Technology

Travo Summit 2016: Visionaries will power the paradigm shift as growth slows

Posted by Lee Hayhurston
Travo Summit 2016: Visionaries will power the paradigm shift as growth slows

Ten years after the Travel Weekly Group launched its digital travel brand Travolution the pace of growth of online travel has slowed so much it is now no greater than the sector as a whole.

Travolution was launched to reflect the increasing influence of the fast-growing online travel sector, at the time epitomised by the UK’s darling of the first dot com boom lastminute.com.

Simon Ferguson, Travelport northern Europe managing director, who founded Travolution when he was Travel Weekly chief executive, told the title’s annual summit that online growth is now focused on emerging markets.

“But the remarkable thing is online travel booking growth is actually slowing. In consolidated mature markets online growth is not growing any faster than the overall travel market.

He said KLM’s social seating, the first Instagram hotel in Australia and another in Madrid that communicates with guests only via Twitter could not have been dreamed of a decade ago.

“There has been incredible innovation,” he said. “Yet we are still doing the same fundamental things. The interface has changed, the medium has changed and the pace and speed has changed.

“But the remarkable thing is online travel booking growth is actually slowing. In consolidated mature markets online growth is not growing any faster than the overall travel market.

“We should not expect much growth. There is growth in other markets where they have been a little bit later in adapting.

“It does not mean it [online travel] is not huge, it just means it’s not growing in mature markets any faster than general booking.”

Ferguson said he expected the focus of technological enhancement to shift in coming years away from just booking travel.

“In simple terms we have spent much of the last 10 years on the booking, making travel bookable online. But actually going forward the digitisation of travel has to encompass a lot more than that.”

A shift east is also seeing countries like China, Indonesia, Vietnam and South Korea rising up to challenge the home of travel technology innovation; California’s Silicon Valley.

“How do we respond? It’s popular to say customers are driving this. I completely disagree with that. Travellers provide adoption, but they do not provide the spark.

“The next generation of digital urbanisation is going to happen in the east,” Ferguson said. “Silicon Valley is starting to lose some of its digital hold.”

US global share of travel technology investment has slipped from 43% in 2012 to 30% last year, including “the monster” Airbnb, and just one third of global start-up deals are US, said Ferguson.

The future of travel will see personalised hotel rooms, shorter more intense but more frequent travel plans, virtual avatar travel agents and a more integrated travel ecosystem.

Ferguson said Apple’s application for a patent for biometric fingerprinting suggested passports and personal identity will be fully integrated with the mobile web and payments.

He pointed to the Chinese app WeChat which currently has 450 million users and which allows people to book and pay for flights, instant message and unlock hotel rooms, as one to watch.

“Disruption is always just around the corner and critically it always comes from outside.

“How do we respond? It’s popular to say customers are driving this. I completely disagree with that. Travellers provide adoption, but they do not provide the spark.

“People, when asked, look for incremental change. You get these huge shifts because someone has come in to break the paradigm.

“The essence of the digital travel sector is absolutely tied up in this ability to see what everyone else sees and yet to see things differently; having the courage to do something different.”

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