As consumers’ expectations get higher, so search is becoming more ‘intelligent’. Tricia Holly Davis looks at how the dynamic package era will evolve as technology improves.
Dynamic packaging is getting a makeover. The newly-minted version will be the product of clever mash-ups and super search technology, which blurs the lines between traditional packaging, DP and semantic search to deliver uber-rich content, while simultaneously simplifying the user experience.
“DP is in its infancy,” says Roberto Da Re, president of Dolphin Dynamics. “Thus far, it has not delivered what it promised. More intelligent search at the back end is where the market is moving, especially when it comes to margin control and suppliers’ and sellers’ ability to push one product over another. This will be a crucial part of the next phase of DP,” he says.
Graham Donoghue, TUI new media director, also talks about “intelligent search” as the next phase. “All DP is search anyway, but intelligent search is the future because customer expectations are so high,” he says. “Consumers want this super search that marries modular components, like flights, with content components, such as hotel descriptions. We’re all naïve in terms of who controls this industry – it is not the suppliers or affiliates. It’s the customers who are really in control, because they decide what they want, when they want it and where they want it. For travel sellers, this means you need to open up access to your product.”
TripAdvisor is a good example of this “openness”, says Donoghue. “A year or two ago, it would not have given its content away, but now that makes absolute sense, and is a win-win.”
So, he says, the next stage of DP goes far beyond product. “It’s about ‘one search’ – or ‘intelligent search’, which does everything a package search does, and a DP search does, and a content search does, and a meta search does, and a semantic search does – and mashes it all up.” Most of all, he says the super search is intuitive and allows customers to make an informed choice. “In this way, I don’t really see it as the next DP; I see it as the next type of search,” he says.
For TUI, Donoghue says the focus now is on “progressive disclosure”, where certain products are only displayed at certain times and can be customised based on user behaviour. “We’re at the stage where we have everything – we have a 5,000 piece jigsaw. The challenge is trying to put it together the right way.
“We spent a long time, building everything and getting the foundations right and now it is time to refocus how we make the information available. I’m not working on a covert super-search project – it’s about making sure we have functionally rich applications, and that is a challenge,” he says.
Da Re observes it is increasingly clear that consumers are not interested in products as much as experience.
“Though this has been discussed for a long time, it is only now just getting to point where consumers actually can perform a lifestyle search, for example.”
Until now, he observes, booking engines were happy to pass on to consumers the information provided by travel suppliers. Now, however, travel sellers want to own the information and are distinguishing themselves by synthesising that information and building their own descriptions to enrich that data and make it more consumer-friendly.
“So, search is switching from product to content in terms of being able to convey what a holiday means. It’s not just about the hotel having a pool. It’s about what type of hotel is it and what types of people are most likely to enjoy that destination, etc. That type of data is only now being gathered,” says Da Re.
Da Re predicts intelligent search is likely to develop quickly over the next two to three years. DP thru meta search, on the other hand, will take a while longer.
Though each day more applications are developed that make the user interface more intuitive, integrating DP into a meta-search model presents challenges on two fronts: connecting all the data in an intelligent format on the backend and making it simple to use on the front end.
“The problem is that DP is by its nature dynamic and not a static product, so applying it to a meta search model can get very complex. Traditionally, we see a search based on destination or price. But a proper search on DP is way off, because suppliers present different information in completely different ways. How do you compare someone going to a Mediterranean destination, with a specific carrier, and a hotel that doesn’t include transfers to one that does and whether the price includes full-board or half-board?”
In this way, Da Re notes the barriers to entry are as much about data as they are about perfecting the search technology. “Travel data is often not provided in a format that makes it possible to perform these types of searches. Though there are some ways to simplify it, in the short term we won’t get to the level of sophistication we see today with flights, for example.”
Donoghue points to technology coming out of Silicon Valley in the US – which remains the undisputed hotbed of next-generation IT development – for a glimpse of how developers will overcome these barriers. “Websites such as Schemdley, a drag-and-drop application, and Kayak and a host of other travel specialists are doing vertical search and aggregating rich content, and paving the way for the next phase of DP,” says Donoghue.
“The meta-search engines in the US are especially good at mashing up lots of data from different sources, but there is also a lot to be said for simplicity. The challenge is there is so much data to present and not confuse the user and we can’t underestimate that challenge. You can compete by having the best product, but if you have the best way for people to access information then that is what will make you successful,” says Donoghue.
“I’ve got an iPhone and the user interface and the simplicity behind it is fantastic. The iPod is iconic in that sense, so Apple is a great company to look at to see how the travel space needs to develop – there’s a lot to learn from a business like that.”
Put another way, he says: “You can have a vanilla version or a chocolate chip cookie version – there are a lot of ways to have a clever interface to deliver data. If the data and product are good enough, then people will hunt out your site.”
The challenge on the back-end is to interconnect all this data, but the technology needed to do that does not exist – yet.
Michael Hughes, global director of sales and marketing for Cultuzz, the accommodation provider to eBay Travel, agrees a smart meta-search model for DP is where the market is moving, but it is still way off.
“Major questions are being asked already about the adequacy of content control as we merge DP with Web 2.0 (consumer-generated content) and try to deliver this to multiple channels and back into the booking systems of the suppliers, but there is a long way to go frankly.
”No-one is ready for quality control of Web 2.0 let alone what that means when we add a layer of complexity, such as DP, to the equation,” says Hughes.
Regardless of size, the fact is the systems are just starting to cope with a marriage of multiple media that will support the sale of a DP, such as video, text and interactive maps. In addition, he observes that in many cases, meta-search engines degenerate the desired content representation of the supplier with what they have already made available on their websites and via IDS channels. “I do not believe meta-search engines are ready to scrape their way through thousands of DP results.”
In the more immediate term, Mark Hopper of Click With Technology says the market can expect a “big search” for traditional packages and dynamic packages, which will appear on a joint search result. “That’s being developed now and is aimed at affiliates, who don’t want to work with individual suppliers, but still want all the major brands, like Thomson.
“It’s about high-margin DP or ‘virtual tour operating’ combined with lower margins and strong brands,” says Hopper.
“DP through meta search has all kinds of challenges, so ‘virtual tour operating’ is really the growing trend in the near term.”
Virtual tour operating consists of a cache of all flights and accommodation that is multiplied to come up with a cache of all possible holiday combinations and price. The results are then distributed via an XML connection into the big meta-tank sites.
Jet2Holidays is one example of virtual tour operating. CWT’s virtual tour operating technology is also being used to populate Teletext and Travelsupermarket, says Hopper. He observes that companies such as Teletext, which trades 100 million offers every night and creates a 100 million new offers the next day, are actually completely dependent on DP technology, but the final products are presented as a pre-made package in the same way as the big tour operators.
“It’s a hybrid between traditional tour operating, DP and virtual tour operating, where we are using DP tools to create products that look like traditional packages and can thus work with the meta-search engine model,” he says.
Such capabilities are becoming increasingly necessary as travel intermediaries must compete more aggressively with suppliers, which want to own the customer.
Malcolm Preston, partner and travel sector leader, PricewaterhouseCoopers LLP, observes suppliers are now providing the lowest-cost bookings available on the Internet and those that have sufficient scale will continue to see more bookings made through their own sites.
At the same time, he says that unlike airlines or hotels, which have perfected customer loyalty schemes, “aggregators struggle to provide anything significant to ensure customer loyalty. Discounts are one option but this comes directly off the bottom line. If they want to give a free flight, they have to first purchase it from the supplier”.
Hence, this is why online travel companies are offering a wider range of services unrelated to travel, such as theatre tickets, restaurant bookings and theme park entry, for example. This can result in increased customer loyalty and higher revenues per booking for the online operator, says Preston, but it also harks back to the importance of the customer ‘experience’.
Da Re says the most successful online travel providers – be they suppliers or aggregators – will have more margin control and be able to discriminate which products they distribute. “This will make a difference to travel companies while search technology continues to improve.”
But it’s a mistake to think that only the big players will survive. “Travel is such a complex market that even the larger players are going to struggle,” he says.
The playing field will also evolve as established players break from their traditional models. Expedia’s recent decision to adjust its supplier fees is a great example of how the future will look, adds Da Re.
“What’s interesting is companies such as Expedia, which already has data and search capability, are moving more into the Google space. If you are a travel supplier and you know a lot of people go to Expedia and then book direct, would you rather spend your finite advertising budget on Expedia or on Google?” he questions.
“Internet searches are becoming a chore and are losing their excitement, because people have to spend a lot of time to find what they want, so if you can provide all information in one place and get the customer to trust you, then they will buy from you. Suppliers will continue to go direct – they have decided they want to own the customer. Everyone is going to have to be creative if they are going to be in the business.”