PhoCusWright

PhoCusWright has published the Top 10 Travel Technology Trends for 2009. Every year, PhoCusWright takes a fresh look at the technologies and innovations that have the potential to drive change in the travel, tourism and hospitality in this annual publication.Each of the 10 trends from this report, listed below, has been weighed by PhoCusWright experts for its business value and potential to change the face of travel.

Bob Offutt, senior technology analyst and editorial director, Technology Edition, explained that “Innovation is at the very heart of the travel industry-from the beginnings of air travel and global hotel brands to GDSs and OTAs. These ten technology trends will reshape the way consumers search shop and buy travel.”

1. Despite Market Woes, Pockets of Investment Still Exist
2. The Entire Trip Experience Will Be “Informationized”
3. Software as a Service (SaaS), Cloud Computing and Open Source Spawn a New Flock of Innovators
4. Suppliers (Finally!) Provide Personalized Shopping/Booking Tools
5. Technologies Will Continue to Converge
6. A Flood of New Mobile Travel and Location-Based Applications Come to Market
7. Advertising Technology Transforms Travel Distribution
8. Still Searching…for Better Search
9. Democratization of Supply Levels the Playing Field
10. Business Intelligence and Analytics Move to the Forefront

The complete article, with technology overviews, in-depth strategic implications and examples of each trend, is available here (purchase required), but I’ll give you a sneak peek at the kind of stuff you’ll find inside.

The first trend, about investment, points out that 23% of private equity companies, 5% of venture capitalists and 25% of other investors are actually planning to increase investment in the travel sector in 2009. According to their survey results, investors still believe there is plenty of room for innovation, considering the large gap between Travel 1.0 and Travel 2.0 functionality.

Examples cited for this trend include the funds raised by AdventureLink, TVtrip, Uptake and Tripwolf (when I started writing this post, I had no idea Uptake was mentioned in the report). Summary of it is that if you have the confidence in your innovation/product, now is the time to hit the road, so to speak.

The second trend, about the trip experience being informationized, details the improvements and opportunities in local information access tools and content, which have enabled service providers to hang on to travelers even mid-trip, for things like local transport, restaurant reservations, trip changes or cancellations, etc. Leveraging existing content with GPS, tools from Google and the abilities of devices like Apple’s iPhone has resulted in the opening up of a huge local content market, and provides more opportunities for offering services from the time you leave home on a trip until you return.

And this area of development is also benefiting from additional trends that are improving the ability to rapidly deploy new capabilities, like Software as a Service (SaaS), Cloud Computing and acceptance of Open Source in production applications.

We’re on to trend three here, and if I go on, PhoCusWright won’t take kindly to my considering all their hard work as open source, so… if you want to read the rest, you can get the full report here – http://www.phocuswright.com/report/09techtrend

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

Downward Spiraling DOW

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

Travel Channel

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

IM@ wins Innovation Award for 2008

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…)

Three trends:

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.