May 2019, London
Europe's biggest event for commercial and digital travel execs
The business case for openness in the era of the API
Holding your data close to your chest is no way to grow into new markets and segments in 2019, writes Tom Bacon
Who hasn’t heard of a manager who considered the functional data of his department ‘proprietary’ and resisted sharing information across the firm? We’re talking the manager who obviously regards data as power, and believes that power would be lost by sharing. Yes they exist, but there has also been a growing recognition that this behaviour can be damaging. After all, cross-functional collaboration can be enhanced by data sharing across the organisation.
In fact, sharing is now an inter-company opportunity as highlighted by IBM’s move to purchase Red Hat for $34bn. Red Hat facilitates open source IT solutions “without building in proprietary limitations”. In other words, it specifically facilitates inter-company collaboration. This represents a huge paradigm shift as, historically IT firms have invested in proprietary systems closed to outside firms.
API and away
Another new version of inter-company sharing is open APIs. At the recent Eyefortravel conference in Las Vegas, Philip von Ditfurth, the founder of apaleo said monolithic and costly legacy hotel systems were the largest bottleneck to travel innovation. Typically, system enhancements are slow and do not meet individual property needs. Open APIs, which facilitate totally new business models, are helping to address this. By applying this strategy, von Ditfurth noted that apaleo had gained access to a wide spectrum of new applications with its first 48 hours. Open APIs could be viewed as an “unbundled back office” system allowing firms to tap into a variety of new systems, each built for a specific task. Furthermore, those systems can be replaced those same systems with newer, better versions as they become available. Task-specific apps, designed externally, and now connected to apaleo’s open API, include revenue management, analytics and business intelligence, marketing, event management, distribution, room control, and hotel operations.
Admittedly, customer reservation systems (CRSs) sometimes provide a similar menu of services. But these become the primary curator of all add-ons, in control of the selection of both the components and the individual offerings. With open API’s, hotels can become their own curator.
Partnerships, product, scale and speed
In another presentation in Vegas, Susan Black of CIE Tours, an Irish tour operator, outlined how and why they were adopting an ‘API strategy’ to achieve aggressive growth objectives. An open API is a critical part of the firm’s plan to triple in size in the five years. According to Black, this approach is helping to secure new partnerships, exploit scale efficiencies, offer innovative products not previously available, and speed up the implementation of new functionalities. The result, she said, is that CIE Tours is growing into new markets, and tapping into apps that appeal specifically to new customer target segments.
Open APIs, like open-source systems and like cross-functional data sharing, can create entirely new business opportunities for meeting customer needs, driving efficiencies and boosting and generating revenues. And that can only be a good thing as we head into the New Year.
Tom Bacon has been in the business 25 years, as an airline veteran and now industry consultant in revenue optimisation. He leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Questions? Email Tom or visit his website