I was part of a panel at Davos today discussing future scenarios for the travel industry with a particular reference to the impact of technology. It was an interesting session, not least because of the pressures many in the industry seem to be feeling from social media. There was much debate about the role of the “intermediary” or traditional travel agent in a world where people are increasingly going to other people for information and recommendation.
Here’s Stelios’ take on that:
Here’s a summary of my remarks:
I am not a technologist or someone in the travel business. Given these admittedly significant limitations for today’s event I will talk about the one thing I know a little of and that is the consumer and how he or she is changing these days.
There is a man walking around this town this week called Jeff Jarvis who runs a blog called the Buzzmachine. You may remember that almost two years ago he led the “mob” with “pitchforks in hand” to storm “castle Dell”. He complained on his blog about product and service quality and got inundated with responses . . .so many in fact he set up www.ihatedell.net as a home for them (Jeff Jarvis corrected me here that he did not in fact actually start the site up, though he did lead the “mob”, many of whom populated it) which then took on a life of its own and became a beacon for anyone with any kind of grudge against Dell. At one time if you Googled Dell, this site was higher up the search list than the official one. That became a problem because by then employees were speaking directly to the customer. That is, the people who made or designed the kit were answering customer calls not the call centre staff. People who were going to Dell for job interviews were talking directly to employees about the people who were going to interview them and the whole thing was being watched and reported on by the media and analysts.
The point is most of the people who rallied to Jeff’s cause were techie consumers. They loved their PCs and were happy to blog when blogging was radical.
If not exactly mainstream, the nearly two years since then have taken the adoption of social software to a much wider audience. The MySpace generation already travel disproportionately, they affect the decisions of their parents and will be the travellers of tomorrow. People who go on holiday are disproportionately likely to be netizens. They have the money.
Since then of course the number of really useful applications has increased. The widespread adoption of broadband and the new frontier of mobile ready applications have the potential to consumerise or democratise an industry like the travel industry very quickly.
Health check . . Dell were massively affected in terms of image and reputation but their business model or processes didn’t really change. The question is, will the same be true of the travel sector?
The process of democratisation has the potential to fundamentally change the relationship between the actors in a value chain and the final consumer. It can be massively disruptive and whilst I’m not going to tell you that vertically integrated businesses in travel are dead or that the small guy will now win every battle, the game has in my view only just begun to play out so I would urge you to give full consideration to the Youvelution scenario (one of the three scenarios the Forum has worked up).
Very quickly a few applications that are starting that process:
I don’t know if any of you have seen Yahoo Answers. This is based on that social media phenomena often referred to as the wisdom of the crowds. The idea is that someone sends in a question, and someone, anyone, answers it. And just like Wikipedia which is now the most referred to reference source on the planet, answers get corrected and edited by the crowd too. No travel agent involved there adding value.
Yahoo Answers is still quite new, but as people get even more confident about on-line sources my free prediction is that this is where a lot of people will go to check on what other people (not professional reviewers or marketing or PR folk) think of products or experiences or destinations.
Yahoo also has a trip planning service by the way, which already has 37,000 itineraries on it . . . . . some of these are provided by professionals but others are not. The potential of course is that this can be as micro as you like and you could get a travel itinerary for the most specific of interests. The travel industry is not really involved in this.
Every single place on Earth will soon be catalogued and reviewed Wikimapia, a homegrown site that layers a wiki on top of a Google Map, has already catalogued more than 2 million places. Flickr has nearly 10 million photographs that have been geotagged – e.g. plotted on a map. How powerful is that once we have real-time access to those on mobile devices which know where we are and so constantly give us a map and the chance to see reviews and watch other people’s experiences and maybe book our own?
New 3D virtual worlds create new simulated experiences where we can sample life. Starwood Hotels launched Aloft, a new hotel that doesn’t exist yet, inside the Second Life virtual world before even a brick was laid. TripAdvisor.com has more than 5 million unbiased reviews, according to Wikipedia. It’s now owned by Expedia of course and maybe that’s where some of this is going.
Hardly any of this is valued in monetary value yet of course, but as traffic builds chances are it will be for the bigger social media players like Google and Yahoo. But for every Starwoods launching a virtual hotel in Second Life and for every technical innovator like Expedia there are a host of static players. Perhaps in the travel industry of all industries given its nature, there is a small firm on the periphery now that may be able to link the consumer with product in a way that we can currently only imagine.
[tags]Stelios, easyGroup, Davos07 [/tags]