We talk endlessly about travel startups at Tnooz. Indeed, no publication has covered more travel startups, with over 200 new business profiles published on Tnooz TLabs.
In short: Tnooz loves travel startups.
We also have lots of great coverage of the Phocuswright and EyeforTravel travel innovation and startup competitions, so it’s not just about Tnooz itself.
Now enter stage right: tech blog giant Techcrunch.
This week, Techcrunch Europe has taken a big swipe at travel startups. Quoting Europe editor Mike Butcher: “If I have to see another startup which wants to ‘aggregate travel experiences’ I will gnaw my right leg off.”
Ha!
Noooo – that is so wrong! Aggregating travel experiences is where all the action is in the travel industry! (well, alongside vacation rentals and hotel flash sales).
But, seriously, Butcher is right. If you read the detail of his post he isn’t really aiming at travel experience aggregator startups at all. What he is saying is that travel startup entrepreneurs should aim higher and look to disrupt the entire travel industry.
That indeed is a big challenge.
It’s tough to disrupt the entire travel industry as it is so vertically fragmented and so global, made up of many local marketplaces and procedures and legacy systems.
Most entrepreneurs that aim to disrupt actually end up creating a reasonable, fresh looking business, but do not change much how the industry works. This is by no means a failure, but not quite the industry changing startup that Butcher wants us all to strive for.
But disruption must be out there right? Here then are my top three areas where disruption is happening right now:
1. Room level hotel information
Before Room 77 [TLabs Showcase - Room 77], we had most of the hotel industry looking to propose the best HOTEL in a destination rather than the best ROOM in a property.
Although Room 77 isn’t the first, it has certainly been the first to bring to a wider attention the idea that room level information is a key driver to a hotel booking.
As a result of this disruption, others are introducing similar features.
2. Person-2-Person (P2P)
Plenty of disruption going on here. Want somewhere to stay? Go to someone’s home (not a hotel). Want a tour? Book from an individual (not a tour operator).
This is new disruption. None of the companies are currently from what we would think of as the regular travel industry. This area could be massive unless legislation from various national governments holds it back.
There are challenges though: for example, in vacation rentals there are plenty of tales of incorrect calendar data or tardy replies to availability requests. Perhaps, at scale, businesses are best placed to handle booking requests rather than individuals who may or may not be regularly available.
But yes, P2P would fall into the definition of travel industry disruption.
3. Go local
There are too many layers in the travel industry. For example, traditionally in tours you have three layers: source market travel agent, source market tour operator, destination market supplier/ground handler.
Each layer takes customer service, takes cost for cash flow etc, etc.
This is pointless. Disruption is coming from exposing the previously hidden local ground handlers (for tours) directly to source markets. That’s what we are doing with TourCMS for tours and others such as Tripbod are doing with local individuals.
Travel agents pretty much only existed because it was previously hard for consumers to contact these local businesses. Now it is easy using the web – the travel agent’s value diminishes and, therefore, this is a ripe sector for disruption.
Conclusion
Disruption is possible in the travel industry. There are even UK entrepreneurs aiming for big travel industry disruption, so it is not all about the buzzy Silicon Valley scene.
But aiming for big scale disruption is unnatural. Engineers tend to focus on the practical rather than the big vision and travel startups tend to be engineer-dominated – so we all tend to be a bit less bold than perhaps we should.
True disruption also requires change at the infrastructure layer of the travel industry – a tough, long-term, commitment perhaps beyond the resources of most startups.
Without solid foundations, a disruptive travel startup will look great for a day but won’t last a year as when it hits problems over scale, many of which often need a quick solution, there won’t be any quick answers.
Sadly, while travel startups are brainwashed to strive for innovation rather than building industry changing infrastructure, this situation is likely to continue.
Related posts:
About Alex Bainbridge
Really like this article, Alex. You’re spot-on in your analysis of where innovation/disruption is happening in travel right now.
Nice editorial Alex. I believe Beach.com should have made your list of start-ups destined to make a tremendous impact in the travel industry. For most global travellers, There is no greater aspirational vacation or holiday than the beach. Almost 2/3 of all destinations searched on OTA’s are beach locations. While it is necessary to aggregate data to build credibility and user experience, Beach.com’s model that was showcased in tLabs on May 16th provides a new approach to local expert content on a global scale.
Beach.com is also looking to provide much greater value to a limited number of hotels and resorts in each beach destination, through direct links and booking into their reservation systems. Our value proposition is focused on both the industry, consumers and local revenue generation… and that these days is truly innovative.
Thought-provoking as always. One small addition re the following sentence:
“Most entrepreneurs that aim to disrupt actually end up creating a reasonable, fresh looking business, but do not change much how the industry works.”
One can hardly be surprised. Unlike consumer/B2B technology – which Mike covers daily – travel still has an absolutely massive amount of inefficiencies and opportunities inherently baked in. Many companies in the travel space move at glacial speed and that inefficiency leaves glaring opportunities for small, nimble players to add value.
As Alex says above, nothing wrong with that.
interesting article. Not sure if I agree with a lot of your points though and certainly feel there is lot more happening at the moment outside of the person to person and flash sale side of things.
But there are an awful lot of start ups in the travel sector these days and many seem to be able to raise significant investment which I often find surprising.
It is a tough industry to crack particularly because a lot of the suppliers are fairly slow to accept new tech or ideas. Start ups have to deliver supplier revenue immediately thats the make or break point really
Hi Ciaran
This post was mainly about disruption of the entire, existing, industry (or a major part of it, e.g. a specific sector). There is a lot more going on that is interesting – but other projects tend to aim to work within the existing boundaries of the travel industry – not hold a gun to its head (which is what Mike Butcher was proposing in the post I was commenting about)
Would love to know what you don’t agree with then we can have a good debate about it!
Cheers for commenting. Alex
It is a tad naive to suggest that our raison d’etre as travel agents was in part, due to clients not having a yellow pages for Crete or Benidorm. Indeed, to bring the customer directly to the local ground handler would certainly be disruptive – a charter for any Tom, Dick or Harry to make of thousands of leisure pounds and be off before your could say “bonding”.
This is very much a techy stance on leisure travel and one which prevails throughout the web – “There has to be an easier way” – Yes, there is, but not if customers are to feel safe about spending their money – and there is enough historical information on that subject to show how things have, generally speaking, gone belly up, ever since the EU saw fit to interfere with stabiliser – resulting in the totally shambolic customer-insecure mix we have today.
Travel agents, our networks and our way of doing things was not an overnight invention. The way travel is sold and the way customers money is protected (rather, was protected) came about through years of trial, of paying due heed to hard lessons learned and by putting into place systems to prevent the sort of fly-by-nights and Johnny-come-Lately’s that Alex, you seem keen to endorse.
There is, likewise, plenty of empirical evidence to show how the likes of tripadvisor, and its clones, may it has been suggested, be unreliable and how opinions may be possibly doctored. The web side of travel needs to tidy up and fix what it has already, I would venture (and it is a sorry sight in some areas) before it can move on.
It is interesting to see room level informtion being presented as important. That said, it always has been… and long before the web, we used brochures which, believe it or not, invariably had a picture of … yes… a room. Thing is, it was “a” room – which did not always mean you got “that” room – irrespective of this being on the web or in a brochure. Which room you got, was at the discretion of a hotel’s manager or reception team – and just before anyone says “Ahhh! But with our website, you can book a specific room” (which, incidently, one could do ages ago as well, so nothing new there) – to effect such, would mean hotel management losing complete control of the flexibility of their inventory… that is hardly likely to happen.
Sites booking a persons house… or a room in their house. I believe we have already had one example of someone finding out the inherent dangers in that idea. The responsibilty will have to rest with whoever offers that room in their client’s house, that that person has been CRB checked, has not double booked that room, is not a homicdal maniac and that the room is not a flea pit. At present, anyone has free reign in that particular market sector and it will probably take a few exposes on “Watchdog” before the nail of regulation hammers down on website operators – or worse an assault on a client or even, God forbid, worse than even that.
With ideas comes reponsibilty. There is a lot more to travel than a few techys throwing some ideas around and coming up with (yet another) startup, which garners millions of dollars – simply to spread thinly spread jam even thinner – as Ciaran observes.
No, we agents are a long way from being redundant. Apart from having to spend our time untangling bookings which clients have got themselves into with hoplesslyunrealistictravel – dot – com (and there are a few) a new task evolves – taking the gloss and facade off of a new, insecure, unbonded side to taking customers money..
Murray — Not everything in travel tech revolves around replacing agents. There are tons of opportunities for startups to replace inefficiencies that, dare I say, would make even your job easier.
…For example…???
There’s an entire ecosystem of technologically poor agency CRM “solutions” that promise agents a way to add customer value for their booking fees. Mostly poorly written crap and an area ripe for the picking by a startup, in my opinion.
Fair enough, agreed.
@alex – yeah, come on??
@Alex, technologies isn’t always the key that disrupt a market
We will do our best! Thanks for the market insights Alex!
- Keith Petri, iGottaGuide
This one is just too good to pass up. I will posit that the reason that there is such interest in Travel Startups is not just because “its cool” but because there is a real need to fix a large number of poorly delivered services. Murray may be right that a lot of the focus has been in the past on replacing the agent. I can definitely state that the Agent piece is not game over despite the dominance by a few.
But, let’s move on. Who can forget that it was only 2 years ago we were all bombarded with messages about the “long tail of travel” and how there was such a mother lode of possibility only to find ourselves today hearing about yet another experience tool or someone who is going to change the way we do things.
There is seldom smoke without fire. The current generation of solutions for travel revolve around a poor search metaphor and way too much explicit activity on the part of the user. Technology is supposed to ease the user’s efforts. All I can see after 15 years of web based travel is that we have not done a terribly good job at improving the consumer’s lot. The poor search metaphors are in turn driven by difficult ways to get at the data. Finding needles in haystacks should be easier not harder in travel.
I am critical of a lot of lipstick on a lot of porcine faces.
The user sadly finds it hard to tell the difference in Airbnb and Hotels.com or Priceline. Yet we know they are different, don’t we?
In my view there is a lot of good ideas out there and some REALLY bad ones. Travel is not an easy product category and its complexity is legendary… at least to those of us who have slaved in it for a long time.
I have to agree with my learned friend and his sentiment that disrupting the industry is hard. There are a lot of embedded legacy thinking companies who indeed are preventing innovation. They can try and hide it – but there is a core of very powerful gatekeepers who need to change so that true innovation can emerge in the marketplace.
Sadly great talent and ideas is not enough. You need a certain amount of industry knowledge to disrupt it. And you need a heck of a lot of stamina.
Be warned before you step foot here…. the boogie man (men) will get you.
Cheers
Very well said, my friend, and a learned one you are too, I might add.
The only significant disruption in the travel industry in my mind happened when Travelocity, Expedia and maybe Priceline came on the scene and grew from zero to multiple billion dollar companies in probably the shortest time frame ever seen in travel since its start. It certainly took Thomas Cook a lot longer from his first Alpine forays in the 19th Century. And, no I didn’t work for him, only entered the industry at a later stage, ca. mid-20th Century!
Everything since, and maybe I’m too harsh in my judgement, or ignorant, or both, has been less than fundamental and a lot of it just copies what those two first entrants did with some improvements based on how web technology has developed in the past 15 years.
It is a very tough industry to enter and disrupt in a major way and also make the customer experience a vastly better one, which should be a major objective. As long as that is the case the Murray’s of this industry who know their trade will continue to be around with many of them using web based tools to be successful.
disruption often comes from where you least expect it… http://youtu.be/iwSJ_m0SMZA
more coming…
Interesting… maybe. Disruptive… bit of a stretch.
My take on this, after lots of time in travel technology and distribution, is that ‘outsiders’ almost always fail to understand the nuances of the business models of the various travel segments, and how different the segments are within the travel industry. A revenue model that works in the hotel space will not work in the air space or the cruse space. The long tail segments are different from the legacy segments but are just as complicated. The industry is not monolithic and woe to the wallet of those who assume it is.
As a past rainmaker for PriceWaterhouseCoopers’ hotel technology practice, I was always amused at how little due diligence was done by investors and entrepreneurs looking to get into the space. It looks easy from the outside – heck, let’s throw up a web site and aggregate content and… wait, who owns that content, who’s the merchant of record, what’s my liability if I take a booking and who actually owns the inventory? Following the trail to content or and/or inventory in any travel segment, and presenting it in a meaningful way, takes patience, experience, vision and a long view.
By definition disruption means to throw into disorder. So I agree with the headline, but am not sure I agree with Alex’s specific areas of possible disruption:
Room-level stays – really, who cares? Selecting the right hotel for my holiday is complex enough. And if I’m traveling for business (as I do for about 8+ weeks a year), I truly don’t care about the view (I care about wifi!). As an educated consumer (and a past hotelier), I assume the hotel company is accurately representing the room type I book without my having to then go through the additional time of picking an actual room.
P2P – I am SO not into this. Listing services by definition don’t have access to inventory, so these sites are making me, as a consumer, work harder for my booking by adding more layers into the search and booking process. And given the recent findings about the gaming of review sites, most consumers now view them with a fairly cynical eye. Sexy to an outside investor, yes. But to me, no thanks.
Go local – Not sure I agree with Alex’s position here. Success again will depend on how easy the process is for the consumer. Sure, the web makes it easy for small providers to throw up a web site but that doesn’t mean what they put up will be useful or comparable. Murray accurately points out that I can hire (for a modest fee) a travel agent to do the mindless and mindful research that I would spend hours on. And I will.
For better or worse, disrupting the travel industry in its current form will take LOTS of money and LOTS of experience, as Alex rightly points out. Nibbling around the edges might make for good PR but isn’t fulfilling for anyone, investor or consumer.
The real disruption facing the travel industry right now is the outcome of the current litigation between the airlines and the GDS’. If the courts in the US and EU throw out the validity of the GDS models, there will be plenty of disruptive opportunity to go around. And it will have an impact on the long-tail segments, make no mistake.
@valyn I’d like to respond to your comment on P2P. I don’t think this is just about listing services and I think it’s appealing to more than just outside investors.
Side note @alex, I don’t agree that P2P in hospitality is new. Remember http://www.couchsurfing.org/ (circa 2004)?
Back to my point — these aren’t just listings sites. Check out http://www.airbnb.com (and the 10+ competitors) — yes there are listings of homes/couches/rooms, but these are run/operated/controlled by individuals with active calendars. Everyone has to book through the site. I’m sure they’ll start to see (if they haven’t already) boutique hotels listing. It’s driving a lot of inquiries/bookings for many markets.
Hi Mike
Ah yeah, couchsurfing
Thing is, 6 years ago, these P2P sites were not disrupting the industry…. (this article is about disrupting the existing travel industry – not about making something new, innovative, fresh or just a plain old successful business (one that makes money))
Do you think couchsurfing disrupts the travel industry? Early to the game, yes, but did they disrupt? Genuine question, I don’t know the answer, I tend to think not though. Never got to sufficient scale to do so.
On one of your other points, think you are going to get a debate going about individual person managed calendars vs business managed calendars – and which are more likely to be accurate (enabling true online booking)
Alex, Good point re: couchsurfing. I went down the innovative road not distributive. However, Couchsurfing 2.0 (aka AirBnB) does have the makings for disrupting the industry. More so than HomeAway.
Yes, airbnb. Now, let me see. A site with everything apart from er…. a contact. A site with T&C’s that use an awful lot of “may’s” and “mainly’s” You select a property and shove in your credit card details and then Hey! Presto! All will be revealed. You have just handed over credit details to someone who owns a property which (hopefully) resembles the photo’s on the website and (hopefully) will have that property available when you go ding-dong on the flat buzzer with you, the wife, two kids and some mate of eldest daughter who came along at the last minute at quarter past is-it-that-time-already after some 24 hours of travelling and having just spent 3 hours trying to track down No2 daughters teddy which got left on a seat at the departure gate. There is no security, no-one to turn to, no gurantee worth the email it’s written on…
Joking aside, if people want to serve up sites, there must be an element which shows responsibility for what they are selling or offering. It is not good enough to witter on about contracts being twixt the consumer and the accommodation supplier. Have the properties been checked? Is the renter a safe person? What security is there for a clients money? Who do I turn to when things go wrong? Unless all this is in place, *AND* it is clearly visible that these things are in place – these sites could be a licence for people to rip others off and for every thieving (or worse) lunatic to wreak havoc.
As an agent, we have seen it all before. We only use/ recommend those that have this sense of responsibility and maturity – true, even these can go bust etc but at least there is someone to turn to.
@Murray
Seems as though you may have been spot on and all to soon about the potential horror story waiting to happen regarding AirBnB http://www.airbnb.com/
What a horrible story and an even worse response from the non-existent crisis management protocols from a recent Internet darling.
http://ejroundtheworld.blogspot.com/2011/07/airbnb-nightmare-no-end-in-sight.html
http://techcrunch.com/2011/07/29/airbnb-victim-speaks-again-homeless-scared-and-angry/
http://www.washingtonpost.com/blogs/faster-forward/post/airbnb-robbery-victim-says-company-tried-to-quiet-her/2011/07/29/gIQA7R03gI_blog.html
Safe to say that the honeymoon is now officially over with AirBnB and all of the other P2P accommodation copy cats.
Regulators from all over the globe are going to come down hard on this business model. They were just waiting for something crazy like this to happen.
Wonder if the ink is dry on the $112 million cheque from Andreessen-Horowitz, Digital Sky Technologies, Jeff Bezos, Ashton Kutcher et al?
Can hear them all saying now “our shares are preferred, time to liquidate!”
Quad Erat Demonstrantum, I think. All techy – no travel. For P2P rentals to work, you need to vet all accommodations, you need to vet all those renters of apartments and you need to have some element of control on those doing the renting. In other words, do the job properly.
Interhome have been around for many, many years doing exactly that. Interhome offer Properly vetted properties, properly controlled and properly managed. Proper contact arrangements. All this costs money and needs properly trained staff. AirBnB is a disaster waiting to happen. I just hope and pray no-one gets hurt. A good example of techys not understanding anything about travel. As to the egits who put money in – well, clearly not the sharpest tools in the shed, then.
Mike,
Airbnb, Homeaway and all the other sites that provide listing services have NO control over the accuracy of the availability calendars on their sites; they and their users are at the mercy of the owners. As a regular user of these sites, i can tell you that flaw makes them aggravating as all get out and will constrain their opportunity for growth.
Having zero control of inventory is not remotely disruptive.
A $112 million of new funding might buy a lot of distribution infrastructure though.
I suspect we haven’t heard the whole story about the “live inventory” dilemma from the likes of AirBnB and HomeAway.
As an aside, I was told from a very reputable source that, until recently, HomeAway had a policy / algorithm that would only forward a minimum amount of inquiries (14 a year to be exact) to keep their property owners / managers satisfied in order to get them to re-new their listings. Their strategy was, in fact, to spread the inquiries around from popular listings to less popular listing that few consumers were inquiring about – Their own version of “Vacation Rental Socialism” I suppose.
That was the real reason that many consumers who sent requests via the “Contact Owner” call to action never received responses from the owner. . After all, HomeAway has no “real” incentive to push bookings to its property partners, only do enough to get them to re-new their annual subscription year after year.
You heard it hear first on Tnooz.
Whoops… You heard it “here” first on Tnooz.
John,
I seriously doubt the statement regarding forwarding a limited number of inquiries. We’ve had upwards of 20+ homes on VRBO and HomeAway at any given time and the inquiries will vary from 100/year to 10/year. All depends on price/location/pictures.
The reason people don’t hear back is because many owners/managers don’t respond if it’s booked.
@Valyn,
I agree that these companies are at the mercy of the owners but eBay is at the mercy of sellers. Isn’t it very similar? I think eBay still has some problems with their sellers but I’d also say eBay was/is disruptive.
There are examples in other industries where losing/giving the control over to the users is disruptive. I.e., Craigslist, eBay, Kiva.org,
Am I missing something? I’d love to hear your thoughts. BTW, this is the Mike that sat next to you at VRMA conference.
@Valyn and Alex,
I think HA and ABB can create incentives to keep calendars up to date. HA heavily weighs updated calendars in their search algorithm (at least historically). And I’m pretty sure they’ll continue to build out tools which entices owners/managers to use HomeAway as their primary rental website (calendaring, billing, etc).
Funny, that. Interhome manage to have control of inventory. (Not disruptive, I know – they have been around for – Ooooh! – What? 30 years and upwards?) But in true “I’m a techy but know naff all about travel”, style – off people go to re-invent the wheel. Perhaps people should compare these sites. How do HomeAway customer support check things? Yes! They review…. the advert. Well, that’s a comfort, eh? How does their insurance protect people? 10,000 dollars (Oh! Unless we send you a note to say that we have decided your particular rental does not actually qualify for cover…)
Travel sites must take responsibility for their oferrings – that has been the whole ethos of selling travel in any guise and why we have sought to protect people ever since the Court Line crash. True, protection is now a dogs dinner, but that’s the EU’s fault.
It’s only a matter of time before the rip-offs start. It’s only a matter or time before some loony owner attacks guests – because there is no protection nor even, any attempt at protection. Then, these sites will be on the news for another reason – one which may not be quite so palatable.
Interesting to see mentioned “…like the hotels did in the 90′s” – apart from, erm… they still do – CRS systems simply convey information, ie have access to inventory rather than hold it. Should be entertaining to see: “Dear property owner. In order to continue to advertise on our site you will need to buy – 1 – off server”
Voice in the wilderness, I suppose. Everyone is too far gone down the starry-eyed “travel is really, really interesting” route to bother about silly things like customer protection. And all the BYP’s who book on these will be quite happy booking … ‘cos the bad reviews will be edited… pity the one that “..the owner is an axe-wielding psycopath” got deleted, eh?
Not too sure how long we will be prepared to take the battering, though! Agents have had to put up with every sector of an industry trying to promote sales through every and any avenue possible – as long as it is not through that avenue which is wholly decdicated to selling their product. Apparently, it saves commission. That said, no-one has yet demonstrated that the saving on commission (certainly long term) has been saved when compared to the costs of DIY web promotion, incl. driving traffic to respective website, advertising, promotion, keeping things up to date… whole, burgeoning techy type departments to do a job which agents did for free (or at least, only had to be paid when something was sold).
Agents long ago accepted that we are not that influential in the preferring one airline against another – actually, we never did. We took the view that the best airline / hotel/ car in the world was the one that got the client where the client wanted to be, when the client wanted to be there and in the most cost effective manner, given that clients’ “foibles”.
Then came the “disruptors” (modern parlance, the “Death Eaters” ) Thing is there has been a lot of “disrupting” going on, what there has not been, is anyone doing much thinking about what to replace what has been disrupted with. EG By all means, disrupt the GDS system – Okay, so where is the new, tried and tested 110% reliable system that you want to replace it with? Eternally Beta testing, I would venture. I am responsible for making sure my client gets to where he needs to be as seamlessly and as stress-free (ly) as possible. I hear people saying “direct connect” Okay, fine – show me the replacement system that can do LAX LOS JNB LAD PAR with the certainity of a GDS. I have seen some toys and some people saying “this is this bit, that bit we are working on” No good. Forget it. We need 110% reliability, rock solid, 24/7, full on ticket-and-forget (as it were) reliability. Anything below that standard is useless.
I listened (many moons ago) to a certain woman from a certain national airline (along with a rather silly consultant) banging on about “new models” and agents walking dogs. That woman had never set foot in a travel agency. “Have you ever run an airline?” She asked me. “No” said I, “.. but if I was going to run one, I would make damnned sure I knew how it went together, before I pulled it apart” That was pusihing 10 years ago and still, today, airlines have not really found the answer are still searching for that Holy Grail – why? Because everyone has bright ideas… but no-one thinks them through.
Most websites are fair weather operators. As are airlines, hotels, car hire types. They want the booking – what they don’t want is (as mentioned by others, passim) the responsibility that goes with it. Another very important “thing” they do not want, is having to provide the “service” element. I am not taliking about how you say “Have a nice diurnal anomaly”. When things go pear-shaped (eg ash clouds, terrorist attacks, wrong sort of pleasant early evening spring sunshine, etc)It’s not “Call your airline”, it’s call your travel agent. Even if you do call an airline, what you are likely to get is some moronic Indian sub-continent call centre, where the holistic knowledge of travel is zero.
Websites work on the principle that you want to go from A to B and in some cases, as long as it is easy, they will encompass C as well. Web performance, once past the A to B scenario, is dire – and I mean by hundreds of pounds compared to old-style agents.
The knocks, may be too great. We are not getting the right caliber people into travel – “on the counter” as we say. Why? Because every which may someone is out to hit you over the head. All memebers of the public amateur agents. Airlines not only try to kick agents, they invent ruses such as to outsource ticket monitoring to try and create a revenue stream through the ADM system – though Virgin found out that they were pushing that one too far. Cost cutting, use of terminally hopeless sub-continent call centres etc are all increasing the need for knowledgable old fashioned agents – but so are websites, mainly through the fair weather friend syndrome.
So, disrupt away, my friends. Just make damnned sure you have something to replace what you have disrupted because so far, you have nothing. Oh! And there will be none of us agents left to pick up the pieces, so – have fun.
@Murray Harrold – It sounds as if you need a holiday mate.
The travel industry has changed and continues to do so at an accelerating pace. Growing numbers of consumers, especially young consumers, prefer to plan and book their travel arrangements themselves, where ever and whenever they like; this fact is undeniable. Young consumers view travel agents about as relevant as VCRs and Encyclopedia Britannica. Clearly, many consumers are willing to give up the added value an agent used to provide for the “perception” of saving money (real or not) or the host of other reasons why they prefer to do-it-themselves.
I trust you realise that very few agents these days have the depth of knowledge, experience or passion about the industry that the likes of you and your ilk possess.. you are, unfortunately or not, a dieing breed. The result of less agent expertise and an inability for agents to promote themselves at scale is leading to the growing trend of travel DIY (OTAs, Google, etc.). Evolution is a cruel and bitter pill for those who are increasingly pulling the short straw.
The web and new technologies have provided consumers with empowering tools to discover their needs themselves and the choice to fulfill the transaction on demand with instant gratification – powerful stuff. Think iTunes, Amazon Kindle or NetFlix – this is the future, not Tower Records, Borders or Blockbuster. Nuff said.
Regarding your reference about technology or the web’s ability to deal with crisis management issues satisfactorily, i.e. ash clouds, terrorist attacks or undesirable sun patterns. Agreed, many organisations haven’t thought through the implications of crisis management very well nor created scalable processes to handle those events with satisfactory customer service levels… yet. Although recently, some brands have made good use of Twitter and Facebook to disseminate critical information to their followers quite successfully, KLM for example during the ash cloud. I have no doubt that some clever entrepreneur will come up with a solution to that problem, after all, necessity is the mother of all invention.
Finally, your last paragraph “So, disrupt away, my friends… etc. etc.” We can all taste the bitterness of your opinion – you do realise that this is a blog about travel technology and a post about innovation where 99.9% of the audience advocates change, innovation and disruption? It’s obvious that your primary goal in participating in this conversation is not to “win friends and influence people”, so what does motivate you?
My suggestion – use your experience, intellect and passion for the industry to come up with a POSITIVE solution to reverse the plight of your fellow agent brethren, rather than waist your energy being a critic of, well, everything that isn’t you. Perhaps a 24/7, non-moronic, euro-continent, travel specialist call centre where all agents have encyclopedic knowledge of every destination on the planet whilst delivering flawless customer service at all times. And oh yes, all agents would earn $100,000 plus commission, benefits and a free monthly ride on the unicorn or magic carpet of their choice. It’s a no-brainer!
Failing that – have fun… cause life’s too short.
Actually, we did have non moronic people with a very good knowledge of an awful lot of destinations with very good customer service, knew how to achieve best value and usually knew what the client wanted better than the client. They were called “travel agents” – people who spent a long time studying travel, learning about places, going on educationals etc. True, they earnt very little, but still – they were prepared to take all that cr*p to try and make sure you were able to slap on the factor 50 in exactly the right conditions.
Before any techy or “wow this travel is so backward I am sure I can do better” type starts to get involved I want them to have a thorough holistic understanding of travel – and not just 2 weeks sitting in some shop so it looks good on the CV. We may get less hair-brained schemes, that way.
Of course there are a lot of young people who want to do things their way… but those young people grow old. As they grow old, so too, does technology get more advanced – in 50 years time you (not me – I will have a full time job pushing up daises by then) There will be people who say – “I don’t get this new fangled holo-net, senso-hol thing… Is there someone I can ask?” These new empowering tools are not for all… when you are 70-odd will you wish to be told to sod off and go and empower yourself? I think not.
In this Orwellian world we are in danger of losing the people that know how part A fits onto part B, everyone knows how to work the finished product but few – the Orwellian select few – know the mechanics.
It does not worry me one iota. I have other interests apart from the (business) travel which I deal with. Indeed, in one sense a “travel agent” is not a “travel agent” – he or she is a highly skilled retailer, with hard won customer service skills – that they happen to sell travel is incidental – those skills can be applied to most on and offline retail situations and it is much easier for a retailer to employ a techy than for a techy to learn from the retailer. (As we have seen on many weird and wonderful websites).
So, I am not bitter. Nor do I seek to win friends and influence people and I am not a team player – if you want to get a job done properly – do it yourself, I say. Team players are simply people who want to be sure there is someone else they can blame. I could not give a rancid roadkilled rodent, frankly. I am sad to see a great industry have so many clueless half baked ideas with idotic sums of money coming in and saying “This is the future” … supported by people who would not know what “bonding” implies and have to ask where Cyprus is.
As mentioned elsewhere, before you take something apart, it’s a good idea to know how it goes together… just in case.
Excellent discussion. I agree that ground handlers will increasingly be reaching direct to consumer, and what will be the most interesting to be a part of is how the best agents and operators stay engaged, specialized and how these new relationships between agents/operators and ground handlers will evolve, either via technology or via good old fashioned personal relationships.
As the VP of a major RTO and former BOD of the US Travel Association it is comforting to see everyones point of view in this discussion. While some use it as self promotion for their disruptive idea, it is also a sounding board as to the diversity of our industry and, if anyone actually could develop a technology to cover the entire sector then we would all be extinct. Disruption comes from the need to eliminate processes (shumpeter) and since we are trying to create experiences that are individual to each one of us there is no singular solution. Going Direct to a supplier is as close to a disruption we are going to see in our industry. The destination is key to any product we sell, and how we sell a hotel, transfer, sightseeing or attraction has pretty much been exhausted so until suppliers realize that they are interconnected the only real opportunity is to try and formulate a distribution model that is interelated with live trending social circles to take advantage of like minded individuals and their present desires for a destination.
I am not a travel expert but am intrigued by how the independent travel agencies survive these days, let alone disrupt the industry.
I’ve read that something like 50% of them went out of business since the day when airlines started handling their own reservations.
As an Inbound Marketing Consultant, I am curious about whether technology has really helped the independents – or is slowly killing them off. Is this an industry that can benefit from greater Internet horsepower through blogging and social media? I’m curious because I’m a travel nut, and whenever I look for new clients, it might as well be in an industry that can get me out of bed at top speed in the morning!
Any thoughts?
I think the disruption (or lack thereof) in travel technology is basically led by VC investments which, to put it mildly, raise many eyebrows within the travel industry.
When a VC puts millions into a start-up that (yet again) aggregates or filters some data, it’s all over the news, blogs and social media. The founders are hailed as heroes. Thousands of brilliant entrepreneurs around the world look up and think to themselves: “So THAT’S where the money is!”
In my opinion, the culture of entrepreneurs looking for the money under the lamppost is one of the main reasons for slow evolution in our industry and perhaps many other industries as well.
These last two responses hold two interesting points: Barbara says “..I’m curious about travel… might as well be in an industry..” and Ophir remarks about the squillions of VC funds going into (travel) startups, etc.
Therein lies the rub: Travel attracts so much attention because it is perceived as exciting, as “interesting”, we all like to travel and techys/ disrupters see our industry and say “Hey! Look at this, they still use viewdata/ green screens (blue, actually), DOS entry… there’s got to be a better way”. Well, perhaps there is, thing is, after – what? – 20 years of internet and technology, no-one has come up with anyhting. Why? Simply because travel may be glamarous it is also and a very, very, personal thing. Sure, by all means take out all the mundane leisure cheap flight to Benidorm (most agents are only too relieved to be able to say “Go home and book it online”) or the VFR flight for 3 days to Uncle Charles in Milan. There is no money in that and the effort and time consuming “Yes, flights are all right but the aeroplane toilet door is not quite the right shade of blue” syndrome means that having this sort of stuff online as a DIY scenario makes sense. The airlines can deal with the hassle.
The thing about being successful in travel – proper TRAVEL – does not rest in finding “the cheapest”, it is not in taking a set of parameters and matching them. It is about finding the “best value” it is about taking the (clients) parameters and re-interpreting them into what they really, really want
. What the client wants is invariably not what the client asks for. For the internet website, it is that Douglas Adams situation: “We know the answer, but what is the question?”. “Cheapest” and “Best Value” are not the same in order to ascertain which is which, you need and agent.
In order for te agents to work, he or she needs information. Raw information – not mucked about with information or suggested information or “You asked for this but you might like that” information – and it is for this reason much travel technology remains today as it was 30 years ago. It works, (that is, how raw information is presented – if it works, as (this horrible expression) a “business model” for others is another saga). Some very useful tools have evolved: Google Earth, for example and a flavor-of-the-month route itinerary checker, which one uses to make sure one has not missed anything and perhaps TripAdvisor which, if used with CAUTION is useful for double checking seemingly slighty iffy hotels.
We do not need disrupting and especially as no-one who champions disrupting has the faintest idea how to replace what they have disrupted with, or produced any viable system that can offer the same surety of operation that is already in place.
We’ve had plenty of experience regarding commuting with various VC’s over the past year, most of which can’t seem to comprehend more complex models, relative to the structures of Hipmunk, Ostrovok, Gogobot etc. On the other hand, travel landscape disruption needs money, and lots of it, especially for early development stages.
As we explore further multi-supplier/product/gds aggregation and data standardization processes, we come to understanding we’re building yet another GDS system – 2.0. In our vision, central access systems will remain essential, as long as they will remain flexible and have the ability to adapt and evolve.
In order to reach full potential in retail market, solutions being creative as might be, entrepreneurs and existing players, will always rely on bookable data after all. Providing them with such tools, we hope to establish an international development community and essentially a travel market place, where all participants can both contribute and enjoy collective growth. Reliability on low margin cooperation models will always come second to having direct tools without the need to set up operation.
I always wonder about the hype with VC ad travel companies, travel may be ‘sexy’* but multiples tend to be low compared with other industries.
I personally wish that new businesses, especially well funded ones would focus on doing something which resolves some of the core infrastructure issues rather than yet another bells and whistles website a la 1999. Just as one example, I’ve noticed something about the way flight schedules are loaded on (I think twice a year) which probably causes quite a lot of disruption (the bad kind) in the travel industry.
*doesn’t seem sexy to me at the moment, just a lot of work lol. That said, my work this morning is looking at cake companies to send our customers presents, and choosing whether I like bicycles or chickens more lol (community project in Cambodia). Amazing what I get away with as work. Just joshing, back to spreadsheets in the afternoon.
Thanks All for fabulous comments and feedback to @alex initial thought provoking article.
From my time at Travolution, the then editor Kevin May, can confirm we were often approached by companies who wanted to find a way into the travel sector simply because it seemed a “no brainer”. Many failed simply because they did not have enough insight knowledge of the industry but thought it was an easy industry to tackle.
It is of course not impossible to penetrate the travel sector without any insight knowledge but it helps. Unique ideas and solutions to consumers’ problems and requirements are still sparse. Finding the holiday you are looking for at the price you’re prepared to pay is still (for me) the biggest obstacle. The hours you spend searching for relevancy to your requirements only to be directed to totally irrelevant web sites, is staggering… For me the travel industry still has a big job to do when it comes to improving its web sites.
First of all, what a discussion on Tnooz. I think this must be the longest thread on a provocative post from Alex.
When I read all comments above, I can’t help thinking that being disruptive in travel is not all about technology and how much money you raised. We are missing a big point here which is how do you market your product better than anyone else and faster than anyone else.
I have always heard the saying that if you have a great product online, consumers will to come to your door eventually. I beg to differ in the travel industry because the sector is very competitive.
Yes I agree, I wouldn’t qualify a new meta travel search engine a disruptive company in the travel sector. But if the product has been better than anyone else in the past and the audience loves it, it will be disruptive.
The love factor is not something you can predict in advance and VCs can’t buy this either.
The new kids on the block like AirBnB or us at HouseTrip.com (watch this space) are providing something different to what listing companies do (Homeaway & co). We provide owners and agencies a calendar where they update their availability and pricing. There is nothing disruptive to have an online calendar. But in this particular market, the inventory has always been offline and on request. We’d like to think that apartments owners could use a CRS like the Hotels did back in the 90s. It’s better inventory management control for the owners and it’s a better value proposition for travelers (don’t need to wait 4 days to get response from the owner).
Externally, you know you are disruptive when big traditional media talk about your market on the 8 oclock news. This is what happened last night on the French TV network. There was a quick programme about the trend of worldwide travelers who would rather stay in apartments than hotels to save money but also to have a bigger space for a longer time and become Parisian for a week. You tell me if this was possible 10 years ago…
Cheers, Guillaume
There are three ways to change.
Natural evolution… constant improvement if you will.
Revolution – blow the whole darn thing up – and the middle piece is disrupt the model.
For Travel with many structures in place many of which are by convention, there is plenty of opportunity for all 3. It is sexier to claim disruption. Normally that makes people nervous who are inside the tent. They can handle evolution but don’t like the other two.
In my view there is a clear wave of disruption attacking some of these conventions. Some have sound basis. Some are darn right silly. But you need a mixture of the ability to understand what you are disrupting. There is a very large graveyard of “coulda been players” in Travel. And forgive me for harping on one of my themes… This is NOT easy.
Cheers
Pre-cisly: A great line “… you need a mixture of the ability to understand what you are disrupting” which most, frankly, don’t. People forget that a lot of the conventions, as you say, evolved to protect the paying public. They were not put there for fun.
Many others evolved as travel is highly complex (that is, proper travel, not “flight London/ Amsterdam on Monday morning, back in the evening” that said, even that, for many firms, needs policing which (only) agents do).
Many call it “blue sky thinking” that is, empty, vacant…
Wow, what an exciting debate! We wonder if you would consider these ideas “disrupting”:
Disrupting the travel industry is extremely hard because it requires (a) an in-depth industry knowledge (b) access to talented developers (c) a ton of money – and since there are barely any VCs in our industry who can truly comprehend how the industry is to be truly disrupted – all the money flows to simple ‘non-disruptive’ concepts, who have models simple enough to put a value tag on in terms of investment (i.e. we have so much traffic, and so many sales) – with serious endeavors left to their own devices in terms of financial recruitment.
In our vision, graphical interfaces of any kind or configuration, whether its Wanderfly or Hipmunk, are a direct outcome of creative designers and UX specialists. Business models of flash sites and stree-free interfaces are only a natural outcome of supplier-consumer relations. Meta search is very popular, but offers extremely small margins, and all depend on huge traffic volumes and over valuation. Travel agents are highly GDS dependant and non savvy technologically speaking. Social travel is ‘hypish’, but depends on other participants to generate income. We understand that all abovementioned models work to a certain extent, some more than others, but all sum to 20-30 dominating companies, almost all retail oriented.
In designing our system, we embraced one foremost basic principal – the more data, channels, suppliers you can access and work with, the higher your profit and attractiveness will be. Merging not only multiple suppliers, but multiple segments of each travel sector, we’re looking to create a central distribution and management system. Instead of connecting home owners to retailers, or wholesalers to agents, we essentially believe in creating a global travel-professionals community, allowing all participants to share exchange and sell travel resources to each other.
Social activities, reviews, knowledge sharing and many other features to create a flexible ecosystem, which will have the ability to adapt and implement any changes in the travel landscape and rapidly embrace new trends and technologies.
We know it may seem impossible or very hard to achieve (or very expensive), but understanding the goal, learning from other systems, market needs etc. we have a vision, and an ambitious plan to fulfil. Disruption in travel industry can’t happen overnight, and it’s hard to expect an overnight emergency of a game-changing technology, simply because it’s a highly complex, fragmented, and diversified industry. Back to you @Alex – it is hard to disrupt the travel industry, but it is not impossible. Stay tuned – change is right behind the corner!
Nice article Alex.
We are under the 4 point, Local.
http://www.patagonline.com
Directly negotiation whit que local handler, but in Patagonia is really difficult to habe a internet connection, we have to intermediate whit the local handler and the final client.