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Amadeus: The 'Amateur-Expert Traveller'

Amadeus: The 'Amateur-Expert Traveller'

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The Amateur-Expert Traveller

Three important trends in travel which are being accelerated by the recession.
For more information:
mediarelations@amadeus.com
www.amadeus.com/amateur-expert
Previous publications
Future Traveller Tribes
2020
Report for the Air Travel Industry
Developed by Henley Centre HeadlightVision
in partnership with Amadeus
Future Traveller Tribes
Report for the Travel Industry
Developed by Henley Centre HeadLightVision in partnership with Amadeus
www.amadeus.com/traveller tribes
The Austere Traveller
The effect of corporate cutbacks on hotels
A report from the Economist Intelligence Unit
http://www.amadeus.com/hotels/austere_traveller.html
The austere traveller:
the effect of corporate cutbacks on hotels
A report fromthe Economist Intelligence Unit
Sponsored by
Executive Summary
The Amateur-Expert Traveller
Three important trends in travel which
are being accelerated by the recession
Content
Foreword, by Ian Wheeler 1
The Amateur-Expert Traveller 2
> New destinations 4
> The rise of the BRIC economies 5
Building the brand in the online world 6
The Responsive Journey 8
> Technology and the total trip experience 9
> Waiting for mobile 12
> Looking further into the future 14
> …but it’s so much nicer to [stay] home? 15
The consumer booking experience 16
All Niches Great and Small 18
Appendix 22
The Amateur-Expert Traveller l
Foreword, by Ian Wheeler
In the summer of 2007, as the frst cracks in Wall Street’s mighty
fnancial edifce began to appear, a natural disaster was already well
under way on the other side of the United States. Millions of acres
of the American West were ablaze in what would turn out to be the
second most destructive summer of forest fres since records began
in 1960
1
. On the other side of the Atlantic, the European Forest Fire
Information System called July 2007 the worst on record.
Forest fres, like recessions, are both painful and tragic. In this report,
we have tried to look beyond the immediate devastation of the
credit crisis and ensuing global recession, to the future. We have
tried to look at the trends and innovations which might fourish in
the post-recessionary environment.
Recessions – and even depressions – do not always smother
innovation as much as we are sometimes told. Hewlett-Packard,
Geophysical Service (now Texas Instruments), Polaroid and Revlon all
started during the Great Depression; Microsoft and The Gap Limited
were founded during more recent recessions. Indeed, in some ways,
recessions make starting new businesses easier – there is a larger
number of talented people looking for work, suppliers are more
open to negotiation and customers may be more open to trying a
new product or service that promises cost savings.
Niall Ferguson, a fnancial historian at Harvard University, draws a
similar parallel between biological and business evolution: “…often,
the real drivers [of fnancial history] are the process of speciation -
when new types of company are created - and the equally recurrent
process of “creative destruction” - whereby weaker companies die
out or, more commonly, get ‘eaten’.”
2

In this paper, we describe three broad trends infuencing the travel
industry today – increasingly expert customers, the ever more
technological trip experience and the growth of “niche” travel
– that we believe are being accelerated by the current downturn.
To reach these fndings, we interviewed thirty leading executives
and thought-leaders in the travel industry and polled 2,719 travel
professionals worldwide about a series of key trends in the travel
industry. We then conducted extensive desk research to understand
how these trends might be affected by the recession.
The amateur-expert traveller: the Internet has put much more
information at the fngertips of the average traveller – whether from
professionally produced content or user reviews and other social
media. With business and personal budgets squeezed, the incentive
to put all that knowledge to good use has never been greater.
The responsive journey: technology has improved the booking
experience immeasurably but the trip itself remains ripe for
technological innovation. Such innovation may be provided by
talented executives using the recession as an opportunity for a
change in direction.
All niches great and small: travel companies will increasingly look
at opportunities in travel niches or selling niche travel services or
additional offer opportunities for additional revenue as well as
higher margins for in-depth expert advice.
Just as forest fres form an important part of the regeneration
process, we believe that the current recession will clear the way for a
fresh burst of innovation in the travel industry.
Ian Wheeler
Group Vice President, Marketing & Distribution, Amadeus
www.amadeus.com
2 The Amateur-Expert Traveller
The Amateur-Expert Traveller The Amateur-Expert Traveller
The Amateur-Expert
Traveller
The Amateur-Expert Traveller
The Amateur-Expert Traveller 3
The Amateur-Expert Traveller
This is the result of two factors: as people live longer, more
suffer from long-term illness meaning that people live with their
condition for years whereas doctors have merely studied it. The
medical industry has dubbed these the “Expert Patient”. Second,
the Internet has given patients more access to information and
helped them to diagnose their condition. This has given rise to
“participatory medicine”, in which the rational relationship between
an all-knowing doctor and a dutifully passive patient is replaced
by a team which includes a knowledgeable and actively engaged
patient, specialized social networks, and clinical researchers in a
“collaborative relationship of mutual respect”
4
.
Something similar is happening in the travel industry. The current
recession notwithstanding, travel has increased enormously over
the past 10 to 15 years. Similar to someone with a long-term illness
– though, one hopes, not suffering quite as much – the frequent
traveller will often know more about their destination and how best
to get there than a travel agent. This applies as much to business as
it does to leisure travel.
Just as the Internet has empowered patients with knowledge, social
networks, user-reviews and other Internet resources have, and will
continue to, devolve to travellers the power of knowledge. Over
the next ten years, half of the experts in our panel expect to see a
“major change” in travellers’ level of knowledge about their travel
options (see chart).
The corollary to this is that half of our experts expect a similarly
signifcant change in the level of service which travellers will
demand over the next ten years. This is partly a function of a
customer service “arms race” in which travel companies compete to
give better customer service, which in turn sets a higher expectation
among customers. “The challenge there is, the more you give the
customers the more they demand,” as Paul Ellerby of easyCruise
puts it. A smaller – but still signifcant – proportion of our experts
expect travellers to become less likely to seek professional advice in
the future.
Looking to the future, to what extent do you think consumer behaviour will change over the next 10 years in each
of the following ways?
(Expert interviews: Base: all responding: 28)
Towards the late 1990’s doctors began to notice a curious trend: increasingly, patients
knew almost as much about their illnesses as their doctors did
3
, who, after all, have the
beneft of years of university study.
More knowledgeable about options
More demanding in terms of service
Less likely to seek professional offline advice
Major change Reasonable change Slight change No change Don`t know
14% 50% 25% 11%
7% 43% 50%
14% 36% 50%
4 The Amateur-Expert Traveller
The Amateur-Expert Traveller The Amateur-Expert Traveller
Organisation, the current top three travel destinations globally
are France, Spain and the United States. Although our panel do
not expect a major shift, they do anticipate that China is likely to
become a major travel destination. Asked what they think the top
three destinations will be in 2020, most popular choices were the
USA (76%), France (66%) and China (52%). Spain was relegated to
fourth position (28%).
Travellers are expected to become more adventurous in the future
too. This makes sense: if fore-warned is fore-armed, then more
knowledgeable travellers will feel more confdent about travelling to
places about which, previously, there was little information.
According to the UN World Tourism Organisation
5
growing demand
for new and unusual destinations continues despite the broader
recessionary trend of falling global visitor numbers. Globally,
international tourism declined by 8% between the frst four months
of 2008 and the frst four months of 2009; but tourism to Africa
increased by 3% over the same period, driven by North Africa (+6%)
and the return of tourism to Kenya following unrest in 2008.
Indeed, according to Gerard Bellino, a vice president at Carlson
Wagonlit’s leisure division, quoted in Business Week, the recession
may even be accelerating the growth in travel to non-traditional
destinations: “People are taking advantage of a down market for
things they may have had to save more and longer for in the past.”
6

Perhaps unsurprisingly, China also looks set to beneft from
changing patterns of tourism. According to the World Tourism
New destinationsDescripIion
Major change Reasonable change Slight change No change Don`t know
More adventurous
More cost-conscious
More short-term booking ahead 11% 43% 11% 29%
14% 29% 25%
4% 21% 25%
More travel abroad 7% 43% 29% 7% 14%
29% 4%
29% 21%
7%
Looking to the future, to what extent do you think consumer behaviour will
change over the next 10 years in each of the following ways?
(Expert interviews: Base: all responding: 28)
The Amateur-Expert Traveller
The Amateur-Expert Traveller 5
The Amateur-Expert Traveller
The rise of the BRIC economies
Not only will the traveller of the future be more knowledgeable
and more willing to try new destinations, they will increasingly
arrive from different countries too, as the growing middle classes of
developing economies such as Brazil, Russia, India and China (BRIC),
lead to an increase in tourism from those countries.
Developing countries are playing a growing role as a source of
tourists and business travellers. Tourism from China grew by an
average of 27% a year between 2002 and 2008
7
. Each year, the
world receives 45 million tourists from China – that is more than the
entire population of Spain, the world’s second most popular tourist
destination
8
. Between 2000 and 2007, Russian outbound tourist
numbers increased by 9.4% a year and the money spent in foreign
countries by Russian tourists increased by 14% each year over the
same period. In 2007, Russia was the 9th largest outbound tourism
market
9
.
Eye-popping statistics about growth and opportunity in emerging
markets – especially Brazil, China, India and Russia – have been a
staple of management consultants and journalists for much of the
21st century. So far, though, this has been a pre-recessionary story.
Will the growth in developing economies continue through – and
beyond – the recession?
The story is mixed, but overall the recession may well accelerate
the global economy’s shift Eastwards. While the current recession
is undoubtedly global, its effect is not equal. Generally-speaking,
Western economies have been pushed into reverse whereas the
BRIC countries have merely had hitherto spectacular growth rates
clipped. The International Monetary Fund
10
expects the economies
of the United States and Europe to contract by 1.6% and 2.0%
respectively in 2009. The economies of China and India, by contrast,
are expected to grow by “only” 6.7% and 5.1% in 2009.
As Western households rein in spending and rediscover the
virtue of living within their means, Chinese consumers are taking
full advantage of their higher savings rates and an enormous
government stimulus package. Consequently, excluding Sports
Utility Vehicles, almost as many cars have been sold in China as in
America in 2009
11
. In 2006 Americans bought twice as many. In the
airline sector, Air China, China Eastern and China Southern posted
16%, 25% and 6% growth in revenue per passenger kilometre on
domestic Chinese routes for the frst four months of 2009
12
.
The growing importance of non-Western cultures in the make-up
of the world’s travellers has very real consequences for the travel
industry. An Amadeus-sponsored Economist Intelligence Unit survey
published in early 2009 found Asian business travellers to be more
infuenced by the respectability of a hotel’s brand than Europeans or
North Americans.
With more travellers taking more, longer and more adventurous
trips, increasing numbers of travellers from the emerging economies
and the all-pervasive impact of the Internet on the travel experience,
it will become an increasingly global marketplace, breaking down
geographical boundaries. In this context, customers will need to
be segmented across new lines. An 18-year-old male from China
may have more in common with an 18-year-old male from the US
than with a 40-year-old male from his own country. Over 80% of
our expert panel accept this proposition, most of them strongly
agreeing.
> The Amateur-Expert Traveller is much more knowledgable about
his or her destination and what to expect when they get there.
Their expectations of service have diverged: they either expect a
totally touchless online experience or they expect a very high level of
personalised service.
> The Amateur-Expert Traveller is more adventurous about trying new
destinations. Africa and Asia are more accessible and popular than ever.
> The North Americans and Northern Europeans who have traditionally
dominated the travel industry will increasingly make way for Brazilian,
Russian, Indian and Chinese tourists and business travellers.
Key fndings
6 The Amateur-Expert Traveller
As more business goes online and online brands take a larger
and larger share of the travel market, the relationship of travel
companies with their customers becomes more fragile.
Most of our expert panel acknowledge that it is harder to
build brand loyalty online than it was offine. Marilu Ngo, of
Griffn Sierra Travel in the Philippines sums it up thus, “In the
proliferation of user-generated content, customer loyalty is
inadvertently lost in the online environment because now, it is
mostly price-driven.”
Compared to the offine world, would you say that
building brand loyalty in today’s online world is
easier or harder?
Building the brand in the online world
They cite the increased fragmentation of the market, the
wide number of options readily accessible to the customer,
the loss of personal relationships, the volume of user-
generated comment and greater price competitiveness.
According to Henry Harteveldt, at Forrester Research,
“It is so much easier for people to discover options that
they may not be aware of. … It is much easier for them to
share their opinions and to read others’ opinions and be
swayed by them, and then to use the Internet to fnd new
options.”
According to our panel, the two most important factors
in building an effective brand, whether online or offine,
are consistency between brand promise and delivery and
the quality of the user experience. Word of mouth and
effective promotion are both considered to be marginally
more important online, whereas building an emotional
connection with the brand is thought to be more
important offine.
How important would you say each of the
following is in building an effective brand in
today’s travel industry for both online and
offine?
Much easier
A bit easier
The same
A bit harder
Much harder
10%
3%
7%
40%
40%
(Expert interviews: Base: all responding: 30)
Online Offline
Quality of user experience
Peer-to-peer word of mouth
Emotional connection with the brand
Consistency between brand
promise and product delivery
Effective brand and product promotion
1 2 3 4 5
(Expert interviews: Base: all responding: 30)
Average score based on
scale 5 = vital, 4 = very important,
3 = fairly important, 2 = not very
important, 1 = not important at all
The Amateur-Expert Traveller 7
“I think that the travel providers are going to get into the
review business as well. I think they’re going to let their
customers read a review and share the demographic data on
the reviews with their other customers.”
Brian Harniman, Kayak, USA
“I think that hoteliers will have even more pressure to
upgrade their experiences and to ensure that a customer still
comes to them, when a customer has that much more of an
ability to understand the experience in advance.”
Alan Josephs, formerly ebookers, UK
We explored in our interviews the question of whether user-reviews actually reduce the control a company has over its
own brand. According to Dhruv Shringi at Yatra.com in India, “The other parts of the brand in terms of the service and product
are still very much within the company’s control. The user generated content just refects these factors.” For Mr Shringi, user
reviews are a symptom, not a cause, “…so if the company can control the others, the user generated content is just an outcome
and won’t really have too much of an impact.”
Most of our expert panel believe that user-generated reviews are a positive force, driving up quality and expectations of brands
(73%), rather than a threat to brand reputation (13%). Those taking part in the online survey generally refect this view. Most
positive are the car rental companies (42% see it as ‘very positive’ vs. 27% overall) and online travel agencies (39%). Fewer than
one in fve regard it as a threat, although the offine travel agencies are more likely to do so (25%).
How do you see user-generated content with respect
to your brand?
(Online survey: Base: all responding: 2,646)
Very positive 27%
Moderately positive 55%
Moderate threat 16%
Severe threat 3%
3%
16%
55%
27%
8 The Amateur-Expert Traveller
The Responsive Journey The Responsive Journey
The Responsive
Journey
The Responsive Journey
The Amateur-Expert Traveller 9
The Responsive Journey
The 1987 flm, Planes, Trains and Automobiles, tells the story of Neal Page, an uptight advertising executive, trying to get home to see his
family in Chicago for Thanksgiving after a business trip in New York. Among the many absurd misfortunes which turn a 1 hour 45 minute
fight into a three day epic, he suffers a downgrade from business to economy, a diverted – then cancelled – fight, an awful motel room, an
abortive train journey and an irritating travel companion. Despite the considerable impact of technology on the travel experience, the story
is no less plausible today.
To what extent do you agree or disagree with the elements included in the statement?
(Expert interviews: Base: all responding: 29)
Technology’s impact has largely been concentrated around searching for, and booking, the
journey, not the journey itself. That, according to our panel, is about to change.
Technology offers signifcant immediate opportunities to improve the customer experience before,
during and after a trip. The travel professionals on our expert panel acknowledge that this will generate
additional revenue and 79% agree that it will solve the problem of online customer loyalty.
Technology and the total trip experience
To what extent would you agree or disagree with the following statements from your own perspective?
(Expert interviews: Base: all responding: 29)
Totally agree Partially agree Neither Partially disagree Totally disagree
Technology hasn’t changed what the
consumer experiences on a journey
That`s about to change 34% 41% 3%
14% 45% 17%
14%
24%
7%
Completely agree Agree to some extent Neither Disagree to some extent Completely disagree
Services beyond the booking stage will
generate further revenue
Services beyond the booking stage will
solve the problem of online customer loyalty
3% 28% 69%
3% 45% 34% 7% 10%
l0 The Amateur-Expert Traveller
The Responsive Journey The Responsive Journey
Sensory airport / airline systems
7% Digital identities
Digital concierge
Social computing
Tailored loyalty programmes
Geo-localisation technologies
Virtual reality
7%
14%
17%
17%
21%
28%
41%
55%
Intuitive interfaces
Personalised destination information
Major opportunity Reasonable opportunity Slight opportunity None / D.K.
Acitivities upon return
3% 38% 41% Comparing price information
Choosing destination
Researching / choosing hotel
Booking a trip
Finding price / availability information
Researching the trip
31% 41% 21% 7%
17%
7% 38% 45% 10%
3% 52% 45%
7% 38% 48% 7%
14% 34% 52%
7% 17% 66% 10%
Technology and the total trip experience DescripIion
Looking ahead, to what extent would you say each of the following
elements offers an opportunity for technology to improve the customer
experience before, during and after a trip in the immediate future?
(Expert interviews: Base: all responding: 29)
Which of the following will have the biggest impact on humanising the
travel experience? (Expert interviews: Base: all responding: 29)
According to our panel, the opportunities
are most evident in researching the trip,
fnding price and availability information
and booking the trip.

If the industry is to make the most of
these opportunities, then it will have to
embrace new technology solutions that will
help to make the travel experience more
comfortable, secure and personalised for the
traveller – the ‘humanisation of technology’.

With the pace of technological change
accelerating, our expert panel feel that
the impact will be greatest for those tools
which particularly address the issues around
poor user experience, making the online
experience more personalised and easier to
use.
Foremost among these are likely to be more
sophisticated customer information systems
which select destination information based
on customer preferences, and intuitive
interfaces, which will provide new ways to
interact with computing devices, such as
next-generation touch-screens and voice
interaction. Nearly one-third also anticipate
the role that virtual reality may play in
humanising the travel experience.
But the Internet is a continually evolving
phenomenon, and, even in mature markets,
the likes of Web 2.0, social networking and
mobile technology continue to be drivers of
growth. Our expert panel predict that, by
2020, technology will have brought about
signifcant improvements in capabilities for
travel providers, sellers and consumers in all
areas of the travel industry – in particular,
the ability of travel sellers to make more
travel options available to the public and the
ability for consumers to share information
about travel providers with other consumers
– both themes picked up in other places
throughout this research.
The Responsive Journey
The Amateur-Expert Traveller ll
The Responsive Journey
Nearly all of our expert panel agree that Web 2.0 improves
information transparency ‘a lot’ (69%) or ‘a little’ (28%), although
one disagrees, believing that it actually makes information less
transparent. Around 80% of them have already added or are
considering adding social computing or user review functionality to
their own websites. Airlines are perhaps a little behind others, but
they too are generally considering taking this step.
Without exception, our experts agree that Web 2.0 will improve
the customer’s travel experience between now and 2020, whether
‘beyond recognition’ (17%), ‘a lot’ (59%) or ‘a little’ (24%). In
particular, they see Web 2.0 as an answer to user experience issues
which may be hindering the growth of online travel services.
Primarily, it will give the user more and better information that will
be better organised, easier and faster to access and more interactive,
leading to greater satisfaction with the whole online experience.
“There will be a dramatic change in the way the content is searched
and organised. It is still extremely hard for customers to fnd
content, defne content easily and to actually use it. Going forward,
all these factors will change tremendously and … it will be very
easily accessible. … The technology will add a lot of value in terms of
how data gets collated and presented to the end consumer.” (Dhruv
Shringi, Yatra.com, India)
Some also point to the increased opportunities to personalise
and select the information that is most relevant to the user’s own
circumstances and to share experiences. According to Timir Bhose
and Pia Viljaniemi of Finnair, reading user reviews, “…supports better
pre-planning so that the customer will be able to plan better ahead
and get more knowledge about other customers’ opinions.”
Thinking ahead to 2020, what would you say the further impact of technology will be on the following …
(Expert interviews: Base: all responding: 29)
Improve beyond all recognition Improve a lot Improve a little Hardly / not at all
79% 7% 14%
Ability for independent travel providers
and sellers to increase market share
7% 79% 7%
Ability of travel providers to manage the
logistics of travel better
Ability for consumers to find information
about the quality of travel providers’ products
Ability for travel providers and sellers to make pricing
and availability information available to the public
Ability for consumers to share information
about travel providers with other consumers
Ability of travel sellers to make more
travel options available to the public
38% 41% 14% 7%
7%
10% 76% 10%
66% 28% 3%
10% 59% 31%
3%
3%
As with many of the changes associated with the Internet, it is not
so much the technology itself but the way that technology enables
behaviour which is important. Kerry Cannon Jr., at iM@, captures
the essence of this when he says: “There’s always been user-
generated content; it was called word of mouth. Technology has
just empowered that word of mouth… technology has absolutely
changed the game in terms of how many other mouths you can
hear from.” Or, in the words of media consultant and author, Clay
Shirky, “[social media] tools don’t get socially interesting until they
get technologically boring.”
13
Looking forward to how user-generated content itself will evolve,
Nikos Goulis, of E Travel SA, in Greece, sees the proliferation of UGC
continuing unabated, “User generated content will have more data,
both in text and picture, video and music. I believe we will have
content for destinations that are not very popular right now and
there isn’t much … and, for the popular destinations, we will have
a plurality of the content which might be missing today.” (Nikos
Goulis, E Travel SA, Greece)
Joe Bous, at US travel agency, Wholesale Travel Center, thinks the
challenge is not so much to get more content, but to fnd meaning
in the content you have, “there might be 4000 reviews – what are
you going to do with 4000 reviews? And it all, of course, comes
down to 3.5 stars. It’s sort of worthless.” Part of the answer is
knowing who wrote a given review, as Brian Harniman, Kayak,
points out, “I can look for people that seem to be like me and really
trust their judgement more than the rest of the great unwashed
reviews. If someone is travelling for a different reason from me, a
hotel may be good for them but by the same token horrible for me.”
l2 The Amateur-Expert Traveller
The Responsive Journey The Responsive Journey
Totally agree Partially agree Neither Partially disagree Totally disagree
User-generated content has yet to improve
the business travel experience
User-generated content would be beneficial to the business
traveller in much the same way that it is to the leisure customer
21% 41% 3%
7% 34% 31%
31%
7%
3%
21%
Technology and the total trip experience DescripIion
Nearly a third of respondents to our online survey felt that mobile devices will have a greater impact on the way the next generation
researches and books travel than social networking, user reviews, video sharing or visualisation tools. According to the International
Telecommunications Union, the number of mobile phone subscriptions exceeded 50% of the world’s population in 2008. Once again, the
BRIC countries are responsible for a large share of this: over 1/3 of the world’s mobile phone subscriptions are accounted for by these four
countries .
14
Which of the following do you think will have the
greatest impact on the way the next generation
researches and books travel?
(online survey: Base: 2719)
For Mr Bous, there is an opportunity for smart technology to
pluck meaning from the mass of content already available, “the
next generation of technology will look at something that can do
semantic analysis and come up with some sort of metric or analytic
that can make sense of all that drivel that people write.”
A fnal word on business travel. Until now, leisure travel has
beneftted most from user-generated content, but two thirds of our
panel see potential – as yet unfulflled – for user-generated content
to add value to the business travel experience.
With corporations under more pressure than ever to keep costs to a
minimum, a mechanism which allows employees to share cost-
saving tips and for travel managers to aggregate feedback from
travellers which can be used in supplier negotiations, becomes all
the more attractive.
Waiting for mobileripIion
To what extent do you agree with the following statements? (Expert interviews: Base: all responding: 29)
10%
N/A
Visualisation tools (ie Second life)
Users reviews
Mobile devices
Social networking
Video-sharing (eg YouTube)
2%
8%
22%
32%
26%
The Responsive Journey
The Amateur-Expert Traveller l3
The Responsive Journey
In a March 2009 report, PhoCusWright calls mobile, “The Next Platform for Travel”
15
and Samsung, the electronics group, expects the
market for smart phones – which combine voice calling with email and Internet access – to grow from 170 million in 2009 to 500 million in
2012
16
.
Long anticipated, mobile internet really does seem about to take off. As PhoCusWright has pointed out, “the more compelling opportunity
[than simply shifting reservations from fxed Internet to mobile] will be to create mobile-specifc applications that go beyond shifting share
to a new channel, and thus generate ancillary revenue that was not previously available.”
17
This is certainly not lost on application developers. Today, Apple’s website lists over 3,700 travel-specifc applications for its iPhone, for
Waiting for mobileripIion
everything from checking fight delays to fnding the cheapest
petrol station to a mobile travel map of China specifcally for fans
of kung fu.
Henry Harteveldt of Forrester Research points out that the nexus
between mobile Internet and user-generated content will be
increasingly important. “Travel is one of the businesses that lends
itself to user generated content and the sharing of ideas, opinions
and suggestions. … A big factor behind this increase will be the
growth and evolution of mobile internet devices that are geared
more for data than voice. These will allow person-to-person or
group messaging that might be written word or voice, SMS text or
other data, and along with this will be the emergence of new types
of internet sites.”
Indeed, some of the most interesting iPhone applications combine
mobile with user-generated content. Roadtrippr is like a wiki of
interesting destinations for people to visit while on a road trip.
Users contribute information about interesting attractions in their
home town and, in turn, use it as a resource when they are on the
road. When used from an iPhone, the application is aware of the
user’s location and tailors (user-generated) content accordingly.
l4 The Amateur-Expert Traveller
The Responsive Journey The Responsive Journey
Looking further into the future
The futurologist Ray Kurzweil (The Age of Spiritual Machines:
Timeline) predicts that, in ten years’ time, computers will be largely
invisible and embedded in walls, furniture, clothing and even bodies.
Mr Kurzweil accurately predicted the emergence of the Internet and
the fall of the Soviet Union, so he is worth listening to.
What is more, his vision of embedded computing is already
becoming a reality. Cars are a case in point: the 1978 Cadillac Seville
was the frst car to include a – single – microprocessor, to power its
trip computer
18
. Thirty years later, even the world’s cheapest new
car – the Tata Nano – carries twelve microprocessors. Car rental
companies already offer optional GPS devices which not only show
you the way to your hotel but can also suggest nearby tourist
attractions.
As with personal computers in the nineties, treating cars as nodes
in a network is revealing valuable new applications
19
. Inrix is
a start-up which aggregates information on traffc fows from
GPS systems installed in vehicles, fxed traffc sensors and other
sources. This is then delivered to in-car GPS systems used either
by private individuals or delivery feets
20
. Such applications are
even changing the way we think about cars: Zipcar is a car-sharing
service billed as an alternative to car ownership or rental. Members
of the service are given an electronic card which they can use to
access any one of 6,000 cars in North America and London
21
. The
cars themselves report their positions back to head offce so agents
can tell customers where their nearest car is. Customers rent the
cars by the hour or for days at a time, picking them up from where
the previous customer left them. Such a model potentially releases
car rental companies from the necessity of renting out large car
parks; the problem is, in effect, crowd-sourced. Similarly, a car rental
company could aggregate historical location data of all the cars
in its rental network, combine this with the real-time locations of
the cars in its network and put such data to commercial use. They
could recommend services not just on the basis of their geographic
proximity but also on the basis of how popular such services have
been with other drivers in the network: “drivers who stayed at this
motel ate at Chez Gerard’s Bar and Grill”.
The Responsive Journey
The Amateur-Expert Traveller l5
The Responsive Journey
…but it’s so much nicer to [stay] home?
The ultimate travel technology would enable all the benefts of
travel without leaving the comfort of your home or offce. Mr
Kurzweil predicts that within a few short years, three-dimensional
virtual reality displays embedded in glasses and contact lenses
will be used routinely as primary communication interfaces,
and that high resolution virtual reality and all-encompassing
tactile environments will enable people to do virtually anything
with anybody, regardless of physical proximity. And the rise in
visualisation tools and virtual reality may change the whole concept
of travel. Travellers can experience the travel sensation while
making their choices, whilst “virtual” travel (video conferencing,
hologram meeting, etc.) may completely change travel patterns.
The technology of the moment, in this respect, is TelePresence.
Launched by Cisco three years ago, TelePresence is basically a high-
quality video conference system. It is still used mostly by larger
companies because the technology is still expensive. Of course,
this is no reason to write it off; as adoption increases the cost will
fall. The question is, will it replace business travel? Starwood and
Marriott think not: both have announced TelePresence services
at their hotels . The target market is smaller companies or local
branches which can’t afford their own dedicated TelePresence
set-ups but would still like the virtual face-to-face experience.
At 500USD an hour the service still isn’t cheap, but it is a lot cheaper
than fying from New York to London, for example.
It remains unlikely that TelePresence will completely replace the
business trip; much less the holiday abroad. Since the invention
of the telegraph, advancing communications technologies have
tended to go hand-in-hand with a global growth in travel, driven
by among other things advancing transport technology, the
internationalisation followed by the globalisation of business and,
simply, the desire to get away from it all. After all, it’s still nice to go
travelling.
> We are about to see a signifcant amount of technological innovation
to streamline the experience of travellers during their trip.
> Mobile internet will combine with social networking to offer new
opportunities for travel companies to offer an improved trip experience
for business and leisure travellers.
> TelePresence technologies will complement, but not replace, business
travel.
Key fndings
l6 The Amateur-Expert Traveller
In this sub-section, we look at how travel companies can
achieve excellent customer experience in the online world. This
must increasingly include:
> A smooth online experience, speed and ease of access
through multiple channels, and freedom from technical
hitches;
In the words of Jasmeet Singh of MakeMyTrip, India: “The
moment of truth for every organisation is the time when a
customer interacts with the business, irrespective of the channel.
In the case of online businesses, it is imperative to provide a top
class user experience. This experience is not only important at
the latter part of the funnel (at payment) but it must begin with
the word Go.”

> Comprehensive information delivery, making it easy to fnd
the right product at the right price, transparency, and the
ability to access all of the information required in one place.
Alan Josephs, formerly of ebookers, says, “It should be 100%
focused on user experience. … Speed and the ability to easily
fnd the right product.”
The consumer booking experience
> Customisation and personalisation, using customer
intelligence to address personal needs, offer relevant
information and make intelligent suggestions.
This is neatly summed up by Andy Bateman of Interbrand,
USA: “Provide a great service that refects the needs of
customers rather than push content that gets in the way of
what customers are trying to do.”
One of the clearest messages we have heard throughout this research is that providers must work hard to improve
the user experience. Indeed, our panel of experts felt that the user experience is the most important element in
creating brand loyalty online.
Incorporate user-generated content
30%
Support multiple platforms, e.g. mobile
Segment products to target niche interests
Offer better value for money
Personalised web content
Improved user experience
30%
40%
40%
43%
73%
Which of the following will have the most impact on brand loyalty in the online world?
(Expert interviews: Base: all responding: 30)
The Amateur-Expert Traveller l7
Below we outline some more specifc actions companies can take
to improve customer loyalty online.

> Especially in Asia-Pacifc, build consumer confdence, trust and
comfort with security around credit card payments and personal
details: “Make the customer comfortable about giving credit card
details over the Internet. It will not happen all of a sudden, it will
be gradual.” (Jasmeet Singh, MakeMyTrip, India)
> Creating urgency and offering incentives, such as fnancial
incentives, discounts and added value, to do the deal: “If the
customer has had a very good user experience frst time, there is a
lot of possibility for positive referral and for the customer coming
back. I think user experience is the most important thing.” (Helen
Demetriou, Wotif Group, Australia)
“Offer an incentive to book immediately – the old tried and tested
method.” (Abdulla Abikhamseen, Kanoo Travel, Saudi Arabia)
> Reassurance on pricing – not just transparency but, where
possible, lowest price guarantees and promises: “Customers, even
if they are getting the lowest price, still tend to ask from different
sources, ‘are there any lower prices available?’. Have a ‘Lowest
Fare Guarantee’ and explain your products well.”
(Timir Bhose & Pia Viljaniemi, Finnair, Finland)
> Providing a ‘one-stop shop’, aggregating products from different
providers, including competitive product, allowing the customer
to build their own tailored package without having to visit
multiple sites: “More far-reaching content. … Travel suppliers
need to aggregate different products into their site to generate
customer interest. These suppliers need to have metasearch
properties in their site that can show real time seat inventories or
room availabilities.” (Marilu Ngo, Griffn Sierra Travel, Philippines)
“Make it a one-stop shop, not only for travel but also for ancillary
processes. … It needs to be a supermarket where the customer can
go in with a list of things he wants.”
(Ratan Ratnaker, Kingfsher Airlines, India)
> Quality of products – offering niche products and
differentiation, not just commodity mass market
offerings: “Offer niche and honest products. Many new
online travel agencies and tour operators which have
a lot of mass products don’t know what they sell and,
while they may get one booking, the year after the client
does not return to them. Our statement is ‘class instead
of mass’.”
(Pascal Zahn, Olimar Reisen, Germany)
> Helping customers through the process step-by-step,
making it clear what stage has been reached, providing
reassurance where required and perhaps allowing for
offine support if needed.
l8 The Amateur-Expert Traveller
All Niches Great and Small All Niches Great and Small
All Niches Great and
Small
All Niches Great and Small
The Amateur-Expert Traveller l9
All Niches Great and Small
Reports of the death of the travel agency have, by and large, been
exaggerated. According to PhoCusWright, “The dramatic shift in
online share towards supplier Web sites that took place in the earlier
part of the decade has slowed or stopped.”
22
Indeed, PhoCusWright
expects share to shift from supplier websites back to online travel
agencies as the economic downturn puts a premium on fnding
deals and comparing different suppliers.
Moreover, there is still a signifcant proportion of travel booked
offine. PhoCusWright estimates that in 2007, 49% (by value) of
travel booked in the US – the most advanced in terms of Internet
penetration in travel – was booked offine. Will the shift to online
level off or will we carry on all the way to 100% online booking?
Three-quarters of respondents to our global online survey think
100% penetration will never be reached.
Indeed, one in ten suggest that it has already peaked or will
even start to fall. This view is most likely to be held by those in
traditional travel agencies – and nearly one in fve of those in North
America believe that the peak has been reached. Kerry Cannon Jr.,
at iM@ thinks, “There is and there will always be a cross-section
of the public that just won’t ever use [the Internet to book travel].
Regardless of how much you humanise it, there will always be a
cross-section of people that will hire people to do that stuff for
them. … There are certain things that the Internet has defnitely
changed, but human nature, no.”
However, the majority – 65% – of respondents think the proportion
of travel booked offine will only be small.
Marilu Ngo of Griffn Sierra Travel in the Philippines suggests that
cultural differences may lead to asymmetric penetration of Internet
travel around the world: “In South East Asia, clients prefer person-
to-person communication or a personalised service … it is this
preference that inhibits growth of online travel services to a larger
extent. Even if the products will become a humanised experience
when they surf the web, the customers will still feel they need
something extra by talking to someone … you cannot take that
away.”
Regardless of where the online / offine equilibrium eventually rests,
our panel expect to increase the proportion of their IT spend which
is allocated to supporting their online strategy.
The Internet has enabled other industries to increase the length of
the distribution curve – i.e. sell more of the small-volume products
– a phenomenon made popular by Wired editor Chris Anderson in
his book, The Long Tail: Why the Future of Business Is Selling Less of
More. For example, Amazon.com makes 30% of its revenue selling
books which are not cost-effective for the world’s largest offine
bookseller, Walmart, to stock.
In our online survey, less than a third of respondents follow the
traditional retail model, deriving 80% of their revenue from only the
top 20% of their product portfolio. However, for nearly 4 out of 10 of
respondents, 80% of revenue is spread across 60% or more of their
product portfolio, which is much closer to the long-tail model.
Currently In 2020
91% - 100%
81% - 90%
71% - 80%
61% - 70%
51% - 60%
41% - 50%
Up to 40%
Yes, soon
10% Yes, but a long, long time in the future
No, there will always be a small
proportion of travel booked offline
No, the proportion is as high as it will get
15%
65%
10%
Do you think the proportion of travel booked online will
ever reach 100%?
(Online survey: Base: all responding: 2,731)
What percentage of your company’s IT spend would
you estimate is allocated to technology to support your
online strategy?
20 The Amateur-Expert Traveller
All Niches Great and Small All Niches Great and Small
Online travel agencies are more likely to be at the “long-tail” end of
the spectrum, with 30% saying that the top 80% of products account
for 80% of their revenue.
Our expert panel generally agreed with the view that “the future of
the travel business is in the millions of niche markets at the shallow
end of the distribution curve” (illustrated in the PhoCusWright
diagram right). Two thirds agree with the statement, and only one
in four disagree (airlines in particular).
Although most of our panel still see big-selling products as their
greatest opportunity, around half see signifcant opportunity in
selling more niche content and selling to niche customers.
What might those niches be? Although family-friendly travel is still
reckoned to offer the greatest opportunity – and is not exactly niche
– our panel did see opportunity in, among other things, adventure
travel (83%), religious travel (55%) and weddings (45%).
Selling niche content has two obvious challenges: low volume
and fnding enough customers. By defnition, a company will not
sell a high volume of a niche product. To become large, a business
must work out how to standardise across a number of niches
to gain suffcient economies of scale to make low volumes on a
number of niches add up to a large and proftable business. Low-
cost carriers operating a network of routes to secondary cities are
a good example of this in the travel industry: the absolute volume
of passengers on each route may be small but so long as they are
proftable, the carrier’s total volume may be large.
All Niches Great and Small
Top 20% products = 80% revenue
Top 40% products = 80% revenue
Top 60% products = 80% revenue
Top 80% products = 80% revenue
23%
15%
34%
28%
Greatest opportunity Second Third Least opportunity
Selling more niche content
Selling to niche customers
Selling more to existing biggest customers 21% 48% 7% 24%
14% 21% 31%
24% 24%
Selling more of existing big-selling products 17% 41% 14% 28%
34%
17% 34%
Which of the following best describes your business?
(Online survey: Base: all responding: 2,515)
Which of the following do you think offers the greatest fnancial opportunity for your own business?
(Expert interviews. Base: all responding, 29)
Adventure Tours
Vacation Homes
Spas
Tours and Activities
Products
P
o
p
u
l
a
r
i
t
y
Long Tail
Head
Scheduled Airlines
Travel 1975
The Old Marketplace
Cars, Hotels
Products
P
o
p
u
l
a
r
i
t
y
Long Tail
Head
Scheduled Airlines, Cars,
Hotels, Cruises
Travel 2009
Low-cost Carriers
The New Marketplace
Source: PhoCusWright, Inc.
All Niches Great and Small
The Amateur-Expert Traveller 2l
All Niches Great and Small
Specialisation is another strategy.
Companies like Trailfnders, which
specialises in adventure travel, or Griffn
Marine, which specialises in marine travel
and participated in this study, can offer
specialised knowledge of a specifc sector
which elevates the decision process beyond
price.
It also builds loyalty. Outside the travel
industry, the carmaker Subaru has
successfully operated in a niche; the
company specialises in vehicles for outdoors
enthusiasts and ‘experience-seekers’. An
article in the Financial Times quotes Tim
Mahoney, US chief marketing offcer at
Subaru, “We’re a niche brand but that has
nothing to do with size, it’s more about
fnding a relatively safe place where we can
exist comfortably.”
23

The same article quotes John Wolkonowicz,
an analyst at fnancial analysis and market
intelligence consultancy, IHS Global Insight,
explaining, “I don’t think you could fnd a
more fercely loyal body of customers [than
Subaru’s], except perhaps for BMW.”
In an increasingly online world, where
loyalty is hard to earn and easy to lose,
and barriers to entry are low, scale or
specialisation or a combination of the two
are rare routes to proftable growth.
Major opportunity Some opportunity Limited opportunity No opportunity Don`t know
Travel goods
11% 33% 39% Dining reservations
Weddings
Ground transportation
Religious travel
Eco / green travel
Aircraft charter
17% 44% 28% 11%
17%
6% 28% 17% 39%
28% 44% 17%
11% 33% 22% 33%
22% 50% 22%
6% 28% 33% 22%
11%
6%
6%
11%
Adventure travel 44% 39% 11% 6%
Groups and meetings 28% 50% 17% 6%
Lifestyle travel 39% 50% 6%
Family friendly travel 39% 56% 6%
6%
6%
> The shift to online will continue but will most likely
plateau before 100%: some travel will always be booked
offine.
> The millions of niche markets at the shallow end of the
distribution curve represent a signifcant opportunity for
travel companies to increase revenue and loyalty.
Key fndings
How would you rate the business opportunity in each of the following
areas?
(Expert interviews. Base: all travel agencies: 18)
22 The Amateur-Expert Traveller
Technical Appendix
Amadeus commissioned independent research consultancy, David Burton Associates (DBA), to undertake a
programme of research within the global travel industry in autumn 2008.
30 in-depth interviews were conducted with key senior opinion-leaders in travel and travel-related companies
worldwide – our ‘expert panel’ – offering a broad-based and informed insight into trends in the travel business.
Interviews were conducted between September 2008 and January 2009. These were principally conducted by
telephone by senior DBA executives and associates, with one or two interviews being completed by correspondence.
Our expert panel comprised:
> Saudi Arabia, Abdulla Abikhamseen, Executive General Manager, Kanoo Travel, Online travel agency
> USA, Andy Bateman, Chief Executive Offcer, Interbrand, New York, Branding agency
> Finland, Timir Bhose, Director & Pia Viljaniemi, Development Manager – e-commerce, Finnair, Airline
> USA, Joe Bous, Director, Wholesale Travel Center, Online travel agency
> USA, Kerry J. Cannon Jr., Chief Executive Offcer, iM@ (interactive MOBILE @dvertising), Travel information
> Taiwan, Jeff Chu, Managing Director, Grand Travel Inc, Travel agency
> Australia, Helen Demetriou, Executive General Manager, Flights Business Unit, Wotif Group, Online travel
agency
> UK, Paul Ellerby, Sales & Marketing Director – UK & USA, easyCruise, Cruise
> USA, Robert Gallagher, Chief Operating Offcer, AIG Travel, Travel insurance
> Greece, Nikos Goulis, Managing Director, E Travel SA, Online travel agency
> USA, Brian Harniman, Executive Vice President, Marketing & Distribution, Kayak, Travel search engine
> USA, Henry Harteveldt, Vice President, Principal Analyst, Airline & Travel Industry Research, Forrester
Research INC., Travel research
> Colombia, Maria Claudia Isaza, Vice-President – e-business, Aviatur Group, Travel agency
> UK, Alan Josephs, Managing Director, formerly ebookers, Online travel agency
> Malaysia, Shivanathan Kesavan, Travel Manager, Gem Travel, Travel agency
> Canada, Guylaine Lavoie, Director – Marketing Innovations, Air Canada, Airline
> UK, Ignacio Martos, Chief Executive Offcer, Opodo, Online travel agency
> Philippines, Marilu Ngo, Vice-President & General Manager, Griffn Sierra Travel Inc., Travel agency / marine
crew & corporate travel
> Qatar, Peter Pohlschmidt, Manager – E-commerce, Qatar Airways, Airline
The Amateur-Expert Traveller 23
> USA, Alexander Pyhan, Director – Global e-Commerce Channels, Marriott International Inc., Hotels
> Lithuania, Audrius Ramanauskas, Chairman, Interneto Partneris UAB, Online travel agency
> India, Ratan Ratnaker, Vice President – Revenue Optimisation, Kingfsher Airlines, Airline
> India, Dhruv Shringi, Chief Executive Offcer, Yatra.com, Online travel agency
> USA, Lorraine Sileo, Vice-President – Research, PhoCusWright Inc., Travel research
> India, Jasmeet Singh, Manager – International Air, MakeMyTrip, Online travel agency
> Japan, Mr Takano, H.I.S. Co, Travel agency / Online travel agency
> Chile, Gonzalo Undurruga, Vice-President – e-commerce, LAN, Airline
> Poland, Janusz Wierbowski, Owner, Sonata Travel, Travel agency / Online travel agency
> Germany, Pascal Zahn, Executive Offcer, Olimar Reisen GmbH, Tour operator
One additional panel expert asked to remain anonymous.
This was supported by an online survey, conducted in November 2008. Invitations were e-mailed to Amadeus
contacts throughout the worldwide travel industry, and a short questionnaire was completed by nearly 3,000
travel professionals, covering all regions of the world and a spread of business sectors.
The profle of the sample was as follows:
BY SECTOR: BY REGION:
Airline 19% Western Europe 34%
Car rental company 2% Eastern Europe 5%
Hotel 15% Southern Europe 4%
Travel agency 52% USA & Canada 25%
Online travel agency 3% Central America & Caribbean 3%
Cruise 1% Latin America 11%
Other 9% Middle East & North Africa 4%
Subsaharan Africa 2%
North Asia 1%
South Asia 1%
South East Asia 6%
Central Asia 1%
Pacifc 4%
24 The Amateur-Expert Traveller
Appendix
1. http://www.nifc.gov/fre_info/fres_acres.htm
2. http://www.niallferguson.com/site/FERG/Templates/ArticleItem.aspx?pageid=56
3. http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/ DH_4006801
4. http://en.wikipedia.org/wiki/Participatory_Medicine
5. http://www.unwto.org/media/news/en/press_det.php?id=4421
6. http://www.businessweek.com/bwdaily/dnfash/content/jul2009/db2009079_431299.htm
7. http://www.outbound-tourism.cn/english/intro.asp
8. http://en.wikipedia.org/wiki/World_Tourism_rankings
9. http://pub.unwto.org/epages/Store.sf/?ObjectPath=/Shops/Infoshop/Products/1482/SubProducts/1482-1
10. http://www.imf.org/external/pubs/ft/survey/so/2009/RES012809A.htm
11. http://www.economist.com/world/international/displaystory.cfm?story_id=13871969
12. http://www.fightglobal.com/articles/2009/06/17/328318/china-bucks-the-downturn-at-home.html
13. http://www.ted.com/talks/lang/eng/clay_shirky_how_cellphones_twitter_facebook_can_make_history.html
14. http://www.itu.int/newsroom/press_releases/2008/29.html
15. http://www.phocuswright.com
16. http://www.reuters.com/article/technologyNews/idUSTRE53I03V20090419
17. Mobile: The Next Platform for Travel, PhoCusWright, March 2009
18. http://www.embedded.com/columns/signifcantbits/13000166?_requestid=192742
19. http://www.economist.com/sciencetechnology/tq/displaystory.cfm?story_id=13725743
20. http://www.inrix.com/pdf/INRIX%20Corporate%20Overview.pdf
21. http://www.zipcar.com/how/technology
22. U.S. Online travel overview, Eighth Edition, PhoCusWright, November 2008
23. http://www.ft.com/cms/s/0/430b9fd8-721e-11de-ba94-00144feabdc0.html
PUBLISHED BY
Amadeus IT Group, SA

DESIGN & PRODUCTION
Amadeus IT Group, SA

PHOTOGRAPHY
Daniel Greaves
Alejandra Contreras
Amadeus Image Bank

RESEARCH
David Burton Associates
Acknowledgements

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