JetBlue Airways' investment arm is looking for innovators that are true travel industry trendsetters. Ahead of EyeforTravel's San Francisco show, Pamela Whitby catches up with a keynoter on a mission
There may be a shortage of women in travel tech, but Christina Heggie, an investment principal at JetBlue Technology Ventures, is anything but short of experience.
“I first fell in love with the industry 14 years ago, while I was a barista in the Seattle area, and that was it,” says Heggie, who then ran a little B&B on Camano Island. Pursuing her degree in hospitality management from the Cornell Hotel School, she went from “wanting to run a hotel to wanting to run a hotel company”, a realisation that led her into the Switzerland headquarters of the hotel chain Mövenpick. What followed was a stint in general consulting for AT Kearney, in both New York and London, where she discovered that she really missed ‘her industry’.
“I knew I wanted to return to the travel industry, but the question was where did I want to go. Did I want to go old world, or new?”
To find out, Heggie first tested her traditional problem solving skills in the digital strategy department at Starwood, where she helped define their mobile app strategy. Then she moved to Airbnb’s hospitality group in San Francisco where she worked closely with Chip Conley who is “one of the greatest people in the industry”.
“At Airbnb, I fell in love with the energy in the Bay area,” she adds.
Before joining JetBlue Technology Ventures, the investment arm of the JetBlue Airways, Heggie also worked for travel tech startup Checkmate, until it was acquired by TrustYou in 2016. “The traditional travel industry can be risk adverse, but in the Bay Area, there’s a different mindset – to choose not do things the way we have always done them, but do things to make travel better,” she says.
Heggie believes what the industry needs is companies that are that “are truly going to change how consumers travel – into perpetuity”. So, ahead of EyeforTravel’s upcoming San Francisco Summit, keynoter Heggie shares what she knows today.
1. Voice will be the next big disruptor
Today hundreds of millions, if not billions of dollars are poured into search advertising in some form or other. “Priceline and Expedia each outspend Starwood by three to one on ad dollars, but voice,” Heggie argues, “will fundamentally change where those dollars go.”
How exactly this plays out remains to be seen but voice will eventually narrow down the hundreds of search results delivered today to the five or so best one’s for an individual customer.
Companies will compete not on the breadth of the search, but on the accuracy of the recommendations
“Companies will compete not on the breadth of the search, but on the accuracy of the recommendations,” she says.
2. The timeline for voice adoption will be similar to mobile
In travel, the transition to mobile took longer than expected and Heggie expects a similar, if slightly shorter, trajectory for voice. “Smartphones were pretty much everywhere in 2010 but only now, in 2018, are we seeing the majority of searches happening on mobile devices, and it’s now just over 40% for mobile bookings,” she says.
Voice in travel will likely follow a similar timeline simply because travel remains a high-risk, high-cost purchase. However, with consumer demand for change accelerating, the consumer adoption curve might happen a little faster – in, say, five to seven years.
3. The competition will be won with data
When it comes to which companies will provide the hardware for voice, the landscape is pretty clearly defined, as outlined in EyeforTravel’s recent whitepaper – Can Voice Change the Way we Travel? Google, Apple and Amazon will be the hardware big hitters, with others like Samsung lagging a bit further behind. Where it starts to get interesting is in software development.
“Right now the software in the device is still very hard to use, and the competition is still being fought around consumer brand awareness,” explains Heggie.
So, for example, Alexa users today will ask Kayak – a well known brand - to find destinations, flights and so on. But, says Heggie, “let us be real! That is not how it’s going to be down the road, because it will be far easier for me to talk to my AI who will be able to answer which is the best destination, hotel and more, based on everything a software UI already knows about me.”
In this world, data will win the day, and it will simply be a matter of how companies use that data. The winners, quite simply, will be the companies that are able to give the very best personalised recommendations.
If hotels don’t step up to the plate to curate the data on their own properties and customers, then I think the larger tech companies will end up winning
Says Heggie: ”If hotels don’t step up to the plate to curate the data on their own properties and customers, then I think the larger tech companies will end up winning in this scenario because they are more data centric”.
4. AI must be human-centric
When it comes down to it, it is less about buzzwords like ‘chatbots’ and more about developing a conversational interface.
“Chatbots are only as good as the data that is put in, the data set that it trains on,” says Heggie. “A chatbot might do well, but ultimately it will end up being folded into a broader conversational AI programme or tool.”
What Heggie expects to hear is “a tonne of noise”, but then a few people or companies emerging as leaders, either by building some internal conversational ability or by partnering to develop a conversational aspect to their business. Ultimately though, Heggie sees the world moving towards human-centric AI.
5. Experimentation to control distribution will continue
In the near term, Heggie believes that both hotel and vacation rentals firms will continue to look for ways to flex their muscles. One of the main reasons for Marriott’s $13-bn acquisition of Starwood was to have more leverage over the OTAs and other third parties. Now the world’s biggest hotel company, Marriott has aggressively stepped up its efforts to limit dependence on middlemen, and this is expected to continue.
Both hotel and vacation rentals firms will continue to look for ways to flex their muscles
According to Heggie, we will continue to see big hotel chains, and companies like Airbnb, experimenting with how much to keep their product sacred to their own websites versus how much they share across other distribution channels. The partnership with SiteMinder, is a good example.
She continues: “And we will start to see a lot more testing of different strategies as hotels try to catch up with the ground they lost since 2000.”
Admittedly, not all experiments to reduce dependence on the middleman will work. After two years of allowing independent hotels to list on their booking website, Accor recently closed its marketplace platform, which it launched to take on the OTAs.
6. Blockchain could lead to a more level playing field
If we are talking about axing middlemen, the opportunity for blockchain technology is very much the flavour of the month (don’t miss EyeforTravel’s upcoming Blockchain Demystified webinar). Heggie believes there are multiple possible future scenarios for blockchain. More specifically, instead of a binary end state – the travel industry running on blockchains or not - there are multiple ways the blockchain can support the travel industry.
One future scenario, she says, would be for a blockchain to act as a central hub for a simple and true record of inventory, with the opportunity for different travel suppliers to partner and build additional services. “Blockchain offers the potential to reduce the volume and the friction of intermediaries,” she says, “which would benefit the end consumers and the industry’s innovation overall.”
7. A big picture vision is a must
When JetBlue is sizing up any investment opportunity, the first thing it assesses is the team.
“We look for a product or service with vision and a culture of integrity; we look to partner with teams that we respect and believe in. People need to be able to see the big picture. It is easy to focus on this product solution or that market need without having a concrete view on how you want to change things,” she says.
We are not looking for companies trying to jump onto an old trend
What JetBlue simply isn’t looking for is startups which are trying to be the Uber of X or the Airbnb of Y. Says Heggie: “We are not looking for companies trying to jump onto an old trend. We look for companies are that are truly going to change how we travel.”
8. Informed travel investors are few and far between
Travel is an incredibly challenging industry, and there are very few informed travel investors for early stage companies. “One of the problems is that most general investors just don’t understand the challenges we have in travel, particularly with the industry’s legacy tech stack. They don’t know what a GDS is, they don’t know what a PMS is and they don’t understand that the Sabre system built in 1962 actually doesn’t have a lot of working APIs,” she says.
When the founders aren’t from the travel industry that can add further complications; roadblocks are inevitable.
“A lot of investors got burned in travel, with some investments raising a tonne of money that shouldn’t have,” Heggie explains. “That is why you need an informed strategic partner at the table.”
Join us in San Francisco (April 9-10) to hear more from JetBlue's Christina Heggie, and other top notch execs from the world of travel tech
April 2018, San Francisco