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
Copyright © William El Kaim 2014 4
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.
Copyright © William El Kaim 2014 5
Copyright © William El Kaim 2014 6
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
Copyright © William El Kaim 2014 7
The Third Industrial Revolution
Copyright © William El Kaim 2014 8
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.
Copyright © William El Kaim 2014 9
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
Copyright © William El Kaim 2014 10
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)
Copyright © William El Kaim 2014 11
Looking for the perfect experience !
Always more Content, Usages re-inventednew experience:
Wikipedia content, in a new app on Ipad
Copyright © William El Kaim 2014 12
If We Had To Summarize Each Revolution by a
Movie …
Copyright © William El Kaim 2014 13
The Entrepreneurial Age
New and valued offer in a mass market
through the development of a new business model
Copyright © William El Kaim 2014 14
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
Copyright © William El Kaim 2014 15
Copyright © William El Kaim 2014 16
Copyright © William El Kaim 2014 17
Copyright © William El Kaim 2014 18
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.
Copyright © William El Kaim 2014 19
Hotel Tonight
new experience:Beautiful pictures and selected hotels with
discounted fare
Copyright © William El Kaim 2014 20
WeHostels
new experience:For students, mobile only,
all in one app!
Copyright © William El Kaim 2014 21
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!
Copyright © William El Kaim 2014 22
Copyright © William El Kaim 2014 23
“Software is eating the
world.”
Why Software is Eating the World, Marc Andreessen, The Wall Street Journal, August 20, 2011
Copyright © William El Kaim 2014 24
“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
Copyright © William El Kaim 2014 25
http://www.orchestra.eu/
new experience:French leader in TO
packaging
Copyright © William El Kaim 2014 26
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!
Copyright © William El Kaim 2014 27
Booking.com launches rental site villas.com
Copyright © William El Kaim 2014 28
http://alltherooms.com/
AllTheRooms.Com
new experience:One request to display
them all (hotel, rental, etc.)
Copyright © William El Kaim 2014 29
Digital Revolutions in Travel
Copyright © William El Kaim 2014 30
TRAVEL INDUSTRY
ALREADY
EXPERIENCED
FOUR DIGITAL
REVOLUTIONS!
Copyright © William El Kaim 2014 31
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.
Copyright © William El Kaim 2014 32
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.
Copyright © William El Kaim 2014 33
1st Revolution in Travel Industry
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.
Copyright © William El Kaim 2014 34
1st Revolution in Travel Industry
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
Copyright © William El Kaim 2014 35
Copyright © William El Kaim 2014 36
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
Copyright © William El Kaim 2014 37
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
Copyright © William El Kaim 2014 38
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
Internet Search / Compare
Copyright © William El Kaim 2014 39
Customer at the HEART!
Copyright © William El Kaim 2014 40
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
SITA API
https://www.developer.aero/Boarding-Pass-API/Copyright © William El Kaim 2014 42
Expedia Affiliate Network API
http://developer.ean.com/Copyright © William El Kaim 2014 43
Copyright © William El Kaim 2014 44
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
Copyright © William El Kaim 2014 45
CitizenGate
http://www.citizengate.com/Copyright © William El Kaim 2014 46
https://www.airbnb.co.uk/business-travelCopyright © William El Kaim 2014 47
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!)
Copyright © William El Kaim 2014 49
Google Flight Explorer
https://www.google.com/flights/explorer/Copyright © William El Kaim 2014 50
Airports Misery Map
http://fr.flightaware.com/miserymap/Copyright © William El Kaim 2014 51
Train Misery Map by CrowdSourcing
http://www.raildar.fr/Copyright © William El Kaim 2014 52
Ecosystem, platform but also …
Platform and Cloud
Fluid Experience
SoLoMo
Copyright © William El Kaim 2014 53
Capitaine Train vs.
Voyages-sncf
Fluid Experience
Copyright © William El Kaim 2014 54
http://www.google.com/hotelfinder/
Fluid Experience
Copyright © William El Kaim 2014 55
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
Internet Search / Compare
TaaS
Mobility, Multimodal, real-
time crowdsourcing
Copyright © William El Kaim 2014 56
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.
Copyright © William El Kaim 2014 57
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
Copyright © William El Kaim 2014 58
Alitrip from AliBaba
Copyright © William El Kaim 2014 59
AlgoFly
Latest French Metasearch
Copyright © William El Kaim 2014 60
Capitaine Train
https://www.capitainetrain.com/
Copyright © William El Kaim 2014 61
Apple PassBook
JauntedCopyright © William El Kaim 2014 62
Traveler journey before
Source: World Economic Forum/The Boston Consulting Group analysis
Copyright © William El Kaim 2014 63
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.
Copyright © William El Kaim 2014 64
From Travel to Mobility: Multimodal & Door to Door
Copyright © William El Kaim 2014 65
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.
Copyright © William El Kaim 2014 66
Rome2Rio – MultiModal Search
http://www.rome2rio.com/
Copyright © William El Kaim 2014 67
https://citymapper.com/Copyright © William El Kaim 2014 68
Copyright © William El Kaim 2014 69
Google Now!
Copyright © William El Kaim 2014 71
Citroen Multicity
http://www.multicity.citroen.fr/Copyright © William El Kaim 2014 73
Multicity is powered by Moviken
Source : MobilicitéCopyright © William El Kaim 2014 74
Daimler Mobility Services
Moovel Platform
GottaPark
Copyright © William El Kaim 2014 75
Resources
Claudine O'Sullivanhttp://www.claudineosullivan.com/Email : [email protected]
Copyright © William El Kaim 2014 76
http://www.twitter.com/welkaim
SlideShare
http://www.slideshare.net/welkaim
http://fr.linkedin.com/in/williamelkaim
Blog
http://www.reimagine.fr/
Copyright © William El Kaim 2014 77