May 2019, London
Europe's biggest event for commercial and digital travel execs
Significant 2018, looking ahead and a Christmas wish list
Global expansion, natural disasters, Brexit woes, blockchain, and more, kept the travel industry on its toes this past year. Now it is onwards and upwards into the future
On many fronts, 2018 was a turbulent year for the travel industry. Among the challenges, a rethink on US immigration and travel rules, Brexit uncertainty and gyrating fuel prices. Natural disasters and global emergencies led to the tragic injury and death of many travellers- in Bali, the volcanic eruption, in Alaska, an earthquake in Alaska and the boat disaster in Phuket. Meanwhile, worries about over-tourism intensified, there was ongoing consolidation and, though no longer hot news, digitalisation continued to disrupt business models.
EyeforTravel canvassed views from across the industry on the past year and some of their views are below.
Overall says regular EyeforTravel columnist and airline expert Tom Bacon 2018 was a year of “extreme turbulence”. His view: “Aside from changing US immigration and travel rules and Brexit uncertainty in the UK, there was disruption within travel disruptors. Uber’s management continued to face scrutiny as ride-sharing company’s started to lose ground to bikes and scooters. Also interesting was SABRE’s acquisition of Farelogix, fuel prices were up, down and up again and the only constant was Alitalia's on going financial problems!”
Today, nearly one in five US adults have access to a smart speaker and adoption of these voice-powered devices has grown to 47.3 million adults in two years, or 20% of the US adult population according to research from Voicebot.ai. For this reason, says Abhijit Pal, Head of Research, Expedia, the most significant development in 2018 was the creation of a new path to purchase through the use of voice-activated assistants. “Brand Expedia made improvements to our Expedia Skill on Amazon Alexa, and launched the first Google Assistant travel action of its kind where you can not only browse, but book your hotel using voice.”
The most significant development in 2018 was the creation of a new path to purchase through the use of voice-activated assistants
Expedia’s Brent Harrison, Expedia’s VP of Product & Technology agrees: “The market has seen rapid adoption of these new technologies within the past year and we want to make sure that Expedia customers are able to get the travel information they need, exactly when they need it.”
At KAYAK Europe, an Expedia company, it was a similar story. John-Lee Saez, Managing Director for KAYAK Europe, says in 2018 there were continued advances in chat-based innovation and voice search.
One of KAYAK’s innovations of the year, says Saez, was the augmented reality (AR) bag measurement tool, which helps travellers calculate a cabin bag’s size to know if it’ll fit in the overhead locker (or not) before arriving at the airport.
Useful, perhaps, but the jury is still out on whether it will deliver commercial value!
While innovations in voice search continued to be a focus, this did not signal the death of call centres. As part of its international growth strategy, Ctrip added international call centres in Edinburgh, Seoul and Tokyo to the nine it already has in China. Staffed by 15,000 specialist customer service staff members, who are available 24/7, 95% of customer calls can be answered within 20 seconds, says Victor Tseng, VP of Corporate Affairs at Ctrip.
Global expansion was certainly a significant development for Ctrip this past year. The air-ticket booking arm of Ctrip’s international brand Trip.com achieved three-digit growth in eight consecutive quarters. Meanwhile, the direct booking programme of Skyscanner, which was acquired by Ctrip in 2016, experienced revenue growth of around 250%, compared to the third-quarter of the previous fiscal year.
In September, Ctrip launched Trainpal, a UK train-ticketing app, which it claims will save an average of 37% on UK railway ticket fares. Amy Wei, GM of International Train Ticketing at Ctrip, will share more on this at The Travel CX and Acquisition Summit 2019. Other highlights for Chinese OTA Ctrip were strategic partnerships with global players in the travel industry including KLM and AccorHotels.
In fact, building partnerships was another major theme of 2018. Dan Christian, chief digital officer at The Travel Corporation, says: “We saw an expansion of online distribution partners looking to sell multi-day product and an increase in booking activity as a result with firms like TourRadar”.
Global expansion was also revealed in KAYAK’s acquisition of HotelsCombined which, says Saez, reflects the company’s “continued progress in APAC and globally”.
Google grumbles and technology focus
For Bobby Healy, CEO of CarTrawler, “this year’s most notable development was that Barry Diller, chairman and senior executive of Expedia Group, called on Google to be dismantled”. First reported by NBC, Diller reportedly said: “Google and Facebook own basically the advertising business worldwide,” Diller said. “Google certainly has a monopoly [on search volumes and digital ad sales] in Western Europe.”
Google was not such a problem for Holiday Pirates, which through 2018 continued to avoid paying the search giant a penny for advertising, and nothing is likely to change in 2019, says CEO David Armstrong. “The only paid media we currently invest budget in is social media and this represents less than 10% of the traffic we acquire,” he says.
This year’s most notable development was that Barry Diller, chairman and senior executive of Expedia Group, called on Google to be dismantled
Like CarTrawler, Holiday Pirates has continued to focus energy on mobile, and this year united all local apps into one international app. In 2018, 10 million people had downloaded the company’s app, and at the same time itcontinued to build its Facebook fan club, which also exceeded the 10-million mark.
Aside from investing in mobile, Holiday Pirates has started to develop knowledge in machine learning. Needless to say, the deals driven website is not alone. AI and machine learning were a focus for The Travel Corporation, along with online training for travel agencies, personalisation of brand websites and marketing activity.
Blockchain on the map
At the beginning of 2018, few people were clear about the promise of blockchain and according to EyeforTravel’s recent State of the Market Survey of 1,500+ executives, still see it as a long-term priority. But for Richard Lewis, travel and tourism consultant, what3words, “blockchain is potentially the most exciting development in travel and tourism in 20 years!”
There is a need for a long overdue global leadership upgrade that is fit for purpose across all verticals
Winding Tree, the blockchain powered travel ecosystem, which held an ICO in February, certainly thinks so. This year the firm has signed partnership deals with the likes of Air France-KLM, Air Canada, Swissport, Nordic Choice and Citizen M. Founder and Chief Operating Pedro Anderson says the team continues to develop its platform and hotel product, all in open source code for the community to use and benefit from and in 2019 “will be focused on expanding the developer community and working with partners to accelerate the airline side,” he says.
While blockchain may excite the likes of Lewis, he is much less convinced by the state of global leadership. “There is a need for a long overdue global leadership upgrade that is fit for purpose across all verticals,” he says.
Bart van Poll, co-founder and CEO of Spotted by Locals, strongly believes that ‘overtourism’ is the word of the 2018. “It’s increasingly disrupting locals and it’s getting worse,” he says.
Governments are starting to react to it. In March, tourists were banned from Boracay, an island in the Philippines, and the Thai government restricted overnight access to the Similian islands. Meanwhile, organisations like the Assembly of Neighborhoods for Sustainable Tourism (ABTS) and the Network of Southern European Cities against tourism (SET) sprang up to address the problem of overcrowding in European cities. Companies like Spotted by Locals are starting to take action too. The firm has started a crowd-funding campaign to help focus on producing city guides for little-visited capitals in Central Asia and the Middle East in 2019. “This will help move tourists (and their dollars) to countries that need it and increase intercultural understanding,”’ says van Poll.
Responsible tourism is certainly making headlines and with firms like fairbnb, a smart and fair solution to community powered tourism springing up, this is bound to be a major theme of 2019.
Customer service, personalisation and tech
Personalisation, if not hyper-personalisation, accelerated in 2018, and in March, our first ever AI and Hyper-personalisation in Travel conference kicks off in San Francisco. But it is still early days as Tom Bacon puts it: “Our collective vision [in travel] of personalisation is [still] a bit lofty.”
It should go without saying that customer must be the cornerstone of any strategy – after all, happy customers bring in the dosh! For Ctrip, one way to win the customer is through transparency and the firm now warns customers with a pop up reminder if, for example, tickets are non-refundable. Cancellation policies and other notices will also be displayed.
Rob Paterson, CEO, Best Western Hotels and resorts, a keynoter at The Travel CX and Acquisition Summit in London next year, is clear that customers don’t want a cookie cutter approach. “The most significant development this year was the shift away from homogenised brands,” he says. And to this end, top of his agenda will be hotel development and adding quality and scale to Best Western GB.
A systematic approach
Elsewhere in the hotel world in 2018, Philip Garnier, Vice President, Third Party Distribution IHG, was pleased to successfully launch a completely new central reservation system (CRS) in partnership with Amadeus. In 2019, the continued focus for Garnier, who will be speaking in San Francisco is maximising distribution opportunities to drive hotel revenues.
At US-based Classic Hotels & Resorts systems development, along with GDPR and green initiatives, were a focus. “We are working with point-of-sale and property management systems to bring better handheld devices to our guests for check and ordering food and beverages,” says Esteban Velez, Vice President of Information Technology & Cyber Security, who would like to see the end of chip and signature in 2019. He would also welcome green initiatives to remove the industry’s need for paper! And if that isn’t enough, the creation of seamless connections between home and travel, updating the guest door lock experience as well as wireless technology to new standards that incorporates everything from air conditioning to Bluetooth and geo-location services.
There has been some impact at a global level caused by ever-increasing multi-sourcing of OTA’s and Corporate Travel Agents alike resulting in fusion and confusion
A tougher line comes from Marco Corsi, a third-party and distribution manager for Sokos Hotels in Finland, 2018 was not a revolutionary year for travel innovation. “There is plenty of vision but most are at the embryonic stage.” More seriously, “there has been some impact at a global level caused by the ever increasing multi-sourcing of OTA’s and Corporate Travel Agents alike resulting in fusion and confusion”.
In 2019 Corsi’s continued focus, as will be case for many hotel chains, will be on wholesale strategies, and his question is this: “Do we really need to work with a business model that has outlived itself and is unable to renew?
Christmas wish lists
On Christmas wish lists were the usual suspects – sustainable tourism, world peace, cultural harmony and happy holidays for all.
More specifically Bacon wants IATA’s new distribution capability (NDC). “It would be wonderful to find NDC under the tree, totally unwrapped, not subject to more discussion/testing/modification. How about Instant NDC?” he says.
Lofty goals at Expedia are for continued diversity and inclusion across the industry. “We believe that the more diverse our teams are, the better we’ll be as a company. Women now hold 35% of Expedia Group’s leadership positions, and we hope more companies are focused on diversity and inclusion as part of their guiding principles,” says Pal.
To allow for more joined up thinking, Velez would like to see the creation of local industry think thanks that allow teams to collaborate between all hotels in every city.
Highlighting the competitive labour market, Winding Tree’s Anderson wishes for more developers in travel, both on the supplier side but also in the start-up community.
And Paterson would like “access to the best labour talent across all of Europe for GB” in his Christmas stocking. Could be wishful thinking considering Brexit!
On another wishful note, Armstrong hopes that “the uncertainty around Brexit will have as little an impact on people’s travelling plans as possible!”
We wish all our readers and contributors a Merry Christmas and a happy and sucessful New Year.