It has been nearly 2 years since Apple filed the patent for iTravel, a comprehensive effort to capture the full cycle of travel booking, itinerary management and airport check-in. Last spring, Google completed its acquisition of ITA software and last September Google launched Flight Search while continuing to add features to its Hotel Finder. Also last year, RIM BlackBerry private labeled WorldMate creating BlackBerry Travel. These trends cannot be ignored, but how exactly will native OS travel apps transform the travel process?

The key will be how will these initiatives fit into the current travel ecosystem. Naturally there is some fear that a native OS travel button may lead to the OS provider taking a piece of the distribution pie. With the current airline direct model of the Google Flight Search, the mobile button could lead to more disintermediation. It is essential to recognize that there is an important connection between the emergence of intelligent agents (Siri, Google Assistant) and the OS travel button. My previous post described how I see voice UI impacting every aspect of the travel process. Combining voice assistance and a native OS travel button could transform the mobile travel experience.

It is important to note that all these initiatives are focused on the traveler UI.It is unlikely any OS travel button would provide a complete  m-commerce platform, for travel but rather these buttons would more likely act as a meta-search funnel and hook up into an existing channel (OTA, direct supplier sites). Controlling the front-end funnel for travel does have tremendous  implications for the industry. Apart from the obvious competition this creates for OTAs, Meta-Search, Itinerary aggregators (e.g. TripIt) and even corporate booking platforms (Concur, Rearden Commerce), creating an iTravel button directly challenges the traditional search metaphor promoted by OTAs and Meta-search companies over the last 10 years. There have been numerous articles written over the past few years highlighting the consumer’s unhappiness with the current UI for Web-based travel such as this recent TNOOZ article. A major weakness in the way many travel companies have approached mobile is to simply bring Web functionality to the mobile platform without recognizing that mobile plays a different role in the travel process. Mobile search is about location, relevance and context. Native OS travel buttons will likely take advantage of this triad and deliver a superior experience to the user.

So if OS travel buttons are inevitable, what does the travel industry need to do to prepare for their impact. Rather than spending money on lobbying efforts such as the FairSearch Coalition, the key industry players should be funneling a greater amount of R & D into their mobile platforms.  This includes:

• Focus mobile efforts on location, relevance and context
• Commit R & D dollars to investigate creating your own Siri like functionality for a travel voice UI
• Consolidate functionality so that a single app or mobile Web can do everything the travel needs. For example, including airport navigation, merchandising, itinerary aggregation (for components booked through the site and through other sources), real-time destination information and long tail services.
• Partner with other travel value chain entities on a mash-up of functionality
• Explore new ways to collect personal preferences (opt-in) to deliver more relevant content
• Create a skunk works team to explore next generation mobile capabilities that is separate form your mobile product roadmap group
• Reach out to the big boys – Apple, Google and Microsoft to explore how to support the backend for their travel OS initiatives.

The travel industry cannot afford to have an inward looking view of mobile, but must recognize that the OS trends shape consumer behavior. The sooner your organization starts planning for the OS travel button, the better prepared you will be when it emerges in the market.

With all due respect to the classic children’s TV show and game Carmen Sandiego, I have borrowed the show’s tag line having just completed a grueling travel schedule that took me to London, Washington DC, Miami, Rome and Amsterdam all within a five week period. These  trips involved client technology engagements and speeches to various audiences. My Miami stop was to participate as Co-Chair of the PhoCusWright Travel Innovation Summit.  This most recent series of trips augments a busy 2011 travel schedule that included trips to Israel, Orlando, Italy and two trips to Cannes, France.

Travel Tech Consulting provides services that cross all segments of the travel industry (airlines, hotels, OTAs, tour operators, TMCs, government and technology suppliers who support all these segments) with the underlying theme of how emerging technology is changing business practices. A common topic across these speeches and engagements has been the impact of mobile technology and social media on the travel process. Whether addressing audiences in Israel or Amsterdam, I was able to observe first hand the impact mobile technology and social media is having worldwide. Just as much of the traditional travel ecosystem has become accustomed to dealing with online issues, mobile and social are changing the game. As part of various research projects including a comprehensive special report for PhoCusWright entitled “Mobile  Hits the Mainstream”, I have interviewed a wide range of travel and technology companies about the impact of mobile and social media on their strategies. Here are a few observations:

• In many parts of the world mobile is becoming the primary means to connect to the web.
• The emergence of tablets is not only un-tethering the travel planning process, but extending the ability to plan and book travel any place at any time. When I returned I was greeted by my new Amazon Kindle Fire, the first under $200 tablet that represents the fusion of the e-reader and media tablet at a lower cost that the market leading iPad (Amazon Kindle Fire is now the #2 tablet worldwide).
• Audiences and clients all now agree that their customer’s social graph is having a direct influence on travel purchasing and most are struggling to implement an effective social media strategy to target the key influencers while protecting their brand integrity across social media channels.

Now that I am back home in the San Francisco Bay Area and looking out my office window at San Francisco and the Silicon Valley I am amazed how my region which is home to Apple, Google and Facebook is changing the travel industry in every corner of the globe.

During a briefing today with Amadeus they disclosed the fact that their launch customer for Amadeus One, their new Agent desktop platform is not currently an Amadeus GDS client. The Amadeus One application allows agents to use cryptic formats from any of the major GDS or a graphical user interface to create fare and availability queries. The fare and schedule information is returned in a “sandbox” allowing the agent to manipulate fare quoting in a variety of ways from a variety of sources. For years, Amadeus has been promoting the fact that they are an IT company, not simply a GDS transaction engine. By selling the Amadeus One platform to non Amadeus GDS customers, this does point to truly a change in posture in the market. Now one could speculate that this is simply a competitive necessity to compete with Travelport’s Universal Desktop and Sabre’s Red. The opportunity for the GDS as an IT provider to significantly change the market is more dramatic, but it depends solely on the TMCs willingness to embrace new channels.

An clear battlefield has emerged between the Axis Group of airlines who are promoting the Farelogix XML interface and the traditional distribution players. The corporate travel market represents the true pot of gold for all distributors with the highest yield and frequency of travel and this segment is still controlled by TMCs. Contrary to other industries the big four  TMCs – American Express, Carlson Wagonlit, BCD Travel and HRG do NOT control 80% of the corporate market, with a variety of regional TMCs still thriving despite these difficult times. The real corporate battle lines are with these 2nd and 3rd tier TMCs. When asked whether Amadeus One could connect into the Farelogix XML feed, Amadeus said it was capable of doing this, but it would require the TMC to request this enhancement. The real question is what is going on behind the scenes between the GDS and their TMC customers. In a traditional relationship, the GDS provides financial incentives to the TMC to book segments with that GDS. But in the case where the GDS is providing the front-end technology to a competitor GDS, this incentive does not seem to be a factor. It is then logical to assume that source content should not matter and thus the XML feed from Farelogix should be part of the mix. The value of adopting the Farelogix XML is immediate access to all participating airlines’ ancillary fees. American and recently Delta Airlines have stated that they want to control price and services on a one to one transaction level based on the value of the customer. This would be facilitated through the Farelogix XML. Time will tell whether this represents a change in positioning  for the GDS or a true opening up of distribution sources. TMCs the ball is in your court.

Source:  Global Intelligence Alliance

One major debate that persists in the area of mobile development is the question of whether a travel company should create a native (downloadable) app or simply provide a mobile Web application. As part of my upcoming PhoCusWright Webinar Mobile Chaos: Do I Need an App for Every Platform? (next Wednesday September 15th at 12:00 noon), I will discuss this subject.  As a teaser here are some of my thoughts concerning this debate.

An interesting paradox exists in respect to the motivations of travel firms in porting their Website to the mobile Web. Many state that their primary motivation is to make their app available on as many devices as possible at the lowest cost. Though this is an admirable goal, the reality of the mobile Web is that the majority of browsing is happening on smartphones such as the iPhone, Android or the BlackBerry. Therefore if the goal is to reach full feature phones, through these efforts is misdirected. A more important issue is how a normal Web pages appear on today’s smartphones. Even the most sophisticated smartphone browsers still provide a frustrating experience for the user when viewing a normal Web page; therefore, every travel company needs to port their existing Website to the Mobile Web. With more and more browsing happening on the smartphone and with the direct correlation between the frequent traveler and smartphone ownership, the effort to transcode the current Website to be more readable on a mobile Web browser is no longer a luxury, but a mandatory part of every travel company’s mobile strategy. As HTML5 matures, the ability to interact with a phone’s core features such as the GPS, calendar, address book, accelerometer and  compass is emerging.

Source:  Global Intelligence Alliance

As a result, the mobile Web will behave similar to the native app and within the next few years matching native app capabilities. The question then arises, do I need a native app?

The answer is best provided in terms of market segmentation.  To create a native app that simply mirrors the functionality of the current Website, wastes resources and may not yield any significant incremental benefit to the travel company or traveler.  From a market segmentation perspective, the native app should be targeted to your best customers and as a result provide unique functionality that takes advantage of location, personalization and situation.  Recently, Priceline reported that a good majority of its mobile app bookings where coming the same day as the reservation.  Priceline did not disclose whether these bookings had cannibalized their Website bookings or whether they were incremental. The Priceline Negotiator is a good example of a limited function native app that is targeted to specific activity – book last minute hotel or car reservations. Clearly Priceline did their homework to determine the profile of their best customers and the type of function they wanted in a mobile app. Other downloadable apps miss this opportunity and simply mirror Website functionality.  Native apps can provide a travel company with a great opportunity to interact with a company’s best customers, but these applications must be innovative taking advantage of the smartphone’s unique capabilities such as the compass or accelerometer and provide personalized recommendations based on the traveler’s location and situation. It is with this in mind, a travel company can have a successful native app launch. Though most apps seem to first appear on the iPhone the importance of the Android and BlackBerry platforms cannot not be ignored as each has a significant market share. For non-US roll-outs Nokia is an essential platform as well.  We also have the launch of Windows 7  in the fourth quarter of this year and the re-emergence of WebOS under the direction of HP as wild cards to consider as well, not to forget about the explosion of tablets that will hit the market over the next 12 months.  Mobile Chaos will be the norm for some time.

Sabre has introduced a downloadable iPhone app that competes with TripIt.
It has some similar features but unlike the email parsing capability of TripIt, TripCase automatically imports the PNR information provided it was booked in Sabre. It is currently only available on the iPhone, but additional platforms will be introduced later this year. So is this a TripIt killer? Maybe at some point, but certainly not immediately.
What I find fascinating is the fact that Sabre participated as one of the investors in TripIt’s 5.1 million in Series B financing. It looks like Sabre is hedging its bets!

What is a bit ironic is Sabre’s market behavior which reminds me a lot of Microsoft back in the 1990s. Back then, Sabre joined other tech companies in challenging Microsoft’s ability to control the development of applications because of its ownership of the OS and browser. In those days Microsoft had a solid reputation of partnering with smaller software entities and then coming out with a competitive product. It is unlikely that Sabre Studios who developed TripCase had any connection with the Sabre group that invested in TripIt, but the fact that TripCase is a clear TripIt competitor at least gives one the impression of a one time partner who is now a competitor.

From my perspective I am happy to see a major travel brand embracing the downloadable app store approach to distribution as these types of apps can take advantage of the location awareness of the smartphone delivering new services not available on the Web.

I had the pleasure of moderating the panel entitled : Best Practices in Mobile Applications at the PhoCusWright@ITB conference earlier this month. We had a good cross-section of panelists that included Pablo Alvarez, Group Innovation Manager, Lastminute.com, Stefano Galastri, President and CEO SIA Internet, Marina Hegemann, Managing Director, TouristMobile GmBH, Michael Lacy CEO the Handy Group, and Gerry Samuels, Founder and Executive Director Mobile Travel Technologies. We had quite a spirited discussion on a number of topics. The biggest disagreement was around the development strategy and ultimate distribution approach to mobile travel applications. I promoted the vision of multiple app stores (e.g. Apple, Google, Nokia, RIM Blackberry, T-Mobile) and my belief that was voiced in our recent publication “Mobile The Next Platform for Travel” (a summary of our special report “The Future of Mobile Travel“) which recommended downloadable Web-enabled applications (versus solely browser based) as the best strategy going forward. Our panelists voiced different views, from a firm commitment to downloadable applications (Marina Hegemann) to a belief that browser based mobile applications are the future (Michael Lacy). Time will tell whose strategy is correct, but all agreed that mobile travel apps are still in their infancy and that dramatic change is ahead over the next 12 to 18 months.

A major New Years resolution for me this year is to blog at minimum once a week! During the last two months of 2008 I did not blog at all and I am determined not to repeat this long absence. My apologies.

A recent post by Tim Hughes of the BOOT (and VP of Orbitz in Australia) predicted that 2009 will NOT be the year where the travel industry embraces mobile.

I could not disagree more! Having now completed the PhoCuWright “The Future of Mobile Travel” special report, I strongly believe mobile travel applications will flourish in 2009 despite the global economic crisis. The two primary drivers of this mobile trend are the adoption of smartphones and the implementation of next generation networks (3G, LTE & WiMAX). The research clearly showed a correlation between frequent business travelers and smartphone adoption. Take a look at these two slides from our Special Report:

The key statistic here is that as of November 3, 2008 18.9% of consumers are now carrying a smartphone.

Compare that with our research results which found that 71% of Frequent Business Travelers own a smartphone. Additional research showed that 90% of frequent business travelers have owned their smartphones for less than 2 years, showing that smartphone adoption is a recent trend. You combine this with the explosive growth of 3rd party apps stores from not only Apple, but RIM Blackberry, Google and T-Mobile and it is clear that 2009 will see tremendous growth in downloadable travel specific applications.

These applications will be location and contextually relevant. The affinity between emerging mobile technology and frequent travelers will change the business and leisure travel experience 2009.

Things are heating up even more on the smartphone front as RIM introduced the new BlackBerry Storm which will be available later this month. RIM’s BlackBerry owns the enterprise smartphone mobile space. Recent surveys we’ve completed as part of the PhoCusWright special report “The Future of Mobile Travel” shows the iPhone gaining ground on the BlackBerry with a significant number of frequent business travelers (at least 4 business trips a year) stating that they are considering an iPhone.
The growing smartphone war has positives and negatives for the travel industry. On the positive side, smartphones patterned after the iPhone will have a more practical mobile Web browser experience. The downside comes in application development. Our research is indicating that downloading applications is a more practical strategy than simply repositioning current Website information. In addition to Apple’s iPhone App store, Google and Blackberry have announced plans to open app stores as well. The cold reality of this trend is that travel companies who are serious about mobile applications will need to port their app to multiple environments. The iPhone SDK is a good development platform but very closed in nature. In contrast the Google Android platform promises to provide a more open environment for mobile platform development. Even Symbian OS now owned by Nokia is talking about a more open computing approach. Those travel suppliers and intermediaries who believe that simply translating their current Website to work with Web browsers on multiple handsets is a sufficient mobile strategy, will need to rethink that approach as smartphones become the standard device for business and leisure travelers. Yes Web browsing is definitely on the iPhone, but even with the ability to use the two finger pinch to zoom in on Web content, there is a major difference between an iPhone app verses viewing a Web page on the Safari browser.

Here is the screenshot for the Travelocity Web page on the iPhone. Yes you can zoom in but this is still not a practical way to book itineraries.

Compare that to the screenshot of the Travelocity iPhone App. Sure the Travelocity app does not have booking capabilities but the UI is much easier and more practical to use for a future booking platform, which BTW our research shows frequent business and leisure travelers want (especially for irregular operations!).