Last week in Beijing I made the case for de-commoditizing the airlines. Even though it was a friendly audience at the CASMA Fall Global Conference, there was some sharp discussion during Q&A. Fair enough, as I skewered American’s handling of its Direct Connect value prop to the business travel community. Here are the key points:
Does Distribution Really Matter? Can it Differentiate Airline Products?
Absolutely. Think about how the endpoint of the distribution chain looks today. You still see flight times, carrier logos and prices. Pretty commodity-like stuff, that. From green screen GDS terminals to mobile booking displays, all you see is a long list of racked-and-stacked flight options.
It’s the equivalent of shopping in the paper towel aisle at WalMart. Price dominates.
There’s got to be a way to cut through all the clutter when it comes to travel-related offers. One solution may be to create socially aware offers tied to what’s known about the traveler.
Start with a booked (or just planned) date and destination. Combine that with the traveler’s socially-accessible profile. Assume the traveler selects a persona or trip type, such as “Business + client entertainment”, or “Family vacation”, “Romantic getaway”. Presume the traveler has tied some preferences to each persona.
Together, these elements form the Social Reservation. Put that in the cloud, and let suppliers have a look!
No doubt, given the ever-improving analytics of travel marketers, we’d see more on-target offers presented. Think Groupon and Google Offers brought to your social reservation’s doorstep.
Dot 1: Google is in a quandary. It needs to enter big markets with high growth opportunities. Dot 2: Google likes the travel industry. I’ve heard estimates that about 10% of its revenues are attributable to travel. Dot 3: There’s a big travel-related search market that Google hasn’t cracked. It sits behind the walls of the GDSs. Dot 4: ITA Software has deep expertise in airline pricing, shopping and availability searches. ITA powers Continue reading →