IN-DEPTH: The travel industry convulsed with change, false horizons and big news during 2011. It was, for most in Western markets, a tough year but pain and change creates opportunities, says Hugo Burge, CEO, Cheapflights Media.

2012 will continue to be a year of change, exaggerated by strong companies taking advantage of new opportunities whilst others hunker down to survive or avoid change, shared Burge, who also lists his top 8 travel trends for the time to come.

By Ritesh Gupta

Travellers increasingly expect more information to be readily available throughout the entire travel cycle. Plus, they also expect powerful tools to aid them in order to make sense of such content. Proliferation in choice of content is being further compounded with increased choice of channel and access to content with Internet, mobile and offline all vying for the consumers’ attention.

Social networks and online tools are becoming more and more important for research before purchases are made for any product, including travel. Consumers are increasingly savvier so they go online to search for information and recommendations from friends, travellers themselves, whether on social networks or forums.

Overall, customer expectations are driving changes in the online travel business. Travellers want fast shopping whenever and wherever they feel like shopping, better selection and attractive prices/ deals to go with it.

Intermediaries can really play a valuable role in helping consumers and they also realise if they do this efficiently, they can differentiate themselves. For instance, OTAs have focused on the user experience this year - from speed and flexibility of the site to providing the best deals. OTAs believe it is critical to have support and technical expertise to turn planning into transactions and accordingly, they are making investments in increasingly popular consumer channels like mobile and social media. There is always room for smart ideas from competitors, but they also believe it is important to help consumers both plan and buy travel.

In addition to the existing players, there has been a spate of new ventures, too, focusing on improving travel planning in a big way. The actual correlation between social media and commerce is only just developing. The industry also witnessed the emergence of a new, flexible channel that promises to move distressed, last minute inventory through mobile channels without onerous commitments.

Technology continues to evolve the dynamics within this huge sector as consumers find ways to better serve their needs and companies test new models to find the next big one, says Hugo Burge, CEO, Cheapflights Media.

Reflecting upon 2011, Burge says the travel industry convulsed with change, false horizons and big news during 2011. 

This is what he had to say about 2011 and how 2012 is expected to shape up:

What do you think stood out in travel distribution and also in the manner in which travel technology evolved this year?

Hugo Burge:

The industry is growing globally but the geographical and technological balances are shifting. Against a background of economic gloom we must remind ourselves that new distribution models offer new opportunities, whilst travel and Internet penetration grows apace in emerging markets.

Mobile devices had a watershed year as new companies were born with substantive business models, whilst existing brands reported rapidly growing and now material traction on this new platform. This cannibalised existing (even growing Internet) channels but more excitingly created completely new models and opportunities.

Social media engagement transformed customer relationships for some, whilst TripAdvisor, which was born out of social content, appears on track to float despite horrible market conditions – showing the power of social to build real business models.

Facebook became a channel most companies dabbled with but only a few really succeeded in making it meaningful. 

Google changed from being gatekeeper to many to becoming a formidable competitor.  Whilst Google’s initial product underwhelmed many, showing the challenges of building disrupting business models in the travel sector, it is hard to meet a travel company who has not had the big G on their lips. The other G in 2011, Groupon, promised a lot, and built a gold rush around the nascent local deals sector. But sentiment seems to have turned about how sustainable this model is – whilst some like Facebook have pulled back their efforts, Google again takes up the mantle as a player in this sector, so it will be interesting to see how this evolves.

Symbolically, Thomas Cook, the inventor of modern day holidays, suffered a challenging year in the public eye but lives to fight another day as it adapts to economic uncertainty and changing distribution trends.  Many other smaller companies were not so lucky in 2011 as economic pain and changing trends left them behind, permanently.

The Internet, in one guise or another, continues to be ascendant and disruptive in its ability to change the way the travel industry operates and we will look back at 2011 as the year the stakes got significantly higher.

How do you foresee travel distribution to shape up in 2012?

Hugo Burge:

I don’t have any unfeasibly, shining new predictions – I believe the trends that we have seen in 2011 will continue.  It will continue to be a year of change, exaggerated by strong companies taking advantage of new opportunities whilst others hunker down to survive or avoid change. 

Mobile will become a significant distribution channel for everyone, not just the pioneers.  I envisage that mobile strategy will be more important to most travel companies than a social media strategy but clearly it will depend on what kind focus/ product you have. Travel distribution will increasingly seek international opportunities for growth as mature markets flounder in economic gloom.  In a time of such change, there is a huge opportunity to be the change maker in travel distribution in 2012.