Travel and hospitality are among the fastest-growing CX services sectors in 2023, with the market recovering to pre-pandemic levels. However, while vendors and clients are trying to adapt to the increased demand, they face higher costs, changing customer requirements, and more IROPs.

In February, Conduent was awarded a CX services contract by Virgin Atlantic to manage rebookings and provide customer support, including flight changes and cancellations. I spoke with Conduent to discuss the recent win, their sector-specific services, and the market evolution.

Pedigree in travel

Conduent’s longest-tenured CX services client is a U.S. multinational full-service airline it has supported since 2005. During the pandemic, Conduent reorganized and scaled down the operation for the client to accommodate the demand drop, but since 2022 has been ramping up the support structure again to handle the increased volumes. Conduent also supports a vehicle rental company, cruise lines, and hotel chains. Outside of pure CXS, it has transportation business worth $750m annually (FY 2022 revenues), which includes managed services and technology for road tolls and charging, curbside management, passenger payment, ticketing, boarding, and travel safety solutions.

Conduent’s CX services include different types of passenger support and customer care, technical support, sales, retention, collections, and specialized LOBs such as lost luggage management and upselling and cross-selling of ancillary services. For example, Conduent launched a white glove service for a cruise line for the premium customer segment with delivery from Guatemala.

Strategic domain offerings

Conduent’s travel and hospitality CX services are built on three foundations: standardization of operations, employee development, and addressing seasonal fluctuations.

The first foundation is standardization of operations, CX technology, and operational models across the multishore delivery network. With many travel clients expanding through M&A, the requirement to standardize disparate processes such as WFM, technology environments, and results is a high priority.

For example, for a cruise company in 2013, Conduent consolidated its nine locations into three in the U.S., LATAM, and Europe. It then unified the multilingual CX for 12 markets in nine languages. It regionalized the support structure to facilitate client communications and enable full visibility of newly outsourced guest services. Conduent also leveraged CX analytics to track agent productivity and customer activity across channels. The vendor also took additional LOBs, including sales and loyalty, to improve bookings, upselling, and cross-selling. Since the program started, Conduent has achieved 34% savings with $1m annual efficiency gains and has increased CSAT by 3%.

The second foundation is employee training, development, and engagement. Conduent’s Customer Experience Management practice has ~37k employees, including ~20k in WAH; the company’s talent recruitment, onboarding, learning, engagement, and retention best practices are key to attracting travel brands. For example, Conduent cross-shares its talent management know-how with a hospitality chain for its captive and third-party suppliers. This model of a collaborative outsourcing partnership is becoming standard.

During the pandemic, travel clients wanted to maximize WAH and looked to Conduent to offer rollout experience and tools such as gamification and especially security. For example, for an international brand of full-service hotels and resorts, Conduent built a CX services team of ~700 agents within two months. It streamlined the training curriculum to enable agent ramp-up and augmented the timelines with flex trainers. It also implemented WAH capability management and scheduling to complement the client’s four locations. As a result, Conduent reduced agent onboarding time from one week to two days, the customer curriculum reduced training from three weeks to 11 days, hiring SLA improved from 45 to 30 days, while quality scores in learning exceeded the target. Conduent teams also surpassed the client’s sales conversion performance for agents with the same tenure.

The third foundation is the ability to address seasonal fluctuations, with travel and hospitality clients struggling to maintain their CX resources throughout the year. Conduent uses its contracyclical clients in insurance, tax, healthcare, and the public sector to allocate travel support agents to other programs during the low season. When demand returns, it can ramp up 3x or 4x times. This flexibility eliminates the reduction following volume fluctuations, shortens the lead time for new agents, and reduces recruitment costs. It also improves eSAT through better work variability, with Conduent measuring 90% positive agent feedback across travel projects. An example of scaling for the current demand surge is for its longstanding airline client: Conduent grew from 50 voice agents to ~800,  and in 2021 it recruited and trained ~1k chat agents.

Bringing full BPS capability to the travel sector

Conduent accepts operational optimizations and knowledge sharing with travel accounts as part of the larger client relationship. Sharing training expertise for improved proficiency in the client’s delivery ecosystem and customer insights leading to reduced customer pain points in the overall travel product can be the basis for winning additional business in other areas such as F&A, procurement, HR services, and automated document management. For its flagship airline client, Conduent delivers HR services such as workforce admin, payroll, health & welfare admin, and other back-office services, with the deployment of employee self-service and full automation of HR processes.

Next on the CX services development roadmap, Conduent sees new requirements from U.S. travel clients for regional and multilingual support overseas. The company plans expansions in Europe and APAC, for example, in Conduent’s center in Kuala Lumpur, which offers multilingual support in Mandarin, Japanese, Korean, and Thai. The company is also exploring using a gig work model with a partnership platform to address the peripheral demand in the travel sector.

The company expects travel brands to take advantage of CX transformation levers more broadly, such as conversational AI for call avoidance. These investments are the sector’s response to growing cost pressures and higher cost of capital. Analytics is another investment area in travel, to gather insights into opportunities for operational improvements. An example is Conduent’s work for the cruise line mentioned above, for which the deployment of speech and sentiment analytics during the COVID-19 outbreak protected revenue and customer loyalty. Conduent reduced call refund volumes with IVR tuning and decreased the call backlog by 75%. As a result, Conduent became the sole analytics services provider for the cruise line.

Further, travel clients look for consumer insights to identify patterns and drive sales and marketing campaigns as well as product development, such as new destinations. To provide these insights, Conduent is now spending more effort on call transcriptions and after-call work to map upstream and downstream optimization opportunities; for example, around payments.

ESG and eco-travel next on the CX agenda

The topics of ESG and employee experience (EX) are becoming more prominent in Conduent’s discussions with travel brands. Sector clients add more KPIs for employee retention and satisfaction by benchmarking the performance of outsourced versus captive operations. This hyperfocus on quality follows the logic of better EX driving sales measures of success.

Sustainable travel is another emerging topic, but so far has little material impact on CX services. Consumers are cautious about spending more on eco-travel, with West European markets likely leading in this niche. Conduent executives see this space as highly correlated to macroeconomic trends but consider it capable of driving the creation of new CX models and white glove services.