I recently claimed in this webinar that the travel industry’s innovative golden years were in the 1990s, and that our industry hasn’t seen much innovation (with a capital I) since.
Why the lack of innovation, you ask? I listed three factors, and am adding a fourth here.
Barrier 1: The legacy “Rows and columns” GDS mentality. The GDSs are arguably the most influential – and constraining – link in the travel value chain. Their products and attitudes about travel technology have driven much, maybe most, of the way suppliers, TMCs and many corporate buyers think about the travel technology landscape, for better or worse.
Unfortunately, those products, and the way GDS folks relate to them, don’t fit the emerging needs of the market, mainly the travel suppliers and TMCs. An easy example: airline merchandise just doesn’t fit in the tables of existing GDS displays.
Barrier 2: TMCs don’t have an innovator’s orientation. Instead, they see themselves as integrators. Yes, integration is a real value, as is their focus on delivering seamless services. But what makes this a bottleneck to travel innovation is the depth to which TMCs see so many problems. Why? Because a deep understanding of pain points is a key factor in innovation. Nobody sees more pain points in travel than a mega-TMC.
If there was one part of the travel industry that I’d expect to deliver significant innovation throughout the years, it is this one. And yet the TMC industry’s innovation record is arguably appalling. It’s not for lack of opportunity, so it must be some combination of insufficient skill or will.
Barrier 3: Overly-cautious corporate buyers. Buyers are closing their doors to innovators because they don’t want to take the risk on a new technology or unproven approach. Sure, these folks need to evaluate risks and rewards, and I get that they may err on the safer side of a decision, but still.
Innovations die without markets. If every buyer waited until someone else took the first leap off the diving board, we’d always be looking at an empty pool.
Barrier 4: Poor innovation practices. It occurred to me after the webinar that this barrier is the fundamental explanation. There’s no lack of desire to innovate, and there sure is no lack of opportunity to solve problems. It has to be that innovators, and their managers, are not going about the job in the right way.
It goes back to skill and will. By skill, I don’t mean the ability of innovative teams to imagine new solutions. I’m talking about the processes they use to find worthy problems and then validate their prospective solutions.
By will, I mean the political will, and to a much lesser extent, the financial will to back the pursuit of innovation within large organizations. That’s you, GDSs and TMCs.
That’s also you, the corporate buyers. You’ve got to make time for more in-depth conversations with your suppliers about what you really need, and what you’ll pay for.
I recently heard a story about a credit card executive who asked a buyer if he’d like room night volumes from the credit card data. “Oh yes, that would be great!”, said the buyer. And how much would you be willing to pay for that enhancement, asked the card guy.
“Oh, nothing – you need to give us that data for free.”
If that story ended there, then shame on both the buyer and supplier. A problem was identified, a solution was floated, and the buyer immediately popped the trial balloon.
And we wonder why there is a lack of innovation in our industry.
This article originally appeared last week in The Beat.
See this post on the future of airline distribution.
See this post on GDS implications from the Google-ITA deal.
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