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Travel Tech Trends 2013

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The past few years have been tumultuous for the European travel marketplace. Yet despite a lingering debt crisis and continued uncertainty in markets such as Spain, Italy and Greece, the region’s …

The past few years have been tumultuous for the European travel marketplace. Yet despite a lingering debt crisis and continued uncertainty in markets such as Spain, Italy and Greece, the region’s travel industry is beginning to show signs of life. Millions of European travelers who passed on vacations during the depth of the recession returned to the traveler pool in 2013. France, Germany, the U.K. and others are paving the way to recovery, and consumer confidence is on the upswing.

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  • 1. PhoCusWright’s Travel Innovation & Technology Trends: 2013 and Beyond Written by Bob Offutt
  • 2. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 PhoCusWright Inc. 116 West 32nd Street, 14th Floor New York, NY 10001 PO Box 760 Sherman, CT 06784 +1 860 350-4084 +1 860 354-3112 fax www.phocuswright.com Travel Innovation & Technology Trends: 2013 and Beyond Written by Bob Offutt Travel innovation & Technology Trends 2013 is published by PhoCusWright Inc. The information contained herein is derived from a variety of sources. While every effort has been made to verify the information, the publisher assumes neither responsibility for inconsistencies or inaccuracies in the data nor liability for any damages of any type arising from errors or omissions. All PhoCusWright Inc. publications are protected by copyright. It is illegal under U.S. federal law (USC101 et seq.) to copy, fax or electronically distribute copyrighted material beyond the parameters of the license or outside of your organization without explicit permission. ©2013 PhoCusWright Inc. All Rights Reserved.
  • 3. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 About PhoCusWright PhoCusWright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning, tactical decision-making and organizational effectiveness. PhoCusWright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use PhoCusWright research for competitive advantage. To complement its primary research in North and Latin America, Europe and Asia, PhoCusWright produces several high-profile conferences in the United States and Germany, and partners with conferences in China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce. The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents. PhoCusWright is a wholly owned subsidiary of Northstar Travel Media, LLC. PhoCusWright Inc. 116 West 32nd Street, 14th Floor New York, NY 10001 PO Box 760 Sherman, CT 06784 +1 860 350-4084 +1 860 354-3112 fax www.phocuswright.com ©2013 PhoCusWright Inc. All Rights Reserved. Page iii
  • 4. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Contents Areas marked with this symbol ( q) are interactive and clickable in the pdf version of this report. Table of Contents q Trend 5 Cross-platform data access engages users 15 Introduction 1 Key Trends 2 Trend 1 New patterns of content challenge distribution 3 Technology 3 Examples 3 Implications 5 Trend 2 Too much choice means less is better 6 Technology 6 Examples 8 Implications 8 Trend 3 Social technologies change the shape of travel 9 Technology 10 Examples 10 Implications 12 Technology 15 Examples 16 Implications 16 Trend 6 A cloudy future beats no future at all 17 Figure 9 13 Virtual Assistant Hologram at Newark Liberty International Airport Technology 29 Examples 29 Figure 10 16 Pebble Bluetooth Wristwatch Implications 29 Conclusion 29 Technology 17 Examples 20 Trend 7 Intermediaries require fresh approaches throughout the travel cycle 20 Technology 21 Examples 21 Implications 23 Trend 8 Big Data makes travel smarter 23 Technology 24 Examples 24 Implications 25 Trend 9 Better travel management through predictive analysis 25 Technology 13 Examples 14 Implications 14 Technology 26 Examples 26 Implications 27 ©2013 PhoCusWright Inc. All Rights Reserved. Table of Charts q Figure 1 The Personal Cloud 4 Figure 2 The Farelogix Airline Commerce Gateway 5 Figure 3 Gravity Personalization 7 Figure 4 Gravity's Interest Graph Engine 7 Figure 5 The Sojern Data Processing Model 8 Figure 6 9 The Travel Agency Usage of Social Media, 2011-2012 Figure 7 Nasair’s Extended Marketing Reach Using Social Technologies Figure 11 Google Glass 16 Figure 12 Google Glass Display 16 Figure 13 18 NIST Cloud Computing Conceptual Reference Model Implications 20 Trend 4 New efficiencies reenergize the customer experience 12 Trend 10 Short-range communications links improve processes 28 11 Figure 8 12 Criteria for Comparing a Mobile App to a Mobile Browser Figure 14 Cloud Broker as Service Aggregator 18 Figure 15 19 The Role Cloud Brokers Could Play in a Travel Company’s Cloud Architecture Figure 16 21 WestJet Flight Schedule Figure 17 22 Air Canada Flight Schedule Figure 18 Air Canada Product Offerings 22 Figure 19 Air Canada Banner Sale Offering 23 Figure 20 Customer Life Cycle by Channel 26 Figure 21 Hotel IQ Booking Pace Analysis 27 Page iv
  • 5. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Travel Innovation and Technology Trends: 2013 and Beyond Introduction The past few years have been tumultuous for the European travel marketplace. Yet despite a lingering debt crisis and continued uncertainty in markets such as Spain, Italy and Greece, the region’s travel industry is beginning to show signs of life. Millions of European travelers who passed on vacations during the depth of the recession returned to the traveler pool in 2013. France, Germany, the U.K. and others are paving the way to recovery, and consumer confidence is on the upswing. While the challenges of economic sluggishness tempts some companies to put research and development into a deep freeze, travel technology has progressed unabated, and consumer expectations continue to rise. Thanks to its legacy foundation and conservative attitude about the future, with a few exceptions, travel lags other industries in embracing new trends in technology that promise to sustain existing business and open the door for new opportunities. With the recovery advancing, however, many travel companies are taking a closer look at long-term strategic goals and more aggressively pursuing opportunities for innovation. Technology trends in the travel industry are complex – they involve cuttingedge content aggregation, distribution, user engagement, intelligent agents, mobile payments and more. Some new technologies are designed to improve the user experience, others to contribute to business performance and service delivery. But all innovations must work within the context of a rapidly evolving technology environment in which consumers are changing the way they interact with devices and suppliers can deliver new capability faster and cheaper than ever before. Mobile web penetration is now nearly ubiquitous across Western Europe. Three in four travelers in France and the U.K., for example, accessed the mobile web through their phones over the past year. One third of U.K. travelers, as well as 25% in France and 20% in Germany, used their smartphone to shop for travel products over the past twelve months. Increasingly affordable mobile devices, ©2013 PhoCusWright Inc. All Rights Reserved. Page 1
  • 6. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 improving roaming charges and faster mobile data network speeds are combining to create a perfect mobile storm that European travel companies must be prepared to harness. With European consumers embracing mobile and social media, there are significant opportunities to leverage Big Data and business intelligence to improve customer targeting and increase conversion. Tools are emerging that will enable companies to individually tailor messaging and product offers to the individual, delivering a personalized experience that serves the right product to the right consumer at the right time. In both the consumer technology and back-office spheres, opportunities to gain competitive advantage through innovation are as plentiful as the risks of failing to move forward. As 2013 draws to a close, this article highlights ten key technology trends that can help your company leverage innovation in the coming year and beyond. Key Trends Travel technology trends vary in scope, impact and endurance. Some yearly trends are fleeting, such as flash sales. Others, such as cloud computing, are in it for the long haul and will remain on the trends list (albeit in different stages in their life cycles) year after year. Taking technology trends into account – and determining how to work with them – can help business executives make more conscious decisions about applicability, potential business value and need for investment. As you consider these trends, remember that they are not independent phenomena, but a set of interdependent (and often simultaneous) movements. Trends 1. New patterns of content challenge distribution 2. Too much choice means less is better 3. Social technologies change the shape of travel 4. New efficiencies reenergize the customer experience 5. Cross-platform data access engages users 6. A cloudy future beats no future at all 7. Intermediaries require fresh approaches throughout the travel cycle 8. Big Data makes travel smarter 9. Predictive analysis improves travel management 10. Short-range communications links improve processes ©2013 PhoCusWright Inc. All Rights Reserved. Page 2
  • 7. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Trend 1: New patterns of content challenge distribution Travel was an early leader in e-commerce. The intermediaries that eventually became global distribution systems (GDSs) matched buyers and sellers of travel products using mainframe technology and global networks. Although the Internet and low-cost computing have threatened the value of the GDSs, they haven’t yet supplanted them. Instead, new forms of aggregation are emerging to deliver business and customer value. Automation of more and more supplier information has enabled capabilities like real-time shopping, booking and confirmations. Peer-to-peer marketplaces for travel products and services are becoming mainstream. The original travel distribution paradigm – in which intermediaries aggregate content for shopping and booking – is being challenged by a model that emphasizes shopping, booking and then aggregation. Technology Several technologies enable this new model of aggregation and distribution: 1) “Personal clouds” allow users to access information anywhere, anytime, and on any device. With a personal cloud, each consumer can store and retrieve information in a centralized virtual storehouse dedicated just for that person. The user can then access the information regardless of device (laptop, tablet, smartphone – and even some automobiles). 2) The Internet of Things enables integration of sensor data with humangenerated content to provide relevant and/or hyperlocal information about factors that can influence a trip, such as traffic, pollution, weather conditions, social hot spots, baggage location and homeland security advisories. 3) Ubiquitous global communications and cheap devices (like tablets) extend the automation of inventory management and the reservations process to small1 travel suppliers. These suppliers can then distribute through conventional channels (e.g., travel agents) or in a peer-to-peer electronic marketplace. 4) Today’s compute power and connectivity make it possible for both individuals and businesses to collect and integrate itinerary data from multiple sources without a GDS. Examples n Personal clouds can be hosted on a third-party server farm such as iCloud (Apple), Amazon’s cloud service, Google Drive and Dropbox. Some products allow you to configure a computer on your home network to service all of your devices (see Figure 1). 1) For the purpose of this paper, “small travel suppliers” indicates companies with five or fewer employees. ©2013 PhoCusWright Inc. All Rights Reserved. Page 3
  • 8. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 1 The Personal Cloud Source: ZDNet ©2013 PhoCusWright Inc. All Rights Reserved. n Farelogix is attempting to establish itself as a new intermediary with its Airline Commerce Gateway (see Figure 2). The Airline Commerce Gateway aggregates content from multiple sources, applies business rules, and delivers custom offers to shoppers at the point of sale (POS). n Travel management and expense reporting company Concur is promoting its Open Booking tool, whereby managed travelers book their travel with their supplier of choice. Processes in the background apply corporate policy and discounts. The individual bookings are then collected and assembled into a single itinerary using TripIt technology (which Concur recently purchased). Other companies providing similar itinerary aggregation technology are GDSX and Traxo. n Intel has developed a pollution and weather detection chip that gathers environmental data from sensors and, through cloud technology, learns a user’s precise location and delivers information relevant to that location. Travel service providers can then use this data to predict, for example, weather-related flight delays, and pass this information on to the traveler. n Gray Line Tours and Expedia have both announced initiatives that enable small travel suppliers to fully automate their inventory management and distribution processes. n InnHand is a free online reservation system for properties with up to 25 rooms. Cloud-based and accessible from mobile devices, InnHand’s system can easily be integrated into a property’s website and Facebook page. ©2013 PhoCusWright Inc. All Rights Reserved. Page 4
  • 9. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 2 The Farelogix Airline Commerce Gateway Source: Farelogix ©2013 PhoCusWright Inc. All Rights Reserved. Implications n Aggregation and distribution continue to be moving targets. Travel companies should keep their eyes peeled for new patterns and methods of distribution to reduce costs and create business value. n Merchandising systems will change the mix of travel products that points of sale will handle. n Points of sale can tap new content sources to broaden their product offerings, providing more value to their customers while expanding their sources of commission. n With online, real-time inventory, small suppliers will be able to expand their product distribution. n The Internet of Things will enable new products and services. ©2013 PhoCusWright Inc. All Rights Reserved. Page 5
  • 10. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Trend 2: Too much choice means less is better The mantra of early online travel agencies (OTAs) was often “more is better,” meaning that the OTA that showed the most flight or hotel options was clearly the best. This race led to massive investments in new technology in order to transform a travel agent’s screen from a limited 19-line display into an interface that would show the (literally) hundreds of options developed by the GDS (which could be displayed at any POS). But this mountain of choices frustrated consumers and slowed the reservation process. According to the “paradox of choice,”2 shoppers want a few choices, but not too many – if they have to make too many decisions, they become irritated and unhappy. In other words, giving people too many choices tends to lessen their satisfaction. However, delivering targeted content (and thus fewer choices) based on personal and behavioral data can improve conversion. While the travel industry suffers from a paucity of data about offers presented versus offers selected, it does have the capacity to track overall shopping and purchase patterns and data from social networks, which together can provide a fairly clear view of a shopper. Combine this information with psychographic and demographic databases, user surveys, “look-alike modeling,” and environmental factors such as weather and geography, and you can deliver well-targeted information in advertisements and search results. One key element in improving targeting is the ability to process large amounts of data (see Trend 8). Targeted marketing is not just a travel phenomenon – other industries, particularly consumer retail – are quite adept at it. For example, consumer research company Nielsen used microtargeting to help a refrigerated meat manufacturer find out who its most profitable customers are. Instead of summer grillers, as the manufacturer believed, the core customers were actually teenage boys and their mothers. The company refocused its marketing efforts to reach this audience, a move that drove annual growth of 15-20% for several years in a row.3 Technology Targeting technology has evolved so that audience segmentation no longer needs to be in broad categories (e.g., sports enthusiast, daytime TV watcher, soccer mom). For example, social advertising targeting company 33Across has defined over 50 social “persona” categories that include social and media consumption behaviors, interests, and demographics that can be used to segment a target audience. 33Across collects data on 1.25 billion people. Gravity and 140 Proof target consumers based on the interests they express in their social graphs (see Figure 3). Both companies use complex algorithms to match a consumer’s interests with certain content so the consumer will see the most appropriate ads (see Figures 3 and 4). 2) Barry Schwartz, The Paradox of Choice: Why More is Less, Harper Perennial (New York, 2004). 3) Jason Green, “Micro-Targeting: It’s Not Just for Niche Brands Anymore,” Nielsen Newswire (Feb. 16, 2010). ©2013 PhoCusWright Inc. All Rights Reserved. Page 6
  • 11. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 3 Gravity Personalization Source: Gravity ©2013 PhoCusWright Inc. All Rights Reserved. Figure 4 Gravity’s Interest Graph Engine Source: Gravity ©2013 PhoCusWright Inc. All Rights Reserved. Sojern, another targeting firm, accesses over 100 million anonymous data points about travelers and uses this data to provide its clients with insights about audience intent (i.e., when and where travelers are going). The company also tracks travel purchase patterns, top destinations and destination searches by type of traveler (see Figure 5). Presenting carefully targeted content becomes more important on a smartphone or tablet platform, where screen real estate is at a premium. The more closely the content relates to what the shopper seeks, the more likely the shopper is to complete a purchase or make a reservation. Complex algorithms are required to define relationships between different data elements and the products and services a particular shopper would find ©2013 PhoCusWright Inc. All Rights Reserved. Page 7
  • 12. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 5 The Sojern Data Processing Model Source: Sojern ©2013 PhoCusWright Inc. All Rights Reserved. most interesting. Most approaches use discrete, definable user segments to target content (e.g., if you know a leisure traveler is bound for Maui, show her an ad for a snorkeling adventure). The more discrete segments, the better. The ultimate goal is to treat each individual as a segment of one. Gravity’s Social Interest Graph takes this tack. The next step is delivering targeted content at the right speed – meaning Internet speed, as retrieving it from a database would be too slow. Fortunately to this end, in-memory processing has become affordable. Examples n At PhoCusWright’s 2012 Travel Innovation Summit,4 Amadeus previewed its “Amadeus Featured Results,” which uses flight search technology and travel business intelligence to present shoppers with a list of the cheapest, fastest and most relevant booking options. Implications Providing targeted offers is a key capability for travel companies, and it is even more critical in the mobile arena. Despite mobile’s substantial and continued growth, the platform is limited by connection speed and screen size, compelling advertisers to either deliver extremely relevant content or not bother delivering content at all. Any travel company with a mobile strategy needs a targeted content strategy as well. 4) November 13, 2012 ©2013 PhoCusWright Inc. All Rights Reserved. Page 8
  • 13. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Trend 3: Social technologies change the shape of travel It may seem like a no-brainer to incorporate a social media strategy into your business plan. But travel retailers taking their time may soon find themselves losing share to savvier suppliers. According to a 2012 survey by the American Society of Travel Agents, just 39% of travel agents employ social media in their business processes. Among those, 49% use Facebook and 44% use LinkedIn. Of travel agents using social media, 15% consider these services essential to their business, 29% are still learning how to use social media, and 20% say social media is still unproven as a marketing channel (see Figure 6).5 These statistics fly in the face of social media’s worldwide groundswell: In July 2012, Facebook had 834 million unique visitors.6 In the same month, social media reached 84% of Internet users globally, each of whom spent an average of 337 minutes a month on their networks of choice.7 In the meantime, suppliers are aggressively pursuing a social media presence with high-quality en-route and destination content. These suppliers use social networking tools to track service deficiencies, manage their reputations, 5) Johanna Jainchill, “Lots to ‘Like’ About Facebook, But Agents Need Diverse Online Presence,” Travel Weekly (Oct. 29, 2012) and the American Society of Travel Agents. 6) ComScore (July 2012). 7) ComScore Media Metrix (July 2012). Figure 6 The Travel Agency Usage of Social Media, 2011-2012 How do you view participation in social media websites like Facebook, Twitter or YouTube? Essential 7% 18% Nice to be there 9% Still learning how to use social media Unproven Waste of time 12% 13% Not valuable due to my business model 15% 7% 17% 2011 20% 37% 2012 17% 29% Source: Travel Weekly and the American Society of Travel Agents ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 9
  • 14. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 improve customer service, build communities of travelers, and engage customers at various points in the travel value chain. This proactive supplier behavior – in contrast to slow-moving travel agents – opens the door for a major change in allegiance. Rather than serving as trusted advisors, travel agents will simply become data suppliers. Unless travel agents “get the memo,” suppliers’ social media initiatives are likely to steal share. Still, it is early days, and while social technologies have created substantial value so far, their real power is still unclear.8 Technology Social technologies enable people to interact informally online and create, enhance and exchange new forms of value (e.g., digital money). New products that support online social interaction are coming to market at an amazing pace. Social technologies generally have the following characteristics: 1) Open networks and peer-to-peer communications tools 2) Democratization of content: the ability to add, change or comment on content 3) Content that may be centralized or distributed Examples n The Cosmopolitan Hotel in Las Vegas makes extensive use of social media to promote exclusive events, deals, contests and ticket offers for its social media-savvy guests. In addition to its own promotions, the Cosmopolitan retweets its guests’ tweets.9 n The Colonnade Hotel in Boston uses Twitter to communicate travelrelated tips, event details, weather status and other relevant information with its guests.10 n Nasair, a low-cost carrier based based in Saudi Arabia, has seen a major increase in marketing reach since it began using social technologies aggressively (see Figure 7).11 In six months, the airline increased the number of emails it sent as part of marketing campaigns by 243% and the number of tweets that mention its name by 129%. Visits to Nasair’s Facebook page grew 4,526% in seven months in 2012. And between January 2011 and July 2012, the number of mobile users accessing its website jumped 345%. 8) Michael Chui et al., The Social Economy: Unlocking Value and Productivity Through Social Technologies, McKinsey & Company (July 2012). 9) Shira Lazar, “Hotels That Rock at Social Media,” Entrepreneur (Nov. 2, 2011) 10) Ibid. 11) SimpliFlying Awards 2012, “Best Airlines Driving Revenue from Social Media” finalist presentations, SimpliFlying (Sept. 3, 2012). ©2013 PhoCusWright Inc. All Rights Reserved. Page 10
  • 15. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 7 Nasair’s Extended Marketing Reach Using Social Technologies Source: Nasair ©2013 PhoCusWright Inc. All Rights Reserved. n WestJet experienced significant bookings increases and return on investment (ROI) in the wake of its “Kargo Kids” April Fools’ Day promotion, which it announced via YouTube, Facebook and Twitter.12,13 The results: • 650,000 YouTube views in 194 countries • 3,300 video shares in 69 countries • 1,700 Facebook post shares • 189,000 visits to WestJet’s April Fools’ landing pages • 4,000 new bookings • $1.3 million in new bookings 12) Ibid. 13) Calgary-based airline WestJet sponsored “Kargo Kids,” an April Fools promotion that pretended to offer the child-free flights many frequent fliers have been dreaming of for years. This mock “program” has kids carted off on a “travel toboggan” to a “special VIP area” of the plane, while adults fly hassle-free in the main passenger area. The “travel toboggan” is a blue bin that whisks kids away on the luggage conveyor, and the “special VIP area” is the cargo hold. ©2013 PhoCusWright Inc. All Rights Reserved. Page 11
  • 16. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Implications Intermediaries have been slow to appropriate social media, which has opened the door for suppliers to garner customer loyalty and shift share to direct channels. It’s not too late for intermediaries to develop and implement social media strategies, but the clock is ticking. Trend 4: New efficiencies reenergize the customer experience Historically, travel distribution has centered on offering the same product in a variety of ways through multiple distributors (including suppliers), and each party vied for a share of the travel purchase. But competition for the traveler dollar is becoming less about a battle between suppliers and distributors and more about providing the best customer experience. Suppliers and distributors need to put the channel wars behind them and focus on competing for customer loyalty. For example, why not show competing offers and other purchase alternatives, as the insurance industry does? (Six hotel chains thought this was a good idea, as described below.) Travel executives need to change their focus from channel share to customer share. The next generation of travelers will have the expectation that all shopping – including travel shopping – should be as efficient as an Amazon experience (see Figure 8). Figure 8 This kind of quality shopping experience has to be available at all customer Criteria for Comparing a Mobile App to a Mobile Browser Source: eDigitalResearch (used by permission) ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 12
  • 17. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 touchpoints and provide seamless interaction across all channels: social media, email, browsers (desktops, laptops, tablets) and mobile (both apps and browsers).14 Key features in providing this experience are quality site search, clear branding, consistent icons, consistent content (especially deals) and simple checkout. A quality shopping experience is just part of the equation. The greatest shopping experience cannot compensate for bad service Figure 9 delivery: Service providers also need to leverage technology to improve and customize delivery. Virtual Assistant Hologram at Newark Liberty International Airport Technology Providing a consistent customer experience across touchpoints is as much an organizational issue (who is responsible?) as it is a design issue. For instance, travel companies need to accommodate technology limitations on mobile devices (e.g., size and shape). It’s no secret that mobile commerce lags general online commerce in feature functionality, and that mobile applications often lack the quality searching and purchasing capabilities offered by mobile browsers. A variety of technologies make it easier and less expensive for travel companies to offer quality customer service. Much of the cost of customer service is in staff salaries and call center operation. Fortunately, virtual agents, using natural language interfaces and artificial intelligence, are able to handle a high percentage of queries. These agents can interface with customers through a kiosk, on a computing device, via phone or through an avatar hologram (see Figure 9). Source: Scott Beale, Laughing Squid ©2013 PhoCusWright Inc. All Rights Reserved. Other technologies: n New tools that bring real-time luggage tracking directly to the customer n Unified communications (UC) that provides infrastructure to meet peak demand, route the customer to the best service agent, and communicate options to the customer n Anticipatory search that alerts travelers of disruptive events such as bad weather, aircraft delays and traffic delays15 n Tablet computers that enable tailored customer service 14) An interaction is considered seamless when the user’s status, purchase history and profile can be accessed at all points of sale. 15) Bob Offutt, “Search: The Key to Successful Travel Sites,” PhoCusWright Inc. (December 2012). ©2013 PhoCusWright Inc. All Rights Reserved. Page 13
  • 18. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Examples n Virtual assistant technology from Next IT supports customer queries for Alaska Airlines, Amtrak and United Airlines. On an average day, United’s virtual assistant, Alex, responds to over 75,000 customer inquiries. During irregular operations (e.g., storms, volcanos), Alex has exceeded over 100,000 calls in one day. n In the banking sector, Coastal Federal Credit Union – using personal teller technology from uGenius (now owned by NCR) – became the first bank to use only video tellers. The bank cut teller costs significantly and expanded teller hours. n Using hotel shopping and booking technology developed by Hotelicopter, Choice Hotels, Hilton, Hyatt, InterContinental, Marriott, and Wyndham have implemented a hotel shopping service called Room Key that supports all their properties. Properties can be displayed in a number of ways. The Room Key display enables travelers to easily see prices, access reviews and compare property features. Competition is in the value of the stay, not the distribution channel. n U.K. travel management company Portman Travel is using UC as a key part of its customer service strategy. Using UC to link 17 sites and 550 users, Portman has reduced call waiting time to under three seconds and achieved a £30,000 ROI. The company is now using its communications infrastructure to provide video conferencing to its clients as an alternative to traveling. n Delta Air Lines provides real-time luggage tracking to customers on their mobile devices. n Several airports in the U.S. and U.K. have introduced projected holograms in the form of avatars to assist travelers. n American Airlines provides flight attendants with tablet computers that they use to recall/record food and drink preferences, customer names, frequent traveler statuses and special needs. British Airways is experimenting with a similar strategy. Implications Demand for customer service will increase, and the cost of providing it will decrease, thanks to new technologies. Quality customer service, however, is in the eyes of the beholder. Excessive menu trees or outsourced call centers in foreign countries may cut monetary costs, but frustrate customers. Each travel company needs to determine how to use customer service technology in a way that increases customer satisfaction and reduces costs. On a personal note, using Alaska Airlines’ virtual assistant was a satisfying experience. ©2013 PhoCusWright Inc. All Rights Reserved. Page 14
  • 19. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Trend 5: Cross-platform data access engages users To consumers, the future involves the ability to access desired digital information regardless of device. To businesses, this same future is a development and support nightmare. Businesses once had little to worry about in terms of client-facing applications – just choose between Java Script, Java and Flash with CSS. But in the wake of the proliferation of various mobile devices – the iPad, iPhone and the many devices running Android or Windows 8 – interfacing with clients has become much more difficult. Apps exist for every device, in multiple languages, and on different operating systems. In addition, custom code must run in each environment to detect screen size aspect and resolution. While the world seems addicted to mobile apps, the business cost of developing and maintaining apps for all the disparate environments means it’s often more practical for companies to “write once, run anywhere” using HTML 5. Figure 8 (above) shows the criteria companies can use to judge the effectiveness of using an app versus a browser on a mobile device. Supporting all these devices and interfaces may be confusing and costintensive, but the future will only bring more devices. For example, Apple has a smart wristwatch in the works.16 In addition to smartwatches, devices and systems are in design – or already available, in some cases – that interpret human gestures, enable touchless interaction with PCs, recognize and understand speech, and allow users to operate and secure vehicles using their voices. Technology There has been rapid development in technologies that enable users to access their desired information from any smart device. Such technology frees users from loyalty to, for example, a specific phone or tablet, as they can get the digital data they need from whatever device is most convenient at the moment. One of the most popular of these tools is Siri, the intelligent personal assistant on iPhone models 4S and newer. With a solid set of business rules and a speech recognition system, Siri is paving the way for smart devices users can address with speech commands. Efforts to build the next-generation intelligent personal assistant are underway in the banking, medical and travel industries. Also in development are devices that will communicate with humans via gesture, eye movement detection and 3D interaction. And portable devices will soon be able to move from the home (or office) directly to the automobile’s computer and communications system. 16) Nick Bilton, “Disruptions: Where Apple and Dick Tracy May Converge,” New York Times Bits blog (Feb. 10, 2013). ©2013 PhoCusWright Inc. All Rights Reserved. Page 15
  • 20. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Examples Figure 10 n Using curved glass, Apple is rumored to be developing a wristwatch that runs iOS. Several Bluetooth-capable wristwatches are already on the market. One such device is Pebble, which can connect to iPhones or Android devices (see Figure 10). Pebble Bluetooth Wristwatch n Desti, a travel guide for iPads, uses technology similar to Siri’s to deliver answers to travel-related questions. n Hertz is building intelligent kiosks that include browserbased video chat, interactive sharing and co-browsing. The kiosks improve customer service, reduce costs (the interactive chat connects to a single national service center), and increase ancillary sales. They include key safes and readers for myriad ID documents. With these kiosks, Hertz is expanding into hotels and repair shops without the overhead of staffing. Source: getpebble.com ©2013 PhoCusWright Inc. All Rights Reserved. Figure 11 Google Glass n The Crown Towers Hotel in Melbourne, Australia uses UC from Cisco to create a unique in-room experience. Guests can use the touchscreen to request room service, call housekeeping, check local weather, check flights and look at restaurant and retail store information. n GM is incorporating a feature on some 2013 models that allows drivers to initiate Siri by pushing a button. n Google Glass is a wearable augmented reality display (see Figures 11 and 12). It can take pictures and videos, interface with social networks, retrieve information, advise users of upcoming events, and match pictures with associated data. For travelers, it can offer local transportation schedules, display restaurant menus, show hotel alternatives with rates and ratings in a given geographical area, advise of flight connections and delays – and all from a simple, glasses-like device. Google is currently seeking developers for the Google Glass app store. At the same time, the company is cultivating 8,000 consumers to be its core group of customers for the device. Source: Google ©2013 PhoCusWright Inc. All Rights Reserved. Figure 12 Google Glass Display Implications Cross-platform data access requires travel companies to track the changing user interface patterns of their customers to provide the appropriate level of service. This will be a Source: Google ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 16
  • 21. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 continuing process as new technologies evolve and businesses become less restrictive about the devices their employees can use for particular tasks. The suppliers and distributors that support the most user-friendly, convenient interfaces will enjoy increased market share. Trend 6: A cloudy future beats no future at all Research from IDC shows that worldwide revenue from public IT cloud services exceeded $21.5 billion in 2010 and will reach $72.9 billion by 2015, representing a compound annual growth rate of 28%. This growth is over four times the projected gains for the worldwide IT market as a whole. By 2015, one of every seven dollars spent on packaged software, server, and storage offerings will be through the public cloud model. However, in an industry poll of IT executives at travel companies, PhoCusWright found that 55% of respondents spent 4% or less of their total IT budgets on cloud computing. In contrast, according to a 2012 study by IDG Enterprise, spend for cloud computing across all business sectors averaged 34% of the total IT budget. More than half (63%) of the 1,650 IT professionals polled expected to increase spending on cloud computing solutions in the next 12 months.17 Although the PhoCusWright sample was limited, the difference in the amounts spent on cloud computing in the travel industry versus in industries as a whole is substantial. At this rate, travel will significantly trail other verticals in realizing the cost savings and business value of cloud services. In the meantime, no less than 15 organizations are currently working on standards for cloud computing, which will enable its growth and institutionalization as a resource.18 Cloud computing has the potential not only to reduce IT costs and improve time to market, but, with cloud brokerage services, to define and develop new cloud services by combining different sources of content. Cloud brokerage is like a web services mashup, where a developer assembles content and e-commerce capability from different sources into a cohesive, integrated application. For example, cloud brokerage services could allow a cloud-based service to combine rail and air content for a multimodal trip planning tool. Technology Figure 13 shows a generic, high-level cloud computing conceptual reference model that was created to explain the requirements, uses, characteristics and standards of cloud computing. 17) “Research Indicates That Cloud Increases Short-Term Costs for Long-Term Gains,” IDG Enterprise press release (Apr. 2, 2012). 18) Cloud Standards Wiki. ©2013 PhoCusWright Inc. All Rights Reserved. Page 17
  • 22. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 13 NIST Cloud Computing Conceptual Reference Model Source: National Institute of Standards and Technology, U.S. Department of Commerce, Special Publication 500-292 ©2013 PhoCusWright Inc. All Rights Reserved. A key player in this model – particularly for travel distribution – is the cloud broker (see Figure 14). Since most travel points of sale use aggregated content from multiple sources, a cloud-based content aggregator holds significant potential. Figure 14 Cloud Broker as Service Aggregator Cloud Provider 1 Cloud Consumer Cloud Broker Cloud Provider 2 Source: National Institute of Standards and Technology, U.S. Department of Commerce, Special Publication 500-292 ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 18
  • 23. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 The cloud broker manages the use, performance and delivery of cloud services and coordinates the relationships between cloud providers and cloud consumers, including: 1) Service intermediation: Adds value to a given service, such as access to cloud services, identity management, security and performance reporting. 2) Service aggregation: Combines and integrates multiple services into one or more new services. A travel-related example would be a cloud broker integrating airline direct-connect fares with GDS results. 3) Service arbitrage: Service aggregation without fixed sources. For example, a travel agent obtaining the lowest rates for a given hotel from five different sources, even though those sources might change over time. Cloud aggregation services are similar to those the GDSs perform today. However, in the face of new channel pressures such as direct connect, travel companies may need to look beyond GDSs for aggregation. And given the myriad business management technologies travel companies need to interact with, they may find other uses for cloud brokers as well (see Figure 15). Figure 15 The Role Cloud Brokers Could Play in a Travel Company’s Cloud Architecture Source: National Institute of Standards and Technology, U.S. Department of Commerce, Special Publication 500-292; PhoCusWright, Inc. ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 19
  • 24. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Examples While no acknowledged cloud broker vendors have entered the travel space, key players in other industries include: n IBM’s SmartCloud Aggregator offers tools for a service provider to broker cloud-based services and aggregate content from both inside and outside the firewall and deliver the results to a variety of points of sale. SmartCloud Aggregator is targeted at the telecommunications industry, where provisioning mobile services is an ideal application for cloud brokerage. n Jamcracker supports self-service cloud fulfillment and channel enablement. It provides tools for technology organizations to aggregate content in private and public clouds for corporate users. n Liaison Technologies sells tools for integrating systems (either on the businesses premises or in the cloud), transforms data to meet proprietary needs, and supports the translation of data into information. Implications Cloud computing can provide a substantial reduction in unit cost and increase in technical capability. Cloud brokers can potentially expand business capability, and effective use of cloud computing can provide substantial competitive advantage. Trend 7: Intermediaries require fresh approaches throughout the travel cycle As travel products become more complex and distribution channels increase, the role of the travel intermediary must advance beyond just offering advice and arranging travel. Traditional travel agents aren’t the only ones who need to adapt – travel management companies (TMCs) and OTAs have catching up to do, too. To retain and expand market share, intermediaries must come up with strategies to function optimally in an environment – i.e., our everyday lives – dominated by the following technological influences: n Proliferation of information. At each stage of planning a trip – whether for business or pleasure – travelers confront an incredible number of information sources. The challenge for intermediaries: to cut down on information overload. n Digital transformation. What used to be on paper is now available digitally. n Cross-platform data access. Information in digital form is available virtually anywhere on your device(s) of choice. n Social networking. Social networking permeates everything we do, from shared trip planning to destination selection. Intermediaries need to leverage the surge in social media to better assist their customers. ©2013 PhoCusWright Inc. All Rights Reserved. Page 20
  • 25. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 n Changing business models and disintermediation. The pressure for direct connect for air shopping, along with Concur’s Open Booking and the continued success of metasearch, is changing the distribution landscape. Travel components – once commodities – are now differentiated products. This shift puts the burden on the intermediary to facilitate comparison shopping and pursue up- and cross-sell opportunities. n Business analytics. Business analytics give travel companies the tools to understand their businesses, customers, suppliers and competitors on a more complex level. This knowledge enables companies not only to make improvements right away, but also to plan for future ones. Technology Myriad technologies can help intermediaries refresh their approaches to helping customers plan, shop for, and book travel. Particularly hot areas of development include technology for: • Content aggregation and distribution • Customization and personalization • Enhancing the customer experience • Cross-platform data access • Big Data • Predictive analytics Examples One challenge intermediaries face is facilitating comparison shopping. Figure 16 shows flight options for a trip from Vancouver to Montreal on the WestJet Figure 16 WestJet Flight Schedule Source: WestJet ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 21
  • 26. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 website, featuring traditional (commodity) flight alternatives. In contrast, the Air Canada site displays this multitude of offerings for the same route: Figure 17 Air Canada Flight Schedule Source: Air Canada ©2013 PhoCusWright Inc. All Rights Reserved. Fare options include the following services: Figure 18 Air Canada Product Offerings Source: Air Canada ©2013 PhoCusWright Inc. All Rights Reserved. ©2013 PhoCusWright Inc. All Rights Reserved. Page 22
  • 27. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Along with this bonus shown at left: Figure 19 Air Canada Banner Sale Offering The dilemma of the intermediary – whether automated or live – is how to simultaneously 1) offer the kind of tailored product choices Air Canada does, and 2) enable comparison shopping with dissimilar offerings from multiple airlines. Implications The role of the travel intermediary will become substantially more complex in the next several years. Instead of just selling the best airfare between Point A and Point B, intermediaries will have to provide the best (or lowestcost) travel experience as a whole. This new imperative requires (sometimes drastic) changes – and investment – in technology, training, customer service time, and service delivery tools. If intermediaries can’t make the needed changes, they will cede shopping to suppliers. Source: Google ©2013 PhoCusWright Inc. All Rights Reserved. Trend 8: Big Data makes travel smarter Big Data refers to amounts of data so large they cannot be processed with traditional tools and technology (e.g., relational databases and normalized structures).19 How much data is “Big”? The amount ranges from tens of terabytes all the way up to petabytes. Only a few Big Data initiatives in travel have been successful so far.20 While companies can use multiple approaches to create business value with Big Data, many barriers stand in the way of realizing that value. A few examples: Value: Detailed transactional data about website performance, call center metrics, display optimization, conversion cause and effect, and multichannel performance can assist management in fine-tuning every aspect of the travel product sale. Barrier: Travel companies historically have focused on transactions, either through the GDS or with their own technology. Focusing on data represents major changes in technology and operations. Value: Big Data allows precise segmentation. Barrier: Beyond loyalty programs, which vary substantially in their understanding of customers, the travel industry has focused on the trip 19) Bob Offutt, “Big Data: Redefining Travel Business Decision Making,” PhoCusWright Inc. (July 2012). 20) Evan Konwiser, “Big Data in Travel: Rubber Hitting the Road, But Only for Some,” Tnooz (Jan. 25, 2013). ©2013 PhoCusWright Inc. All Rights Reserved. Page 23
  • 28. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 itself rather than on specific characteristics of travelers and their friends. Implementing effective segmentation models requires major reengineering of technology platforms. Value: Big Data can help companies define new products and services. For example, by monitoring social media (a key source of Big Data), travel companies can better understand how to create more relevant – and valuable – offerings for their customers. Barrier: Many travel companies are highly dependent on GDSs for products, so room for customization is limited. For travel companies that can develop their own products and services, social media monitoring provides a major opportunity. Value: Big Data supports effective business analytics, and business analytics provide critical positioning capabilities: market intelligence, competitive intelligence, sentiment analysis, customer attributes, and discovery of trends and patterns. Barrier: The gap between gathering business intelligence and acting on it is wide. To bridge this gap, travel companies need to reengineer their approaches to business. One example of a successful move in this direction is Delta Air Lines, whose social media staff includes representatives from corporate communications, marketing and reservations. This team creates Delta social media campaigns and monitors social media 24/7.21 A few years ago, Delta learned (via a YouTube video) that it had charged soldiers returning from Afghanistan for some of their checked bags. Less than 24 hours after the incident, Delta changed its policy and apologized. For an airline to be so responsive to social media and to change a policy so quickly is remarkable. Technology Technologies that support Big Data are evolving to provide greater performance and response times. This boost in speed enables real-time interaction with customers and faster decision-making for management. Major suppliers like Oracle have developed NoSQL offerings, and Hbase22 – a database extension of Hadoop and NewSQL23– has improved performance and response times. Examples n Costco Travel:24 Costco Travel offers thousands of unique variables to its customers as they plan a trip. These variables include length of stay, travel dates, destinations, hotels, room categories, meal plans, transportation options (rail, air, car), transfers, sightseeing, activities and insurance. 21) Dennis Schaal, “Inside Social Media at Delta Air Lines – A Behind-the-Scenes Look,” Tnooz (June 16, 2011). 22) “What is Hbase?” IBM. 23) “New SQL,” Wikipedia. 24) “Costco Uses Google Analytics to Grow Costco Travel, Its Online Travel Business,” Google Analytics (2010). ©2013 PhoCusWright Inc. All Rights Reserved. Page 24
  • 29. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Using Big Data, Google Analytics and a fluid purchase process, Costco Travel has identified many opportunities to deliver better customer value. Since employing this technology, its vacation package sales and overall conversion rates have substantially increased. n Choice Hotels:25 Choice Hotels is setting up a master record for every guest and loyalty program member. Each profile will capture a variety of data: customer service history, bookings, and on-property selections like food and beverage. The master record will allow service personnel to find out what creates loyalty for various customers and to tailor experiences and custom offers. The enhanced loyalty program delivers $1 out of every $3 in revenue earned by Choice Hotels International. Implications Big Data is a gold mine. Travel companies need to analyze its potential to support future product and service offerings. In many cases, the data companies need exists but remains uncollected or is in a form that won’t support the direction the company wishes to move in. This missing data makes developing a data strategy and action plan even more critical. Trend 9: Better travel management through predictive analysis Business intelligence (BI) is a collection of tools and algorithms companies can use to make sense of – and informed decisions about – the immense amount of data they have available. BI can be especially helpful for companies navigating the travel industry, given its broad scope and complexity. Travel was an early leader in BI, and suppliers currently use sophisticated BI tools in the revenue management process. But supplier and distribution channels have evolved – sometimes rapidly – and use of BI to manage those channels hasn’t kept up. Effective BI for channel management requires access to high-quality data, which is often difficult to acquire (the travel industry is made up of service providers, not data experts). And because channel development is fragmented, a travel company’s most useful data about its channels is often scattered throughout the company (e.g., in Excel spreadsheets). Figure 20 shows the typical customer engagement life cycle. This cycle is complex when each channel is managed independently, but becomes considerably more so when channels are managed collectively. While the travel industry continues to bumble along with graphs and tables of historical data, other verticals are graduating to the next level of predictive analysis: simulation, prediction, optimization and other metrics, including 25) Ritesh Gupta, “Data Matters and Why Loyal Members Could Be More Lucrative Than You Think,” EyeforTravel, (Oct. 15, 2012). ©2013 PhoCusWright Inc. All Rights Reserved. Page 25
  • 30. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 20 Customer Life Cycle by Channel Source: PhoCusWright Inc. ©2013 PhoCusWright Inc. All Rights Reserved. real-time reporting and analysis. Simulation and prediction optimization are key capabilities that will provide business differentiation between travel companies. The BI market (including data warehouses and customer relationship management analytics) is growing at 9% a year and is expected to reach $136 billion by 2020.26 Technology Triometric provides tools that analyze XML traffic by channel. This capability is necessary to collect and analyze historical data that might otherwise be lost. With the rapid rise in number of distribution channels, travel suppliers and distributors need to understand the dynamics of each channel they use. Hotel IQ, a product from Intelligent Hospitality, sells tools that enable revenue managers and sales and marketing departments to look at past performance and forecast future business. A booking pace analysis, one of hundreds of views that Hotel IQ provides, can display the booking pace of any past or future period by any combination of market segment, sales channel, source market and room type (see Figure 21). Examples n Thomas Cook Netherlands, after seeing a substantial increase in its online 26) Drew Robb, “Gartner Taps Predictive Analytics as Next Big Business Intelligence Trend,” Enterprise Apps Today (Apr. 17, 2012). ©2013 PhoCusWright Inc. All Rights Reserved. Page 26
  • 31. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Figure 21 Hotel IQ Booking Pace Analysis Source: Intelligent Hospitality ©2013 PhoCusWright Inc. All Rights Reserved. bookings, was concerned that without clear visibility into the customer experience, the company could not understand where customers were struggling. To address this, Thomas Cook employed Tealeaf to monitor customer shopping and purchase patterns. In three months, the companies found that Thomas Cook had lost over €3 million in revenue due to website software errors.27 n GTA (Gullivers Travel Associates) collects data on thousands of hotels and destination services from Salesforce.com and other sources and stores them in a consolidated data warehouse. Accessing real-time information, analysts can accurately predict peaks in demand and open hotel rooms. This allows GTA to avoid shortfalls and develop customized offers to increase customer bookings for hotels and destination services. GTA uses Triometric to monitor and analyze its 18 million daily XML transactions. Implications As travel content, context and technologies change, managing both supply and distribution channels is critical. Travel companies need to determine their own “best practices” for optimizing content acquisition and distribution. Doing so involves acquiring the appropriate tools and establishing business processes and management structures to monitor, analyze and respond to channel business intelligence. 27) Tealeaf case study with Thomas Cook Netherlands (2013). ©2013 PhoCusWright Inc. All Rights Reserved. Page 27
  • 32. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Trend 10: Short-range communications links improve processes Most people are acquainted with Bluetooth, but fewer know about radiofrequency identification (RFID) and near-field communications (NFC). All three technologies provide limited-range communications capabilities: n Bluetooth: Allows communication from device to device within a 30-foot range28 and supports voice and information transfer. n RFID: A computer chip (or “tag”) attached to an object transmits and receives limited amounts of information from a radio station receiver. The RFID system can have either an active (battery-enabled) tag, which periodically transmits data or responds to query signals, or a passive tag (no battery), which responds when queried by a radio signal. Communication can range as far as 200 meters. n NFC: A short-range data connection protocol between a device and a radio station receiver. NFC is a subset of RFID; its scope and range are more limited. All these tools are solutions looking for problems to solve. Because of its ability to handle voice communication, Bluetooth has been used most often as a dongle placed in the ear to serve as an extension of a mobile phone. Bluetooth is also used to monitor pressure in car tires. RFID has made itself useful in various arenas: n Access management n Tracking objects (e.g., individual items, bulk shipments, airport baggage) n Tracking persons and animals n Collecting tolls n Contactless payment n Machine-readable travel documents Most RFID applications are operational in nature, but RFID can also enable companies to make tactical and strategic decisions based on traffic and purchase patterns and other observable parameters (e.g., preferences of adults with families versus those without). Using these patterns, companies can make smarter decisions about design and scheduling for destinations, event venues, amusement parks, hotels and other areas where people congregate. NFC has found a home as an enabler of room check-in, localized payments, Google Wallet and other payment and “permission to enter” services. 28) Bluetooth Basics ©2013 PhoCusWright Inc. All Rights Reserved. Page 28
  • 33. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 Technology Over 40 vendors have released NFC-enabled headsets. Google supports NFC with the Android mobile operating system, and BlackBerry enables it on the BlackBerry 10. Microsoft supports NFC on its mobile operating systems as well. MasterCard has added NFC support for its PayPass service. Notably missing from this list are Apple products. With the aim of creating the foundation and encouragement for service providers to introduce NFC applications, France Telecom-Orange Group plans to roll out 10 million SIM-based NFC phones in 2013.29 Examples n A joint venture by AT&T, Verizon and T-Mobile has developed a single platform called Isis, which allows NFC-enabled mobile phones to function as credit cards for any of the 200 million customers using the carriers’ mobile services throughout the United States. n Disney has created an RFID-enabled, rubberized bracelet dubbed MagicBand. MagicBand admits guests into the park, provides their names to park employees for greeting, and allows them early boarding for rides, among other functions. Guests can also use it to enter their resort hotel rooms and pay for park products and services. From the guest’s perspective, MagicBand is very experience- and convenience-oriented, which could make RFID a key factor in customer satisfaction and retention. n MagicBand also allows Disney to track every guest. While tracking will help Disney improve efficiency and customer service, it will also let Disney know where you are every second of your stay (and thereby maximize guest spending). Strategically (as mentioned above), tracking information can reveal traffic and congregation patterns that can later help engineers improve the theme park design, including placement of services and new attractions. Implications Beyond recognizing and enabling contactless payments, destination venues should consider the value of monitoring visitor patterns, as this data can lead to improvements in the visitor experience. We have only begun to see the potential of short-range communications links in all aspects of the travel process, from payment to facilities design. Conclusion As technology advances, so do customer expectations. Travelers expect timely 29) “Orange Presents Its ’10 Commitments’ in Brussels, Contributing to Europe’s Digital Agenda,” France Telecom-Orange press release (Mar. 20, 2012). ©2013 PhoCusWright Inc. All Rights Reserved. Page 29
  • 34. Travel Innovation & Technology Trends: 2013 and Beyond q November 2013 information and a quality experience that meets their needs during each step in the travel process. For companies, there are no cookie-cutter solutions when determining how to use new technology to meet business and customer needs – each travel company has its own culture, goals, business processes and target audience. Still, in order to face the future looking forward (rather than playing catch-up), travel companies must: n Be aware of social media’s role in your business. This could mean monitoring Facebook profiles, detecting service issues, or using social media for active marketing campaigns. n Deliver tailored content. Don’t offer too many choices: Travel shoppers are increasingly using mobile devices for trip planning, and on a mobile device, options can quickly become impossible to sort through. Refine the information you provide – and make travel shopping easier. n Make content available on any smart device. People are shopping on desktops, smartphones, tablets, and maybe soon, even Google Glass. n Know how each of your channels is performing. Supply and distribution channels are popping up like crazy, and travel companies need BI about volume, performance, reach, customer characteristics, buying patterns and profitability for each channel they use. n Redesign software and customer engagement practices so users can shop and book more complex products. For traditional air, this means selling ancillaries and branded fares. For low-cost carriers, it involves going to multiple sources and using multiple business processes. For destination events, activities, restaurants, and specialty lodging, it involves presenting content from multiple sources to the customer. v PhoCusWright is the most credible and quoted source for travel, tourism and hospitality research worldwide. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Still not sure we have what you're looking for? Contact me today for help finding the research that can make the difference in your strategic planning. Florence Kaci Director, Sales EMEA and European Market Specialist +44 (0)20 32 947 146 Mobile: +44(0)77 02 967 466 fkaci@phocuswright.com ©2013 PhoCusWright Inc. All Rights Reserved. Page 30
  • 35. PhoCusWright Inc. 116 West 32nd Street, 14th Floor New York, NY 10001 USA PO Box 760 Sherman, CT 06784 USA +1 860 350-4084 +1 860 354-3112 fax www.phocuswright.com

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