The deal of the 21st century in the travel industry
Many industries and companies thrive on innovation and many more often die or wither due to lack of it. In fact, whole industries, and most definitely companies, often are built on innovation. Someone has an idea, product or service then develops it and – voila! – a new industry, company or opportunity is developed. We’ve evidenced and are familiar with stories of how this happens. So how does this apply to travel and why does it matter?
Over the past 10 years, and 5 in particular, innovation in the travel industry has never occurred at a more rapid rate. More specifically we’re talking about technology, new products, services and ways of approaching business in relation to the sale/resale of travel – not about new types of aircraft or such. Realistically, how much further could we be along the path of innovation if it were not for the perspective of self-preservation? There is always a critical mass component to any disruptive technology, product or service – in other words, those who have critical mass in the existing world are interested in self-preservation as opposed to disruption. While those innovating want to quickly get to critical mass so they can establish themselves as an industry player. Sometimes the critical mass comes in the form of consumer demand.
The self-preservation often revolves around an economic or financial model which is being disrupted. The challenge often is that companies focused on self-preservation as opposed to evolving, adopting or adapting in many cases are not focused on benefits to other users and are simply threatened by a new business model. This tamps down innovation in the short run and may provide time to ‘reinvent’ one’s self it doesn’t stop the critical mass demand from building (think of TripActions as an example here).
As the drip of technology develops new opportunities and ideas continue to proliferate (TripBam, Yapta, Freebird, Rocketrip, Lumo, Hopper, PSNGR1, TripActions, Whereto, TravelPerk, Concur, GetThere, Deem, FarePortal, Travix, Groupize, mTrip, Farelogix, RouteHappy – not to mention Expedia, Booking, Hopper, and others).
Sometimes these entities become huge enterprises, sometimes they fail and sometimes they consolidate around each other. The point is that innovation is not stopped – at some point, the acceptance of innovation simply becomes self-preservation, adapt or die.
As well, intermediaries who have become dependent upon the existing economic model scramble to invest or keep up with new technology. While new entrants, business models, and opportunities continue to emerge. Of course as we’ve seen with NDC sometimes the process is lengthy (and it helps to have strategic backers) but eventually, the critical mass is achieved – even if it is because concepts are co-opted and they move to the next step. The opportunities created because of innovation will continue and new models will evolve – just as NGS has now come out of NDC.
How the various constituencies integrate technology to help them capitalize upon the opportunities will be intriguing to watch over the course of the next few years. New products, new services, new companies all around the same transaction(s) will show us who are the innovators and who are the self-preservationists.