October 2018, Las Vegas
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The rise and rise of travel tech
At EyeforTravel’s Las Vegas show Tom Bacon learned that in 2018 travel suppliers should, at the very least, be embracing new technology through partnerships or strategic investments
From chatbots to artificial intelligence, personalisation and virtual assistants, throughout 2017 the talk of the travel industry has centred quite heavily on travel technology. Indeed, new technology and how to leverage it dominated the agenda of many an EyeforTravel event.
In Las Vegas in October, for example, Sagar Desai, head of acquisitions & development at Viceroy Hotels, could not have been clearer. “Travel companies need to become tech companies," he said.
How is it doing this? Well, Viceroy is bringing residential properties under its umbrella, branding them and offering a superior level of customer service. In doing so, this hotel chain is leveraging its technology platform and brand to dramatically expand what they can offer customers.
Consistent with Desai’s comments, in Las Vegas there are numerous examples of travel companies investing heavily in tech.
1. The rise of the retail mall: Travel distributors including global distribution systems, online travel agencies and metasearch companies are probably the best example of the travel-related tech opportunity. Skyscanner, the metasearch travel distributor recently acquired by China Ctrip, is one such example. Mark Crossey, Commercial Director – Americas, Skyscanner spoke of becoming the online travel retail mall for multiple travel brands. They strive to be the platform for popular travel companies and, like a retail mall, feature the tremendous variety needed by the modern traveller as well as the distinctiveness of each individual travel brand. As a meta-search platform, their business is using technology to link to a variety of other travel brands.
Allegiant prefers to be thought of as a broader, full-service travel company that also operates an airline
In a similar vein, Allegiant too has always billed itself as more than an airline; they prefer to be thought of as a broader, full-service travel company that also operates an airline. At the conference, Allegiant CIO Scott Allard spoke of their six-year effort to develop a new retail platform that allows it to operate more like an online travel agency. Like Skyscanner’s plan, and OTAs in general, Allegiant wants to tap into the success of other travel suppliers and effectively grow as a technology platform that is separate from, but complementary to, airplane growth. Allegiant already is known for selling car rentals, hotel nights, and events – but their new platform is more specifically designed to support ‘ancillary’ and other travel-related services that are part of the total travel experience. They are already a leader in such full service travel planning but this will arguably allow them to go much further.
2. Looking for synergies: Meanwhile, jetBlue New Ventures and Carlson Wagonlit Travel are both investing in tech startups that potentially offer synergies with their current services. Although these investments are not intended to make these firms ‘tech companies’, they do demonstrate a recognition that technology is fundamental to future success in travel.
There are many opportunities in travel technology, and as travel suppliers look ahead to 2018, they must consider carefully about how best to exploit them. Repositioning a traditional travel supplier as a ‘tech company’ is often a stretch but considering what that means for any individual incumbent can lead to a healthy review of existing strategy and more effective positioning for the future. Embracing new technology through partnerships or strategic investments is a more modest approach but one which, at a minimum, is critical given the changing dynamics of travel.
Tom Bacon has been in the business for 25 years, as an airline veteran and industry consultant in revenue optimisation. He leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Email Tom or visit his website.