Sally White takes a closer looks at two recent reports on the future of travel and finds that there is good news for those willing to adapt their business models
The pace of technical change in online travel is about to speed up and take many players by surprise, according to one of travel’s largest global technology suppliers, Amadeus. Driven by consumers’ increasing use of their mobiles, possible innovations change could include personal mobile travel agents. For another, the demand from leading IT players and e-Commerce giants for innovative platforms could result in an all-encompassing travel marketplace.
These are two of the opportunities and threats to OTA’s outlined by Amadeus, listed among the results of some far-reaching research throughout the industry. The results are published in two recent reports. One, Online Travel 2020, Evolve, Expand or Expire, is based on focus groups and workshops organised worldwide among Amadeus consultants and customers. The other - Travel Distribution: the end of the world as we know it? - is an analysis of research across the industry carried out for Amadeus by a team at the London School of Economics (LSE).
The future for many industry players is at a crossroads, says the London School of Economics
“The future for many industry players is at a crossroads,” the team at the LSE says. Disruption to the status quo is heating up as a result of consumer expectations, social media, advances in artificial intelligence (AI), big data, regulation and travel risk.
Combining data from different sources - social media and emails and the calendar function - a personalised mobile phone assistant could become a service offered by travel agents, it suggests, detailing ideas collated. It adds that this “could be targeted to offering the right product at the right time, alongside more relevant and targeted advertising.” The service would support the whole travel experience, including the in-destination services through apps, and overall strengthen OTA’s offers, ultimately supporting their revenues in a competitive market.
Combining different data
There could also be a possibility for technology players to combine data from different sources (not just travel suppliers) and aggregate it to provide additional analytics, it adds.
Digital Tour Operators are another possibility, says Amadeus. Traditional tour operations and OTAs could merge to become the ultimate travel seller: “From handling complex trips to servicing with new generation travel stores, Digital Tour Operators could provide a happy mix of digital and human interaction to create a personalised travel experience,” it suggests.
Although a Digital Tour Operator has yet to grace the High Street, the probability of such an eventuality is high.
“Although a Digital Tour Operator has yet to grace the High Street, the probability of such an eventuality is high. And the relationship will not stop there. We can easily imagine a scenario where Digital Tour Operators will have a cool concept brick and mortar store where customers will be attended by engaging, trained agents...”
Calls for new marketplaces were collected by the LSE research team from across the travel industry. “The hospitality industry needs its own independent distribution channel, and mutualising the market and crowd-sourcing clients makes this possible,” was a comment collected from Skye Legon, CEO of Bookbedder. He added: “There is a market for more than the big OTAs … it’s like grocery shopping - some clients opt for the low cost and convenience of a supermarket, but others appreciate a market with independent sellers.”
There is a market for more than the big OTAs … it’s like grocery shopping - some clients opt for the low cost and convenience of a supermarket, but others appreciate a market with independent sellers.
On the Travel Marketplace, Amadeus explores various ways in which one could be created for OTAs, airlines, hotels and other travel-related companies to sell their products and services. As it says, the question is how suppliers would use the platform to create and maintain meaningful relationships with the travellers.
There is a market for more than the big OTAs … it’s like grocery shopping - some clients opt for the low cost and convenience of a supermarket, but others appreciate a market with independent sellers
One possible scenario could be that an e-commerce giant, a technology company or one of the large OTAs like Ctrip or Expedia develops an e-platform from which travel companies could sell. “It’s not hard to imagine the Travel Marketplace moving beyond travel research and booking into at-destination services (restaurant, tours and activities) and upselling other travel services (rental equipment, insurance, etc). Travellers will have a one-stop e-commerce platform where they can buy anything they want - the ultimate package,” it comments.
There would be, it acknowledges, a downside for suppliers. They would risk losing their relationship with the customer because the Travel Marketplace would control the profile and payment method. Suppliers who wanted access to customer profiles for advertising would find that they were deprived of that information. Whoever owned the Travel Marketplace would own the traveller for the entire journey!
Another example it offers could be WeChat. The cross-platform instant messaging service app (and more) has successfully created a payment platform and connects suppliers to a range of products and services.
“Is such a Travel Marketplace likely?” asks Amadeus. “Could Amazon follow the Alibaba model? Could Apple partner or purchase a large aggregator or even a GDS to distribute travel content through their mobile apps? The sky is the limit, but what we do know is that travellers are looking for the one-stop shop that meets their travel needs.”
Such a scenario is not beyond the bounds of possibility, it concludes: “OTAs need to be prepared for a future that is very different from anything they are experiencing today and these scenarios are to help them do that!” Especially if they want to participate in a Travel Marketplace, “they will need to adapt their business models!”