The buzz about Web 2.0 and as a subset Travel 2.0, continues to get stronger. The flow of investment money into new start-ups in this area has been growing every month. As my readers know, I am always on the look out for emerging technology, not just for the “cool” factor, but with an eye on how it may change the underlying business practices in the travel industry. So apart from all the buzz words (social networking, mash-ups, user generated content) what does Travel 2.0 really mean to the underlying economics of the travel industry?
Any new wave of technology is often misunderstood upon its initial entry into the market, particularly on how it changes the economics of the business. That being said, a common cycle always occurs in respect to new waves of technology driven changes. The now hackney phrase of a “paradigm shift”, still has an important underlying lesson that is still often overlooked: No dominant player in any market can simply rest on its laurels ignoring, or bad mouthing new technology driven by Travel 2.0 initiatives, while continuing to march at a snails pace in regards to innovation. For travel planning, the number of choices to shop fares, read travel blogs or search for packages has never been greater. The underlying message of Travel 2.0 should be setting off alarms at any Travel 1.0 company or application. This is true for the online travel market in both the consumer and corporate space. In fact, the corporate travel industry suffers from a long history of ignoring overall travel technology trends, suddenly to be awakened by their economic impact. In this sense the incumbent OTA giants (Expedia, Orbitz, Travelocity and Priceline) as well as the corporate online booking players (GetThere, Cliqbook, eTravel) must embrace new ways of thinking and if not risk being swept away by a new consumer driven trends. The economic impact of these changes is unknown, but the near term effect of an expanding universe of choices is clear: the old model where a single site or application can provide all information and comparative shopping capabilities for users is fading fast (if it every existed at all!). How can these single silo sites and applications embrace this new world? The first step is acknowledging the fact of the limitations of the single source concept, while seeking out partnerships that help bring the company’s offering into more of a holistic solution.