Just saw this on Elliott Ng’s blog and thought it was definitely worth a repost – Thanks Elliott!
“There’s No Room 4 Maybe” http://bit.ly/ei6kU
The keynote at TravelCom by Henry Harteveldt addressed the reality of a significant shift in consumer confidence and behavior caused by the financial crisis. Entitled “There’s No Room For Maybe” was a call to action for the travel industry to overcome uncertainty and help consumers make more confident decisions and spend money on travel.
But were we all fiddling while Rome burned?
Harteveldt says yes–the online travel industry has failed to address these problems in good times, and now must address them in bad times. According to Forrester’s Technographics Travel Online Survey Q1 2009, only 1 in 3 say travel Websites do a good job of presenting choices and tradeoffs. (this is exactly the problem that we are trying to help address at UpTake).
Here are 6 insights I got from the keynote. (What insights did you get?)
1. Consumers are more open to trade-offs today than they have before.
They are willing to accept inconveniences (e.g. flight connections, location) in order to save money. They expect to get deals and to get value.
2. Online leisure/unmanaged business travel is still expected to grow in the coming years, even as the total travel market stagnates in the next 2 years.
In 2008, online was $84 billion but is expected to grow to $88 billion in 2009.
3. “New Frugality” is a new consumer preference that we must consider strongly. People still care about quality but they are doing intense price-shopping and considering their purchases with greater degree of diligence. Implications: travel providers MUST provide much higher quality written and visual content. Harteveldt: Details will matter much more.” This means more photos, more details on room types, more descriptions, and more information so that people can set aside their uncertainty and plunge into the purchase process.
4. Harteveldt highlighted a framework they have established called the “Four Pillars” – Merchandising, Context, Engagement, and Value. The big point Harteveldt made was that “cross-selling isn’t merchandising” and that for too long, the travel industry has been thinking of distribution as putting inventory into channels and NOT about merchandising. He pulled examples from the JCrew Website to show how other online retailers do merchandising and how the travel industry can benefit by observing what is going on in other industries.
5. Harteveldt talked about “Context” being more important than ever before. At UpTake, we talk about “Themes” and “trip types”…in other words, “Context” means providing the right information and details for the consumer’s travel planning needs based on their trip type, their trip companions, and their trip intent. Harteveldt stated that “Context” helps shift the decision away from a pure price-based decision, which is good for consumers and for the trade.
6. Another trend is the incdrease of social computing, and Harteveldt reference the “social computing ladder” that segments people by their engagement level with social computing: creators, critics, collectors, joiners, spectators, and inactives. Joiners have increased from 27% year ago to 37% today, and he characterized social networks as “Email 2.0″, which means that travel providers MUST take these networks into account today. Also, more and more travel-specific social computing has begun, which is an encouraging trend for the industry.
The chart shows growth in all segments, but especially in the Joiners segment.
Bottom line is that the travel industry must fix the travel planning process to help people make decisions more easily and confidently, otherwise they simply will not spend! The downturn creates an opportunity for those who stay close to their customers and their needs to retain their best customers and survive in what is highly turbulent times for the industry.
Will the industry hear this call to action and respond? What do you think? Thanks Henry!