The French have an expression “plus ça change”. This means roughly – the more things change the more they stay the same.The travel industry goes through cycles of change. This is driven by a lot of factors. But in the end, travel is about the experience or the utility of leisure or business travel respectively. And Travel and Change are joined at the hip!
For 2013 we will have a multi-speed world. A rising tide is not going to raise all boats. I believe it will be a year of transition. My predictions for 2012 were dark. For 2013 I am looking for transitional impacts to be felt.
For Tnooz, one of my key predictions was the impact of the Millennials are having on our society. According to Time Magazine, “about 40% of millennials — the largest generational cohort in US history, bigger even than the baby boomers — are nonwhite.”
I believe that most travel suppliers and intermediaries have failed to acknowledge this generational change of the Boomers leaving and the influx of Millenials, even by those who are of that generation. I look back on every WIT thus far and recall how there were so few younger attendees. Now the audience is packed with them. Some of the older people are still there but many of the attendees were still in school when the first WIT conference hit.
My predictions therefore are focused on this under-current of change.
Fundamentally we are seeing a freeing of the shackles of the older technologies and definitely a freeing of the legacy thinking. The impact of Big Data will be felt across the board. Sadly some will confuse Big Data with expensive hardware and analytics without understanding that Big Data is really about the comprehension, interpretation of behavior and true personalization of product offerings and customer interaction. All data is good data. All interpretation needs to be good. Smart data managers will be looking hard at using this explosion of data in a meaningful way. That is going to be very hard!
The centre of gravity is moving inextricably to Asia. I predict that in 2013 (or perhaps in 2014) that TravelSky will become one of the biggest – if not the biggest GDS. The liberalization and opening up of China will be a measured process. Not dramatic but no less impactful.
The traditional big players particularly in airlines will find themselves challenged. While the mega alliances and Joint Ventures will dominate the news, look for the low cost airlines to evolve and not necessarily buy into the monolithic one size only structures.
Don’t look for airline prices to fall – rather look for them to rise. Unbundling, rebuilding are just additional manifestations of price obfuscation. That is going to get more sophisticated. Keep an eye on IATA’s NDC efforts. The Etihad, Virgin Australia model will continue to evolve causing consternation at both IATA and the Alliances. Hotel brands will finally wake up to home stay accommodation as their biggest threat. Hotel pricing will still struggle. Perhaps not so much in the northern hemisphere but where accommodation is tight – like India and the urban metros of Asia you will see this spread. Look for sharing and other social tools to emerge.
In the intermediary space there will be a rearrangement. For the big OTAs there will be an acknowledgement that the purchase process is no longer driven by the singularity of the moment of booking. For multi-product trips this is going to change. Over time look for the purchase path to be a less rigid and a more natural experience.
For the process of ideation, search and shop, there will also be changes. The huge rush of effort into the front (no-purchase) part of the travel process will see a bloodbath. Anyone who is there today will struggle. There are no winners and no one can dominate. Eventually the shakeout will leave a lot of wounded warriors.
In my opinion there will be a greater engagement with more natural approaches and less with making me as a consumer jump through other’s hoops. The death of Groupon-like processes will be welcomed across the board, however the consumer is now educated to understand deals better. Comprehending the difference between price and value will continue to challenge all of us.
Mobile does not equal small screen smartphones. Rather mobility means that we have a desire (but not ability) for always-on data access no matter where we are. The explosion of additional data-enabled devices will put a lot of strain on the existing infrastructure.
Look for hotels (particularly large properties) to be unhappy and for their customers to be unhappy. Yes Virginia WIFI does matter, don’t even THINK that it doesn’t. Those squillion tablets being purchased largely come without data plans and those that do have crippled ones anyway. Consumers will be downloading and interacting. Cloud based services will cause more problems before their real value starts to become demonstrable. (And will I finally dump my Blackberry I ask myself?)
Enjoy the ride. It’s going to be another great year!
• Recognising the impact of the generational change, WIT and Duxton Consuiting Group teamed up to conduct a study of Singapore’s Millennials to find out what their aspirations were as employees and as travellers. The findings were presented at WIT 2012 Conference in conjunction with a panel discussion. Here are the results of the study.