These are tough but exciting times for the online travel industry but do you have what it takes to forecast the future?
NB: This is a report by Pamela Whitby, editor for EyeforTravel.
There is a strange and a sad irony in the fact that this year’s Travel Distribution Summit in North America will kick off on September 11 in New York.
This is, after all, the 13-year anniversary of an event that shook the world and had a profound economic impact on the entire travel industry.
Flights were grounded, share prices plummeted, hotel occupancy in New York fell below 40% and airlines laid off thousands of staff – and that was just the beginning.
Carl Oldsberg, vice president of revenue and distribution for Nordic Choice Hotels, pointed out at an EyeforTravel event earlier this year, how industry behavior changed from that day on.
"After 9/11 we came to the OTAs with all these gifts. We said have some rate parity, have some last minute availability, take some commission. And then we [hoteliers] realised that wasn’t smartest thing to have done."
Of course, 13 years on and many hotels are fighting back, metasearch has matured, new channels are emerging all the time, rate parity is fast becoming history and the OTAs no longer have everything sewn up.
There is still a long road ahead of them and mobile seems to be the missing part of the puzzle and although it’s clear that this is changing, there is still a lot to be learned…
A few stats from our recent Mobile in Travel Report series demonstrate just what a game changing issue mobile has become.
- 80% of online travel and metasearch executives see mobile as business critical. Why? Because 47% of consumers want to manage their bookings across all the devices they use – and people are using mobile a whole lot more.
Meanwhile, hospitality and air travel executives are a bit slower on the uptake:
- 64% of hotel executives believe mobile has helped to drive direct bookings and in the air travel space the same number say it has improved customer engagement
- Just 49% of hotel execs say the will increase investment in mobile in the next three months
For keynote speaker Glenn Fogel,
Priceline Group’s head of worldwide strategy and planning, how the firm will sew up mobile is certain to be top of his mind – and the minds of those in the audience.
Priceline is certainly on a mission to control all aspects of the customer journey, and not just the customer in traditional markets – the firm’s stronger push into China with a $500 million investment in Ctrip is a clear indicator that they mean business.
And the OpenTable acquisition and push to develop a mobile payments system for foodies (which will launch in New York) adds more grist to the mobile mill.
But it’s not only Priceline that’s moving quickly. TripAdvisor’s acquisition of tours and activities player Viator and, yes, another restaurant play in La Fourchette could explain the steam emanating from former parent company Expedia’s Seattle boardroom.
Ed Mesrobian, Expedia’s chief technology officer, says the company will continue to invest in the mobile space to help travellers on the go.
Expedia will obviously leverage big data and analytics to become more personal and competitive, but – and this is speculative - could we also expect an announcement that brings Expedia strongly back into the race for global domination and the consumer wallet?
Our guess is that discussions could centre on the possibility of more mergers and acquisitions across all continents.
It may not directly be the online travel industry, but could the Alibaba IPO, which is expected to raise $20 billion in the US, and growing interest Snapdeal, India’s equivalent online marketplace, be a sign of things to come?
"Chindia" could be one to watch, but what about Russia whose travel industry could be hit by ongoing tensions in the Ukraine, not least following the downing of the Malaysia Airlines in July?
Indeed, despite those political and military problems, can travel brands really afford to ignore a market that has been growing so significantly?
According to the European Travel Commission (ETC), some 35.7 million tourists from Russia took a foreign trip in 2012, up from just 7.7 million in 2006. The ETC also forecast that outbound travel was forecast to grow by 7.5% on average until 2017.
The Russian incident is obviously something that Dean Dacko, senior vice president of marketing for Malaysia Airlines, will never forget - not least the weight of the challenge that faced his executive team in managing the nightmare of two airline disasters.
Earlier this year, Dacko shared his story of how the firm used social media to tackle the crisis of the missing MH370.
But, still, these essential lessons will likely trigger more questions than answers about how an airline - or any travel brand - copes with a double tragedy when the eyes of the world, from both the industry and travellers, are on you.
NB: This is a report by Pamela Whitby, editor for EyeforTravel. It appears here as part of Tnooz’s sponsored content initiative.
NB2: Join us in New York on September 11-12 for the Travel Distribution Summit North America where you can expect to hear from the biggest brands and fastest innovators in travel today
NB3: Guessing game image via Shutterstock.