PhocusWright 2008 came to a close yesterday. During the four days, three trends surfaced. The first trend was the extreme pessimism about the economy and its impact on the travel industry, the second was the rising importance of video and the final trend was the impact of mobile on travel
1. A global economic meltdown is worth discussing
If I wasn’t concerned before the conference, I am now. The state of the economy was discussed on stage, in blogs and during lunch breaks. It is obvious the travel industry is preparing to be hit hard and is doing its best to prepare. A few of the center stage speakers comments were noteworthy and offered some hope in the new economy:
Jean-Claude Baumgarten President and CEO World Travel & Tourism Council just arrived on stage direct from from India. He encouraged and inspired attendees to look at India and China’s emerging economies are a realistic means of growing their travel businesses world wide. These two countries each have a thriving middle class with money to spend and a desire to travel. His comments were inspirational and informed.
McKinsey supports Mr. Baumgarten’s message with these statistics in a recent report:
“The lure of China’s urban-affluent segment is easy to understand. These consumers earn more than 100,000 renminbi (about $12,500) a year and command 500 billion renminbi—nearly 10 percent of urban disposable income—despite accounting for just 1 percent of the total population. They consume globally branded luxury goods voraciously”
And TimeAsia offers the same growth statisitics from India,
” for the past 23 years India’s GDP has grown at an average annual rate of 6%, making it one of the fastest-growing economies in the world. The growth rate may have been lower than that of China’s, but it is double that achieved by the West during the Industrial Revolution. As a result, India’s middle class has more than tripled in size to 250 million people.”
With record growth in these two economies, the west can look to the East for revenue and profits for growth or just survival during the next few years.
A few other speakers joined in the discussion, Stephen Kaufer, President of TripAdvisor, told the conference he was irritated by the pessimism and found it “boring.” Jeffery H. Boyd, President and CEO of Priceline, when asked if the economic climate could be a windfall to Priceline, responded, “we are not feasting on their pain, we are helping fill seats and rooms. This comment alone proves that even in a downturn, some firms may show record growth.
The overall message from the conference was that we must innovate, invest in the product, cut all possible costs and focus on profitability.
2. The rising importance of video
Most travel web sites don’t feature video. Beautiful photography, UGC and original editorial content seem to be everywhere, but not video, unless you look for it. However, Charles Younge, President of the Travel Channel, stated that “video and travel go together like love and marriage, horse and carriage.” With the growth and popularity of YouTube, the rising number of mobile phones (350 billion worldwide) and the fact that 1 in 7 people view a video prior to making a travel purchase, he may be right. He mentioned that the TravelChannel had 30,000 visitors view a short video on a resort in the Bahamas, in just a few weeks that had had no promotional effort whatsoever. In his opinion, if video is done correctly it can be a game changer. To do that it must be:
Searchable-support multiple video platforms, optimize, etc.
Relevant-if presented correctly, it can be a deal closer
High quality-most viewers consider web- based video unsatisfactory, they want the good stuff
Trusted-”bad creates a premium for good,” he recommends 90 seconds that is not overtly commercial, takes them beyond the obvious such as Intercontinental Hotel Group concierge series
Ubiquity-one reason travel planners don’t search for video is that they don’t think it exists
Two firms seem to be on trend, TVTrip offers high quality hotel videos by professional photographers and TripTelevision offers an award-winning, intelligent media player that travel marketers can “visually direct their customers through an intelligent, TV like experience. It was only after Mr. Younge’s presentation that I realized TripTelevision with its high quality and searchability may be onto a good idea.
3. Mobile & travel may have made a match
Mobile remains the new profit frontier because the industry leaders recognize its importance and the innovators are delivering a product that performs for everyone.
- Steve Kaufer mentioned, “TripAdvisor brought out a great mobile product a few years ago. It was used by 1,000 people.”
- The Travel Innovation Summit Innovator Award winner was IM@, Interactive Mobile @dvertising, LLC. They offer a free downloadable travel application for most phones. The application offers travelers information they need while on the road. It caught the audience and the judges’ award winning attention.
In a few short days, a leader in travel mentions he tried to capture the power of mobile, but failed. Conference participants chose IM@ from32 innovators as one of the top six, and then a panel of experts selected it the winner of innovation for 2008. It won because it promises to make mobile work for the consumer and for advertisers. That says potential… Here is the link to the demo video from the Innovator stage presentations.
(now you see what I mean about video, if only this worked better, and was searchable…)
1. A economy spiraling out of control;
2. Video gaining momentum; and
3. Mobile applications delivering on both sides of the travel equation.
I will be interested to see what happens in the next year, who is flourishing and who is not and if these trends continue to rise in importance.