TDS2015: Travel’s big challenges? Growth without profit, content, disruption and owning the customer

Travel is facing a significant challenge from the enormous investment being made available to back travel start-ups to achieve rapid international growth, even if they are loss-making.

Travel is facing a significant challenge from the enormous investment being made available to back travel start-ups to achieve rapid international growth, even if they are loss-making.

Hugo Burge, chief executive of Cheapflights parent Momondo Group, said globalisation and internationalisation is “a very important driver” in the industry.

Speaking on a keynote panel at last week’s Travel Distribution Summit, Burge said there seemed to be “an extraordinary passion for growth in the investment industry.”

“Investment in change and investment in growth seems to be a huge driver. We are seeing start-ups making enormous losses in order to grow.”

Frank Fiskers, president and chief executive of Scandic Hotels, said the change in the hospitality sector is the technology maze that sits between the hotelier and the consumer.

He said this was especially in terms of owning the customer.

“Are we going to be commoditised? Are we going to be a supplier of intermediaries or will we add enough value so that we can actually say we own that relationship?”

Bryan Batista, Booking.com head of global partnerships, said innovation in travel was not necessarily coming from the biggest established industry players but from disruptors.

He said much mobile innovation was being driven by Chinese firms that a barely known in the west. Batista added the role of content was also increasing either user generated or curated, the latter of which Booking.com was focusing on.

“It will be interesting to see which path will be the winning path,” he said.

Asked for his take on the future for travel distribution, Iata’s new distribution regional implementation head David Rutnam, said:

“In the 1960s airlines were ahead of the game in terms of electronic distribution. They were doing electronic sales in real time anywhere in the world.

“It was all based on 1960s technologies and many of these are at the core of the airlines today. Data storage was very costly and therefore data was very compressed.”

Rutnam said Iata’s emerging New Distribution Capability (NDC) XML data standard was about addressing that and bringing airlines into the twenty first century.

“It’s about getting the rich content out into the market. It’s about personalisation. Today, airlines really do not know who the customer is until they get the information in the booking.

“It’s about dynamic offers, being able to control the offer rather than allowing third parties to control the offer and, or course innovation.”