European Travel Sector — Unsettled Yet Undeterred

27 May 2016
By Charlotte Lamp Davies, VP of Travel and Hospitality, DataArt and Anna Grevtseva, VP Online Travel

The third Phocuswright Europe Conference was held at the Convention Centre Dublin on the 10-12  of May  2016 and drew the continent’s top players to exchange views on the trends in technology for the European travel market. The theme was “Unsettled yet Undeterred”, reflecting the backdrop of Europe’s bumpy economic recovery and reduced spending on travel.

The travel industry DNA is changing, with important shifts happening from one year’s Phocuswright to the next.

Stephen Kaufer, CEO, Tripadvisor, emphasized the company’s shifting focus from a review resource to one that accommodates instant bookings. KAYAK and Google have also introduced direct bookings.

This trend was in the spotlight of the Executive Roundtable: “Mo’ Meta is Mo’ Betta”, where metasearch industry players discussed whether assisted bookings are blurring the boundaries between a metasearch and an OTA model and confusing the customer. Hugo Burge, CEO, Momondo Group, argued that assisted booking is threatening to undermine what metasearch stands for, namely independence and neutrality and consequent consumer trust. Frank Skivington, CCO, Skyscanner, disagreed and noted that the instant booking option on the metasearch engine gives customers a better and richer shopping experience, removing much friction from the booking path in the traditional meta redirect model.

Another universal shift of the travel sector conversation seems to be from selling travel products to creating inspirational and complete consumer experiences.

Oliver Gremillon from Airbnb talked about a campaign to launch ‘act two’ of Airbnb to show the shift from being an accommodation provider to offering a more substantial trip experience – to live like a local.

Gary Morrison, SVP, Expedia argued that the key to creating an outstanding customer experience is to test what works best and to ask users as many questions as possible, collecting answers, making hypothesis and testing them. Scale is an important driver of traffic and traffic is “the lifeblood of how many tests we can run concurrently” he said.

Morrison noted that competition is for the technology enabled traveler’s attention and can be won by superior product design. He went on to share Expedia’s four keys areas of focus in product design: 1) Prioritize real time information, so your products and services have low latency and provide personally relevant, real-time feeds to various audiences (e.g. hoteliers could have feeds about competitor pricing and act in real time by introducing instant promotions). 2) Create an engaging and playful experience. 3) Provide relevant content- Morrison noted that people readily give a lot of information about themselves but there is an expectation that it will be returned in a form of customized relevant and valuable content. 4) Design for cross-platform availability – customers are expecting a 3D preview of the destination to determine what the experience there would be like, in addition to consistent experience across all the current devices. A shift of platforms from tablet to Oculus Rift, is to be expected.

Another common theme was one of frictionless journeys from destination selection to package booking. Frank Skivington and Hugo Burge both talked about tapping into the beginning of the consumer journey – the destination selection stage. Competition here will depend on the relevance, quality and inspiration factor of the content that companies are able to provide.

Online players are turning their focus on packaged deals. Fabio Cannavale, CEO of Lastminute.com said the firm’s main focus in Europe is on the digitisation of the package sector, 70% of which remains offline. “We think there is tremendous growth in that,” he said. “Integration of different services; adding together flights, hotels, transfers, car and other services, all our focus is on that.” Cannavale said this could be achieved both internally and through acquisition.

The audience went silent as Google’s VP, Travel and Shopping, Oliver Heckmann, talked of building a packaged holiday exploration service. Other innovations to look out for from Google include: in-destination discovery tool, new Destinations mobile service and Google Trips mobile app, which lets users search for destinations using variables like activities, season or mood, organizes every aspect of one’s travel and offers useful suggestions. Tapping on a destination will present users with several sections related to various aspects of a trip: reservations, things to do, saved places, food & drink, getting around and need to know. Flight search and hotel finder also remain in core focus, yet Heckmann once again stressed that Google is not competing with OTAs.

Another very clear and continuing trend is the consumer shift to mobile. Oliver Heckmann noted that there has been an almost 40% increase in mobile searches in the travel category from quarter four of 2015 to quarter one of 2016, while Peter Verhoeven, MD, Booking.com, stated that 50% of travelers are booking on mobile and a third of all Booking.com users come from mobile.

Change in the airline sector was predicted by Kenny Jacobs, CMO of Ryanair, who thinks that more legacy airlines will follow the lead of Lufthansa and impose a fee on GDS bookings. “Fuel will go back up above $80 in the next three years, and we will see more consolidation.” said Jacobs, this will see the share of low-cost airlines rise from over 30% today to more like 70% to 80%. 

DataArt presented a selection of completed projects, highlighting some of DataArt’s core skill set expertise beneficial to the travel sector. Projects presented included work completed for oneworld alliance, Triometric, Skyscanner and Miki Travel, among others. Charlotte Lamp Davies, VP of Travel & Hospitality at DataArt said: “Two days packed with meeting some of the most innovative thinkers in travel, great content, solid research and a fascinating dialogue, Phocuswright continues to be a perfect platform for showcasing  DataArt’s  biggest achievements in solution design and consulting expertise.”

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