There are a ton of travel problems to solve and the travel industry is constantly changing. ‘Hotels’ has continued to be where the main business is for travel companies world-wide — contributing roughly 15–20% margins for hotel bookings. Over the last decade, the agency model grew in popularity particularly in the fragmented European market — enabling more hotel inventory to get onto travel products that adopted this model, thus improving “usefulness and coverage” (#1 in the Universal Product Framework).
Teams of product managers at travel companies worked to make the “ease of use process” (discover, organize, book, travel — #3 in the framework) better with more sophisticated technology powering their websites and creative product ideas.
User generated content (UGC), particularly reviews, made travel products in the industry more “trustworthy” (#5 in the framework). Since trust is paramount for the very first step of the travel value chain (plan, discover, organize, book, travel, share), companies like reviews-based TripAdvisor thrived in this new category — helping travelers decide on where to go and what to do, rather than “how to get there”, the bread and butter for the rest of the industry. Trust also was proven to be very important in helping to facilitate travel bookings (4th stage of the value chain) — as customers wanted to trust that the expensive purchase they made would help them get what they were looking for.
Recently, industry trends resulted in segments of the travel industry being more “affordable” (a new point #6 in the framework). When mobile smartphone devices became the norm, travel companies raced to offer their services on the new platform. The convenience of mobile gave rise to a new segment of the market — last-minute, discounted bookings — an improvement to travel as a product because of “convenience” and “affordability”.
This was not the only new industry segment. The sharing economy driven by Airbnb took “affordability” to a whole new level. As our world became increasingly social and interconnected, sharing made economic sense and lodging options that included local citizens’ extra bedroom or couch suddenly created an entirely new lodging segment. Lower-priced and sometimes even social, the value proposition for this travel product was clear.
It’s clear that the travel industry as an overall product over the last decade has improved on “usefulness”, “ease of use”, “trust” and more recently, “affordability”.
What’s next?
Probably advancements in the same areas but to greater depth, with an element of social. But trends will give us a clue.
Mobile — the obvious first choice. Consumers have migrated to the new device and the new device offers new affordances that will continue to shape travel going forward.
Social — the rise of Facebook, LinkedIn, Pinterest, Instagram, Twitter — all point to an interconnected world. Social travel planning, social travel discovery, social travel coordination, social travel booking, and social travel sharing are all ripe for innovation.
User Generated Content — reviews are all over the internet to help customers plan travel and facilitiate trustworthy hotel bookings. New concepts like real-time reviews are being explored to improve customer experience and trust/expectations. But UGC is not just limited to reviews — new forms of content have yet to be explored.
Sharing — given the increasingly social world we live in, the growth of Zipcar, Netflix, Rent-the-Runway were based on renting, not owning. These then gave rise to Lyft/Uber and Airbnb.
Big Data — today’s modern computers can solve traveler painpoints efficiently. With the help of some human curation, finding the best multi-city trip route to take, the most popular point-of-interest itinerary for a destination is all within reach.
These trends all mix. Mobile facilitates UGC — by making it easier to collect (startups like JourniApp). Social makes UGC/Big Data more trustworthy or credible, adding an element of human curation/trust. etc.
There can be more. How all of these trends mix together in the future is a big black box and I’m not quite sure I’ve nailed it all down yet. But I’m pretty sure that travel innovations will lie in making the travel process more stress-free and make certain travel decisions more trustworthy — especially as all of these travel decisions are made online.
Some of the key problems I’d love for the future of travel to address are:
A) WHERE?? I have money to travel. I have time. And I have access to great deals. But where should I travel next? Researching is too time-consuming and stressful.
B) WHAT TO DO?? What should I do at Destination X? How does that change if I only have 5 days? Planning an itinerary is a multi-variable problem — how can we make this easier?
The solution to the above two customer pain points will certainly evolve as trends in the marketplace change — but will likely involve an element of credibility/trust. One concept I’ve always kept in the back of my mind has been the “trip template” — taking someone else’s trip template (including itinerary, memorable moments and things to do), copying it and making it my own.
But such a simple elegant solution is actually quite tricky to solve. It involves 1) collecting user-generated content and 2) applying a layer of credibility/trust on top of it to make it useful/relevant to the next traveler. Both of those steps are incredibly tricky to solve. But I believe technology trends will one day change the landscape and make these two points much easier to solve. Was the latest mobile trend enough to solve it? Not quite fully yet. But we’re close.
And I’m looking forward to when the stars may align so we can finally solve this tough universal travel problem.
You may be interested in my other travel post on Expedia as a product.
