COVID-19 certainly disrupted the travel industry—but it isn’t the only significant disruption the industry has seen in recent years, and it likely won’t be the last.
In this episode of Vertical Reality: Travel, Epsilon’s Jason Simon and Brown Analytics Group’s Bob Brown connect with Matt Maule, associate vice president of marketing for Celebrity Cruises, to discuss how travel marketers can take advantage of times when business-as-usual is put on hold.
Listen to learn how travel marketers can use data in moments of pause to build more resilient customer engagement and loyalty strategies.
Transcript:
JASON SIMON: Welcome to Epsilon's "Vertical Reality: Travel" podcast. My name is Jason Simon, I'm a senior vice president and a leader in Epsilon's travel practice. Joining me today is Bob Brown, founder of Brown Analytics Group. Joining us today for our conversation is a very seasoned travel marketing executive: Matt Maule, who is an AVP of marketing at Celebrity Cruises down in Miami. So Matt, before we get started, can you give us a little bit more on your professional background?
MATT MAULE: I'm a AVP of business intelligence, one-to-one communications and global media planning at Celebrity Cruises, which is part of their Royal Caribbean group. I left college a long time ago with a degree in psychology and statistics, looking at human and animal behavior, which has served me well in corporate America. I’m currently at the cruise lines—been there 16 years. Had nine years at United Airlines before that. And a brief stint at the Mars Corporation over in the UK working with coffee vending machines, which was completely different from travel and partly why I got into travel.
SIMON: I'm glad you mentioned that you had spent time at United prior to joining Celebrity. And the reason is, it sort of gives you a unique perspective and some experience having gone through some major disruptions in the travel space. I think from your timeline you were at United during 9/11 and now you're at Celebrity during the interruption that's been caused, obviously, by COVID-19 and the pandemic. Have you seen any similarities or differences between these two major travel industries being impacted so greatly by things out of their control?
MAULE: Yes. A lot of of similarities and you know, there's been, even between the big, major events, there's been lots of episodic, periodic interruptions to business. So my first introduction to weird stuff that goes wrong was back in 2000, when at United Airlines, there was a pilot strike.
Obviously a year later in 2001, we had 9/11. After that, because of 9/11, we went through, as a company, Chapter 11, which was a process. 2003, we saw SARS break out in Asia. 2003 as well, I think, was the Iraq War version two. And then having moved to the Royal Caribbean group, we had the economic crash of 2007-2008. Swine flu in 2009, which interrupted business. 2010 was the Icelandic volcano eruption over in Europe. Um, 2012 was Costa Concordia, the impact to the cruise lines. 2015-2016, Zika virus. Relatively quiet years but still interrupted by geopolitical events around the world. And then, 2020 and 2021 with COVID, obviously impacting all industries, all people all around the world.
BOB BROWN: Mm-hmm (affirmative).
MAULE: And then really bringing down operations, slowing down the business, whether that's preempted by government action or company action or financial necessity, and then going through the sort of turbulent transition period and then seeing light at the end of the tunnel and sort of reaching up towards a way out and then emerging through what again, turbulent times into what is the new normal. So, I think those are big similarities and we're not out of COVID yet, obviously, but we can see the light at the end of the tunnel and have high hopes for what's coming.
BROWN: So Matt, I'm curious about the positive note we've started out on here and you listing out everything bad that's happened over the last 15 years, (laughs). What sort of learnings have been helpful to you in the last 12 months based on what you'd gone through before?
MAULE: Sure. So, I think first of all, you know, you've just got to be thankful when you're not directly impacted by one of these events, which can obviously be extremely tragic. Then as you just related to business and how you get through, I think the first thing is to recognize that there are a wide array of individual differences in terms of how people respond to events like this. Whether it's your leadership team, your peer group or the people that you supervise. And in every interaction, I think particularly at the beginning, it's important just to know that everyone's going to be reacting differently, they're in a different personal situation, they're in a different work situation, they might have different experience through times like this generally driven by, you know, your age or your career progression and how much you've been involved operationally with these times.
So you have to be very careful so as not to alienate your peers, colleagues or those that you supervise. I think the second thing that really comes through during the difficult times is how the strength of your relationships will play a role in coming out of those times and emerging to what the new future is.
You make some great relationships and very strong bonds as you're going through the trouble, but it's more likely to be positive and constructive if you have built those strong relationships before those hard times come upon you. So, it becomes apparent that it's what you do when things are successful, what you do when you're riding high when you've got more, perhaps, resources and influence and how you conduct yourself when things are going well that really pay off when times are tough.
I think another attribute that's really important is flexibility. So, as you go into a downturn, everything is changing very, very quickly. And so the ideas you have of a successful marketing relaunch perhaps a week into the troubles are not going to prove themselves to be relevant or effective three months later when you're a month away from the reemergence. So I think over-investing yourself emotionally into solutions early on can be detrimental.
SIMON: Yeah, that's interesting because to your point, conditions are changing on the ground, right? What I'm hearing you say is that, you know, out of necessity, the relationships that you have within your organization probably get utilized a little bit differently than they had in the past as prioritizations shift. Is that sort of a fair summary as you see it, Matt?
MAULE: Uh-huh, yup. Agree with that.
SIMON: So it's kind of interesting to hear you talk about how you guys needed to approach, you know, day to day at some level.
MAULE: Yeah, that's very true and even though during the lockdown and quarantine, every day feels like it's the same day over and over and over again.
SIMON: Yup.
MAULE: Right. Every day your assumptions of what will work and what is true change, particularly in terms of consumers likelihood to want to go on a vacation or go on a cruise. That's changing so dynamically and thankfully it's on the upturn and gaining momentum right now and for the foreseeable future we hope. So you just have to be extremely flexible.
SIMON: I always think what's interesting for those of us that work in the travel space is remember that we're also consumers, right? We travel for business or for leisure and I think the pent-up feeling that a lot of people are thinking about relative to having been so long prevented from, say, cruising, is true in myself and my peers. We're also feeling that Groundhog Day effect and wanting to get away. So, I think that, you know, it's natural to assume that the audience itself, the larger audience, would demonstrate some of those attributes, as well.
MAULE: Yeah, that's true. And I'd say analytically that statement is true with a caveat, and we can often look at things through our own lens and assume with our sort of focus group of one that it's true for everybody. So, the great thing about customer segmentation and data is that you can when you got the right levels of detail behind it, you can really start to see the different demographic groups responding in very different ways.
SIMON: In terms of different ways from how they might have previously responded and so the experience here has shifted their view of engaging or different in the sense of just what you anticipated?
MAULE: Both, really. I think many behaviors are difficult to predict when the times are unprecedented. You don't really know what to expect and then from a consumer perspective, I'm gonna draw a very simple correlation that we believe exists based on logic, which is one imagines that people will become more confident about traveling and cruising as they become vaccinated. And the vaccination schedule is, along demographic lines, basically, looking at age.
SIMON: Right.
MAULE: So you would expect to see, and I think there's evidence that suggests this is true, you'd expect to see that certain demographic groups are rebounding, not quicker, but sooner.
BROWN: Given what you've gone through many times in the past, do you have examples of where analytics has played out and given you an understanding of how to come out of, uh, you know, major downturn?
MAULE: Yeah, I think one of the best examples I can call upon is I was in the revenue management group. We were past the worst of the economic crash and we started to see signs of life in terms of booking volume. I was looking after three different product groups short Caribbean cruises, Mexican Riviera seven night and Alaska. And each of them have very different demographic make ups from a customer perspective. And what we saw, for example, is that Alaska, which generally has an older clientele and, perhaps at that point, a few more retirees, their personal income and wealth was more tied with the stock market, because they got by on their investments and their 401ks and pension plans.
And so when the market began to recover, as it did really, really quickly, we saw that that group was returning in terms of booking volume quicker than other groups, and also those people who made their money from making money on the stock market were also booking at a higher rate. The short Caribbean product, which is generally younger and less wealthy, mainly because of age, less wealthy demographic, were also sort of emerging sooner than the GenXs, if you like, who were tending to book on the Mexican Riviera product.
So that product was available in the summer, it's very popular with families and that product demand was lagging the sort of higher end, wealthy individuals going to Alaska and the more service industry population that were booking on short Caribbean cruises. You know, a long weekend break.
So those trends kind of emerge and then flatten out and then tail off at different times. And so, what's happening at the beginning of the emergence is very different from what happens when business returns to normal.
SIMON: It's interesting. We were talking, Matt, recently about the business versus leisure travelers, which obviously it's Celebrity, it's leisure. I think we had talked about the idea that from the perspective of your experience at United that one of those segments returned faster than the other and it may not be the same order coming out of the pandemic. Any thoughts on that?
MAULE: Yeah, and I think this is purely speculative, but some of the facts from the United days were definitely true, which is that corporate travel in 2002, there were some corporations that did well in that post-9/11 era for a couple of years. So corporate travel really appeared to bounce back sooner than leisure travel. Airlines make a lot of their money from first and business class, and first and business class tend to get booked by corporate travel. The company is paying for the ticket. We saw that happen and then leisure came back later and a lot of it was price driven. So, that can always encourage demand, obviously. I think in our case, in the cruise industry, you know, as you said, it's all leisure travel and what we observed is people have got a bit of cabin fever, they haven't been able to travel, they haven't been able to see the world, the sort of GenX generation was one of the first generations to really go out and discover the world from a leisure perspective and it's champing at the bit to get back out there, and that's the sweet spot from a target perspective for us at Celebrity Cruises.
So, we see that coming back. The impact for the airlines, if that holds true is maybe corporate travel will be down versus where it's been in the past. You know, we're conducting more business via Zoom calls and Webexes, and it's been pretty good and very productive. And so then maybe the need to travel all around the country will be subdued for a little while. At the same time, leisure travel is going bananas, and so we'll probably see a sort of reverse of what we saw post-9/11 and those years after.
SIMON: Yeah that's likely true. I read a report this week from McKinsey that basically said that business travel probably won't return to anything near post-pandemic until 2024, but again to your point, probably a very opposite reaction when it comes to leisure travel particularly in the cruise industry, right?
MAULE: Mm-hmm (affirmative).
SIMON: So that's a positive thing, right? But then the question that I have is, on our last podcast we talked about this idea of “know your audience” and that there's been some shifts in the casino industry specifically around some of the demographics. Do you anticipate having to spend some more time on analytics or was this stuff that you were able to think about during this period of time where you've not been sailing, about what those shifts might look like from your traditional historical markets?
MAULE: Yeah, the analytics groups over at the cruise lines, I think all of us, for many years and sometimes with your help, thank you very much have been all over consumer data. It really helps us identify emerging trends and that helps us change our deployment so that we put our ships in places where there's a high degree of demand and interest. And helps us deliver fantastic vacations, which obviously helps us become more successful.
The customer types that we're seeing emerging from this crisis are kind of exaggerated. It's a little bit of a caricature at the moment. I think we'll go back to the more broad appeal that we have across the different generations, multi-generational travel is very, very popular and cruising is a great way to experience that where the kids and the parents and the grandparents all travel together. We'll see that come back. We'll see the GenXs come back and travel in the peak summer periods, and we'll see the other generational groups behave in the same way that they always have, because at the end of the day, the value of cruising is still amazing.
BROWN: Matt, over the last 12 plus months, travel overall has been heavily impacted, obviously, by COVID. Cruise is unique in that it's just been completely shut down and I'd love to hear how you've been spending your time. Has this just been a 12-month vacation for you and your team or have you been able to tackle some things that you haven't been able to give attention to in the past?
MAULE: (laughs) Yeah, it really has been a 12-month vacation and we decided to use our vacation time by working probably more than ever.
(laughing) I think we've taken advantage definitely in a couple of areas. Um, one is the projects that never really got started because they needed consecutive hours of investment to go through the brainstorming sessions. That extra hour that you're not commuting in the beginning, at the end of the day, sometimes when you can do your best work, means that you can move things along that you might otherwise not have been able to move along.
We built a great semi-AI tool itinerary recommender. Basically, this was a sort of automated process by which we found cruises with itineraries that we felt, based on your cruising history and your satisfaction rating, we felt you would love to experience. And so, through streamlined business processes and data engineering and some personalized URLs, we basically now deliver curated lists of itinerary recommendations for deployment that we have out in the future.
SIMON: I want to ask a quick question, not about the program, but about getting to do that programmatic work that you described. Would that have been something in normal operating levels that you wouldn't have had the ability to necessarily get to or focus on?
MAULE: Yeah, 100%. It had been on the back burner for at least two years. But what we didn't have to do in the analytics function was we didn't have to work on customer profiles for particular product season combinations where perhaps we wanted to stimulate demand. Because we had a period of no sailings, the volume of that type of work went down, which enabled us to sort of tackle these bigger projects that we truly felt as we emerge from this thing, will be amazing tools to have that we can share with our sales colleagues and also directly with our consumers and through our travel partners.
SIMON: I have found the same scenario here that our days are really booked now. And now the calendar's sort of wide open and the days are long and there's a lot of interaction. Other things might become more efficiently done and maybe other things aren't as important as they seemed and may not be as emphasized coming out of this. Is there sort of a sense on your part that that's got some truth to it?
MAULE: Yeah, definitely. I mean, there was less blocking and tackling going on. And more strategic game plan discussion going on, and some of the game plans are around having products and engines and things that you create ready to go when the no-sail is lifted and we're back in business again at full throttle.
BROWN: Does that create a realization as you get back into sailing that we need to carve out time for these bigger projects and this bigger thinking and kind of figure out a way to make that happen and that may mean doing away with some of the things that were consuming our time and mental energy before?
MAULE: Yeah, I think that's a really interesting point. The realization that you can make big stuff happen has definitely occurred in our groups. I think the other thing that happened from a data perspective during this period is that there are parts of the business that have always been awash with data and that's the analytics group, sales reporting and analysis, revenue management pricing, those guys are always around data and have been using data in great ways for many, many years, if not decades.
I think this gave an opportunity for different groups to come together to understand each other's data better and to work through some strategic data projects where basically the blocking and tackling did not involve stitching a bunch of disparate data sets together and trying to come up with an output that you could make decisions around, but didn't last. It was kind of a bunch of ad hocs all at the same time under a high degree of time pressure. I think what we've definitely seen is certain groups who are not necessarily always awash with data have come together and we've created a number of different products that allow us to see their data, for them to see our data and that just expedites the process by which you make more fact-based decisions and do better things.
We have, like all other cruise lines and airlines, a loyalty program. Ours is Captain's Club. And our customers earn points by cruising and when you're not cruising, they can't earn points. So no service, so no opportunity to earn points and that means people don't move through the tiers and collect additional benefits, as quickly as they had before. They're stuck.
We also, at times like this, we tighten the purse strings a little (laughs) or a lot. And there's fewer resources out there to drive many things, including maintaining customer engagement. So here we channeled the teachings of a great book by Ryan Holiday called “The Obstacle Is the Way.” He references the times and teachings of Marcus Aurelius, the Roman emperor, and the quote I love is, "The impediment to action advances action. What stands in the way becomes the way."
And so, when we looked at all those challenges and had a couple of hours brainstorm session, we created something called Power Up Points. And Power Up Points were an interim way of our Captain's Club members to earn points and giving them opportunities to participate in webinars, learn about products, complete their preference profile, give us their opinion on destinations they would like to go to, participate in fun events—all of these things in return for them engaging with the brand and telling us a little more about themselves and what their preferences were. We rewarded them with points that stay and, of course, help them move through the tiers and enjoy even more on a cruise.
So, that was a great thing. We gotta figure out the extent to which that can continue and provide a compliment to sailing-based rewards. But that was a great concept that was born out of this time that never would've really existed had it not been for that opportunity which presented itself as a series of problems.
One of the other things and this is really from a data and analytics perspective that's important is that when you go through a period like this, all the benchmarks and baselines for determining what is good and bad performance are thrown out the window. When we look at same time last year now, we're talking about 2020, and we were on the down slope and came up a bit and then went down again and stayed down, like many other industries and businesses.
And so comparing to 2020 isn't great. So what do you compare it to? You have to find a realistic baseline. And then across all different parts of the businesses and particularly in marketing, there are so many items that we measure and they all have different metrics.
If we're looking at email, for example, we might look at the volume of email sends. We might look at open rates, click through rates, click-to-open rates, unsubscribe rates—all of those things are measured in a slightly different way, and the challenge is really figuring out what's good and what's bad. So, one of the things we're working through now is building out what we call composite scores and instead of just saying, "We're done 54% versus same time last year," we're kind of drawing a line in the sand ourselves and then providing a rating relative to that arbitrarily constructed benchmark or baseline.
That has a lot of science and data behind it, but we give it a letter grading—so, A through E, let's say—and just evaluate each business unit's performance across that sort of normalized rating scale. So, we'll see if that survives, or if we just go back to our standard baseline metrics.
SIMON: It sounds like rethinking some of the metrics, just as a concept, might be in vogue now, so maybe even if you normalize, or as you just said, step back, maybe even then you'll still look at them with fresh eyes and figure out what might or might not be important versus what was historically important.
MAULE: Yeah, that's very true. I've never in all my time in analytics seen a metric be retired.
BROWN: I'd love to have this conversation in a year to talk about what has persisted, 'cause the COVID impact that has triggered your ability to look at these things and has changed the way you view your business. It'll be really interesting to see what is a shift in business on an ongoing basis and survives and what is more of, just through the downturn, something unique that we do.
MAULE: I think that's where the use of really good, well-thought-out guiding principles plays a role. A wise colleague of mine that told me once that the metric you're looking at should help to improve revenue, save costs, or drive up the guest experience, and anything outside of that is very kind of niche and operational. So I think the ones that will survive all help to achieve one of those three areas.
BROWN: You know, earlier, we talked about the importance of relationships and when you're going through a tough time like this, how you're tapping into the investments you've made in relationships earlier with teammates and with partners, do you think that same concept applies to relationships with your customers as well?
MAULE: I can say with hand on heart that in the cruise industry—probably all of the brands, but definitely the ones I've worked with and for—delivering an amazing experience is always the number-one priority, along with obviously health and security. That won't change in terms of being a priority and being something that we proudly work towards becoming an expert in the travel industry and the world at large.
I think what we've seen is first party data has become more and more important. It'd be great if we could ask everybody what they want particularly in terms of one-to-one communication, and then process that at scale and deliver back to them exactly what they have said will be relevant and interesting in a manner and a cadence that suits them.
With Power Up Points, it's forced us to develop a couple of projects around collecting and leveraging the preference data that customers are happy to provide us with, you know, that's obviously not unique to our brand or our business, but, we've made good headway during this last year in collecting and then responsibly using that.
SIMON: I think it's interesting to talk about that as sort of a change in sort of customer engagement, because I think of other verticals like retail where some of the functionality that we'll see is probably going to be permanent, which is going to impact the way those companies market to people. I'm thinking like curbside service at, like, a brand like Dunkin', right? And the engagement level that they're going to have with their consumers via that information that they're collecting and Matt, I would argue probably with some degree of confidence that you're gonna see similar behavioral data that will help you be more predictive moving forward, based on some of the experiential stuff, that you guys are able to do with the Power Up Points program.
MAULE: Yeah, I think that's true.
BROWN: I think there's a massive shift in customer expectations and everything from, every restaurant should provide carry out because that's what we had during the pandemic and so you would expect that to continue, but from a marketing standpoint, this digital acceleration and I think how people are consuming their marketing messaging has changed.
I don't know if there's anything you can speak to, Matt, around how that translates to cruise marketing, if you've had investment in certain areas within digital that, you know, have picked up due to pandemic, how that's shifting for you guys?
MAULE: I honestly think some of the shifts that we've seen, at least in our business, are because people's day has changed. With people spending more time at home, I think their opportunity to browse has gone up and so there'll be some shifts that might retract a little bit when people are back in the office, when they have less time to spend browsing on the computer, and obviously speaking to a travel professional or speaking to, um, one of the branded agents at our call centers, you're gonna get to the truth a lot quicker if you can't navigate your way around expertly on the website. So, I think some of the behaviors are just driven by the change in habit that we've all had and experienced as consumers and employees.
SIMON: I agree. I think that's gonna be a big factor moving forward. So, as we like to do on this podcast, first Bob and then, Matt, you know, what's a takeaway from the stoppage that we like and what's something we don't like and let's see where all three of us come out.
BROWN: My biggest takeaway is that Matt can do amazing things when he doesn't have to commute.
MAULE: (laughs)
BROWN: I support, in whatever way you need me to, that you avoid that commute once things get back to more normal.
MAULE: Well, I appreciate that, Bob. Thank you.
BROWN: (laughs)
SIMON: Matt?
MAULE: I think the thing I would like to see continue, and will make it happen, is to always carve out time for that strategic game planning and make sure that we've got a window that's far out where we can put our strategic initiatives. And more robustly follow through on them. You know, the great ideas, make them happen. That's the big learning for me, I think.
SIMON: That's a big learning though, from all the years of business as usual, right? I think that's one of the takeaways that we got out of our comfort zones a little bit, Matt and Bob, and so we found that maybe new ways of doing things were okay, if that's a fair summary of that point.
MAULE: It is.
BROWN: Yeah, agreed.
SIMON: I think consumer behavior as a whole category has been irrevocably changed and I think it's almost as if we put some of the acceleration for the marketing channels on fast-forward. I think it's gonna impact the travel industry about expectations of response and engagement. I think it's gonna have a lasting impact, so that's what I took away.
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