Travel - what's new becomes old becomes new again

This week the focus in on travel and whether we are seeing the beginnings of a new disruption to how we go on holiday.

Travelling back in time

Back in the last dotcom bubble, the travel industry went through huge disruption as aggregator websites like Expedia, Lastminute and booking.com all changed the way we bought our holidays.

The idea of the package holiday came under threat in the mid 2000s as people started to book their flights and hotels both separately and online. The result was the merger of Thomas Cook with Airtours and Thomson with First Choice. The big four became the big two.

A large part of the profit for the aggregators came from selling hotel rooms. There is very little money in selling flights. For many years, hotel websites have been very poor experiences. Difficult booking systems, different currencies and not always clear information about the rooms themselves. You could do better going to the big travel websites previously mentioned.

Now the aggregators are under investigation for “clarity, accuracy and presentation of information”.

First it is the challenge Google originally had with placing ads at the top of its search results. How transparent are the big travel sites being when they are paid extra to promote hotels to the top of search results?

Another aspect is the oldest sales trick in the book - scarcity and social pressure. “Only two rooms left” and “three other people just booked this room” are all ways of increasing the pressure to make a quick purchase.

Travel is normally a considered purchase taking more like days than minutes. Partly this is due to the need to involve other people in the decision process. I wonder though if with the increase of smartphones this decision time is decreasing. This could in turn be fueling the growth of “secret sales” type platforms.

Finally, there always seem to be hidden charges around when investigations happen and this one is no different. Things like additional taxes or booking fees etc.

Government investigations though are slow and cumbersome and by the time they actually conclude the markets have moved on. In this case the shift is already starting to happen.

Hotels were never keen on giving away at least 15% of their revenues to the big travel websites and have slowly been overhauling their own internet presence using cloud based platforms like Triptease to provide better booking experiences without the large investment needed previously.

If you no longer need to go to the major aggregators to get the best price or information then they have a real problem.

A modern day online approach would be to create exclusive content to allow people to better identify the right hotel but these companies have never been publishers and I doubt it will scale as well as the old model in any case.

There is the old tried and tested model of being more and more specialised. Smaller hotels, hotels targeted at different age groups etc. Though this still suffers over time if its better to go to the hotel directly. Maybe they can create better quality loyalty programmes than the hotels themselves allowing customer to not stick to a single hotel chain.

Finally, they may instead opt for the full service approach offering end-to-end service taking away the hassle of organising a holiday or adding trips/experiences at the destination. All things that hotels themselves will find difficult to deliver on. For now.