be a mere cultural blip. Remember when anonymity was the big internet problem? People once worried about how made-up reviews posted by unknown people on hotel websites might spoil the usefulness of crowdsourced ratings. Issues of anonymity like that now seem quaint.

Many consumers appear to have reacted to recent high-profile cases of personal data being misused by shifting their preferences and behaviors. To regain consumer trust, travel companies must do a better job of protecting their databases from hacking.

Skift Research found that only 46 percent of the travel companies we canvassed were following the industry best practice of only working with third-party data vendors that comply with privacy regulations. Making that practice commonplace could go a long way.

Travel companies must block and tackle potential new problems, too. Airlines like Delta and Lufthansa are testing the use of fingerprints as a form of identification to give passengers access to airport lounges. Collecting and storing such so-called biometric data can pose challenges.

Skift Research’s ultimate conclusion is that consumers will respond well to personalization if they feel persuaded of its benefits and if they believe that companies will protect their data from theft and misuse.

In other words, personalization could use some marketing help. Javier Cedillo-Espin, CEO of luxury alternative lodging brand Onefinestay, summarized the potential message simply: "The more you tell us, the more we react to you.”

Skift Editors Dan Peltier, Hannah Sampson, Dennis Schaal, Brian Sumers, and Deanna Ting contributed to this report.

The Future of Personalization in Travel Gets Much Harder Now

Despite any consumer fatigue about push notifications and 24/7 digital intrusions, it’s clear that the travel industry is pushing ahead with personalization initiatives, although companies realize that the effort will be both long and difficult.

The challenges will include the complexity of further personalizing the travel experience when leisure travelers book vacations so infrequently and might also be looking for something completely different when they travel for business. Travel companies must take all of these variations into account without encroaching on privacy sensibilities.

To get a glimpse into the future of personalization in travel, Skift contacted a number of online travel and hospitality executives to find out whether they see personalization playing an even bigger role in their businesses in the next few years, and how it might evolve.

For travel companies, a complicating factor is that while Amazon can make headway in personalization because a majority of Amazon Prime members claim to make purchases two to three times per month, the average American consumer purchases round-trip flights just twice annually, said Werner Kunz-Cho, co-CEO of Fareportal.

When customers log into their accounts, they already experience a degree of personalization because Fareportal, a corporate travel agency that also operates the CheapOair consumer site, pre-populates their passenger details, including TSA PreCheck information, and preferred payment methods.

But the inherent obstacles to personalization efforts make achieving Fareportal’s goals a protracted, rather than a short-term effort. “The limited number of purchases consumers make on a travel website over a one-year period, and the extensive parameters required to execute a flight search and complete the purchase, makes personalization a long-term initiative for Fareportal,” Kunz-Cho said.

Kayak co-founder and CEO Steve Hafner also spoke about upcoming personalization features such as richer account prof iles and user-driven recommendations, but conceded they are “simple stuff to describe, but fiendishly hard to execute.”

Kayak has already added past trips to users’ account profiles, and applies “intelligent filtering and sorting” for the customer who always flies United nonstop from Newark International to Miami, for example, instead of displaying all airlines and every option for number of stops, Hafner said.

Hotels and booking sites see personalization as the next frontier, whether it’s enabling guests to tweak the lights, temperature, and entertainment options in their rooms, or marketing offers based on data insights.

Hilton is seeing an increasing blending of physical and digital experiences. In Hilton’s Connected Room, guests will be able to control the room environment from their smartphones, and the hotelier has introduced digital keys, and the ability to select specific rooms for their stays.

“Next, we’ll build on the data and analytics capabilities that help us better understand our customers,” said Chris Silcock, Hilton’s executive vice president and chief commercial officer. “From integrated booking systems and micro-targeted marketing campaigns to the increased use of personal digital assistants, our guests should be expecting a greater focus on personalization. The one thing that won’t change is our role as a business of people serving people.”

Insights from mining Big Data will also drive personalization efforts. After all, Big Brother is watching consumers’ online behaviors. They know where and how you surf.

Speaking at a J.P. Morgan technology conference in May, TripAdvisor CEO Stephen Kaufer explained how the company wants its customers to book tours well in advance, but can tailor offerings to them later in the process because TripAdvisor knows where they are traveling and when.

“None of that changes overnight,” Kaufer said, referring to traveler procrastination in booking tours and activities, “but let’s remember some of the assets that TripAdvisor has to play with. I have you, even if I don’t know who you are. I have you cookies on your computer looking at a hotel for this particular date range in that destination.”

Customers may see targeted ads on TripAdvisor or around the web, and the company can then “make sure you get this awesome three-day excursion from wherever you are, and make sure you get this limited-time available tour of the Vatican if you’re going there,” Kaufer said.

On the tours and activities front, Airbnb and Marriott are also taking steps to try to personalize their offerings.

“Whether it’s a stay in someone’s Airstream along the coast of California or an Experience to learn how to make pasta with an Italian grandmother, when guests visit Airbnb, it’s no longer about just booking a home or experience, but curating the perfect end-to-end trip,” said Riccardo Ulivi, head of North America Experiences for Airbnb. “This is where personalization comes in.”

So when it comes to personalization, how will hotels, hotel alternatives, and online travel players differentiate their offerings? As it goes in a lot of things, the advantage will go to the scale players that have huge data sets to work with and the tech resources to turn them into more personalized offerings to travelers — if that’s what their customers really want, that is.

Europe's New Data Protection Law Puts Travel Companies Under the Microscope

The concept of privacy and who has access to our personal data has gotten a lot of attention recently. That focus prompted new European legislation – the General Data Protection Regulation – that went into effect in late May. The European Union has been working on reforming data protection laws for a number of years and each member state now has to comply. Not only will it apply nationally in places like France, Germany, and the United Kingdom, but crucially it applies to all companies handling the data of people living in the EU. That’s a massive list.

To show how serious the EU is about privacy and data, it has stepped up the penalties for breaching the law. It now has the power to fine companies and organizations as much as $24 million (€20 million) or 4 percent of annual revenue, whichever is greater. Whether fines of this size ever materialize is another matter and it will be interesting to see how individual countries go about enforcing the new rules.

The travel industry is likely to feel the full force of the new laws thanks to the masses of personal information it collects on a daily basis and the fact that so many transactions happen online. The changes shouldn’t worry those companies that have always handled data correctly. It’s those that haven’t had the right internal safeguards in place that should be concerned.

GDPR and other privacy issues, however, do raise concerns over one of the biggest travel trends in recent years: personalization. Will customers willingly give up their personal information to get better service, or is this something they are not prepared to sacrifice? Lufthansa Chief Digital Officer Christian Langer isn’t ready to panic about a potential privacy backlash just yet.

“It doesn’t worry us, but of course we take it into account. But you know the thing is, our customers trust us with their lives every day when they enter our planes and we are happy to be based in Europe and to have those very strict European data protection rights,” he told delegates at this year’s Skift Forum Europe in Berlin.

Perhaps what might be the biggest effect of the update is how consumers see their personal data and information. Companies will have to be more up front with consumers — no more pre-ticked boxes and ambiguous privacy statements. That could make marketing their products much harder. Then there’s the fact that consumers can access the information companies have on them free of charge, and also have the right to be forgotten.

“Individuals must be empowered: they must know what their rights are, and know how to defend their rights if they feel they are not respected,” EU commissioners said in a joint statement in 2016.

The EU is intent on handing more power to the people, but how much will change depends on whether they choose to use it or not.

Smart Assistants Lead to Privacy Concerns for Travel Industry

Smart digital assistants represent the future of how consumers and travelers will interact with the services they prefer.

Travel companies have already begun experimenting with voice-controlled tools for their customers. Concur Labs, for instance, is piloting integration with Amazon’s Alexa that will let business travelers access their trip information through a digital assistant.

Google Assistant can pull upcoming flight information when asked, while Alexa has integrations with various consumer travel companies: The Expedia skill provides spoken itinerary information, users can call Uber or Lyft rides, and Kayak customers can price out flights or even book a hotel stay.

Privacy concerns pose a problem for the adoption of smart speakers in hospitality and the wider integration of travel industry systems with assistants across various platforms.

Research from ComScore shows that 52 percent of consumers who didn’t buy a smart speaker in the first quarter of 2018 said concerns about providing payment information made them hold off; 70 percent of smart speaker owners haven’t ordered an item online using one.

“The challenge in the hotel room ... is that it has to reset and totally [change preferences for each new guest],” said Josh Weiss, Hilton Worldwide’s vice president of brand and guest technology. “And we always want to err on the side of the most privacy.”

He added: “There’s definitely a space for voice in a really thoughtful and respectful way.”

The major issue with smart assistant technology in its current form is that anyone close to a device or speaker can use it. This is a security nightmare for travel companies, presenting countless opportunities for bad actors to access sensitive information or commit fraud.

The business travel space, in particular, has security and privacy requirements that make integration with digital assistants a challenge.

Will the rush by companies to create a personalized experience outweigh the potential risks inherent in smart assistant technology? Leaders across the travel industry see voice as a powerful new channel, even with its current security problems.

Mobile is Transforming Travel Payments. Will Blockchain Be Next?

What will the future of payments in travel look like? Sitting in Silicon Valley, blockchain comes to mind as potentially having a long-term role to play. But here’s one immediate roadblock: The three major global distribution systems process a cumulative 5.2 million transactions every day.

In comparison, bitcoin, the most well-known digital currency that runs on blockchain technology, only changes hands around 200,000 times a day. The Ethereum blockchain is more promising, able to handle 800,000 transactions, but still falls short. Compare these to a network like Visa, which handles more than 400 million transactions a day, and the protocol’s bandwidth limitations become even more clear.

Perhaps we should look to China for our blueprint instead? The lesson there is the rise of mobile payments. In 2016, mobile payments in China totaled $5.5 trillion, according to iResearch, while in the U.S., the total was just $112 billion, according to a Forrester Research estimate. The use of cash in China has been declining steadily as mobile payments grow in popularity. Chinese citizens spent the equivalent of about $10 trillion in cash in 2016, 10 percent less than in 2014.

Karlijn Vogel-Meijer, director of social for KLM Royal Dutch Airlines, told Skift Research that 30 percent of the airline’s Chinese customers pay for their flight tickets using WeChat Pay, which it just began accepting in August 2017. This is broadly in line with a 2016 survey by Worldpay and Opinium, that found 25 percent of Chinese consumers book their travels on mobile.

In comparison, just 6 percent of customers in Western countries surveyed booked on mobile. Expect that to change. Mobile now represents more than 50 percent of TripAdvisor’s average monthly visitors and, increasingly, those browsing behaviors will convert into bookings.

The payments landscape is evolving as experiments with blockchain, mobile, and other protocols move out of the lab and into the mainstream. The complexity can be intimidating, but the bottom line is that travel will need to face these dynamics head-on to stay relevant with tomorrow’s consumer.

When Personalized Food Delivery Gets Too Personal

Hospitality in the restaurant industry hinges on personalization, from baristas with great memories to high-end restaurants that research diners before they arrive in order to tailor the dining experience. And when something goes wrong, staff will typically bend over backward to replace a dish, refund the order, or slip an extra cookie in your bag.

But what happens when that personalization goes too far? La Porchetta, a casual Italian restaurant in Sterling, Virginia, received a poor Yelp review three weeks after opening this spring and made a drastic move to rectify mistakes made in the guest’s order. The food hadn’t come as advertised partially due to a mistake in Grubhub’s online menu listing, and when La Porchetta’s manager realized what happened, he used the customer data that he had on hand (name, phone number, and physical address) to redeliver the correct order. He arrived late at night, unannounced, and knocked at her door, asking to speak with her about her Yelp review.

The extreme attempt at hospitality did not go over well. The customer revised her Yelp review to reflect what was now an upsetting one-star experience. Grubhub quickly dropped La Porchetta from its system for inappropriately using the customer’s home address and violating its restaurant terms of service. The story swept across the internet, provoking outrage at the gross misuse of customer data. La Porchetta got bombarded with fake orders and fake one-star reviews online. The restaurant booked no actual business for 10 days straight and had to cut staff from its payroll.

Andrew Ghetia, the area director for San Francisco’s 4505 Burgers & BBQ, watched the news play out with La Porchetta. He spends a lot of his time thinking about delivery, as it accounts for about 30 percent of the company’s business across 4505’s two restaurant properties.

The company works with five delivery partners: Caviar, DoorDash, Uber Eats, Postmates, and Grubhub. Each service varies on how much data it shows to restaurants, but Ghetia said that, at most, he sees the customer’s name, order, and maybe a phone number. (In La Porchetta’s case, it used Grubhub as an online delivery portal and took care of delivery in-house, which is why the restaurant had easy access to customer addresses.)

When it comes to personalizing the guest experience, Ghetia admits that it’s hard to be able to provide the same level of hospitality in delivery compared to inside the restaurant. He ultimately leaves it up to the guest to determine the intimacy of each interaction. “Everyone is going to have different tolerances,” he explained. If a guest has a problem with an order, Ghetia and his team can only work to make it right after the guest has reached out first.

“Unless you have a personal interaction with someone at a restaurant, there’s no reason necessarily for them to know your name,” said Ghetia. “Hopefully you’re going to some great restaurants with great servers and hosts and you can start to make connections. But I think that really has to be done organically.”