City Insider: Whose customer and whose data?

City Insider - A City perspective on the travel industry from FT journalist David Stevenson

The travel industry needs to get better at mining its data – which will mean addressing thorny privacy and ownership issues

One of the most interesting sessions in last week’s Global Travel & Tourism Summit in Beijing consisted of a one-on-one interview with Barry Diller, former Hollywood mega-mogul and now boss of IAC, the internet giant that spun out Expedia five years back and still owns a chunk of businesses such as Ask.com and Excite.

Diller is always a great interviewee, enormously likeable and sometimes brutally honest. He’s also a very sharp businessman who’s done a brilliant job of morphing from an old-world media exec into a new-world web 2.0 tech tyro who ‘gets’ why devices such as mobile phones and iPads are so damned crucial for modern, distribution-orientated businesses like travel.

Diller’s view is that businesses have no choice but to embrace new technologies but that the process will be messy and chaotic. In essence, his idea is to throw money at new ideas and technologies, let loose creative and technological teams who experiment with new apps or ideas, and accept that most ideas won’t work: businesses trying to deal with the constant waves of innovation just need to accept that failure will be commonplace.

This, of course, raises a number of issues, many of which came out a few weeks back at our very own Travolution Summit in central London. All this tech hype is well and good, but many business leaders, especially in travel, remain to be convinced of the value of spending money on social networking or new mobile-based apps. The common refrain is “where’s the money?”. Excitable enthusiasm for new technologies can result in vast over-spends and botched business ideas.

Now, many business leaders are beginning to ask trickier questions. Antony Tyler, boss of Cathay Pacific and chairman of Iata, asked the WTTC summit: “Who owns the data that’s being collected by companies?” And the president of Expedia wanted to know how new technologies would make travelling a more pleasurable experience.

Lurking behind all these challenges are, I’d suggest, four big challenges that Mr. Diller would understand. 
 
The first is what information is actually useful for the companies concerned? Having the ability to put pins on a map in Facebook that tells a wider audience where you’ve visited is all well and good, but how can any money be made out of it? Expedia is currently struggling to answer that one.

Yet a sensible appraisal of the business value of any new technology or app will mean nothing unless it is properly interactive – that is, it allows a proper return path that lets the user influence the final outcome.

At the moment, far too much use of new technology – apps, email-based comms or websites – is one-directional, consisting of big travel networks pumping information to me, the end consumer, without any chance for me to alter the parameters and influence the decisions.

Achieving genuine interactivity will also allow big travel companies to develop technology that allows consumers to become individuals, with very distinctive appetites and preferences, offering up titbits of information that constantly change and make every one of us unique.

Truth be told, not one big travel company here in the UK is even remotely near this point; it’s all centralised databases pumping out mass-market data packets that have virtually no relevance to me at all. 
 
More to the point, when I actually follow up on a few of the digitally communicated offers, they’re not really available – they’re just marketing hooks.

Other sectors ‘get’ the need to mine their databases and then personalise their digital channels. My wine dealer, for instance, is a national network yet it has still conquered the fairly elemental challenge of working out that I like new world red wines (preferably Australian or South American) based around shiraz and malbecs. I don’t think that’s terribly complex, and so I get offers that are relevant, where I feel like an individual.

In my experience, the big travel companies are useless at this. I’ve travelled with all the big guys in the last few years and receive a ton of stuff from them – but it’s all dumb; there’s nothing clever going on here. 
 
But if, at some point in the future, they do evolve, and they do personalise and prove useful, we face one last challenge: the problem of who owns information that is valuable. Interactive information that treats us as individuals will be very valuable, prompting bitter debates about who owns it (Tyler’s challenge) and how much trust the consumer wants to put in the brand (Diller’s challenge).

Diller’s point – backed by Google – is that if you experiment madly and always go the extra mile for the customer, you can buy consumers’ trust because they are excited about your services, technology and ideas. In return, they’ll let you keep information about them, but only if you constantly prove your usefulness.

Can you look in the mirror and tell me that this is the current model in travel in the UK today? Thought not.

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