By Subhashish Chatterjee, VP - Practice Lead
In my long association with the Travel industry spanning over two decades, I have often wondered if there is any industry which is as vulnerable as this – from terrorist attacks to trade wars and from outbreaks to weather – everything seems to have a direct impact and in most cases, a longer recovery cycle. The turbulence of disruption through digital is an additional brunt which is already being experienced by the industry and its outcome continues to blur the boundaries across industry segments, intermediaries, service providers and the consumers. In short, the chaos is not only due to the external factors but also a host of internal changes which continues to shape it.
The era of linear distribution of content from Airlines and Hotels to Travel management companies supported by traditional mode of servicing was challenged in the last decade by the Online Travel agencies (Expedia, booking.com etc.) who provided an easy and faster alternative to consumers to book flights, hotels, cars and other travel services. These companies were primarily technology companies who chose to dabble in Travel. Over the period new consumption segments emerged and shared economy fueled the boom of the likes of Airbnb, Turnkey, and Homestay etc. Interestingly, in the initial years they continued to operate in their self- defined boundaries but as they gained more subscription and user base, they started to encroach on each other’s turf – you can now book a hotel on a shared space app – similarly the likes of booking.com will also offer you a “localized experience” with a shared space. Traditional players like Airlines will provide you options to book Hotel and Car on their websites and even redeem their loyalty points to book “non-air segments” through marketing referrals and ties ups. The eco system continues to emerge and will continue to find and fuel newer arrangements to help pollination across providers, enablers and intermediaries.
The market place though is not only restricted to the above set of companies acquiring each other’s customer base and eating into market share – the new and emerging threat is now from a “non- suspect” category - the social media channels or search engines. Initially they were only leveraged to provide marketing solutions but now pose a new threat to the existing players. Travel companies who were trying to connect with travelers to inspire them during the search and discovery process with Facebook, Instagram and Google are slowly realizing the growing power of “personalization” and influence of recommendation from friends and family. Realizing the power, these social companies yield through a massive subscriber base and ability to influence buying behaviors – most of them have started to “unlock value” by foraying in the travel space. It’s only a matter of time before the likes of Amazon, Facebook or Google drive the next wave of disruption.
The emerging technologies like block chain is also being widely adopted and will provide an enhanced transparency for Inventory management, frictionless booking process and also avoid frauds with better identity management through a distributed block chain ledger. The emerging technologies are also helping companies save costs by exploring new distribution channels e.g. Most Airlines are introducing NDC to avoid paying the hosting fees for the GDS companies.
With a dynamic environment like that out there - the future has never been more uncertain for this industry than what we have witnessed in the past.
The list is long but it’s certain that to be the winners and ultimate survivors, the companies will need to understand consumer preferences better, consolidate content and provide relevant recommendations, provide frictionless experience with seamless multi-channel interaction across chat, phone, email, online ++ - and all of this with an underlying principal of “ secured - data transactions & interaction”.
It’s a tall order and the irony is that there are hardly any organizations out there who can claim to have the all the dots connected. This offers a unique opportunity for business process management organizations to help fill in the pieces of missing puzzle around knowing the customer better, creating the differentiator through improved customer experience, protecting customer interest by managing secured data etc. Our strong understanding and context to the problem, depth and expertise of the domain, benchmarked data sets and an available array of digital levers and practices positions us firmly to take on these challenges on behalf of our clients.
These are interesting times - nobody knows who the next disruptor will be and from which industry backdrop they may come from. A recent study by Accenture quotes that the new wave of disruption will shift US 100 Billion of value from traditional players to the new competitors by 2025. As the going gets tough for traditional players, the only way out would be increased partnerships within the eco system and integrating more organizations like us to drive the next leg of digital transformation for them.
The flight is ready to take off! Fasten the seat belts!!!