Traveling on the wings of technology

It was by accident that Lonely Planet, the famed purveyor of travel guides, hit a new high in its mobile content platform.

It happened in 2010 after an executive became stranded in London as an Icelandic volcano spread ashes across Europe and grounded all flights.

“He was very frustrated because he didn’t know London that well and he needed information,” says Anthony Dorment, general manager for Asia at Lonely Planet. To help, Lonely Planet decided to give away a handful of European city guides on mobile apps for a few days.

“We put up one Twitter post and one post on our Facebook. Within four days we had four million downloads,” he says. “Our run rate from our mobile application business increased by 50 percent and we never looked back.”

That accidental success underlined the importance for the travel and tourism industry to use new technologies efficiently.

Industry leaders reflected on the use and impact of technology on the travel industry during a China Daily Asia Leadership Roundtable held as part of the Global Tourism Economy Forum (GTEF) in Macao on Sept 11.

“The advent of the Internet and mobile technology has…given a big shot in the arm to an industry that contributes $6 trillion to the global economy, 9 percent of global gross domestic product and created 260 million jobs worldwide,” said Zhou Li, publisher and editor-in-chief of China Daily Asia Pacific.

Travelers are increasingly quick at adopting new technologies. A process that used to take years now happens in a matter of months.

“It’s bringing incredible disruption. It’s bringing incredible threats to a lot of businesses and incredible opportunities at the same time,” says Dorment.

New technology and media have revolutionized tourism and the way travelers manage their trips — from the very earliest research of potential destinations to their purchase decisions and how they share their experiences.

“Technology has had a profound impact on the travel space,” says Brendan Jacobson, global head of sales at Zagat Survey.

Few companies have experienced the potentially explosive impact of technology as much as Zagat, which provides user-generated reviews of tourist destinations.

Once exclusively a book that covered only the US, Zagat is now available online. Since it was acquired by Google in September 2011, it has the target of including reviews of all destinations across the world.

The printed guides still exist, but they are now one option on a diversified platform of offerings centered on the same content: From a website to reviews integrated in the navigation systems of cars.

This widespread availability of information is creating massive opportunities, but it is also creating a shift in the industry. Travel agents are increasingly pressured and often seen as irrelevant as airlines and hotels put their offerings directly in front of their customers.

The information gap is disappearing and taking business opportunities with it, says Fan Min, executive director and CEO at Chinese mainland online travel retailer Ctrip.com. Just being a travel agency is not enough.

“Consumers know more and more about our industry. We cannot make money from the information gap anymore,” he says. “Consumers have been empowered by technology over the past 10 years.”

For Ctrip, the opportunity is staggeringly large. Some 70 million Chinese will travel internationally this year, says Fan. The UN World Tourism Organization expects 100 million Chinese will take an international trip by 2020.

While Ctrip aims to become a complete online travel platform, Fan is aware that it is increasingly difficult to program the potential needs of every customer on an online platform that is, at the end of the day, linear.

Others have tried. Ctrip’s foreign competitors like Expedia and Travelocity have realized that people are needed to complement the online platform. Expedia, for example, has hired staff to man the phones and answer questions from customers, says Peter Greenberg, travel editor at CBS News.

“It is very easy to embrace the technology. You can do it at 3 o’clock in the morning. You can do it in your bathrobe. You don’t have to talk to anybody. Human means aren’t involved. So it is very expedient,” he says. “The question is, in the long run, how effective is it?”

The vast majority of travelers — 85 percent — do their research online, says John Liu, executive vice-president and head of Greater China at Google. Perhaps even more surprisingly, the average traveler does 55 online searches before making a booking.

“You search a lot. You really compare and look for information,” says Liu. “All kinds of information are available online and that gives a lot of information to travelers.”

But technology is virtually useless without users. An overwhelming majority of travelers research and book online, but one in two of them base their ultimate decisions on recommendations from people or sources they know and trust.

At the same time, while technology has come a long way toward facilitating travel for millions of people worldwide, it has failed to make the leaps that could streamline the global infrastructure of travel and tourism.

If a traveler is going to fly on a budget airline from point A to point B on a regular schedule, it is fine to operate completely impersonally: A virtual boarding pass, self check-in of luggage and so on.

“Above a certain price point, the more complicated the itinerary, they definitely want that conversation,” says Greenberg.

The experience of Expedia and Travelocity — which had to hire people to man the phones — bears that out.

While technology is making the world smaller for the traveler, operators and regulators have often not taken advantage of it.

“We have a terrible, terrible resistance from…governments and from air traffic controllers to get those systems (changed),” says Jean-Claude Baumgarten, vice-chairman of World Travel and Tourism Council and vice-chairman of GTEF.

The corridors that planes fly now were designed decades ago, basically at a time they followed railroad tracks to determine their direction.

“We haven’t advanced much further than the train tracks when you think about what we are doing today in terms of maintaining an effective, robust, on-time, airline system,” says Greenberg. “They haven’t figured out how to make it work for the system itself. And until we do that... we are hurting ourselves economically, whether it is in China or the US.”

The challenges of technology go far beyond the choice to adopt it or not.

It is creating challenges because it brings choice. And choice makes it harder for all kinds of brands, from hotels to airlines and everything in between, to earn consumers’ loyalty.

For content providers, the challenge is easier to meet: Quality content and a variety of offerings can keep customers coming back.

For airlines, it is a bit more difficult. One approach has led to a proliferation of rewards programs, but these have not always been successful.

There are 17.5 trillion unredeemed reward miles out there that will never be redeemed, says Greenberg. Still, to thrive in today’s competitive markets they have to figure out ways to retain customers, he adds.

Zagat is moving out of its comfort zone and into the world with local language content that will kick off this year.

Lonely Planet, for its part, is pushing deep into multiple markets, including China, where it has been successful with its one-year-old weibo site that has 130,000 followers. Its Lonely Planet magazine has launched in Chinese this year as a complement to Chinese-language international guides and even Chinese-language domestic city guides, says Dorment.

To go forward, companies need innovation and the mindset to embrace the opportunity, he adds. “(And) not being afraid to fail… and taking a bit of a risk.”

Global Tourism Economy Forum
Media & Technology
Date: Sept 11, 2012
Venue: Macau Tower Convention and Entertainment Centre

Panelists
Brendan Jacobson
Global Head of Sales, Zagat Survey

Fan Min
CEO of Ctrip.com International Ltd

Peter Greenberg
Travel Editor, CBS News

Anthony Dorment
General Manager Asia, Lonely Planet

Dr John Liu
Corporate Vice-President, Head of Greater China, Google Inc

Jean-Claude Baumgarten
Vice-Chairman, World Travel and Tourism Council

Moderator
Alexander Wan
Senior Adviser, China Daily Asia Pacific

By Alfred Romann