Digital Revolutions in travel

Research & InnovationAPI & Platform

Business Strategy & Digital TransformationNew Usages, Connected Business & Mobility

Digital Revolutions in Travel

William El Kaim

January 2015 – V1

Question

Raise your hand if you bought your

last trip in a bricks-and-mortar

travel agency?

Copyright © William El Kaim 2014 3


Brick and Mortar Agency in the USA

• The ongoing reduction in the number of bricks-and-mortar agencies won't

subside.

• Seven years ago, according to ARC, about 20,000 travel agency retail

outlets processed air sales through its systems.

• ARC's latest report, for September 2013, listed just over 13,000.

• In another seven years that number may be down to about 5,000, speculated

Travel and Transport president and CEO Bill Tech.

• Mobile travel bookings are projected to comprise over one quarter of the

U.S. online travel market in 2015 – up from just 2% in 2011.



Plan

• The Third Industrial Revolution

• The Entrepreneurial Age

• The 1st revolution: Birth of the travel agent and the GDS ecosystem

• The 2nd revolution: Internet Travel Agency and instant comparison

• The 3rd revolution: Social / Local / Mobile and Meta-search

• The 4th revolution: Travel as a Service and Mobility


The Third Industrial Revolution


The 3rd Industrial Revolution

Jeremy Rifkin • We’re in the first stage of a paradigm shift that is reshaping not only the

economy, but also society at large, and even how we think and perceive our

world.

• The great economic and social revolutions in history occur when two things

happen

• The emergence of a new energy regime that opens the path to a more complex

civilization

• The new energy flows can bring more people together, integrate bigger commercial and social

units, etc.

• To emerge successfully, this new paradigm requires a communication revolution

powerful enough to manage the new energy regime.


The First And Second Industrial Revolutions Scaled

Top-down• First Industrial Revolution driven by coal and steam power

• When: 19th Century

• Energy: Coal and steam power

• Communication: Print technology became very cheap when steam power into printing

was introduced. That decreased the cost and increased the speed, efficiency and

availability of print material. At the same time public schools in EU and USA were

established.

• Second Industrial Revolution driven by Electricity

• When: 20th Century

• Energy: centralized electricity, elite energies (coal, oil, gas, tar sands) that are only found

in a few places and require significant military and geopolitical investments and massive

finance capital, and that have to scale top down because they are so expensive.

• Communication: mass communication (broadcast – Top to all), telephone and then later

radio and television


The Third Industrial Revolution Favors Lateral

Power• 3rd = Internet for communication and renewable energy

• When: Now - When millions of small players come together in vast networks to pool /

share their content, risks and their resources.

• Energy: Transition to distributed renewable energy sources found in in every inch of the

world: the sun, the wind, the geothermal heat under the ground, biomass (garbage,

agricultural and forest waste) small hydro, ocean tides and waves.

• Communication: The Internet has been a very powerful communication tool in the last 20

years. What’s so interesting about it is the way it scales. The Internet, by contrast, is a

distributed and collaborative communication medium and scales laterally.

• Disruption comes from lateral power

• Electricity 2.0: everybody will become a producer, smart grids

• Travel 2.0: social, local, mobile in dynamic networks (ecosystem)


Looking for the perfect experience !

Always more Content, Usages re-inventednew experience:

Wikipedia content, in a new app on Ipad


If We Had To Summarize Each Revolution by a

Movie …


The Entrepreneurial Age

New and valued offer in a mass market

through the development of a new business model


Companies Were Designed like Machines …

• The average life expectancy of a company in the S&P 500 has dropped

precipitously, from 75 years (in 1937) to 15 years in a more recent study.

• Companies were built on a corporate model of “knowledge stocks”

• Developing a proprietary product breakthrough and then defending that innovative

advantage against rival companies for as long as possible.

• The issue is now, because of the increasingly global nature of business

competition, the value of a major proprietary breakthrough or invention

erodes in value much more quickly than in the mid-20th Century.

• Companies should create broad networks and finding innovation at “the

edge” of their business rather than a proprietary core

• Need for a platform and Open Innovation

• Network Effect and User Generated Content

Source: John Hagel III


http://knowledge.wharton.upenn.edu/article/running-faster-falling-behind-john-hagel-iii-on-how-american-business-can-catch-up/




Smartphone is now the “First Screen”

• Daily time spent on mobile devices is now outpacing TV in the U.S. for the

first time, according a newly-released 2014 AdReaction study from Millward

Brown.

• Americans now spend 151 minutes per day on smartphones, next to 147 in

front of TVs. But the numbers are even greater elsewhere. In China,

consumers spend a whopping 170 minutes a day buried in smartphones,

nearly double their TV watching time.

• Users in Indonesia, the Philippines, Brazil and Vietnam also spend more

total screen minutes on average than the U.S., predominately on mobile.

• The firm surveyed more than 12,000 mobile users, between the ages of 16 and 44, in 30

different countries, polling consumption of ads over TVs, laptops, smartphones and

tablets.


http://www.millwardbrown.com/adreaction

http://lookbook.adage.com/Agencies/Millward-Brown

Hotel Tonight

new experience:Beautiful pictures and selected hotels with

discounted fare


https://itunes.apple.com/us/app/hotel-tonight/id407690035?mt=8

WeHostels

new experience:For students, mobile only,

all in one app!


https://wehostels.com/

The Entrepreneurial Age: Re-imagination Is Crucial!

• A large portion of 2020 revenues are likely to come from products and services that don’t even exist today

• Advances in technology without a change in business model nor traction are mere productivity gains from the multitude’s standpoint, and are commoditized in the blink of an eye, preventing the company from differentiating itself.

• The new digital, networked, real-time society forces us to start thinking and acting as an Ecosystem

• Ecosystem are developed using platforms to glue services via API and Funds to encourage startups and partners to hook in

• The Mass customization is accelerated through a rapid adoption pace of technology• 1 million IPOD sold in 2 years at the start …

• 1 million of Iphone 5x in … 3 days!


http://www.slideshare.net/paulsingh/moneyball-a-quantitative-approach-to-angel-investing-austin-tx-aug-2012


“Software is eating the

world.”

Why Software is Eating the World, Marc Andreessen, The Wall Street Journal, August 20, 2011


“Software Is Eating The World”

The Age Of Child Companies• Companies that are, on average, 10/15 years old.

• FaceBook is nine

• Twitter is only seven years old.

• The first iPhone got six years old and the iPad was first announced in 2010.

• Concur

• 600 engineers—"just people who write code

• Over the next 10 years: spend about $1.2 billion on innovation

• $120 million invested in 10 - Taxi Magic, digital hotel marketing firm Buuteeq and Indian

OTA Cleartrip and there is another $200 millions still available

• Pentaho is 9 years old


http://www.orchestra.eu/

new experience:French leader in TO

packaging


http://www.orchestra.eu/

Forces RE-imagination of Everything

• You should not only re-invent your brand and product, you should re-imagine

everything (Mary Meeker 2012)

• The risk if not doing so? Being victim of innovative disruptions (see

Christensen’s video)

• Christensen predicts also the end of consulting as we know it today.

• This is also the end of the Enterprise Architect, and the tools and process he used!

• The Schumpeter creative destruction theory, is maximized in the digital

business world

• Winner-Take-All Effect + Network effects

• First Time User Experience is key (30/50% of dev), no more documentation!


http://www.kpcb.com/file/kpcb-internet-trends-2012

http://www.claytonchristensen.com/key-concepts/

http://hbr.org/2013/10/consulting-on-the-cusp-of-disruption/

Booking.com launches rental site villas.com


http://alltherooms.com/

AllTheRooms.Com

new experience:One request to display

them all (hotel, rental, etc.)


http://alltherooms.com/

Digital Revolutions in Travel


TRAVEL INDUSTRY

ALREADY

EXPERIENCED

FOUR DIGITAL

REVOLUTIONS!


GDS

Travel Agent

1st Revolution in Travel Industry: GDS

Semi-Automated Business Research Environment (SABRE) first came “online” in 1964 (AA and IBM).

In a decade, GDSs enabled the travel agency industry to grow revenue 400% while growing employment by only 20%

By the late 1990s, Central Reservation Systems had evolved into four large companies known as Global Distribution Systems.


1st Revolution in Travel Industry

Computerized Reservation System (CRS)• IBM started in mid-50′s with American Airlines the Programmed Airline

Reservations Systems (PARS) that finally became in SABRE (Semi-

automated Business Research Environment).

• The American manufacturer proposed to use

The IBM 9040 system to govern the reservation application

They predicted a system performance from 1680 transactions in peak hours and a registry storage capacity of 240.000 passengers reservations in 1965 to almost 2000 transactions per hour to 547.000 passengers records by 1975.

For storage and process, they proposed two IBM 7040 and two 7750 with 1301 tapes.



Birth of GDS• CRS morphed later into a Global Distribution System (GDS)

• took the schedules and

• fare information from relatively static sources (CRS) and

• then sent a real-time request to the airline for bucket availability.

• Bringing those three pieces together, the GDS could calculate and push out

all offers.

• The travel agent could make a decision and then book a flight with the GDS.

• When that happened, the GDS would send the booking back to the airline

electronically.

• It was built before the internet.



Basic piece of information = The PNR• The Passenger Name Record (PNR)

• nowadays accepted in any reservations system (airlines, car rental, hotels, etc.) was

introduced by the airlines

• now is a standard defined by IATA and the former ATA.

• In that definition, the PNR had information about

• the flight specifications with a maximum of 48 characters (flight number, flight class,

dates, flight’s segments…)

• the passenger record, with up to 124 characters (16 less than a tweet)

• it had data related to passenger’s name, ticket number, address, phones, reservation

status, etc.

• PNR creation steps here

• http://www.youtube.com/watch?feature=player_embedded&v=Zad7G7e1Ys4


http://www.youtube.com/watch?feature=player_embedded&v=Zad7G7e1Ys4


2nd Revolution in Travel Industry

Online Travel Agents

GDS

Travel Agent

TMC/OTA

Internet Search / Compare

Traveler shopping convenience and price “transparency”From 1995 to 2006

Growth with Internet … From361 million Internet users in 2000 vs. to almost 2 billions today

Starting to create alternative listings of properties (hotel, apartment rental, tour and activities ) Booking direct via API or … screen-scrapping from Metasearch, OTA or Suppliers themselves


2nd Revolution in Travel Industry

Online Travel Agency (OTA)• From 1995 to 2006 : Traveler shopping convenience and price

“transparency”

• OTA were created with Web 1.0 (Global New Entrant)

• Expedia, Orbitz, LastMinute.com, Priceline, etc.

• No fees for travelers, war on fare, no more commission, own the client.

• Disruptive Innovations through Business Models and UX

• Fare Matrix (Orbix)

• Opaque Fare (Priceline) - name your own price!

• Dynamic Packaging (Expedia)

• Flexible date search & Alternative airport

• Fare Optimization


The 3rd Revolution - Travel 2.0

Web 2.0

Social, Cloud, Mobile

SOcial LOcal and MObile (SOLOMO) revolutionConsider the traveler (or client) at the heartTackle every (travelers niche needs and their specific point of views (long tail)Avoid GDS (disintermediation), avoid … Travel Agents

New marketing concept Born in 2008 thatleverages Internet, Web 2.0, cloud and mobility

GDS

Travel Agent

TMC/OTA



Customer at the HEART!


Travel Ecosystem is based on API

The new digital, networked, real-time society forces us to start thinking and acting as an ecosystem.

Ecosystems are developed using platforms to glue services via APIand funds to encourage startups and partners to hook in

Source: PWC, Exploiting the growing value from informationCopyright © William El Kaim 2014 41

http://www.pwc.com/us/en/technology-forecast/2012/issue2/features/feature-creating-openeing-apis.jhtml

SITA API

https://www.developer.aero/Boarding-Pass-API/Copyright © William El Kaim 2014 42

https://www.developer.aero/Boarding-Pass-API/

Expedia Affiliate Network API

http://developer.ean.com/Copyright © William El Kaim 2014 43

http://developer.ean.com/


Travel Ecosystem needs Digital Platform

Company core

services

Sovereign IT

API

Auth

Commodity services

CRM, social network, etc.

API

Auth

Connected commerce

ecosystems & related

digital marketing

API Auth

?

Product-As-A-ServicePay as you use

Craftsmanship & Legacy

Digital Platform

omni-channelpersonalization

advertisingsocial


CitizenGate

http://www.citizengate.com/Copyright © William El Kaim 2014 46

http://www.citizengate.com/

https://www.airbnb.co.uk/business-travelCopyright © William El Kaim 2014 47

https://www.airbnb.co.uk/business-travel

RouteHappy


https://www.routehappy.com/

Travel Ecosystem requires BigData

• The shift from a world of static reporting (aggregated data on cubes) to a

world of predictive and intelligence services (generated value from data in

multiple ways) is Now!

• Rise of predictive information through cards

• Leveraging both data at rest (stored in a database) and data in motion (data

stream in real time) is the new normal.

• Real Time Data And Algorithm Providing Value Now!

Historical Data Live Data

Live Dashboards and Tracking systems like Pre and Post Ticketing, Early compliance and fare check.

Big Data: Data Mining, Reporting, and Benchmarking, Forecasting

Forecast Data

Ad-hoc advanced analytics or for pro-active information generation through information cards (like Google Now!)


Google Flight Explorer

https://www.google.com/flights/explorer/Copyright © William El Kaim 2014 50

https://www.google.com/flights/explorer/

Airports Misery Map

http://fr.flightaware.com/miserymap/Copyright © William El Kaim 2014 51

http://fr.flightaware.com/miserymap/

Train Misery Map by CrowdSourcing

http://www.raildar.fr/Copyright © William El Kaim 2014 52

http://www.raildar.fr/

Ecosystem, platform but also …

Platform and Cloud

Fluid Experience

SoLoMo


Capitaine Train vs.

Voyages-sncf

Fluid Experience


http://www.google.com/hotelfinder/

Fluid Experience


http://www.google.com/hotelfinder/

The 4th Revolution – Travel as a service and Mobility

Web 2.0

SOLOMO, Meta-Search, Ratings

Pervasive access and usage of information pushed to people and connected objects: Open Data, Big Data, User Generated content, multimodal planner, etc.Mobility information natively supported in Calendar app, Operating System, voice activated virtual assistant, TV.

Travel booking is now commoditized and offered by Retail and eCommerce online shopsLocal and domestic transportation offer challenged in real time by customers and usageNew business models are emerging for renting vs. sharing vs. owning, impacting the transportation industry as a whole.

GDS

Travel Agent

TMC/OTA


TaaS

Mobility, Multimodal, real-

time crowdsourcing


No one should ever forget the lessons of the previous

travel industry revolutions

New business models and new usages will

emerge and new entrants will steal market

share.


Fourth Revolution in Travel

• All the disruptions forces will act to commoditize the travel industry and to

make it pervasive (a kind of uber distribution through microservices).

• Alibaba launched Alitrip & Amazon will resell hotels in 2015

• Travel As A Service (TAAS) will disrupt the ecosystem and today's alliances.

• Concur being bought by SAP is the most visible example of that trend

• We also see TMC buying/building technology companies (like Runzheimer buying

ProcureApp or Serko buying inCharge ) instead of more booking volumes.

• Travel will also be integrated in mobile Operating System (Apple iTravel,

Google Now and search and Microsoft Travel), in calendar app

(Tempo offering a good example of what could be done today), in TV, etc.

Software will continue to eat the world


http://www.alitrip.com/

https://www.tempo.ai/

Alitrip from AliBaba


AlgoFly

Latest French Metasearch


Capitaine Train

https://www.capitainetrain.com/


https://www.capitainetrain.com/

Apple PassBook

JauntedCopyright © William El Kaim 2014 62

http://www.jaunted.com/story/2012/11/27/15035/844/travel/The+Ten+Airlines+Now+Compatible+with+Apple's+iOS+6+Passbook

Traveler journey before

Source: World Economic Forum/The Boston Consulting Group analysis


From Travel to Mobility: Multimodal & Door to Door

• Travel today is more than just station to station; it is about door-to-door

connectivity, thus giving rise to new market players offering integrated

various modes to travel.


From Travel to Mobility: Multimodal & Door to Door


Mobility: Multimodal & Door to Door

• Multimodal is a way to combine metro (subway), train, bus, bicycle, walk or

car to go from one place to another.

• The other terminology used is "door to door", in that case, you have to add taxi and

black car (car with chauffeur).

• Some important distinctions should be noted when speaking of multimodal

search:

• Planning vs.. Booking: some routing includes prices some not

• Routing could be based on actual timetables or only on approximate ones

• For example some do not use actual timetables (they use information like: 'one train every

hour' and might then be wrong by up to an hour), most others do.

• Multimodal is emerging mainly due to the high speed train network, but also to reduce

CO2 emission. So they are generally also taken into account as search parameters.


Rome2Rio – MultiModal Search

http://www.rome2rio.com/


https://www.rome2rio.com/

https://citymapper.com/Copyright © William El Kaim 2014 68

https://citymapper.com/


Scout

http://www.scout.me/appCopyright © William El Kaim 2014 70

http://www.scout.me/app

Google Now!


http://corp.smartaxi.me/


http://corp.smartaxi.me/

Citroen Multicity

http://www.multicity.citroen.fr/Copyright © William El Kaim 2014 73

http://www.multicity.citroen.fr/

Multicity is powered by Moviken

Source : MobilicitéCopyright © William El Kaim 2014 74

http://www.mobilicites.com/fr_actualites_demain--calculer-son-itineraire-en-france-avec-n-importe-quel-mode-de-transport_0_77_3072.html

Daimler Mobility Services

Moovel Platform

GottaPark


https://www.moovel.com/

http://www.gottapark.com/

Resources

Claudine O'Sullivanhttp://www.claudineosullivan.com/Email : [email protected]


mailto:[email protected]

Twitter

http://www.twitter.com/welkaim

SlideShare

http://www.slideshare.net/welkaim

Linkedin

http://fr.linkedin.com/in/williamelkaim

Blog

http://www.reimagine.fr/




http://fr.linkedin.com/in/williamelkaim

http://www.reimagine.fr/

Digital Revolutions in travel

Travel

mortar travel agency

century energy

industrial revolutions

internet travel agency

new energy regime

travel agent

speculated travel

televisioncopyright