Last week, technology guru Scott Klososky reminded a group of travel executives at a Travel Weekly Leadership Forum that companies, even entire industries, pay a very high price if they ignore technology trends.
Often, Klososky said, executives believe that because none of their competitors is pushing the edges of technology, they have no compelling reason to divert energy and resources to do so themselves.
The problem with that thinking, he said, is that technologists from outside your industry will come in and eat your lunch. As an example, he pointed out that a computer company, Apple, is now the largest seller of music in the world, leapfrogging over labels like Sony, retailers like Sam Goody and others in the music industry.
Actually, Klososky didn’t need to go to another industry to find examples. Expedia, No. 3 on Travel Weekly’s 2009 Power List, was founded on the campus of software giant Microsoft. No. 7 Travelocity was cooked up by the mainframe geeks at Sabre. In fact, not one of the online travel agencies on the Power List was hatched by an agency that existed before consumers had access to the Web.
TripAdvisor founder Stephen Kaufer once told me that he came from a technology background and, basically, looked around for an industry where he could launch a blog site. He saw a big fat opening in travel. He didn’t invent blogging; he just noticed that no one who was already in the travel space bothered to pick up on the trend.
No question, technologists have certain advantages when they enter an industry, and Apple, Microsoft and Sabre already possessed significant resources and the necessary skill sets for success. Even if traditional agency executives had deep insights into how, for example, augmented reality or brain-computer interface technology could be applied to sell travel, they would have significant challenges in realizing their visions.
Though Klososky spoke about cutting-edge technologies, up to and including robotic soldiers and computer implants in humans, his underlying point was not that travel companies need to seize on those particular advancements to market vacations, but rather that it’s bad for businesses not to ponder how technology, both existing and over the horizon, can be employed.
In reality, technology companies will in most cases have an advantage over whatever industry they choose to enter because it’s easier for them to learn our industry than it is for us to learn theirs. But unless you go back to the 1960s, travel’s track record in exploiting cutting-edge technology seems particularly weak. Many legacy retailers were initially caught flatfooted by the potential of Web commerce. Startup Amazon.com, for example, was first out of the gate to sell books online. But Barnes & Noble wasn’t stunned into inaction, as American Express appears to be almost 15 years after leisure travel was first put up for sale on the Web.
Today there are many agencies selling travel online, including some that have a brick-and-mortar legacy. But as a group, traditional travel agencies are given low marks by suppliers when it comes to exploiting even long-established technologies.
A few days before Klososky spoke, I moderated a panel at Vacation.com’s national conference. Onstage with me were Steve Gorga, president of Travel Impressions; Vicki Freed, Royal Caribbean’s senior vice president for sales and trade support and services; Scott Nisbet, senior vice president and COO of Globus; Bill Smith, senior vice president of sales and marketing for Crystal Cruises; Michele Saegesser, vice president of sales for Viking River Cruises; and Steve Tracas, CEO of Vacation.com.
I read a series of statements and asked panelists to respond only “true” or “false.” Among those statements was: “On the whole, I am satisfied with travel agents’ expertise in database marketing.”
It was the only statement for which there was complete agreement among the panel: “False.” “False.” “False.” “False.” “False.” “False.”
I want to emphasize that my query on stage did not single out Vacation.com agents but asked about agents as a whole. It was clear to me from the discussion on stage that these suppliers are very concerned about the general health of travel agencies and that they believe agents would benefit by taking advantage of existing technologies, some of which have been available for a decade or more.
I worry that suppliers may tire of waiting for some agents to exploit basic marketing technology. Every one of those suppliers on stage has sophisticated database marketing tools, and they all currently use them to market directly to consumers. Some instruct consumers to book only through travel agents; others provide options to book direct.
It’s not only other agencies or even technologists outside of travel that will swoop in on the business of agencies that ignore the power of technology. Their supplier partners will not indefinitely forgo exploiting powerful sales and marketing tools in deference to agents who are technophobes.
Tour operators and cruise lines don’t need to deploy an army of robotic soldiers to replace travel agencies that refuse to get serious about database marketing. They can disintermediate using 1990s technology that some agents still ignore.
Contact Arnie Weissmann at [email protected], or follow him on Twitter at twitter.com/awtravelweekly.