Posted by Henry Harteveldt on August 5, 2009
Our most recent research report, "Using Digital Channels To Calm Angry Travelers," has been getting a lot of attention.
To put it mildly, travelers are so angry with poor online travel experiences they're approaching a breaking point.
Check out the steady decline in the number of US online leisure travelers who enjoy using the Web to plan and book trips, and who feel that travel Web sites effectively present choices and trade-offs to them. These are critically important given the tepid economy and the increasingly complex way consumers are forced to buy travel. And now, notice how we see a small, but meaningful, increase in the number of people considering using offline travel agencies.
I've been asked a lot of questions about this report -- who's to blame? How could this happen? What will happen? Does this mean that online travel dead?
Let's start with the last question: Online travel is certainly not dead. However, if travelers' frustrations are not correctly addressed, it's future becomes increasingly uncertain and potentially less valuable -- and thus less useful and profitable.
So, who is to blame? All of us. End-user companies, mostly the online travel agencies and suppliers, for failing to push themselves, and their technology partners, to innovate, and for failing to ask their customers the right questions when researching their online experiences (or ignoring what your customers tell you). Technology firms, including both travel industry specialists and general tech providers, for failing to demand more of themselves, and for failing to educate and, yes, push their clients to consider new processes. eCommerce integrators and interactive marketing design firms have contributed to this problem as well.
How did this happen? Simple -- we got fat and happy. Online travel kept growing thanks to the organic growth of online travelers, spurred by the growth of broadband connectivity, and pricing structures and fees designed to push consumers to the Web. US online leisure travel spending grew from approximately $28 billion in 2002 to nearly $84 billion last year. Too many travel organizations failed to adequately invest when times were better. Now, many have had to trim eCommerce budgets as their organizations curtail spending due to the recession. We fiddled while Rome burned. Meanwhile, the traveler stewed.
So what will happen? Either incumbent providers get their act together -- now -- or else they lose in the future to smarter, more creative competitors. Among the firms we think understand what travelers want are InsideTrip.com, TravelMuse.com, Uptake.com, Kayak.com, Travelzoo.com, Bing.com's travel search, and Imagini.net, parent of Youniverse.com and provider to Hotel.com's UK visually-based booking engine. Air Canada also wins for how easy they make it for travelers to understand product choices and trade-offs, and for its effective online merchandising. By no means is this list exhaustive, but note who you don't see on it:.major travel agencies, airlines (except for Air Canada), hotel chains, cruise lines -- you get the idea. And guess what? Those firms rely on major travel tech firms, general tech providers, and eCommerce Integrators and design firms. Cause and effect? Or unlucky coincidence?
So, what do you think? Where do you see the opportunities or road blocks? How much of the challenge is due to front-end limitations, and how much is due to challenges posed by back-end or middleware? If you're an end-user company, do your technology partners understand your challenges? If you're a tech provider, do your clients listen -- and act -- on your recommendations? Let's open a dialog and see if we can't solve all the problems of the world. First one to do that buys drinks for the rest of us.
As always, thank for your time.