Marketing

Travo@10: How travel has sown the seeds of its own disruption

Posted by Lee Hayhurston
Travo@10: How travel has sown the seeds of its own disruption

Disruption in travel is likely to be born from within it, according to a founder of Intent Media and a former senior executive of Travelocity which previously owned lastminute.com.

See our Travolution Dinner gallery, sponsored by Intent Media

Richard Harris, who founded Intent Media in 2008, addressed a recent dinner among a series this year to mark Travolution’s tenth birthday during World Travel Market.

He said the evolution of travel can be traced back through the same people and ideas to the foundations of the industry.

Harris originally founded Site59, a pioneering last minute dynamic package site, in 2000. It was bought by Travelocity, an arm of the Sabre Global Distribution System, which bought lastminute.com in 2005 taking it into private ownership.

Harris said: “When I Look at the travel industry in the US it’s been a long history of people giving birth to their own worst nightmare.

“American Airlines gave birth to Sabre, an electronic data exchange or booking engine. The airlines’ worst enemy became the GDSs, then the GDSs, in the case of Sabre, gave birth to Travelocity and so the airlines and the GDSs ended up being at war with Online Travel Agencies.

“And then Travelocity spawned KAYAK. You can trace the line, the physical people, the capital, the ideas between these. KAYAK and other search engines ended up disrupting the other OTAs and they are a serious threat today.

“From KAYAK there is a bunch of artificial intelligence agencies that are now message bots that are out there disrupting the metasearch engines, the OTAs and the GDSs. And they are coming back to disrupt the founders, the GDSs, and getting between travel agents and the way that they book.

“It’s a fascinating dysfunctional industry we all work in. It is on the one hand a beautiful industry in that it’s constantly disrupting itself, on the other hand it’s always giving birth to something that may end up eating its mother. And that’s been fraught.”

Harris said his introduction to a non-US market when lastminute.com was bought by Travelocity prompted the realisation that not all markets were the same.

He said: “Coming into Europe via Travelocity we realised what a different market it was. In the US everything was component buying and dynamic packaging.

“We assumed in 2003 that the package holiday market was just like a ticking time bomb that would blow up fairly soon but it’s still a huge part of the market in Europe. We realised that there were very different models out there that reflect the cultures of consumers.”

Asked what he expected to come along next in travel to disrupt the disruptors, Harris said he expected artificial intelligence to be “the next frontier”.

“We spend a decent amount of time thinking about it, but not a vast amount of time. I do think that once a lot of processes, a lot of things that we occupy our time doing will largely be automated 20 years from now.

“I’m pretty conservative when it comes to thinking about how technology will evolve and adopt, but when you consider ‘driver’ today is the number one occupation in the US. That will be dead in 20 years for sure.

“When you start thinking about the impact of that combined with virtual reality and augmented reality and what people are ultimately seeking when they want to travel. It’s something new, they want to be elsewhere, they want to be challenged and see different things. That’s the root of it, thinking about what travel means. That’s a big potential ideal. The seeking of new experiences may or may not be physical.”

Harris said Intent Media was founded to improve the way people are connected to information in real time to make a decision. And he said this means thinking outside the accepted categories of firms in the travel sector. Failure to do this is what has allowed Google to be a bigger travel business then Expedia, he said.

“In travel we have always thought of ourselves as having very different businesses and with very different economics but from a consumers’ perspective, especially if you hang out with millennials a lot, they are interested in getting the information they need on their phone right now.

“They want the information to make a decision right now and they don’t care whether you are a search engine or OTA or social media referral site, they just don’t care.

“The fact that we have all thought ourselves as different models, some in the business of transactions, some in the business of advertising, that’s been to our detriment and we have seen Google grow. They have a bigger travel business than Expedia does today.

“When we say commerce sites or commerce engines are also search engines we mean that when you really understand what your customer’s trying to do you have to crack open your walled garden and you need to think about how do I deliver exactly the right user experience based on everything I know about this user right now to deliver them the best experience. From that money will flow.

“We try to blur the lines between commerce and search focusing on the best user experience using data science to predict what users really want to do in real time. That means we do things like intervene in real time to make the user experience more relevant.

“In practice that means helping your customers buy something, to get over the line, at other times if your conversion rate is only 3% we help you monetise those visitors who are not going to convert by getting them to wherever they are going to go next, even if that’s to a competitor, by delivering a better user experience.”

 

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