Quite often travel executives move within the industry so when an outsider steps in there is always the inevitable question: does the travel industry lag others in its adoption of technology. For Todd Henrich, Priceline’s new senior vice-president of corporate development, who hails from the banking sector the answer is no but there is still room for innovation. Pamela Whitby finds out why.

It is a complicated world out there. The global economy is unstable, new technology options for booking travel and talking about travel are emerging daily and consumers are fickle. For Priceline’s Todd Henrich who has worked on telecoms and digital media for the banking sector, the travel industry has demonstrated that it is progressive when it comes to technology adoption as long as it drives return on investment.  “Just look at how quickly the industry adapted to the Internet in the late 1990s and began driving travel research and booking online,” he says. “If anything, technology hasn’t always delivered the value proposition that the industry demands.” So the big question now is will the travel industry continue to be a leader in innovation and going forward what should travel and hospitality suppliers be focusing on?

One of the most critical elements, says Henrich, is understanding consumer behaviour and getting attribution models right. Consumer behaviour is changing all the time. Consumers are constantly finding more effective ways to find information and make reservations.  Of course ultimately the priority is getting that all important booking, he says. But what the industry really needs to focus on now is how the customer got to that point, how they moved through and interacted with each channel and what role each channel played in getting the customer to book. “The days where online strategy was a simple as bidding on search terms are over,” says Henrich, who argues that a company with the “scale and resources of Priceline” is well positioned to help hoteliers capture the increasingly sophisticated traveller.

Where social scores

What Henrich is suggesting is that firms take a much broader approach to the whole travel-ecosystem, rather than focusing on last-click attribution. Priceline.com, for example, has found that ‘social’ has not been particularly effective at driving bookings directly but that is not to say that it should be ignored. “In social, I think the challenge for travel, and frankly for all industries, is determining the use case,” he says. Certainly if you are interested purely in direct response or e-commerce applications, the jury is still out. 

But the travel industry, he says, is also well beyond using social purely as a branding tool. “We know that we need to manage our brands online and we’re all figuring out how to do that better, but the real holy grail is figuring out how we capture the power of social to influence consumers’ consumption patterns at a meaningful scale.”

Lots of people are trying to crack this one but a lot of them will likely fail, “because it’s a tricky problem.” 

The mobile game plan is not just last-minute

Where things are really getting interesting and where much of the focus should be right now is in mobile. All the research points to the fact that consumers are becoming more mobile; EyeforTravel recently found that in the third quarter of 2011 bookings via mobile devices increased by 30% and that continues to grow. So before long consumers will be booking travel via mobile without thinking twice and “this won’t be just a case of last-minute bookings either,” says Henrich.

But it is still early days for mobile so the travel industry should tread cautiously when choosing a vendor and carefully assess the risks involved; importantly vendors should be flexible rather than committed to one mobile approach. While it seems unlikely that one single common standard for mobile will emerge there will be more homogeneity than there is today. “It is still a bit of a Wild West when it comes to mobile and if you go with a vendor committed exclusively to one approach you could get stuck,” says Henrich.  

With mobile having the correct attribution models in place is also important. For example, the consumer might not be transacting on a mobile device – yet - but the search increasingly starts here and then it is often executed later on, in a different channel.

“In the mobile area, many smaller travel players are in a bit of a quandary as the costs of developing and then maintaining multiple applications across multiple platforms while also developing mobile-centric websites can be daunting,” says Henrich but this is an area where suppliers benefit by distributing through a large OTA, such as the Priceline Group, because it reaches mobile customers much more efficiently. 

Getting organised

A lot is made of the channel conflict in the travel industry but Henrich believes that the interests of hoteliers and OTAs are aligned. “We both want to give the consumer a path to purchase that they have confidence in and gets them where they want to go,” he says.  But while historically the industry has done a relatively good job at gathering and organising information for the consumer it can go further. Take for example the star-rating system that emerged as a result of consumers search patterns. “If you step back and think about it, a ‘star’ is a  pretty weak proxy,” says Henrich. “I might want a four-star hotel which may give me some idea about the level of quality but it doesn’t tell me much more than that – is it an adventure hotel, is it a spa, is it trendy or is it traditional and so on.”

Of course, reviews emerged from this problem but today consumers still need to sift through loads of reviews before getting the information they need. So one area where innovation can happen is in improving the framework within which consumers do their research thus creating more efficient channels. “From a consumer perspective, you want the experience of searching for and booking travel to be a seamless and efficient process. You want to know that you have the right information at your fingertips,” says Henrich. This means the consumer needs to know that they have access to all the possible options, but they want this information presented in a way that can be easily digested.  Can one company achieve all this? Maybe some day, says Henrich. But as the emergence of large scale search, review and booking sites has shown, as long as the consumer gets what they want, this can be under more than one umbrella for now. 

Nobody has figured it out yet because there is such a proliferation of different channels so being flexible in this business is essential. Across all channels – social, mobile, local – firms need to understand how their customers are interacting and then align key performance indicators accordingly. This won’t happen easily and requires careful analysis, but only when this is in place can hoteliers really start to allocate marketing budgets appropriately.

Todd Henrich, Priceline’s senior vice-president of corporate development, will be speaking at EyeforTravel’s Travel Distribution Summit, North America in Las Vegas from September 13-14 alongside 90 other industry leading experts. See the full mobile agenda and speaker line up here