Planning your vacation in two click. How online tools and platforms are disrupting the travel industry
For the last couple of years, I`ve attended a dozen of travel conferences as a keynote speaker and panel participant. And what I noticed is rather interesting. One of the popular topics among the various discussions is the domination of search engines (especially Google) in the travel industry. One more trendy topic is the use of travel aggregators.
Experts have different opinions, but the majority agrees on one thing: loyalty to famous brands almost does not exist. Quite often, tourists make a decision based only on the pricing policy. As a result they are becoming victims of monopolies, rarely remain loyal to top brands (often due to personal wealth). In fact, only a tiny percentage of people remain committed to a particular hotel chain, airline or car rental company. Let`s take a look at several examples.
1) One European company has an absolute monopoly on rail tourism — and, hence, the person remains loyal to this company because there is no alternative. In this case, search engines or aggregators can only make the tourist’s life a bit easier but are unlikely online tools will make a significant change to it. Frankly, there are very few examples of monopolies in the global world of travel. For instance, in the Schengen Area, the example above is practically impossible.
2) The second example (a rarer one) that won’t work out with aggregators is wealthy customers who choose, for instance, a hotel only of a particular chain. Not just conventional five stars, but let’s say a specific brand. Obviously, such customers will not search the Internet for the best option, the cheapest option, or for any other hotel of a lower class.
3) The third and final example: let’s say that a person became a client of a European car rental company or a low-cost airline. He is not always satisfied with the quality, but the price leaves him with no choice. However, this is already a controversial example, since the better price from a competitive low-cost airline will poach him.
However, it is worth noting that all three examples mentioned above are not making the majority of the global travel industry.
What will happen to the majority of travelers?
For most tourists, brands and names are of secondary importance. There is a myth that Google Flights has destroyed companies that sell plane tickets, at least in the United States. It can be some truth in that. An ordinary tourist often doesn’t care which airline he/she will take. A tourist cares about the time in flight, the quality of connections (if any), and the price. In this case, data aggregators become the best option, and what is more interesting — the traveler reserves tickets on airlines’ websites.
This trend is also noticeable in other travel industries. KAYAK, Rentalcars, and similar websites do the same on the car rental market. By the way, aggregators sometimes get the rental companies’ piece of the pie by offering their insurance, which is often much cheaper.
The same situation happens in the hotel business. Probably the most popular hotel reservation systems in the world are Booking.com and Expedia. There are also Hotels.com or HotelTonight. They have one thing in common — they are hotel aggregators that offer you the opportunity to compare a particular chain or just hotels based on specific preferences.
“Aggregation” of travels takes place everywhere: AirBnb is an aggregator of rental houses and apartments; Uber and Lyft are aggregators of private taxi drivers and carriers; CruiseBe is an aggregator of leisure activities during a cruise; Google Trips is an aggregator of leisure activities during vacation. This list is endless. According to trends, the world’s Internet leaders are actively developing their travel sectors.
This applies to both social networks and search engines. And the key leader in the travel market now is Google.
Sooner or later, these trends will absorb not only small websites and companies. The current popular services around the world are also at risk of losing market share because of the “Google’s appetite” or “Amazon’s strategic goals.” And no one can guarantee that the recently announced Google’ Hotel Search will not get the market leaders’ piece of the pie.
What exactly are aggregators?
The essence of travel aggregators is extremely simple — these services offer nothing by themselves. Often, they do not have their own discounts or promotions. They do not have their own fleet, hotels, or cruise lines. They are simply a mediator between tourists and companies.
Aggregators collect information and sort it by specific criteria. As a result, it becomes possible to compare different brands, hotels, airlines in many respects, ranging from prices to reviews.
Why does it benefit an ordinary tourist? It’s simple! The vast majority of travelers are not picky about the brand of the hotel. The tourist is interested in price, quality, convenience, and according to these criteria, he books a hotel on a booking website. The tourist forgets the full name or the chain of the hotel and associates it with photos on the aggregator or the location on the map. It is the quality of service that is at the top.
Perhaps this was made possible by the massive competition in this market. This scheme also works when buying plane tickets. Because for most of the tourists, the name of the airline is nothing more than an “image” factor, and the price and convenience are more important. In this case, aggregators do help.
Let’s take, for instance, car rental services. The tourist cares about the car’s class. Sometimes he cares about the brand, capacity, price, vehicle efficiency. A company or a travel brand that rents this car is the last thing that most tourists are interested in. Sometimes “bonds of loyalty” appear, but this can refer both to a specific rental office and to a particular aggregator. It works across different industries, whether it is about cars, hotels, or plane tickets.
What`s going to happen in couple of years?
“Aggregators of aggregators” will appear very soon. By the way, Google is working actively in this direction, but not in all countries. These “super aggregators” will be able to plan the entire trip in a couple of clicks. They will offer not only hotels or flights but also leisure activities in certain cities.
Roughly speaking, the tourist will be able to indicate his preferences, budget, and dates — and the program will generate an optimal route for him with a detailed schedule for each day.
With the development of personalization and artificial intelligence, these services will become a daily thing. They will completely replace existing services, let alone archaic travel agents.
This article was previously published in Ukrainian media via the link.
