Let’s imagine for a moment that instead of working in the world of travel technology you owned a general interest bookstore.
You would likely stock the most popular titles, those that reach the bestseller list, and a range of literary classics and reference books, for which there is a consistent consumer demand. It is unlikely that you would sell books which appeal to only a certain segment of consumers, since you could not bear the economic burden of stockpiling titles for which there are only a handful of potential buyers.
Now put that bookstore online. Suddenly, the costs associated with the shelf space that each book occupies and the traditional overhead of a high-street retail outlet (eg staff, rent, etc.) are largely removed from the equation. In this scenario you could sell every book ever printed and, since you are not constrained by geography, could be fairly certain that not just a handful of people would buy them, but perhaps tens of thousands.
This is the economic premise of The Long Tail, as outlined by Chris Anderson in his book, The Long Tail, How Endless Choice is Creating Unlimited Demand.
Broadly speaking, Anderson says: “The Long Tail is about abundance. Abundant shelf space, abundant distribution and abundant choice.”
For the travel sector, Anderson points to how suppliers, such as European low-cost carriers, have created an awesome range of choice by offering routes to obscure destinations across the continent. In turn, lowering flight costs has given way to more travel and more risk-taking on the part of the consumer, driving demand for products.
The Long Tail model, he says, is already having an affect on consumers’ aspirations. While the top 10 destinations have not changed drastically in the past four years, the travel tail now makes up a greater proportion of travel supplier’s sales.
It is still subject to intense debate whether the Long Tail model can apply to all products and services, including the various segments of the travel industry.
There is also a question over whether the model exists in cycles, where the length of the tail expands and contracts based on specific market conditions, such as the number of suppliers operating in a certain sector and the size of consumers’ disposable wealth. If the length of the Long Tail of travel is dictated by consumers’ affluence and the perception it is a right, rather than a privilege, to travel, then it would follow that, under harsher economic and societal conditions, such as the post-September 11 climate, the tail would shrink.
A significant decrease in the number of niche suppliers, either through closure or acquisition by larger players, would equally impact the length of the travel tail.
Cheapflights boss David Soskin observes that, while the length of the tail might vary depending on consumer confidence and the strength of the economy, the tail itself is far longer than it was 30 years ago, when the industry depended on a “short head”.
Soskin says: “Then, travel was for the rich. There were few travel companies, and people tended to go to few destinations. Today, by contrast, there is a Long Tail of travel for all, with multiple types of travel companies and more people taking frequent journeys to more destinations”.
The rise of low-cost carriers and OTAs in the past 10 years has helped to lengthen that tail, creating new destinations and allowing people to travel further afield.