The API economy in travel is emerging in response to a paradigm shift in the relationship between travel sellers and buyers, with mobile driving the innovations in business models.
In a Tnooz-led session at ITB last week, attendees heard from an API specialist, an electronic ticketing platform provider for tours and activities and the digital director of an established luxury hotel chain.
Raphael Klingmann, co-founder of XapiX, represented the API economy, or at least a very specific subsector of that economy. His Berlin-based business' portfolio includes building shopping and booking APIs which can be integrated into consumer-facing apps.
He said that "the most effective new innovations are re-combinations to solve specific customer problems and mobile apps are the best way to deliver this".
However, he warned that for travel suppliers "it's hard to get noticed in the app store" and that a more effective way for suppliers to exploit the API opportunities is "to use your API to put your product into an app that already has customers."
Leith Stevens, vice president and co-founder of Actourex, was more circumspect about the API economy. Actourex has developed an API for tours and activities to distribute electronic ticketing and manage an operator's inventory. He acknowledged that "APIs exist, but it's hard to make a business out of them."
The headwinds around APIs in tours and activities — other than the fact than "30 or 40 years' worth of technology developments in flights and hotels hasn't happened in tours and activities" — is related to the dynamics of the sector, rather than any specific API issues.
Stevens referred to this as "the episodic problem," namely that in a B2C context "tours and activities are taken once or twice a year, so building a consumer brand is expensive." One way to address this is for the industry to start bigging itself up.
"Transportation and lodging are just a commodity - tours and activities brands need to stop seeing themselves as an ancillary and more in terms of being core to the reasons why people travel."
Riko van Santen, vice president of digital strategy and distribution for Kempinski, admitted that the hotel industry had a lot of catching up to do. "Many hotels won't know what an API is, never mind how to work with them," he said.
This hospitality technophobia is one of the things van Santen has addressed since taking over the digital strategy reins at Kempinski in 2012.
"We've had specific e-commerce positions in every one of our hotels for the past eighteen months," he said, adding that "we need to not only work with different companies but also have different people within the industry."
One area of focus within Kempinski is "re-evaluating loyalty" and APIs have a role to play here as part of the bigger tech rethink.
"We're moving to experiences as a reward for loyalty because we want our guests to be ambassadors. Getting a free night isn't going to be something the guest will share. But if we give them a local experience, something they wouldn't have access to on their own, we will see the social media benefits."
APIs, he added, will help it address "a different cost of distribution model" which is more aligned with the value of the customers rather than how much they pay for a room.
Klingmann suggested that one way in which the various threads of the API economy can be pulled together is via hackathons. "They are a great way to start testing your ideas in a controlled environment before releasing them into the wild."