How did technology change the way we travel?
Technology has drastically modified the way we travel, and even its terms and conditions. Discover how you have become your own travel agency.
Your next destination is at your fingertips
Let’s say you have a 4-day long weekend next month. The decision is made to gather a few friends and take a break away.
The first step, find a destination. Spain? Greece? Everyone in the group has their preferences. But most of the time, the final destination will be brought to you by the internet. A quick search on the web to look for the top destinations for a holiday in February and there, you’re now going to Ibiza! Many websites gather the top destinations for YOUR profile: want a warm climate? A maximum 4 hours trip? Going backpacking abroad? You name it.
CNTraveller is a good example of website suggesting different sites depending on the time of the year : https://www.cntraveller.com/gallery/where-to-go-on-holiday-in-january.
We are now going to Ibiza. Great news! Next step, finding transportation. Visiting a travel agency for information? If you’re less than 40 years old, you wouldn’t even have thought about it. Instead, digital is once again your savior, and a few clicks in Kayak and… there, a 4-hour flight will be taking you on your holiday for less than £100.
In 2019, Kayak registered more than 2 billion inquiries on travel through more than 60 different websites. But Kayak is not an OTA (Online Travel Agent), meaning that it does not sign contracts with airlines to sell directly to consumers. The platform makes most of its money from advertising placements on its webpages (around 57%) and from Distribution (43%) to OTA’s, like Expedia or Orbits, and travel suppliers. Thus, suppliers repay Kayak distribution revenue for redirecting clients to their website for completing their travel transaction.
The destination is selected, the flight is booked… All we need now is accommodation. Here, we are arriving at a branch: are you and your friends keener on the ‘all-inclusive’ type of holidays or the ‘do it yourself’ option?
The Airbnb Empire
For all of the adventurers, their choice will naturally turn to Airbnb, the leader of the booking of private accommodation with more than 5 million shelters available across the globe.
The website originally made the bet of offering unusual accommodation, while maintaining a ‘like at home’ atmosphere. They focused their strategy on the sense of belonging to a community: a grouping based upon the love for travel, discovery, people and experience. And it works: the community counts close to 2 million users.
Among the secrets of their success is the use of the ‘3 click rule’*. This unofficial rule states that any client should be able to find what they’re seeking on your website in 3 clicks. Here, first click displays all the accommodation offers, second click gives you info on your selection and third click allows you to make the booking (More information on the 3 clicks rule: http://3clickmedia.com/2017/04/02/what-is-the-3-click-rule-of-website-design/).
In the last years, Airbnb changed its strategy, axing the communication on the UNUSUAL activities it regroups. Among the most surprising offers are a night among sharks in the Paris Aquarium of Trocadero, a stay inside the Maracana stadium in Brazil etc.
For more information on Airbnb’s business strategy, here is another article: https://bstrategyhub.com/airbnb-business-model-how-does-airbnb-make-money/
Destination, transportation, accommodation… You are now ready to go. Now, what are you going to do during these 4 days?
To make their website even more indispensable, Airbnb developed the ‘Experience’ option, a selection of unusual activities based on the location and dates you entered when looking for an accommodation. Since their launch in 2016, Experiences have become a usual add-on to your trip, thanks to a strong advertising campaign on social media, broadcasting short clips of “experiences of a lifetime”.
Experiences have two benefits for the company. First, they bring higher margins than accommodation. Second, the development of Experiences brought an increase in bookings on the platform:
“The company says that its bookings have grown 2,000 percent since this time last year, with Experiences growing 500 percent”
Extract from an article by the blog The Verge: https://www.theverge.com/2018/1/28/16942308/airbnb-expanding-investing-experiences-200-cities-2018
Who you gonna call?
Let’s stop for a second. In less than 30 minutes, you and your friends planned an entire 4-day trip to Ibiza, without leaving your seat. Within a few years, digital and cellphones revolutionized the way we travel. We no longer need to go through an agency or have any social interaction with the outside world. Cutting intermediaries can be seen as a way of simplifying our holidays: you no longer depend on a third party. But this independence has a cost.
Agencies and tour guides were not only an intermediary to your holidays; they were also and mostly a guarantee of support in case of a problem. They were a contact to reach if your flight gets cancelled if your itinerary gets changed. Here, you are on your own. Once you start planning yourself, these guarantees go away. In case of an issue, you’ll have to call the airline yourself to ask for any changes.
“The Travel Providers are responsible for the Travel Products. The Travel Provider’s terms and privacy policies apply to your booking.”*
*This is an extract from Kayak’s Terms & Conditions, illustrating that any change in your booking is related to the supplier’s own policy and that Kayak will be no use if you ever need to make changes to your booking. Click HERE to access Kayak’s Terms & Conditions Policy.
Thus, if wishing to plan your trip on your own, always make sure that you have guarantees. Remember that if anything goes wrong, you’ll have no one else to turn to. These guarantees can be Cancel For Any Reason Guarantees, offered by some booking platforms such as eDreams, allowing you to be refunded if you need to cancel your trip, no matter the reason. Airbnb offers their landlords 3 different cancellation policies, to display the conditions guests must meet to get free cancellation : strict (14 before check-in), moderate (5 days before check-in) and flexible (24 hours before check-in).
Having a full choice of options is great. But next time you book a holiday, you might want to take a closer look at these long Terms & Conditions before booking to avoid any bad surprises. It can seem a lot of extra work, but this is the price that will come with being your own travel agency.
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Business Strategy. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DBS.
