[The following post was written by Mark Seall of MapVivo. Mark previously worked for GreenOptions, an environmental, web-based media start-up...]
My interest in online travel was sparked after realising that one third of the cost of my expensive Christmas skiing holiday had been spent by the agency on marketing.
I'd blindly assumed that the internet revolution in the travel industry had increased efficiency. Far from it.
Now having been involved in the travel industry for a few months, I think I can see what's wrong.
Travel has basically had an easy life on the Internet.
Although one of the first industries to take advantage of the web - effectively disintermediating agents whose phones went quiet while sites like Expedia and Travelocity glowed red hot - it did nothing other than automate some very simple processes.
Online travel agents are no more innovative than an ATM.
Elsewhere on the web people have had to work harder for the dollar, which has led to an Internet full of innovation, culminating in the social web that has emerged in recent years.
The web is no longer a simple information resource, it is at once a library, a conversation, a market, a social gathering and a lifestyle.
Users exist in groups, networks and crowds, filling it with personal information and searching it passively through friends and not just actively through Google.
And it's not just the younger generation - the fastest growing group of Facebook users is in the 35+ age group.
Emerging from this is a breed of web service that gets close to a customer in contrast to one that bombards them from a distance.
While the travel industry tries to divert then convert customers, the future lays in steering them by knowing them better, understanding their needs and offering them travel suggestions with value instead of managed search results.
This is the key to social media, which is far more and offers farm more than allowing simple user interactions through ratings and links to Facebook - which is pretty much where the leading edge in travel is right now.
Many of the books I buy have been cleverly recommended to me by Amazon based on an understanding of what I like to read.
Yet despite having given the web intimate details of my travel habits I've never received a useful suggestion, let alone a relevant deal.
Web 2.0 users reveal a lot of information about themselves, including where they have been, where they are going, who with, what activities they enjoy, and what they rate highly and poorly.
This behavioral information allows filtering of travel information and precise targeting that provides value to customers tired of the information overload that a travel related Google search brings.
Web 2.0 not only enables genuine personal recommendations, but it has the potential to spread them virally.
If you can win one social customer then you have a good chance of winning their friends over at the same time.
Considering my click-behaviour I'm about 500 times more likely to follow a link from a friend than from a paid search result.
The obvious gap is starting to be filled by sites like WAYN and WhereI'veBeen who are developing travel focused social networks, but you don't need to build your own community. Just as people are connecting, the web is connecting.
APIs and widgets allow close integration with and within social networks enabling travel providers to provide intimate customer services in the form of trip planners, destination guides and travel journals which provide value for customers and sales opportunities for providers.
But...
The trouble is that all this is difficult to conceive and hard to implement in an industry that still has deep roots in past paradigms.
In much the same way that the electrification of factories took decades to bring about real productivity benefits, the same may be true for the Internet in travel.
The most likely outcome is that Facebook or similar services will end up owning travel customer relationships and neatly fit itself into the part of the value chain that travel agents vacated whilst the rest of the industry races to the bottom with spiraling acquisition costs through SEO and contextual ads.
That's where a third of my ski holiday costs went.
Thanks for the post. I agree the next frontier for the travel industry is being able to provide relevant inspiration and deals. My company and a lot of others are hoping to close that gap; however, the barrier to "web 2.0" travel is not technology, it's the fact that past behavior is not a clear indicator of future desire. On Amazon if I buy a lot of business books it's safe to recommend similar business books. In travel, if I went to skiing in January will you recommend mountain destinations in June when I really want a beach holiday? If I fly to London regularly for business will you recommend London events for my family holiday? I'm not trying to be an apologist. You are correct about the travel industry lagging behind, but we need to acknowledge some of these complexities in the travel sector. Again, thanks for the insightful post.
An really interesting, thought provoking post... In response to the comment above. I think that a direct translation of previous behavior such as skiing into mountain destinations would obviously be too literal.
However, knowing that a customer has chosen a high end chalet suited to a family of four (as a basic example) would much more readily translate into a personalised summer holiday recommendation.
I think the complexities are definitely there, but this is where the exciting opportunity lies...
2p
“however, the barrier to "web 2.0" travel is not technology, it's the fact that past behavior is not a clear indicator of future desire”
That’s maybe one of the problems – being stuck on the idea of past behavior and not profiling the customer. Sites like WAYN and MapVivo (and your own as well I guess) are starting to focus on ‘intents’ by finding out where a customer plans to go in future. We also find that 70% of our users are more than happy to fill out detailed profile information on preferred types of travel. In addition, we can see what type of journeys people rate highly and those that they don’t, what groups they might join and many other ways that customers signal their interests and intentions.
But as you say- it’s far from simple, and I fully acknowledge the issues and difficulties (such as being sensitive with customer data). Still, having seen a few presentations describing the web strategies of a few larger players I can’t help get the feeling that much of the industry still has a lot of ground to cover.
You miss the point completely.
Online travel is the grand-daddy of Web 2.0; it just doesn't necessarily operate under the main brand's name. TripAdvisor? That's Expedia. Seat Guru? That's Expedia. IGoUGo? That's Travelocity. Trust me, these folks totally "get" that they need to be moving up the travel planning funnel and that their main brands are saddled (to an extent) with an ATM model. But ATM's are necessary and there's more than one way to skin a travel planning funnel cat.
Cheers,
Stuart MacDonald
(CEO Tripharbor.com
Fmr CMO Expedia.com)
Stuart, I guess the key sentence from the post is:
“…social media, which is far more and offers far more than allowing simple user interactions through ratings and links to Facebook - which is pretty much where the leading edge in travel is right now..”
Sure, innovation is happening out there - the size of the market means that its attracting a lot of exciting stuff. I’m not saying that nobody gets it, but significant change will be slow and SEO will be the primary focus for a while. I'd also risk saying that for every firm that does get it there is one that doesn't. Expedia was innovative from its creation, but there are far older models out there.
Glad to see yr comments re Facebook being ahead! We thinks so too - the channels is a soft marketer, according to Mark Dolliver at Adweek 4% use social media for advise on planning a Trip (travel is higher than the average). 24% say is has some influence!
Still we believe in Facebook as a travel resource and we build and launched the first full feature travel platform for Facebook. http://arcResBookings.com is for hotels & tourism operators (activities) that want to put thr info on their Facebook page. Guest can see rooms, photos, rates - get quotes and book online
live facebook bookings demo
http://tr.im/FaceBookDemo
Live example http://tr.im/facebookings
Hope this is useful to travelers and suppliers
@Stuart – you can’t be serious about Trip Advisor? If you think TA represents the state of web2.0 then everything in the post above is spot on.
@Jared,
Jared, I think you misrepresent how Google (and Netflix et al) recommendations work. They aren't based only on your past buying behaviour, they are based on the buying behaviour of all your customers.
So the fact that you have recently bought lots of business books is less relevant than the fact that a lot of people who bought, say, "The Long Tail" also bought (for example) The Kite Runner. After all, taste in books is at least as varied as taste in holiday destinations
So, theoretically, a recommendation engine might be able to make predictions like, people who booked a skiing holiday in Chamonix were more likely to book a summer holiday in Turkey.
Stuart, after all that corporate talk of funnels and the like, what's the thinking behind Tripharbour.com then?
Not meaning to sound disrespectful (but being fully aware that I will) it looks like another holiday brochure with a forum stuck on the side. It appears to be barely a year old yet largely fails to tap into social tools that could generate substantial revenues.
Surely such a site doesn't just have to be an ATM? Surely it can do both?
So are their examples of other industries successfully using social media to sell product? Arguably not. Distribute free media, yes. but that is very different.
I would argue travel already does more in terms of suggesting and inspiring purchase than any other industry. Amazon books is a good exception, but frequency of purchase is so much higher for books than travel product.
Ultimately the problem that travel will always face with social media, is that people engage in travel for a very short period of time, maybe a maximum sustained period of 6 weeks prior to making a purchase. A gross simplification probably, but the rest of the year it isn't front of mind.
@ Dan G,
Good point...the "wisdom of crowds" can offer nice relevance when it comes to inspiration. I agree nobody has really solved this yet. The point I was really trying to make is that it's less about WHO we are as travelers, and more about WHEN we are. In other words, the challenge is giving relevant inspiration specific to the traveler's current mood.
@mark One comment: follow the money.
@tobias Thanks for your comment. You may not like TripAdvisor (there's much I don't like, frankly - I think it's jumped the shark in many ways) but for many it is *the* source of info for trip planning. And it's user generated "people like me" stuff. Does it do a good job in integrating with the social graph? No. That's old school portal thinking. But, as far as being a community that drives travel decisions nothing else comes close. Remember, travelers are a wide-ranging lot - most of whom have never heard of Digg, delicio.us etc.
@paul I agree *wholeheartedly* and we are trying. There's much more to do to enable more sharing and integration into the social graph (which we are working on) but believe it or not we are the only cruise site that integrates ratings/reviews/comments into the eComm path. So while we have a long way to go, at least we have started! As far as that "corporate talk" goes, well that's sort of how online buying of anything works. Thanks for your perspective.
- Stuart
If the major travel players are indeed aware of the fast changing environment they are operating in, it isn't reflected in how their web presence looks like and how they market their product. It all comes along fairly conservatively.
The discussion reminds me of this recent article in The New Yorker magazine http://tinyurl.com/cvfym6 by Malcolm Gladwell. The innovators (Davids) of the first phase have in only a few years become the legacy players (Goliaths). It seems the next group of market entrants ready to challenge them are entering the scene under the web 2.0 banner generally describing the social web and the tools it brings along.
With recommendations by friends and relatives having been a major influence factor of travel decisions for decades now, it is only normal that with these new social tools being developed and introduced in the marketplace, this key element will be turbo-charged to a new degree.
The innovators who are capitalizing on this part of the travel process are challenging the established players as they themselves did when entering the scene more than a decade ago automating the first and easier part, the transaction which we all know is not where travel process begins. The game is on. Should be interesting to watch who the new winners will be.
We have made this comment before: we believe the reason a lot of travel organizations don't adopt web 2.0 is that they really don't want to have relationships with their customers. There is a huge amount of buzz about relationships in the industry, but the reality is relationships, whether for business or in your personal life, take time and effort and a whole lot of yourself. And some organizations don't want to put themselves out there. With the incredible velocity of our society, we don't think people will have decades to harness the potential as in your electrification analogy. Folks who want to grow their business need to realize that web 2.0 is not a fad and recruit people and build organizations committed to building relationships that have meaning.
http://twitter.com/AuthenticCoast
Ben - there are plenty of examples of individual companies driving revenue through social media. One of the best examples is Dell, which has generated over $1 million through its use of Twitter. There are countless businesses that sell product through fan pages on Facebook, alerting users to events, new products etc. It's happening in plenty of places.
I'd also disagree that people only engage with travel for such a short time. Certainly in the UK, low cost airline mean plenty of consumers are constantly on the lookout for a quick city break throughout the year. Even if their year is only dominated by a major holiday, how many people stop having aspirations to travel elsewhere? How many aren't interested in their favourite places, or in sharing their stories with others?
Besides which, your home is actually another destination that other travellers are trying to reach; you're not a tourist, you're potentially a guide, somebody with knowledge of where you live. There's a value to that knowledge, and if it can be shared and built upon, there's probably a way it can be monetised.
@Stuart – I rather suspect that it is the “follow the money” approach that is the problem. There is little incentive to innovate when there is plenty of cash floating around.
@Authentic, Joe, Paul – Couldn’t agree more!
In general I wouldn’t like to say that the industry is completely devoid of innovation. Innovative ideas and approaches are springing up all over the place.
What’s going to be interesting is the rate at which the industry in general will adapt, perhaps measured by a reduction in commissions which would indicate that the web has done its job of improving the value chain between supplier and consumer.?
Mark, you mentioned you'd like to see recommendations like Amazon's. What do you think of NileGuide (http://www.nileguide.com/)? The site provides personalized recommendations based on user-selected travel preferences, planning tools, and a free downloadable guide to go.
It's very well being able to recommend what holidays a consumer might want, but if you cannot book that type of holiday online it is a waste of time.
There's not a great deal of flexibility if you want to book a holiday outside of the normal 7 or 14 day package holiday, unless, you want to DIY-it.
So, let's take a step back here, not get carried away, get back to basics. Allow me to book a multi-centre or solo holiday online through a travel agent then I'll get excited about you all being able to inspire me.
14324
The reason online travel has been slow to 'get it' is surely that the industry was kick-started by marketing people, so no wonder it was just rehashed brochures online.
Social media has come from another direction, and largely been driven by techies. So what are we missing? People who actually understand travel, and the questions people ask day in/day out from agents all over the world - I've got two weeks in October, I want to go somewhere hot, with a beach and bit of culture and under six hours away.
Sure, you can replicate an answer via a database, but that does not come close to the trusted voice at the end of the phone. Saying that because someone liked a high end chalet in Chamonix in February means they will like a luxury villa in Sardinia in June does not add anything revolutionary - maybe they will, but so what? You're much more likely to get a sales showing them another chalet in Chamonix the next February. What motivates people to travel is complex, the buying transaction is complex, and that there are as many opinions as pebbles on the beach as to where to go and what to do, depending on taste.
The holy grail is replicating the trust of that old fashioned travel agent, or a friend, in an online social setting. Trip Advisor works at a basic level because these people (mostly) have actually stayed there, and have taken the time to write thoughtful comments. Hotels lends itself very well to this kind of mouthing off. However, that's where it ends - one person's Scottish dump with no aircon is another's romantic highland castle.
If we can make the right connection between the social network and the product, so that it comes recommended from a socially qualified source, then we will be getting somewhere. Trust me, lots of people are trying. But most UGC is worthless, so focussing on that alone, without any social context that people can feel part of, is bound to fail.
What we are seeing now is the convergence of the marketing people, with their years of experience of online buying habits, the social network innovators, and the travel agents, slowly waking from eons of sleep. There's lots of grinding and knashing of teeth, and plenty of false starts. But someone will get it right - eventually. It's a good time to be alive in online travel.
Great post, "Online travel agents are no more innovative than an ATM" like the disintermediation of travel agents the same will happen to the ota's , increasing direct contact between supplier & customer.
Christopher Faron
nozio.com
Too many travel businesses prefer the status quo. Its comfortable. It keeps them employed.
Startups can't replicate the booking funcitonality of major distribution systems as the barriers to entry are too high [I don't believe that myself, but nearly everyone else does, so I will take it as accepted that I am in a minority!]
Leaves travel startups in an uncomfortable place - with lots of ideas and shouting from the sidelines telling everyone else that they need to innovate. So they end up creating mediocre inspiration websites which look great in theory, are brilliantly executed, but never take off because they don't have the end to end booking capability of the big boys.
I suppose they can hope that the big boys are going to move into inspiration based websites through acquisition rather than self-build. Not completely sure of that myself as the big boys are arrogant enough to believe they can build innovative things themselves. In many cases they can.
I for one rather like the industry as it currently is. The fragmented nature of it suits my business rather well. If you were a book publishing startup and had to go up against Amazon as a dominant sales platform you would be looking at the travel industry wishing your sector was fragmented too!
@hauteroute – Yes, we love NileGuide – to the extent that we plan to compete with it heavily at some time soon!
@james – Brilliantly said!
@chris – I do like the concept and business model you are going for, and will definitely be watching that one closely!
@alex – I think you outline some of the wider issues quite nicely. I think a proper response to that would require a whole new blog post though!
Just as I agree with some of the initial comments and most of the responses, I don't see any issues. I't simply a question of following a roadmap and starting with the low hanging fruit first.
Or put it nicely (and short, there could be much more to say):
Phase 1 is about moving to the web products that agents where booking on a green screen. This has happened relatively quickly for air, hotel and car simply because the GDSs were already there, all it was needed to start was a nice UI. Note that even this is still not 100% completed, and even just started for other sectors like packages, cruises, activities, local transport services. And this is a pre-requisite to do anything fancier. The business model is simple - sell for a margin and reduce costs to the minimum thanks to automation. So yes, we still have a lot of Travel 1.0 around.
Phase 2 is about adding stuff for online users to make better choices - metasearch, meshups, reviews, blogs and UGC. This has started in some sectors (air, hotel) and still to emerge in others (take taxis for example). The business model is mostly based on advertising. This is innovative and was not possible before the web. I actually think there has been quite a lot of innovation here from travel. I don't want to name anyone specific but for some travel products the online booking experience is now 1000 times better and faster than walking into an agent office and also far better than buying a book on Amazon.
Phase 3 has 2 components - the first is moving the social relationships from real life to online to facilitate knowledge sharing. Don't tell me you've never be influenced by friends' travel stories even before Facebook... The net just makes this easier. The second component is location based services but this comment is now too long.
I very much enjoyed reading the blog, we have tried to embrace web2.0 as a travel business, however readers should be aware that travel has faced a few challenges in the last few months, meaning resources have been stretched, but I believe a lot of companies are waking up to the benefits now and moving quickly.
http://www.qualityvillas.com
Nice blogposting and comments. As read the online travel industry is entering a new era. An era where the old fashioned local travel agent returns in the format of a sort of social media tool. The touroperators or travel agencies need to know that the customer journey doesn't start at the bookingsfunnel, but at gossiping about the brand or holiday somewhere around the web.
In my opinion monitoring tools like BuzzCapture, Radian 6 or SocialMention are good tools to listen to what is being said on the web. From there you can intermediate in the discussion and find some related products for them.
Just because holiday requests are difficult to automate, there is a great gap for personal intervenience by call center agents who are surfing for prospects on the web. Thanks to social media, you can find these prospects more and more easily. Until no one has found a automated solution, just take the monitoring tool and get into the discussion.
regards
Guido Gihaux
Manager Customer Experience Center ANWB
This post and the ensuing comments are fascinating. I currently work at a social media PR firm in the US, but I've always had an interest in the travel and tourism industry so it's great to see dynamic discussions like this one taking place.
I haven't been in the working world long, nor am I in the industry, but one thing I have noticed is the lack of social media applications available on CVB and city/state/country's individual web sites. Some sites incorporate reviews and recommendations, but I think that is the exception and not the rule. It'll be interesting to see how the numerous travel sites and applications that are popping up will be used by these more specific and targeted online hubs.
Definitely looking forward to learning more from Travolution and its readers.
As the web is always in a state of flux, the current web trends will be too. The large travel companies will always be slow to adapt (i.e. to web 2/3/4) as they have to put in huge resources to modify their operations and underlying technology. I do not think that this makes them worried. They will just pick up and buy the new hip site with the new technology that has proved themselves in the web marketplace.
I think any sector consists of a range of companies with differing strategies - we are a broad church! If everyone had the same strategy it would quickly be yesterday's strategy!
The web is an evolving and dynamic route to market - there will be early and late adopters.
Fresh user generated content of real value to real people is the only way to build a lomg term business. The concept of web 2.0 does offer opportunities for short term competitive advantage - but if not as part of a bigger picture successful formula the advantage will be short lived