NB: This is a guest post by Murray Harold, a homeworking business travel agent from Buckinghamshire, UK.
There are a few things I do not understand. Actually, there are an awful lot of things I do not understand, but here is one thing which I ponder about, on a daily basis, with my travel hat on:
There is no money in travel – so why do so many want to get involved?
There hasn't been any money in travel for some time. In fact, pretty much since discounting hit retail agencies - in a big way - in the late 1980s. Agents did have some money, but the curtailment of commissions put paid to that.
Airlines haven’t got any money either - well, they do from time to time, but one year's modest profit soon lurches to a mind boggling loss, and then back again.
Tour operators don’t have it, as witness the mixed fortunes and the hours spent sorting out failed operators’ claims.
And don't forget hotels, many of which are hardly swimming in piles of cash.
That said, in each case, there are exceptions. Some big business agents do rather well, a few operators, some of the low cost airline boys (notably Ryanair), and some of the top end hotel chains (eg One and Only Resorts). Or, at least they appear to.
So, why do people (especially from the tech end of business) want to get involved? The only answer I can come up with is that "travel", as such, has nothing to do with it at all.
It’s the information - the data. They want to know everything about you, so where best to find out (more) about people than to look at their travel habits. You go on holiday, you have money. You go on a posh holiday, you have lots of money. You go on a posh holiday en famille, two or three times a year – we want you on our API feed.
If you buy a holiday, you may/will probably buy expensive clothes, cars (several), white goods, jewellery, houses (several), yachts… all products where a reasonably margin can be made – or at least, if not a reasonable margin, then information about the person which can be sold as highly valued data - information which commands a very good margin.
But let’s get back to the travel side of commercial life.
The travel industry has rather successfully managed to make itself the most tight-margined, complicated business in the world. There is no travel person who is going to go to work, do five trades and nip out to buy a Porsche during their lunch break.
This is also why technology in travel is often said by outsiders (and by outsiders, I also include technical types) to be "backward" – but note this simple fact: no-one is going to write fancy expensive systems for an industry that can’t afford to buy them.
That said, I don’t actually remember anyone asking for new technology. The GDS has been around since the late 80’s, viewdata did exactly what it said on the tin and the only recent things which make an agent’s life easier are Google Earth and your flavour-of-the-month metasearch engine.
Agents – good agents – had already learned how to paint pictures with their words… And for many clients, the phrase "I stayed here last year " seemed to work rather well.
I digress. Let’s get back to this "data" thing. So far, not a single airline or tour operator has realised that it’s not about selling their product and its not about distributing their product - it’s all about information, details about the end user. That’s where the money lies.
Thing is, how do airlines and operators feel about that?
Google’s recent foray is a case in point. Does Google want to "be a big player in travel"? I am not so sure.
If it wanted to do that, Google could have do so ages ago and quicker than you or I could say "are mobile apps a good idea?".
Needless to say, airlines and others are queuing up to get into bed with the new Google travel system, and airlines are all starry eyed about lowering distribution costs and how it will be the next big thing (yawn) …
But then again, airline boardrooms never did contain the sharpest tools in the shed and have always had questionable ability to think anything through.
What does Google want? $5 from the sale of a ticket? $0.25 for a click? Okay, Google might take that as a sideline, but what about the details of every person who flies first or business class across the pond, who that person works for, where they live, what sort of disposable income they have, where they like to go on holiday.
That is the really valuable stuff.
NB: This is a guest post by Murray Harold, a homeworking business travel agent from Buckinghamshire, UK.