& Travel

Web 2.0 – Basics & Impact On The Travel Industry Nirat Bhatnagar Co-Founder Chahiye.info

Agenda What is Web 2.0 Web 2.0 Business drivers Value Chain Impact & Opportunities / Risks Content Cycle Impact Assessment Recommendations

What is Web 2.0 really? Beta-test long-tail widgets Remix social life-hacks Syndicate semantic weblogs

What Is Web 2.0 Case Study 1: Travelistic Mike likes the video a lot and puts it on his blog. It is seen by his 1300 daily readers Anne travels to Paris and uploads a video on Travelistic Mike sees the video while planning a trip to Paris 1 2 3

What Is Web 2.0 Case Study 2: Rrove Anne travels to Paris and tags a Moulin Rouge on the Paris map Mike sees the comment while planning a trip to Paris and decides to visit Moulin Rouge. Tags it as night life Geena searches night life in Paris on Rrove and discovers the Moulin Rouge tagged as night life by Mike 1 2 3

What Is Web 2.0 Case Study 3: WikiTravel The Wikipedia of travel Background & travel related info on 16,900 + destinations worldwide & growing! Received the Webby Award for Best Travel Website

The Wikipedia of travel

Background & travel related info on 16,900 + destinations worldwide & growing!

Received the Webby Award for Best Travel Website

Web 1.0= “Web as an information source”; Web 2.0= “The participatory web” Web 2.0 is about collaborating, sharing, expressing Blogs, Wikis, Podcasting There have been fundamental changes in technology and user adoption which have led to a Web 2.0 explosion Technology evolution; open standards Network effect; critical mass in almost every niche Not a fad! The opportunity (and challenge) from Web 2.0 is significant for all industry players- offline and online. What Is Web 2.0 A few loose definitions

Web 1.0= “Web as an information source”; Web 2.0= “The participatory web”

Web 2.0 is about collaborating, sharing, expressing

Blogs, Wikis, Podcasting

There have been fundamental changes in technology and user adoption which have led to a Web 2.0 explosion

Technology evolution; open standards

Network effect; critical mass in almost every niche

Not a fad!

What Is Web 2.0 Web 2.0 Growth Trends Source: Technorati Blogs Social Networking Membership Source: Comscore VC Investment in Web 2.0 Source: Ernst & Young Significant VC investment in Web 2.0 - its here to stay User adoption of blogs & social networks to rise rapidly until 2012 Gen X & Gen Y prolific users of Web 2.0 Gradual but certain adoption by enterprises

Significant VC investment in Web 2.0 - its here to stay

User adoption of blogs & social networks to rise rapidly until 2012

Gen X & Gen Y prolific users of Web 2.0

Gradual but certain adoption by enterprises

Why Web 2.0 Adoption of Web 2.0 by enterprise Campaign : “Up Your Budget” Tools used : Blogs, Internet Videos Spend: < USD 500,000 Results 1 million unique visitors 10 million page views Budget Rent A Car Adopted by a few early adopters in the travel industry – with impressive results Adoption increasing as with emergence of platforms / standards emerge & references Campaign : User submitted video adverts Tools used : Blogs, Internet Videos, Company Website Southwest Airlines Starwood Hotels Campaign : W Hotel designed and put up on Second Life Tools used : Second Life

Campaign : “Up Your Budget”

Tools used : Blogs, Internet Videos

Spend: < USD 500,000

Results

1 million unique visitors

10 million page views

Adopted by a few early adopters in the travel industry – with impressive results

Adoption increasing as with emergence of platforms / standards emerge & references

Campaign : User submitted video adverts

Tools used : Blogs, Internet Videos, Company Website

Campaign : W Hotel designed and put up on Second Life

Tools used : Second Life

What is Web 2.0 Why Web 2.0 ? Value Chain Impact & Opportunities / Risks Content Cycle Impact Assessment Recommendations

Why Web 2.0 Web 2.0 Business Drivers – Cause & Effects Technology Trends Participation By End Users / Seamless Information Re-composition Rich media/ RIAs / Improvements in Usability P2P Reliance In Buying Behavior Reduction of Information Asymmetry Social Behaviour Web As A Platform

Why Web 2.0 Enablers – The Web 2.0 Toolset Blogs Wikis Online Videos Podcasts Photos Creating Content Tagging RSS / Atom Feeds “ Loose” APIs User Participation Open Architectures Applications (maps , Facebook apps etc) Embedding Into Applications Mashups Social Networks Discussion Boards

What is Web 2.0 Why Web 2.0 ? Travel 2.0 Web & Travel Value Chain Travel 2.0 Content Web Value Chain Impact & Opportunities / Risks Recommendations

Travel 2.0 Web & The Travel Value Chain The Travel 2.0 Web Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags Commerce Value Chain Supplier / DMC Tour Operator Online Agent / Offline Agent Customer

Travel 2.0 Web & The Travel Value Chain Analysis Approach Travel 2.0 Content Web Travel Value Chain Customer Perspective Industry Perspective Value Migration Player Specific Strategy Web 2.0 Business Sensitivity Value Chain Impact Opportunities & Risks Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Customer Perspective

Industry Perspective

Value Migration

Player Specific Strategy

Web 2.0 Business Sensitivity

Value Chain Impact

Opportunities & Risks

What is Web 2.0 Why Web 2.0 ? Travel 2.0 Web & Travel Value Chain Travel 2.0 Content Web Value Chain Impact & Opportunities / Risks Recommendations

Travel 2.0 Content Web Customer Perspective: Confused By Info Overload What organizations need to do Customers wants a trip and not just a travel component Travel research has high transaction costs Information is available piece-meal & proliferation of Web 2.0 content sources leads to confusion Travel 2.0 players need to help rather than confuse – provide clear paths to planning & purchase. 3 Week Trip To Australia For 2 What The Customer Wants Blog Wiki Travel videos Social network RSS What The Customer Sees Google Metasearch OTA Planner Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Customers wants a trip and not just a travel component

Travel research has high transaction costs

Information is available piece-meal & proliferation of Web 2.0 content sources leads to confusion

Travel 2.0 players need to help rather than confuse – provide clear paths to planning & purchase.

Travel 2.0 Content Web Industry Perspective: Value Migration Reach, content or commerce no longer sufficient on a stand-alone basis Value has migrated to owning the customer Commerce Content Reach Social Media Commoditized Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Reach, content or commerce no longer sufficient on a stand-alone basis

Value has migrated to owning the customer

Travel 2.0 Content Web Resulting Strategy: Piecing It All Together Is Key Enabling one stop travel planning & transaction is key. Wants trips, not components Transaction costs Information proliferation Planning & commerce facilitation are key Customer Perspective Industry Perspective Content, commerce & reach value poor independently Owning the customer & being the SPOC + Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Wants trips, not components

Transaction costs

Information proliferation

Planning & commerce facilitation are key

Content, commerce & reach value poor independently

Owning the customer & being the SPOC

Travel 2.0 Content Web Piecing It Strategy: Depends on how you fare on 2 attributes Customer Benefits (Your value add) Customer Costs (pain points) Availability Reliability Time Anxiety Effort Quality Transactability … the size of your user base and what kind of value added travel components you provide. Attributes that drive value to the customer User base Components Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Travel 2.0 Content Web Segment Wise Strategies A large user base and end to end coverage of travel planning and transactions through Web 2.0 components is the sweet spot Players with a few components and small user base should Become best of breed Feed out to solution players and complementary product players Players with large user base should aggregate relevant feeds to develop an end to end offering to enter the sweet spot Components Size - + + Rrove Wikitravel Expedia Tripadvisor Triphub Solution play Product play Planning sweet spot Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

A large user base and end to end coverage of travel planning and transactions through Web 2.0 components is the sweet spot

Players with a few components and small user base should

Become best of breed

Feed out to solution players and complementary product players

Players with large user base should aggregate relevant feeds to develop an end to end offering to enter the sweet spot

Travel 2.0 Content Web An example of putting It All Together : Trip Hub Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

What is Web 2.0 Why Web 2.0 ? Travel 2.0 Web & Travel Value Chain Travel 2.0 Content Web Value Chain Impact & Opportunities / Risks Recommendations

Value Chain Impact Assessment Web 2.0 Business Sensitivity: Will You Get Impacted? Customer purchase patterns in different segments vary in their sensitivity to Peer opinions Hard facts Commodities are fact sensitive; experiences are opinion sensitive Sharing of opinions impacts experience oriented / less defined products far more Customized tours Impact of Facts Impact of Customer Opinions - + + Standard tours Flights Tickets Boutique hotels Event tickets Cruises Car rentals Base Impact Strategic Impact Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Customer purchase patterns in different segments vary in their sensitivity to

Peer opinions

Hard facts

Commodities are fact sensitive; experiences are opinion sensitive

Sharing of opinions impacts experience oriented / less defined products far more

Value Chain Impact Assessment Base Impact Direct channel to communicate with customers Customers & critics get an easy platform to discuss organizations. Form cliques Additional medium beyond traditional PR & marketing Participate in community discussions Showcase thought leadership Bypass traditional PR for speed & customer intimacy Build deep customer relationships Leverage word of mouth to develop the brand Corporate indifference to the new Web Negative blog swarms Being viewed as plastic / unauthentic Impact Opportunities Threats Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Direct channel to communicate with customers

Customers & critics get an easy platform to discuss organizations. Form cliques

Additional medium beyond traditional PR & marketing

Participate in community discussions

Showcase thought leadership

Bypass traditional PR for speed & customer intimacy

Build deep customer relationships

Leverage word of mouth to develop the brand

Corporate indifference to the new Web

Negative blog swarms

Being viewed as plastic / unauthentic

Value Chain Impact Assessment Case Studies & Do’s / Don’ts Promotion Crisis Management Success Failure Assign adequate marketing resources Identify mavens and understand context Listen … and then talk … to add value Showcase thought leadership Do’s Be too “salesy” or pushy Be un-authentic Don’ts Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags

Assign adequate marketing resources

Identify mavens and understand context

Listen … and then talk … to add value

Showcase thought leadership

Be too “salesy” or pushy

Be un-authentic

Value Chain Impact Assessment Strategic impact for sensitive product categories Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Impact Opportunities Risks Supplier / DMC Tour Operator Online Agent / Offline Agent Customer Wikis Travel Blogs Social Networks RSS Metasearch Planners Comparator Reviews Tags Greater reach/ visibility Disintermediation Context relevant distribution / promotion Service quality exposed Comparability Product design based on most popular ratings online Customer service becomes key Bundling for price opacity Service quality exposed DIYers can go direct to local suppliers Reduction in need/ value of advice Comparability Offline Agent Sell complex / difficult itineraries Target non-web savvy market share Personalized marketing / offers to customers on your database Go online Leverage Web 2.0 tools Position yourself as a travel guru reviewer on social media Online Agent Invest in Web 2.0 DIY travel Further disintermediation Biggest beneficiary Info overload Comprehensive, quick & effective comparison & planning enabled Collaboration / group travel made easier

Greater reach/ visibility

Disintermediation

Context relevant distribution / promotion

Service quality exposed

Comparability

Product design based on most popular ratings online

Customer service becomes key

Bundling for price opacity

Service quality exposed

DIYers can go direct to local suppliers

Reduction in need/ value of advice

Comparability

Offline Agent

Sell complex / difficult itineraries

Target non-web savvy market share

Personalized marketing / offers to customers on your database

Go online

Leverage Web 2.0 tools

Position yourself as a travel guru reviewer on social media

Online Agent

Invest in Web 2.0

DIY travel

Further disintermediation

Biggest beneficiary

Info overload

Comprehensive, quick & effective comparison & planning enabled

Collaboration / group travel made easier

What is Web 2.0 Why Web 2.0 ? Travel 2.0 Web & Travel Value Chain Travel 2.0 Content Web Value Chain Impact & Opportunities / Risks Recommendations

Recommendations To Summarize Web 2.0 is already impacting all types of industry players Online players will need to figure out their strategy along: Re-assessing customer value proposition Sharing content and tools: data in and data out (‘co-opetition’) Bricks & Mortar players will need to harness web 2.0 To connect to customers, foster loyalty To understand (and even influence) demand … and fine tune offering There is no single formula. Be prepared to experiment and figure out Social media is an important part of your marketing agenda

Web 2.0 is already impacting all types of industry players

Online players will need to figure out their strategy along:

Re-assessing customer value proposition

Sharing content and tools: data in and data out (‘co-opetition’)

Bricks & Mortar players will need to harness web 2.0

To connect to customers, foster loyalty

To understand (and even influence) demand

… and fine tune offering

There is no single formula. Be prepared to experiment and figure out

Social media is an important part of your marketing agenda

Thank You