Guest Comment: Beyond the Hype

Wednesday, 23 Oct, 2003 0

By Paul Richer, Genesys – The Travel Technology Consultancy

The technological revolution that is undoubtedly taking place is unfortunately happening at a speed that is sufficiently slow that it is not being noticed by many in the travel industry; rather like the slow, steady movement of the hands of a clock.

This is reinforcing the opinions of the “I told you so’s” who have little interest in technology. Thinking that the revolution is no more than hype, they continue to conduct their businesses with no thought as to how the industry will be re-shaped by technological innovation.

This was brought home to me at a conference this week when, on the one hand, a well established medium sized tour operator bemoaned the fact that his Web site has done little for his business other than attract telephone calls from Web developers insisting they can do a better job and, on the other hand, a representative from Expedia UK mentioning that their latest ATOL licensing now places them as the fifth largest tour operator in the country, having reached this position in three years.

What are the indicators that point to technology re-shaping the industry?

How about reducing airline commissions? Absolutely the result of technology enabling efficient direct distribution.

How about the satellite TV channels being operated by several major travel companies? All those I have spoken to seem to be happy with the business that their TV channels are driving.

How about those specialist tour operators who have long since abandoned printed brochures in favour of the Web? Without fail, they are delighted with their decisions to do this.

Change is on the way. The increasing consumer acceptance of online distribution will pull the rug from under medium sized travel companies, as it causes the market to polarise between large mass market companies, surviving on economies of scale, and smaller specialists, surviving on differentiation. Ever reducing commissions will force agents to break into the mini-ATOL world of packaging product, earning decent fees and commissions by servicing the independent travellers who want an alternative to pre-packed mass, market holidays.

The clock is ticking. What worries me is the fate of all those who do not notice it, who are sufficiently technophobic that they would not visit an online portal such as TravelMole and won’t be reading this article, who are so ignorant of technology and the effect it will have on the travel industry that they will fail to survive the revolution.