Lately I learned about a major US company being “forced” to change their T&E product and online booking system due to a supplier closing that part of service. It is not so much the action as such, but more the consequences of technology evolution. A company had over time build a structure working well in their environment (supplier to US government). They had a well-functioning booking structure, T&E system and data warehouse. It had taken time to reach a 90% online booking share and building control systems living up to government rules and regulations.
The digitalization and competition forced their T&E supplier to close down their system and thus forced the company to review, select and implement a whole new structure without the industry spec they had developed. Now after 2-3 years they have reached 85% online share and probably 80% of the unique spec they had available in their previous life. Add to this the direct and indirect cost of making this happen.
Being an avid follower of the technology development in travel this story made me realize why real changes in this industry takes forever and in many cases simply do not happen.
I believe there is a fundamental problem in the travel industry.
And the argument is: the systems work!
The travel industry is absolutely not the only one, where this happens. Cars are still mostly produced with combusting motors, ships still use diesel engines and food production is still mostly done by human workers. What set travel apart is the fact that it was one of the first industries utilizing software and technology.
Over the last couple of years, we have read and talked about a long range of tools and ideas entering the market. This includes names and products like Blockchain, BOT, AI, NDC and many others. Everybody talks about them and the impact they will have in the industry, but fact is that very few actions or launches actually happens. The ones getting off the ground has yet to become the Airbnb, Amazon and Google. The few real interesting has been acquired by the big players.
NDC has been around 5 years and no airline has fully embraced it, yet. There are scores of Online engines, but not one is independent from the Global Distribution System (GDS). The hotel world still relies on the GDS, Booking.com, Expedia, TripAdvisor, HRS and others while paying through the nose to receive 1 booking.
The airlines buy formidable new aircrafts, but the service inside the plane still rely on the same wagon the crew push through the cabin, and no one is still pricing the middle seat different from aisle or window. I know some are trying to change this, but we talk exceptional few.
Why is it we never develop products based on the real need of the various industries and consumer groups? Most of what is made and done is a puzzle based on correcting or adding to existing solutions and avoid the hassle of new entrees.
Very few suppliers have created solutions making individual requirements possible. Samtrafiken from Sweden together with HaCon/HAFAS GMBH in Germany is one of them. They developed a real CONNECTION BUILDER, where they simply collected, specified and build a database and from there making it possible to design, book and sell any service a customer would want. Any company with access to this database could design their own version and variation matching their customer segments and their requirements. An example is the app for the Swedish market: resrobot
I know of one GDS trying to replicate this, but did not finish the work.
Looking at the industry today, we see very few dominant players sharing the market. This is whether we look at aviation, intermediaries, accommodation or sectors. This may be right, but I wonder why a company like the above had to go through the pain and cost simply because the industry takes its clue from what is available instead to what the customer need.
What is happening now is Governments taking actions like introducing VAT, TAX on pollution, GDPR and consumer protection laws. Very few players in the industry are ready for this.
If all the players in the industry changed the focus from what is available to what the customer need, the travel industry would again be the model for other service industries, and not leave the market to Google, Amazon and Facebook.