Declining costs of computing are enabling the modern travel company to transform from a ticketing machine to something much more sustainable, Expedia’s head of central Europe said.
Andreas Nau, managing director for central Europe, was speaking at the second Open Destinations London Technology Week event, hosted this year be Ve Interactive.
He told delegates that it was vital in today’s market that businesses were constantly thinking about how fast they can move if a disruptive new player enters their space.
And he said Expedia has re-engineered its business in recent years to allow it to be much more adaptable to trends and data feedback, by constantly testing and learning in a live environment.
“We were probably the first company to be a full service OTA, but the situation today is very different and the competitive landscape in travel and online has changed.
“It’s become very fragmented. If you are a consumer it’s a nightmare. There are twenty, thirty, forty websites and they all seem to be doing the same thing.
“What we say is online travel is more than a ticket machine today. If what we are is basically a slightly smarter ticket machine how can we survive in the future.
“Perhaps there are only a few companies that can survive as a ticket machine. At the end of the day it’s not really a sustainable strategy.
“We asked ourselves how can we change from being a ticket machine to being something else. The biggest reason was can change is if you look at computing costs and data storage costs.
“They have significantly declined. The ability for your company to do more has significantly increased.”
Nau said the volumes of data available today means firms have to become scientific in the way they use it, and that this has fundamentally changed the way websites are developed.
“Traditionally you started with an idea and built that and focussed on complete assumptions. You were relying on your assumptions even before you knew those assumptions were validated.
“This leads to infrequent releases. The new method, because of increased processing power, allow for a much more scientific test as much as possible approach.”
Nau urged firms to go live with ideas and let consumers decide if they are valuable or not. “Throw it on the website even if you know it does not work. The consumer will click on it even if it breaks. If the consumer is interested we will build it,” he said.
Expedia will carry out more than 5,000 individual tests this year and Nau said Expedia has given teams on the front line the freedom to try stuff rather than being driven from top down.
He estimated firms operating at scale need to employ 700 data scientists as a minimum. “That is a big change in mentality,” said Nau.
Developing services that are addictive and are capable of grabbing the attention of consumers with increasingly short attention spans, including in the B2B world, was vital for Expedia, Nau added.
But he said change and disruption in the travel sector won’t come as a revolution. “There’s no major breakthrough, it’s little steps, testing, testing.
“You need a culture and technology that’s very agile. Our differentiation is always going to be technology. That’s what we live and breathe day in day out.”