The travel distribution wars continue, and it seems like everybody is competing with everyone else: legacy travel agencies versus online travel agents, airlines versus GDSs, GDSs versus online aggregators, GDSs versus search engines, search engines versus social networks. Some would say this is just a sign of vibrant competition within a highly dynamic industry. And, it is. So, while its admirable for all concerned to want to protect and expand their current markets, maintaining the status quo is a false choice. History is littered with the corporate corpses of those that failed to innovate in response to an ever-changing market, fickle consumers and brutal competitive pressures. Think BlockBuster versus Netflix, Atari versus Nintendo, Habitat versus IKEA, Polariod and Kodak versus smartphones.
So, there’s an interesting slant on this from Chicke Fitzgerald over at the Distribution Solutionz blog, courtesy of theBeat:
From all corners of the industry, those that have seen this whole story unfold for more than three decades shared their stories of relationships and growth using technology as a tool.
. . . The booking “machine” in our industry is not the tool (aka the GDS, or Farelogix, or the OTA or the supplier.com). It is the professional travel agent.
According to Fitzgerald, statistics consistently show that travel agents book a higher yield transaction than their online counterparts for airline tickets. She goes on to describe why this is the case:
- They help people make decisions about their travel plans – all day, every day. And in many cases, are paid for that professional advice and for the service they provide throughout the travel experience.
- They do not have a singular focus on price.
- They ask the questions WHO are you traveling with, WHAT do you like to do when you are together, WHY are you traveling, WHEN do you need/want to travel, WHERE do you need/want to go and HOW they want to travel and quite often they ask these other questions before they ask HOW MUCH.
- Upselling is what they do. Even though they don’t always get compensated for doing so (e.g. domestic airline tickets)
This is all quite correct. However, the analysis misses the point completely. Travel agents thrived, initially, by servicing a niche and exploiting a fundamental problem in the business-to-consumer market — somehow travel suppliers, most notably airlines, had no efficient and direct way of selling their (increasingly) complex product directly to consumers. The current distribution model is more of a historical and cultural artefact, and would look rather different today if travel had entered the public consciousness in 2000 rather than 1950.
While technology is indeed a key enabler, it is also the key distruptor in the distribution wars. So, it should not be of any surprise to players in the travel marketplace that they need to compete against the status quo, as well as their direct competitors. Survival requires innovation.