Could social media kill the travel intermediary?NewsBy Alex Bainbridge | March 23, 2011Share This article was originally published on The travel industry is notoriously divided into very neat silos.You can slice by product vertical (flights, hotels, tours, car hire, cruise etc) with each having its own annual conference, often many around the world.Then you can slice by how the product is sold (online, retail agent, business travel, groups etc). Again, each slice has its own conference(s).Then you can slice by topic - you will find distribution conferences, social media conferences, payments and fraud conferences, destination marketing conferences etc etc.Chaos. In fact, you could easily spend your entire life just going to conferences and still never get the full picture.But one theme runs through many of these conferences - the bigger companies get to speak and the smaller companies get to listen. Immediately the inference is that somehow due to company size they are somehow going to be correct, relevant or worth listening to.Now, in the online world, many of the larger companies are either online travel agents or are intermediaries of some kind. The smaller companies doing the listening tend to be the suppliers.This has the unnatural effect that much of the discussion at the leading travel industry conferences about social, local, mobile etc, is from the perspective of an agent or intermediary.This leads to problems as I will explain:What problems do B2C intermediaries solve?A travel product intermediary (an entity between the consumer and the supplier) solves three key problems: Search/suggest - surfacing, suggesting and letting consumers compare products.Trust - is it safe for the consumer to book? (Often solved by the intermediary providing a booking mechanism where they take the responsibility for getting the booking information to the supplier)Distance - historically an agent in one country could sell a distant destination far easier than the consumer could contact that remote hotel themselves. In flights and hotels, sizeable intermediaries have become market-dominant.Can you solve the problems intermediaries solve, but in another way?As the old adage goes: you are not a competitor if you have the same solution but if you are solving the same problem....So lets look at the three challenges that intermediaries solve again: Distance - the web solves the distance problem once and for all. If one website is a click away that is the distance problem solved.Search / suggest - a non transactional metasearch can solve this problem quite effectively. Or perhaps even a vertical search solution on a leading mainstream search site. We do need a layer of search/suggest travel websites but they don't need to be handling the transaction in order to be rewarded.Trust - one of the words that is always bandied around when talking about social is that it helps build trust. This is accepted now and if you say this at a conference you may as well be saying the great thing about lightbulbs is they help you see in the dark. We are now beyond discussing trust-building through social media. So, can social media lead us to a point where we don't need intermediaries at all? Could it actually happen?For sure, this debate will not get aired when travel industry speaking slots on social topics are heavily populated by intermediaries as they will want to steer clear of how social media potentially creates significant long term risk for their enterprises.Is this also why Glenn Fogel, head of worldwide strategy and planning for Priceline, said overnight at the No Vacancy Sydney conference that hotels shouldn't invest in social media and why he considers Facebook a waste of time?Fogel is a well respected thinker within the industry and maybe he is not a social denier (like his conference statement may initially make him out to be), but he has instead spotted the long term risk, and is trying to mitigate it?The rise of social is a supplier centric story, not one driven by intermediaries.OpportunitiesIf this hypothesis is correct then it is not all doom and gloom for the intermediaries. There are opportunities as well as obstacles.For example, how do we measure supplier trust using social mechanisms? Could someone devise a Klout for travel suppliers measuring product trust rather than influence? Would it help to see transaction data to help create that score?If this happens, I expect it to happen in tours/activities first, rather than flights/hotels etc). Two reasons: The barrier to entry to setup as a tour guide/tour operator is much lower than to setup as an airline/hotel, hence there are more untrustworthy suppliers. This leads to a greater chance that a consumer, on their first transaction with that company, will look for strong trust signals prior to booking (hence revenue could be generated from running a trust system as the consumer will likely value the information and act on it).Flight sales/hotel sales intermediaries are defending against the long term rise of the supplier. In tours/activities we hardly have any intermediaries to start with, so anything new would just have to solve a consumer problem rather than take on incumbents at the same time. What do you think? Could socially measured trust along with the web decimate the need for travel third party distribution?Indeed, are intermediaries a dying breed?