Once upon a time, the details of booking, the beginning of every travel tale, were veiled from view. The High (or Main) Street travel agent, purveyor of packaged dreams, was one of the first victims of digital disintermediation. Even before the record labels realized, or acknowledged, that their business model was about to be torn apart, travel became something you could book yourself. This wasn’t possible before.
If you’re over the age of 30, you may remember going to a store, browsing endless brochures, and then asking someone with a computer terminal (one that you were never allowed to see) what flights and rooms were available and how much they would cost. Agents had access to the information, you did not.
In fact, what they had access to was more than simply information: it was the ability to make bookings, through a restricted form of read/write access to what was an early private network and search engine. One many still use to this day.
It’s called SABRE: the Semi Automated Business Research Environment. This reservation system, originally developed by IBM for American Airlines in the 1970s, is used by 400 airlines and 100,000 hotels worldwide to search, price, and book travel. It’s what Expedia and American Express use to find your flights. It is still accessed through intermediaries, just online. It’s currently a privately held company (which also owns Travelocity) and still the dominant technology provider for one of the world’s largest industries.
Today, thanks to the web, most travel stories begin, like so much else, with a search. Or, more accurately, with many, many hours, of searching. First comes the dreaming, inspiration phase. This can take you from Facebook to Conde Nast Traveller, from Foursquare to TripAdvisor, and (usually) this is the fun bit.
But once you know where and when you want to go, you are confronted with the travel booking experience: a rabbit hole inside which everything seems to get bigger or smaller, depending on which choice you make. This is not (usually) the fun bit. According to research done by the Boston Consulting Group:
“Leisure travelers spend an average of 42 hours in the travel cycle across 17 of the major travel websites.”
Even if some of these web services are wonderful, the sheer volume and duration has a cumulative, usually deleterious, impact on the start of your travel experience.
Metasearch engines and online travel agents promise transparency, comparison, and discounts. These businesses were one of the great success stories of the early web. Lastminute.com in the U.K. was a dotcom darling, although the brand promise of last-minute discounts never really rang true for the customer. Even today, they still generate huge revenues. Priceline stock trades at nearly $1,000 a share–more than Google, more than Apple at its very peak (which is why brand spokesman William Shatner’s negotiation to take some of his fee in stock was so very smart).
As technology has advanced so has the functionality and design of these travel sites. When the travel providers themselves embraced the web, they provided a new set of options, allowing consumers to book directly. Yet if you run comparative searches–on Kayak, Skyscanner, Hipmunk, Momondo, or the airline websites themselves–you seem to find different flights, or the same flights at different prices.
The more you search, the more likely you are to realize a fundamental aspect of the travel industry: dynamic pricing. Coupled with enough disintermediation to put the information into the hands of the customer, it creates purchase anxiety, which is what leads to all those hours of searching. Because the prices seem to be different, you are driven to search again and again. This is reflected in changes in one of the key metrics in the online travel industry: the “look to book” ratio. Ten years ago it was 1 in 100, today it’s 1 in 1,000.
In some ways, dynamic pricing is simple economics: Both airlines and hotels charge different prices for the same product, depending on demand, actual and predicted, and a number of other factors including the point of sale, which allows for market based prices by country or purchase channel. Supply in the travel market is relatively fixed, so demand is modulated by dynamic pricing. Higher prices are charged during peak times, but digital data also allows for more personalized pricing.
Savvy shoppers tend to run multiple comparative searches, but this leaves cookies and can indicate increased demand, which in turn could be used to adjust the displayed prices and availability. It has been suggested that using incognito mode when browsing for flights could help show variances in prices displayed but availability may suddenly seem to vanish once you log in to an airline or travel agency website that has a better idea of the kinds of prices you have historically paid or are statistically likely to pay.
Data, especially when aggregated, can also work for the consumer. Kayak’s price graphs suggest how prices compare to recent searches by other members, letting you know if prices are rising or falling. Bing Travel makes predictions on the best time to buy tickets based on the fluctuating prices. Kayak unveiled a similar service this year. They are both based on proprietary algorithms and their own aggregated data–the predictions don’t always align.
The web has shown us that industries where there are layers of intermediaries and unarticulated problems borne by customers, such as spending 42 hours planning and booking a trip, are ripe for disruption.
Google’s purchase of ITA, a travel search and pricing company similar to SABRE that powers companies like Kayak, indicated their intention to get deeply involved in the sector. They subsequently rolled out their own flight search tool but are understandably cautious about disrupting relationships with some of their biggest customers, the other players in the online travel industry.
Discussing the purchase, Eric Schmidt suggested that the travel search experience was broken, ready for innovation and new interface ideas. Over time, travel search and price predictions and alerts could become more seamlessly integrated into Google products, allowing it to make tailored suggestions and proactive recommendations based on your personal data and behavior. Once booked, ticket information from your Gmail inbox could be integrated into Google Now and Calendar.
User experience designers have long challenged travel companies to put the user first and many sites have begun to raise their game, creating utilities to add value to their offering and lock in customers.
If you email your booking confirmation to email@example.com, the details appear in your Kayak app, remind you when to check in, update you on flight status. Design company Fantasy Interactive recently posted a digital thought experiment online, their vision for the future of an airline website, responsive of course, providing decision assistance at every juncture, smoothing the pathway to purchase, hoping to eliminate some of the anxiety and time spent searching.
In the future, searching and booking may become as simple as “Once Upon A Time.”
Share your ideas at www.travelbrilliantly.com
Faris Yakob is the Creative Braintrust Creativity Expert and Founder of GeniusSteals