coins
1094 days ago
 

Why do technology people want to get into travel when there is so little money in it?

NB: This is a guest post by Murray Harold, a homeworking business travel agent from Buckinghamshire, UK.

There are a few things I do not understand. Actually, there are an awful lot of things I do not understand, but here is one thing which I ponder about, on a daily basis, with my travel hat on:

There is no money in travel – so why do so many want to get involved?

There hasn’t been any money in travel for some time. In fact, pretty much since discounting hit retail agencies – in a big way – in the late 1980s. Agents did have some money, but the curtailment of commissions put paid to that.

Airlines haven’t got any money either – well, they do from time to time, but one year’s modest profit soon lurches to a mind boggling loss, and then back again.

Tour operators don’t have it, as witness the mixed fortunes and the hours spent sorting out failed operators’ claims.

And don’t forget hotels, many of which are hardly swimming in piles of cash.

That said, in each case, there are exceptions. Some big business agents do rather well, a few operators, some of the low cost airline boys (notably Ryanair), and some of the top end hotel chains (eg One and Only Resorts). Or, at least they appear to.

So, why do people (especially from the tech end of business) want to get involved? The only answer I can come up with is that “travel”, as such, has nothing to do with it at all.

It’s the information – the data. They want to know everything about you, so where best to find out (more) about people than to look at their travel habits. You go on holiday, you have money. You go on a posh holiday, you have lots of money. You go on a posh holiday en famille, two or three times a year – we want you on our API feed.

If you buy a holiday, you may/will probably buy expensive clothes, cars (several), white goods, jewellery, houses (several), yachts… all products where a reasonably margin can be made – or at least, if not a reasonable margin, then information about the person which can be sold as highly valued data – information which commands a very good margin.

But let’s get back to the travel side of commercial life.

The travel industry has rather successfully managed to make itself the most tight-margined, complicated business in the world. There is no travel person who is going to go to work, do five trades and nip out to buy a Porsche during their lunch break.

This is also why technology in travel is often said by outsiders (and by outsiders, I also include technical types) to be “backward” – but note this simple fact: no-one is going to write fancy expensive systems for an industry that can’t afford to buy them.

That said, I don’t actually remember anyone asking for new technology. The GDS has been around since the late 80’s, viewdata did exactly what it said on the tin and the only recent things which make an agent’s life easier are Google Earth and your flavour-of-the-month metasearch engine.

Agents – good agents – had already learned how to paint pictures with their words… And for many clients, the phrase “I stayed here last year ” seemed to work rather well.

I digress. Let’s get back to this “data” thing. So far, not a single airline or tour operator has realised that it’s not about selling their product and its not about distributing their product – it’s all about information, details about the end user. That’s where the money lies.
Thing is, how do airlines and operators feel about that?

Google’s recent foray is a case in point. Does Google want to “be a big player in travel”? I am not so sure.

If it wanted to do that, Google could have do so ages ago and quicker than you or I could say “are mobile apps a good idea?”.

Needless to say, airlines and others are queuing up to get into bed with the new Google travel system, and airlines are all starry eyed about lowering distribution costs and how it will be the next big thing (yawn) …

But then again, airline boardrooms never did contain the sharpest tools in the shed and have always had questionable ability to think anything through.

What does Google want? $5 from the sale of a ticket? $0.25 for a click? Okay, Google might take that as a sideline, but what about the details of every person who flies first or business class across the pond, who that person works for, where they live, what sort of disposable income they have, where they like to go on holiday.

That is the really valuable stuff.

NB: This is a guest post by Murray Harold, a homeworking business travel agent from Buckinghamshire, UK.

 
 
Special Nodes

About the Writer :: Special Nodes

Special Nodes is the byline under which Tnooz publishes articles by guest authors from around the industry.

 

Comments

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

  1. 8 Technology People Sites | MK Computing

    [...] Why do technology people want to get into travel when there is so .Sep 22, 2011 There are a few things I do not understand. Actually, there are an awful lot of things I do not understand [...]

     
  2. 9 Technology People Sites | MK Computing

    [...] Why do technology people want to get into travel when there is so .Sep 22, 2011 There are a few things I do not understand. Actually, there are an awful lot of things I do not understand [...]

     
  3. JJ

    This article is completely non-sensical and very far off the mark in terms of rationale. After having spent the best part of the last decade in the Online Travel Agency industry, I don’t think the author has analyzed the financials of the largest travel companies on the planet like Expedia, Priceline, Travelocity, Orbotz etc. They make a ton of free flowing cash flows and have revenue of billions of $ and profits of multi-millions.

    The reason why tech people want to get into travel is because it is one of the largest industries on the globe at around $750Bn USD and has global reach. The traditional problem with the industry was that it was highly fragmented and technology enabled aggregation of supply and demand in the airline, hotel etc verticals. There is still an enormous aggregation opportunity especially as technology such as mobile evolves.

    It makes complete sense to try and chase marketshare of an enormous opportunity and technology is the key to unlocking the opportunities in a fragemented marketplace.

     
  4. Stuart

    Cheers John. Pretty sure I opted out of rapleaf a few years ago? Looks rather familiar. You explain the benefits of big data well. Think I need to read up on “the economics of data and how it can be leveraged”. Good cost though :)

    By the way, my bank already flogs me wine deals, rubbish annual travel insurance and (and this annoys me) crap holiday deals. Not a massive jump to daily deals suppose…As far as the data they have on me, you’re right it will be detailed, but I wouldn’t buy a thing off them. Can’t stand them – run by a bunch of incompetent crooks and the UK government :) Would switch banks but can’t be arsed and there’s a family thing going on there (same branch for 3 generations)

    As far as Facebook goes, I’ve never seen so many of my mates (civilians) so pissed off with it, as after this latest update…they’ll need to watch that. Folks just want something that works whilst stalking their mates…

    All good. Scotland winning at half time :)

     
  5. Murray Harrold

    … actually, from an airline point of view (or any other service/ product seller) you only have two potential strategies:

    1. Get big. I mean really big. In Airline terms, you would only have 3 airlines – OneWorld, Star Alliance and Skyteam. This would give regulators nightmares but ultimately, it would be inevitable. All individual identity lost … but its the only way to have enough clout to fight back (if that’s the right expression). May be too late, though. Does not bode well for unaffilated airlines, either (eg Virgin)

    2. Get small and get specialised. Go the Ryanair way. “Sod off we will do what we want, the way we want to”. Must make sure you have the right model (which they seem to) and crunch the numbers like fury above all, stick to your guns… which Easyjet may not be doing.

    Thing is, there is nothing in between the two – and the bar would be too great to make the leap.

     
  6. Stuart

    Agree with John P – no way does Google want to become an OTA. You’d piss off so many legislators on Capitol Hill, plus their atttack dog lawyers, woof, nah not gonna happen.

    Still not sold on the *value* of the data. Maybe it’s just me, but keep thinking it’s not all it’s cracked up to be.Unless there’s a massive Big Picture I’m not really seeing?

    Keep up good work :)

     
    • John Pope

      @Stuart

      Cheers.

      Looking forward to our next convo. Hopefully, I’ll be able to add more insight (the way I see it anyways) to this current data discussion and turn you into a believer… you know, the card-carrying, Kool-Aid drinking kind.

      Sorry for this but I thought I’d offer a comprehensive addition to an already excellent conversation and particularly interesting topic for me. Reader Warning: it’s a wee bit verbose… to say the least. ;)

      A lot of the focus in this thread is on Google, and their data acquisition process / strategy. However, there are many other rich sources of valuable data that are available for entrepreneurs to acquire (Google’s data is Google’s alone). Some of those sources are obvious like the Open Social Graph APIs from Facebook, Twitter, et al.

      In addition to the obvious sources above, there are numerous “non-obvious” sources from companies many people have never heard of. Check out Acxiom (http://www.acxiom.com/) and Rapleaf (https://www.rapleaf.com/) for a start. Both of these guys are incredibly powerful and would frankly make George Orwell roll over in his grave. There are others.

      Beyond third party sources of big data, there are also plenty of things web properties can do to collect large amounts of data and build very thorough profiles of their users. Give users / consumers a compelling reason for them to be heavily engaged with your brand (site) and you’ll inevitably have the opportunity build very specific profiles which can lead to hyper-personalised web experiences, which lead to even more engaged and loyal users.

      The value of all this data and the pursuit to acquire it, as others here have alluded to previously, is I believe, more than enough justification for tech people to enter the travel industry. Most traditional travel folk wouldn’t recognise this fact, but @Murray is definitely hip and ahead of his time, so he gets it.

      Back to the Google issue.

      One of the difficulties Google faces is that their user profile data is a million miles wide, but only a few feet thick. Google’s users don’t stay on Google web properties for very long, Google Mail being an exception, but difficult, and practically illegal to extract much data from. Search exists to send users to other sites relatively quickly, thus not a lot of the user’s intent is understood as well as it could be.

      That’s why Google’s getting into travel and other verticals like daily deals more deeply because they can then start to add transactional data (what users purchase), preferences and tastes to the mix. Google’s relative lack of depth in their data is also what makes them so nervous about Facebook… and well they should be.

      Acquiring richer, deeper data (transactional, location, etc.) is the same reason for Google’s entry into mobile (and why they give Android away for free). Google Wallet fits into this same strategy as well.

      Imagine how much data your credit card company has on you, as Murray alluded to above. Now that is powerful, extremely valuable stuff.

      Quick anecdotal aside: Recently, a little bird told me that one of the UK’s largest banks is about to enter into the Daily Deals space. This makes perfect sense; they have extremely detailed information on what millions of their customers purchase (they know everything in fact) and they also have existing relationships with hundreds of thousands of merchants. It’s a perfect combination and makes total sense. Imagine how curated, personalised and targeted those deals will be… two words, mind blowing! It will make Groupon and Living Social’s relevance look like irritating direct / junk mail… oh, that’s right, it already does. American Express has already launched a similar program in the US.

      The point is, Google understands very well the true value of data and is ultimately the sole reason why it’s a $170 billion dollar company today. When you recognise the economics of data and how it can be leveraged, especially its impact on advertising, you see very clearly why it’s a very rational decision for Google to provide all of the best in class applications that they produce for free. Bottom line, it makes them boat loads of cash.

      Once you own / acquire the data, you can sell it over and over and over again to other brands who want to reach your audience. And, most importantly, the marginal cost of selling that information about their users / audience is pretty close to zero – effectively, a 0% cost of sale. That is “the value of the data” that you weren’t convinced of yet.

      Now for the “real” 800 lb. gorilla in the room – Facebook.

      Facebook’s profile / user data, on the other hand, is many times deeper than Google’s and the reason why social (Google+) is such a massive priority for them. You’ve probably heard that Larry Page has attached every Google employee’s annual bonus to the success of social this year. That’s because he knows they’re still light years behind Facebook in terms of understanding their users and wants universal Mountain View focus on shrinking the gap between them and Facebook in the space.

      The “Like” button is probably the most ingenious and at the same time diabolical application created on the web to date, and now Facebook is rolling out more “verb” buttons to measure and collect even more “intent” data about a user. Absolutely mind-numbingly powerful stuff (if privacy advocates don’t stop it). By comparison, Google’s +1 button is a response to the success of Facebook’s “Like”, however, adoption is relatively slow and nowhere near as ubiquitous… and will probably stay that way.

      I personally think Google will be playing catch up on user intent data from now til the end of time for a very simple and shortsighted reason; Facebook, whether intentionally or not, chose a verb, “Like” for its branding. Brilliantly genius, or maybe just lucky because now they are seamlessly moving on to other intent verbs (Read, Listen, Watch, Review, Purchase, etc., etc.) and, my guess is, Facebook users will just get the roll-out of all these new buttons auto-magically.

      Google, on the other hand, chose +1. That may have been a clever connection to their social network branding, but now how do they move on to capture different types of intent verbs? +2, +3, +4, etc. just doesn’t work and, therefore, a simple yet powerful reason why they’ll have a difficult time keeping up with Facebook to build deeper, richer profiles of their users. Not to mention the fact that Facebook’s users spend endless amounts of time on the site.

      I reckon Facebook will become the ultimate power-broker / gatekeeper for the web going forward. I think their strategies are smarter and more focused. They’re also NOT moving into every vertical and raising the antennae of every regulator on the planet. Facebook plays it cooler, quieter and better stays under the radar of both the authorities, media and public alike… in other words, they piss less people off.

      There’s a number of other pieces to the puzzle, but we’ll save that for another forum… one a little more discreet. ;)

      Keep rockin it Stuart and Murray, great conversation.

      Have a good weekend. :)

       
      • Murray Harrold

        This really helps clarify and awful lot … so, the big players could be Facebook, with Google going ape playing catch up. Presume, therefore, that it easier to have thicker data and bolt on the presentation of product/ service, than it is to have the product/ service and use that with wider but very much thinner, data.

        Facebook is easy to offer product on (I do so in the guise of my non-travel alter-ego) and does have a much more homely, “cosy” feel about it. It’s also much easier to advertise, knowing what your spend is going to be!

        This leads me to ponder: 1. How relevant, in the grand scale of things, will the actual provision of the product or service be? and 2. How soon will it be before the tail wags the dog?

        Regards (1) let’s say I am an airline. I can advertise my own services, promote through agents, through my website and OTA’s – but the real income could be from the targeting of what the person wants (or in the case of travel, he or she thinks they want), when they want it, quickly. It’s there, under their nose… but a click away. How much will be cost me to be that service providor? Will what it costs me (or *could* what it costs me) make 9% commission look like petty cash? (From the point of view I may have to present myself many times before getting a sale).

        Regards (2) Facebook/ Google is Global – so, I have to compete globally. Not in my local market, but with every business on this planet (but that’s just until we find a few more inhabited planets). So, could the scenario arrive that (say) an airline does not provide what it wants to provide but the “data presenter” says: “If you want to stay number 1 you need to provide this service at these times” – scaled up, Facebook could say to Amercian Airlines: “Here you are, this is your flying schedule for next week ….. And this is what you are allowed to charge people”.

        Yes, of course, regulators could well be barking up the wrong tree. It’s not who is providing what, it’s who could be telling whom to provide what.

         
      • Paul Basel

        I think it’s all about selling ads.

        Google first and foremost is an advertising company. And now looking to grow google+ for more/better profiling. I see them as having more and better data than facebook and twitter. After all they aggregate content from both facebook and twitter and hundreds of thousands of other sites.

        Google targets ads based on your past (previous data acquisition) and your present (what you are searching on now). The last frontier is being able to predict the future and target ads towards what you will be doing in the future. And knowing your travel plans helps them target ads by knowing exactly where you will be in the future and when. Combine this with petabytes of profile data from other websites which no other travel company has and that’s powerful.

         
  7. Stuart

    Something odd going on with the times on these posts :)

     
  8. John Pope

    @Murray

    Enjoyed the post and our discussion at Travel Massive. :)

     
  9. Murray Harrold

    Ah! But if you go to Apple via Google and Easyjet via Google and everything else via Google – or if Apple do a deal and so do (say) RyanAir and TESCO etc etc to share their data or rather, it becomes possible for a large scale data aggregator to “pool” that data – then you can mash all that data up a to produce a total picture of you, what you like, what you need and when you need it – or at least have a ruddy good idea of what you need, etc… That is the thing.

    Now, if you could do that (and this is Google’s ultimate aim, I suggest) That’s where the value lies. The actual provision of the goods or service, is by the by.

    I don’t think we are fecked for a while yet because, as well all know, travel is complicated and comes with too much baggage (no pun intended)

     
  10. Stuart

    More aggro less aggregation I say Murray :)

    But quite. In my experience what a client wants, and what a client is prepared to pay is a totally different thing. However with a wise word and proper direction this circle can usually be squared (hopefully to a clients benefit ie try this direction or ticket – it’s a £1000 cheaper).

    I just question the *value* of data to the travel industry.

    *Apple* know what music I like and have my cc details. That doesn’t *equal* with where I like to go on my hols….

    Easyjet and Ryanair know where I like to fly to (at the right price…) but all the other emails I get from those two get whacked straight into gmail spam…hmmm. A cheapo to Venice Marco Polo does not equal a cheap flight to Oz or a lower mortage or low cost viagra etc…

    Suppose in an ideal tech world a semantic and scale combo could be like a turbo tavel agent* that actually makes money*. Not convinced yet though.

    Still we could all be fecked, not know it, living off a prayer and *destined to be ruined*, which is nice…

    Suspect not though…

     
  11. Stuart

    Love this article…brave, thoughtful, amusing, and the word from a proper coalface grafter.

    Odd innit, this week I’ve had three people, that I respect, argue about the importance of data (mining or non-mining).

    1. One argued, at the #travelmassive in Covent Garden, it’s 90% of why the *new new travcos (not what we think travcos are is a major point)* want pax and their details (almost like a Tesco Pro Plus Clubcard on bolivian charlie). You know what people want, you know what they will want. That info = uber-power

    2. One argued in Tnooz comments that “the primary aim of capturing their data for “other” purposes is absolutely mad”. True maybe.

    3. Chatting to a chum at the TTG awards about data, and they pointed out that some of the big “travco amalgamations” that occured in the early 2000′s were done on the auspices of collecting data for mailshots and cross-marketting. Turns out a lot of that was complete bollocks.

    Anyone else think that with the debate on data vs no data importance that without doing anything really new, that Google (the biggest travco in the UK) is defining the debate? I do.

    Still think the 2 biggest things of the new Google flights was

    a. the speed (that would bother me if I ran a big OTA)
    b. straight to airline (bypassing a middleman…that would bother me if I ran a big OTA)

    ps. *everyone* should read this on big data (at least once – took me 2 goes to get it)

    http://www.tnooz.com/2011/09/20/news/big-data-bringing-the-magic-back-to-travel-technology/

     
    • Murray Harrold

      Thank you!

      It is interesting (I have read the big data thing – like you I am having to read it a few times). There are two sides to this – what you know (the data you have about the buyer)- and the data you have from suppliers. The trick is to match up the right chunk of data with the right buyer – whoever can do that gets the yacht (and the sports car and the big house …)

      The big data thing is on the supplier side (I think, if I have read it correctly). Let’s have as much of it as you can give as fast as you can give. Now, I see the Google foray into travel as part of the buyer information side – learning as much about Mr Bert Hepplethwaite of 48 The Maples, Much-Binding-In-The Marsh (showing my age) as is possible – and punching out travel efficiently is a good way of learning a lot about someone – or at least, of adding to the pile one has already learnt about that person.

      The lurch from “search” to “matching buyer and seller” is not difficult to make.

      Yes, what Google have produced is blisteringly fast and it can give you A to B – and C, even – on a number of dates and so on and so forth. The thing that will keep us going (at least pro tem until the semantics side of things really gets going – see the relevant semantics post, which you will need to read at least 4 times before you can translate it!) is the “Douglas Adams” effect – The answer is 42 … but what is the question?

      What I mean by this (as you know), is that what a client asks for and what a client wants can more often as not, be two different things – the new G. search thing gives fast results… but that does not mean that the buyer/ inputter (eh?) has actaully asked for the right thing. Now, you know as well as I, that we invariably have to ask quite a few questions and use our own knowledge to work out a) What the client actually wants and then b) The best way of doing it.

      Semantics may be able to emulate some of this, in time.

      Yes, it was #travelmassive that set me thinking as well :-)

       
  12. Jonathan

    People enter the travel industry because it appears glamorous and interesting. They either don’t realize or don’t care to see that this is a low margin business that is being squeezed from multiple sides. I think the sheer size of the industry gives people a false sense that with all that potential revenue floating around, all they need is a small slice of it to be profitable. The reality is that carving out a profitable niche is much harder than most believe.

     
  13. DJ

    Being someone who works for one of the big boys in travel – there are only 2 really, so take your pick – I was fortunate enough to ask Peter Long of TUI what was the secret of his success over the years. Some may be derogatory about him but say what you like his history of delivering consistent profits for a large (and some would say declining) tour operating business is pretty much unparalleled.

    His response was typically erudite. He said that he’s seen a lot of “tossers” come into the industry over the years thinking that they know travel better or they have the midas touch or shining insight that will change the fundamentals of the business. However, it’s usually been demonstrated to be false, and in some cases despite the odds, TUI can still attract the intellectual firepower to outwit most of the upstarts.

    How this plays out in the next few years should be interesting to see…

     
    • Murray Harrold

      I, too, have a lot of respect for Peter Long (and Manny F when it comes to that) but this is no longer about holidays or flights. Neither is it about selling computers or wazzacks either – it’s about having a global ability to match a person with a product or service – and being able, ultimately, to control that match.

      For our industry, that means a holiday or a flight. Now (says the matching party) if you make some money out of it, fine – but I will do the matching. The serious, big time matching, that is. Sure you may pick up a bit through advertising or the odd high street agency but as we become more attuned to running our lives online – whoever is the biggest “matcher” makes the real money. (Side issue – hence the long(er) term concerns for OTA’s etc)

      So, the flight or the holiday – ie the airline or the tour operator – simply becomes a commodity – a means to an end. Ultimately, it may be argued, how much you make will depend on how well you run your business BUT much more will depend on how much you are involved with (ie pay – or provide the most data to) the matching party – and I do wonder how airlines and operators feel about that – or worry about that. This is why I say that many airlines and operators have not thought this thing through. In the days of many agents and commission, the airline/ operator could divide and rule. The headlong dash into online, burning of boats (and the resultant headlong rush of people to live their lives online) means that, not only have ops/airlines jumped out of the frying pan into the fire but may be pushing themselves into a corner where paying 9% commission will seem like petty cash.

      Data – information- and the ability to match the right information – fast – to the right person at the right time is the main plank in all this and Google mean to be the number 1.

       
      • DJ

        Fundamentally, Murray, I agree. It’s long been one of the myths of the modern computing that “one day” we will all be empowered by “virtual intelligent agents” who will go and source info and products to match our every need without us having to lift a finger. Actually, Apple were one of the main protagonists behind this utopian vision. Note this is from 1987!

        http://video.google.com/videoplay?docid=-5144094928842683632

        It’s interesting to note that while Apple have largely implemented the hardware vision behind this, it’s Google who appear to be doing it with software. I think one of the interesting aspects is the lack of transparency with which Google, Facebook et al are approaching this compared to the video above.

        We know that Google “personalise” SERPs even if you are *not* logged in; Facebook change their privacy controls every few months to ensure more of your life gets captured… and on it goes. But then again, as someone below notes, Google’s data is wide but not very deep on the individual, while Facebook’s is deep on the individual and their friends but not rich in terms of their spending. Plus Facebook ads suck commercially (been there, done that).

        I think the legislatory environment may yet mean that there is room to own verticals rather than giving it up to a “global” intermediary like Google, though. Rightmove is my best example of that in the UK. In travel though, the complexity and financial risk of “doing a Rightmove” may well be beyond the reach of most organisations.

        Which is why it’s an interesting space to be in right now!

         
  14. Tim

    The idea that people enter the travel industry to start company with the primary aim of capturing their data for “other” purposes is absolutely mad. From what I’ve experienced (both in and out of the industry) very very few agents, operators or others have passed my details to a car dealership or to a designer clothing chain.

    Is there a lot of room for innovation in travel technology – yes, will businesses with the right skills sets try to fill those gaps – yes, are all our “spending habits” and other financial data being sold to 3rd parties – no. Why? Consumers wouldn’t stand for it.

    An amusing read none the less as there are many travel start-ups that simply haven’t a clue and fail very quickly but then I guess that’s the same in all industries.

     
    • Murray Harrold

      You are quite right – no potential travel would come into travel with the primary aim of capturing data to sell on. What we are looking at, here is not a.n. other agent – we are considering Google (primarily who, I would venture, are coming in to add to what they know already, and travel offers the opportunity (as well as making a bit on the side) of filling in some of the gaps of what they know about you.

      Thing is, when you search for information about Henry Vth or look at various pictures of cars or whatever, over time little snippets of information filter back. They get added to the pile. Slowly, slowly a picture can be built of what “you” are all about. Add the sum of total of what they know about everybody, mix it up and you can target what you want to whom you want (rather, “to whom” is prepaid to pay for it) . Knowledge is power. Absolute knowledge is a healthy bank balance.

      All this happens irresepctive of waht you do or want. Further, you derive no benefit from it.

       
  15. Russell

    Complexity: As a ‘tech’ person who has worked in the industry (airlines at least) for 16+ years the draw is the complexity of the end to end business – sometimes industry self-imposed complexity but other times just the complexity of a business that needs to sell something ‘virtual’ (a seat) for a constantly varying price, and then deliver a very hard product with lots of moving parts … and of course for many of the full service carriers the whole has to be executed with style. It’s also a fantastic challenge to innovate with technology (there are lots of opportunities) when very cash constrained.

    I tried a Utility – silly amounts of money but essentially simple. If the customer takes Gas, sell them Electricity, if the customer takes Electricity, sell them Gas, if the customer is in debt sell them nothing. Nothing too complex technology to support especially with a fire hose of cash.

     
  16. Steve

    One of the main reasons tech folk and startups look at travel as a viable sector is the lack of innovation within it. There is still clear opportunity to do things better, more efficiently and in a new way, and any of those are a viable plan for a startup with funding these days.

    Of course turning that into traction is much more difficult in travel and really depends on the depth of your pockets…

     
  17. Murray Harrold

    Yes, agree, more or less… but what I think we may be missing is that it’s not the gatekeepers to travel data that are the issue (though they may be for now) – it’s the gatekeepers of the future who will control the derived data about you and me … and who will control that data. Google will not be about “search”… Google is about data, more and more data about you and me and connecting the right product with the right person at the right time – for which one pays.

    A lot of information can be found about us throuh credit agencies… TESCO (and others) get a lot of data about us through clubcards; so think about how else can I add to this pile of information? Yes – travel. Passports, where I go, how often, who with. Slowly, slowly, people will be able to buy whatever they need to know about you.

    As technology advances, so too will the power of the person who owns the data about the individual – hell, you won’t even be able to fart without Google (or some other mega data agency) knowing about it. All a bit Orwellian, I know. Part of me, though, thinks I will be better of just having a landline, looking things up at the local library and only paying cash …

     
  18. Timothy O'Neil-Dunne

    I really like the premise of this post. – most of what Murray says is correct in my opinion. However I have to take issue and point out some problems with his conclusions.

    There are a number of ways that people can make money. The fact that travel technology companies take in heaps of cash indicates that if there is cash to be spent then why not spend it in travel. Airbnb and its ilk are good examples of this. And look at how much Rearden Commerce just raised (their 5th round I think).

    Murray and I (hopefully) agree that Travel requires a large degree of knowledge that is hard (but not impossible) to handle via a technology. Like Murray – I can (a little rusty perhaps) usually beat any of the systems out there both in time and options. IE when I say beat – I can find the most appropriate answer to the customer’s individual request.

    However humans don’t scale well.

    The data essential to travel is held in strange and obtuse silos. Relevant data search using the current tools in the market is let’s face it – REALLY hard. We have been largely working on technology based solutions seriously since the mid 1990s. And the current crop of solutions with few exceptions are not that good. So when Murray says the GDS+Viewdata and Google Earth with a few meta search results is “good enough” he is right. There is an essential truth that most technologists ignore. Travel is VERY complex.

    That then begs the question which must logically follow on: IE Are are those who act as the gatekeepers to the data doing enough? And if not why not?

    In my view they are not. And have not been doing that for a long time.

    As a result the need for technology is not driven by the usual metrics of need but by the challenge to the less than stellar performance of the current gatekeepers. Sadly this creates an inverse expenditure ratio that should not be happening.

    We should not see that the cost of distribution is going up and the expenditure by those who rely on the current systems have to invest more and more just to maintain it the status quo. That is a recipe for failure.

    Fred Lalonde’s recent post on the subject of Big Data is indicative of this set of issues.

    Bottom line here folks – i believe that we are seeing the point of no return. There is a change at the Big Data level and that of the user device level. The current core systems cannot cope nor even hope to keep up. The fragmentation is not being accelerated by rogue players – it is being caused by fundamental changes in the makeup of the consumer user base.

    Anyone who ignores that will become road kill along the way.

    Murray and his ilk are doing a great job. I wish he as my agent!!! I can trust him because I know what he does.

    And that my friends is the ultimate challenge – Creating trust.

    Cheers

     
  19. Graham

    There is no money to be made because everyone takes a cut. And most people get out.

     
 
 

Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel