The Phocuswright Conference in November this year comes at a point in the travel and hospitality industry life cycle where challenger startups from 15 to 20 years ago are now the global incumbents.
Booking Holdings, Expedia Group and Ctrip have their leadership positions assured, it would appear. However it is not all as simple as that.
Relatively recent entrants such as Uber and Airbnb have joined that table of leading brands (at least on valuation), and new technologies such as mobility as a service and blockchain threaten to reshuffle the playing cards again.
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Perhaps our industry, with all its multi-layered complexity and geographic nuances, is destined to refresh and replace every 20 years as new technologies emerge.
Indeed, perhaps the power always is with the new rather than the current, unencumbered as they are with legacy needs and operational challenges. This is the Power Paradox - the theme for this year's event.
But it's worth considering the pros and cons for new entrants that are attempting to compete with and eventually usurp those that control how the digital end of the industry operates.
Power disadvantages for new entrants
Consumer brands
It is very hard for a startup to create a consumer leisure travel business. Regular consumers do not travel often enough to be sufficiently exposed to a new brand to become loyal to it - they will stick with the businesses that they know and trust, and who they have booked with before.
That said, consumers are often loyal to travel brands that become habit-forming when used locally AND also used when they travel (for example, Uber or OpenTable).
Regardless of this small window of opportunity, the incumbents hold the consumer brand power.
Digital and TV advertising budgets
The incumbents have a stranglehold on this element of the ecosystem.
They buy advertising in bulk, and although startups can create a keyword-buying campaign on Google campaign with a few hundred dollars, ultimately they are not going to win this purely based on economies of scale.
Perhaps startups don't see this as such a problem because they see the incumbents addicted to this paid-for advertising, unable to kick the habit, while pouring money into the coffers of digital platforms who ultimately will become travel industry competitors (i.e., Google).
The incumbents can keep this power advantage - startups will happily avoid it.
Long-term thinking
Although the majority of incumbents are publicly listed companies and, therefore, need to be continually showing growth, they are able to look further ahead than many startups.
Some startups are trading on a month-to-month basis, and any financial issues can cause significant disruption.
An example of long-term thinking is happening in the tours and activities sector. TripAdvisor acquired Bokun and immediately put its supplier-facing prices for reservation technology down to 0.1% (from the industry standard 3 to 5%).
Booking Holdings has openly discussed a similar strategy, potentially making its recently purchased Fareharbor technology platform free to tour and activity providers.
Startups don't have the luxury of making a short-term loss like this in order to win a longer game. Power advantage to the incumbents.
Network effect of supplier contracts
Many suppliers really don't like startups. Over the years they have been burned by over-ambitious pitches from startups extolling their potential for success.
Suppliers then make efforts to onboard their products into a startup, only to receive close to zero bookings.
New projects from incumbents don't suffer the same problem. They tend to be able to use supplier contracts that are already in place on a company-wide basis. Again, power advantage to the incumbents.
Digital teams
When the incumbents were themselves startups, they were competing against non-digital industry players that were using fax, telex and telephones.
Now, digital startups have incumbents with good digital expertise and the ability to build pretty much what they want (if sufficiently motivated).
These teams are large, global and capable. Not good news if you're trying to unsettle the status quo.
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Power advantages for new entrants
Innovation
The incumbents are not able to innovate and, arguably, they haven't innovated for over a decade - they have not been training this particular muscle.
Their expertise is in scaling, not innovating.
However, we are moving away from supplier and consumer scaling as the success driver. No longer will we get excited about one million bookable accommodations, or 100,000 bookable tours and activities.
Instead, success will be defined by how we best build personalized, end-to-end travel services and other in-trip enhancements.
Innovators hold the power now, not the scale freaks.
New technology
New entrants can build platforms using new technologies. Incumbents tend to change technology very slowly - they have hundreds of developers all proficient on one technology.
Shifting to a newer approach requires significant upheaval (and is always put off vs. other items on the roadmap).
Visibility
Startups can see the current market position, and then spot a gap that they can quickly enter with their greater agility.
This is easier now, with just a handful of leading incumbents (compared to 10 years ago) - with fewer leaders there are larger gaps. Power advantage to the new entrants.
Neutral/supplier-focused stance
The leading incumbents tend to be consumer-facing.
For a supplier it feels more natural to go to an independent company to assist with working with all the incumbents (e.g., a channel manager or a connected reservation system).
This ability to be multi-player, incumbent neutral, creates a power advantage to new entrants.
Risk taking
New entrants can take risks that the incumbents would naturally shy away from.
Incumbents mitigate this by having several horses in each race. New entrants may only have resources for one horse - however, it's often the best horse, trained for very specific conditions.
New entrants just need to win one race in 20 to be remembered, and when the right conditions come up, they look great. Power advantage to the new entrants.
Closer to the problem
Startups with small teams are closer to the consumer and supplier challenges than executive teams at the powerful incumbents.
They are writing code, creating new processes and talking to suppliers about their operational issues on a daily or even hourly basis.
Executive teams at incumbents spend much of their time managing internal teams of people.
This is distinct advantage to the new entrants who are able to spend more of their time on actually building and tinkering with their service.
Who wins?
There are advantages to being an incumbent and to being a new entrant.
Still, it's not easy to create a new entrant that lasts the distance required to become a sustainable business - but certainly very possible.
However, the success of the new entrants is reliant on a deep understanding on how the incumbents work.
This means that the new entrants that are led by people with experience of working at an incumbent are at an advantage over recent university graduates with limited work and real-world commercial experience.