If you’re a regular Tnooz reader, you will undoubtedly have read about the potential of big data in travel.

But just like most up-and-coming technologies, there is much confusion as to what it all really means and how it can help make the customer experience better and lead to more sales.

This article is meant to serve as a technical primer and will show some of the potential future applications across the travel ecosphere.

Big Data 101

The term “Big Data” is often applied in several ways, but it is quite self-explanatory. Big data just means “a lot of data” – that is, datasets that are beyond the capabilities of a typical database in terms of size, workload and overall cost — and the technologies that enable the extraction of meaning from it.

So where might we encounter a lot of data in travel?

A prime example would be the analytics logs of an online travel agency. For years, analytics tools have enabled companies to keep track of conversion funnels, detailed demographic statistics, and other pertinent information such as which pages convert the best, have the highest bounce rates, etc.

These reports are then used to optimize sites to ensure the best possible conversions. But in the era of big data, companies are gathering and paying attention to much more data than seemed possible just a few years ago.

For example, some sites are now gathering the detailed mouse movements of customers in real time as they move around pages.

This generates literally millions of coordinates and data points for every user, allowing companies unparalleled insights into what users are doing when they’re on a page.

Just a few years ago, storing the amount of data required for projects like this would’ve been prohibitively expensive.

These days, the proliferation of cheap storage as well as distributed file systems that allow storage across dozens (or hundreds) of commodity computers enables the cheap and efficient storage of petabytes of data without massive cost.

As storage technology improves, the costs of keeping every last byte of data for later analysis will keep going down.

Big data analysis, MapReduce and the extraction of meaning

Having all this data is nice, but the real value lies in the extraction of meaning from it. Big data tools such as MapReduce, based on technology originally invented at Google, enable easy discovery of common trends in data and the action upon those trends.

This is more easily demonstrated by an example:

Imagine you had an Excel spreadsheet of every hotel in the world and wanted to find the ones most commonly described as “awesome”. [NB: Ed - Are you sure? ]

The raw data you have might look something like the following:

Hotel Name, Review
—————————–
“Hotel A”,”Miserable experience”
“Hotel B”,”Awesome pool!”
“Hotel C”,”Liked it”
“Hotel B”,”Awesome restaurants”
“Hotel A”,”Loved it”
“Hotel C”,”Awesome experience”
“Hotel B”,”Boring”

Even though we’re only showing a few records here for simplicity, this spreadsheet would have hundreds of thousands of rows.

With MapReduce, you could write a function that maps each hotel name and creates a group of reviews for each name that is commonly discovered.

In the above example, “Hotel B” occurs 3 times, so the Map function would create a collection resembling something like this:

“Hotel B”:”Awesome pool!”, “Awesome restaurants”, “Boring”

Already, the map function has helped us find every review for “Hotel B”. But we’re not done yet — we’ll let the Reduce function do its job.

This function lets us perform any type of analysis we want on the collection that Map created for us. In our case, we wanted to find only reviews containing the word “awesome.” Reduce would contain computer code that did this:

“If the review contains the word awesome, increment an internal counter by 1″

This internal counter would essentially act as a score, or number of times the word “awesome” appeared for a given collection. In our example, “Hotel B” would come out on top with 2 “awesome” reviews, “Hotel C” would come out with 1, and “Hotel A” with 0.

So what did we accomplish in the above example? We found commonality in raw, unstructured data and then analyzed it for a business purpose.

While simple, this is the raw power of MapReduce and similar technologies: Extracting meaning when there previously wasn’t any.

The amazing part of this is that MapReduce can analyze billions – or trillions – of data points and find patterns in them. All on clusters of commodity hardware, and at a cost that even a startup can afford.

Can you see the potential yet?

State of Big Data in travel

The ability of big data technology to enable us to find intelligence in vast amounts of data presents a clear, massive opportunity to reshape the way consumers are marketed and sold to in travel.

It’s not a question anymore that those companies with ongoing big data projects are at the forefront of an entirely new way to sell travel to customers.

Emmanuel Marchal, currently at big data storage company Acunu, and a former-director at LikeCube, a company that leveraged big data for consumer travel sites and was later acquired by TimeOut, spoke with me briefly about the current state of Big Data in the travel industry:

• Big data applications are moving from profiling to true personalization. For example, true personalization would enable a site to recommend a specific hotel to a specific traveler based on their specific wants, needs, and previous purchase patterns, rather than a generic set of recommendations based on the type of traveler.
• True personalization is the main driver and “holy grail” of all big data efforts in travel.
• OTAs and other sellers of travel now see their big data efforts as “must haves” rather than “nice to haves”
• 2009 was the year of talking about it. 2010 was the year of starting big data projects. 2011 was the year of the prototypes. Will 2012 be the year these efforts finally see broad implementation?

In addition to personalization, efforts such as Hopper (NB: Disclosure – Hopper CEO Fred Lalonde is chairman of Tnooz) are demonstrating another prime example of how big data can empower consumers.

Large scale analysis of data related to places combined with natural language processing (NLP) enable search queries such as “nearby beach vacations under $500″. While this represents a combination of technologies, they all are enabled by the application of big data processing.

Into the future

While personalization is surely a holy grail, there are literally thousands of potential uses of big data in travel.

Geo-fencing, the process of knowing when a traveler is near a certain attraction or vendor, is starting to emerge.

An example of this is the recently launched Foursquare Radar feature, which alerts you when you are near a place you at one time wanted to be reminded of.

This technology is pure big data: gathering your coordinates in real time via your mobile phone’s GPS and realizing when you are in a certain boundary.

Enabled across millions of consumers, the amount of data gathering and processing required for efforts like this were unthinkable just a few years ago.

Think about it: how many GPS coordinates do you generate in a given day? The potential of geo-fencing to marketers is nothing short of amazing.

Image data processing: Billions of photographs representing petabytes of storage are uploaded to the internet every day.

Photo sharing apps such as Instagram might seem a great way to share moments with friends, but the true value behind these startups lies in the data they’re collecting on the backend. Each photo generates a mountain of data that, with further analysis, reveals a host of information on the user uploading it.

Color, the much maligned startup that debuted with a stratospheric valuation before even launching their product, surely wowed its investors with the potentials behind all the data it was hoping to collect.

In travel, the startup Jetpac is already using these image processing methods to put a different spin on the social travel concept.

Recently acquired by eBay, the startup Hunch represented one of the finest examples of finding commonality in previously disparate forms of data.

Their API and publicly available test tool allows anyone to find out things like “People who prefer Subaru cars also prefer to stay at 5 star resorts 40% of the time” (this is not a real example!).

While these types of correlations might seem questionably useless, imagine the power of putting these concepts to use when you’re trying to market and cross-sell a traveler.

Taste Graphs turn knowing “something” about your customer into knowing a lot of other things about that customer. The use and application of these Taste Graphs is sure to become much wider in the coming year in everything from online retailers to, you guessed it, travel.

To sum it all up, big data isn’t an amazing new magic box you’ll be able to buy from a vendor.

Big data merely sums up the concept that we each generate billions of data points every day and that with the economically viable application of technology, we can be sold to better than ever before.

Are you ready?

NB: Image via Shutterstock.

Foursquare this week launched its Explore feature on the web, an effort termed as: “Personalized search for the real world.”

Previously available via its mobile apps, the launch of this feature as a section on the Foursquare website shows the company is making a serious push into local search on the web.

But more than that, the company may have finally nailed the “holy grail” many travel planning startups have been yearning for: utilizing your friends’ behaviors and preferences to recommend things for you to do.

How it works

Let’s take a brief look at how the feature works. Upon loading, you’re presented with a simple dialog asking what you’re looking for:

Note the options in the bottom right. In addition to being able to simply explore new places you haven’t been to yet, you’re also able to easily search for places your friends have been to.

Here’s a quick example of a search for coffee shops in London:

You’re quickly shown a map with places your friends have visited, how often they’ve been there, and what they’ve had to say about them. Of course, this feature exists on countless other travel planning sites.

But Foursquare has a secret weapon that no other travel startup can come even close to matching: Over 1.5 billion checkins worldwide, a truly massive amount of data on past consumer behavior. Each of these checkins has tracked:

• Where the user is
• The time of day the user checked in
• Whether they’re with a friend
• Any comments the user has left via Foursquare’s “Tips” feature
• Any photos the user chose to attach

Utilizing big data technology, Foursquare has been able to analyze this data on an aggregate level and extract value from it by determining a plethora of useful patterns such as:

• What places my friends like going to at specific times of the day, eg: “Your friends prefer these lunch spots”.
• Where my friends like to stay, eg: “Your friends stay at these hotels when visiting New York”.
• What my friends like to do, eg: “Your friends love doing the Eiffel Tower tour when in Paris”.

What’s different about Foursquare’s effort is that unlike most travel planning sites, Foursquare hasn’t had to ask users to recommend things post-facto or bribe them into having to manually enter this data — this data was shared in real-time, giving it authenticity and lacking the sort of bias towards popularity frequently seen on other sites.

But Foursquare hasn’t stopped at just allowing you to search for places: Explore also now searches the massive amount of data contained in Tips and Reviews left by users, enabling a user to free text search for places and recommendations such as “chic boutique hotel” and really dig into what users think about particular places.

The power of this is perhaps best demonstrated when combined with the ability to follow brands on Foursquare.

Imagine you follow The Travel Channel on Foursquare – now, when searching Explore for places to eat, you might find places with recommendations left by popular Travel Channel personalities such as Anthony Bourdain.

Enabling users to easily find things they’ve previously expressed interest in is another important feature of Explore.

Utilizing the “Save for later” feature, a user can easily bookmark spots in a city they wish to visit in the future.

When visiting that city, Explore would allow the user to easily find spots they’ve bookmarked. This is in addition to Foursquare’s Radar feature, which can automatically alert you when you’re near a place you’ve saved.

Why planning startups should worry

It’s easy to dismiss Foursquare’s efforts as yet another attempt at a problem countless other startups have failed at.

But Foursquare has what many travel startups don’t, including over 15 million registered users, approximately half a billion checkins in the last six months alone, and buy-in from some of the world’s largest brands including a recent deal with American Express. In a word, traction.

But beyond traction, Foursquare’s massive data trove will be hard for most startups to catch up with.

By demonstrating true value to users (such as the recent American Express Small Biz Saturday which saw users who linked their card receive a $25 statement credit), the company will likely continue to accelerate its adoption and usage rates.

This will give it an even bigger trove of data with which to work with and launch new features.

And finally, Foursquare has one of the best startup teams out there. Its discipline in growing the company from a simple location-based game to where they are today shows incredible depth and vision.

But…

Foursquare hasn’t won yet. There are of course other companies with even more data making efforts in the local space, including the recent launch of Google’s Schemer.

Facebook can’t be ignored in this space either, tracking the location of its users everytime their mobile apps is launched. The fact that only 5% of US adults use location-based apps can’t be ignored either.

Will 2012 be the year that this changes? We’ll see.

One thing is for sure: By moving Foursquare Explore to the web, Foursquare has a serious contender in the battle for the travel planning crown.

It’ll be interesting to see how other startups respond.

Expedia. Travelocity. TripAdvisor. Kayak. These are all household names that even your mother will likely know.

But behind these behemoths of travel stand hundreds (if not thousands) of startup attempts to hit it big with consumers over the years.

Some have made it and now stand shoulder-to-shoulder with the big brands. But for the majority of attempts, the only way to truly reach a critical mass of consumers has been what many founders dream about: the exit to a bigger company.

Let’s rewind a bit to an earlier era – an era where the big travel brands listed above were just in their infancy. Gaining customers via advertising online was still relatively cheap compared to today.

In a few cases, the brand was online early enough to have to convince customers to “trust” the process of buying travel online. In all cases, the process of acquiring customers was incredibly different to what it is today.

These brands – led by their amazing teams – trail-blazed their respective categories and, with a good helping of capital and luck, ended up where they are today.

But are stories like the above even possible anymore? Can a consumer-facing travel startup go from unknown to household brand?

On the surface, it looks to be a steep uphill battle. No matter how well a startup is funded, its search engine campaigns will likely be eclipsed by the likes of Expedia, which spends a reported $5.9 million a month on Google SEM alone.

Viral campaigns? Hipmunk, which used incredibly effective re-targeting campaigns to create buzz amongst the tech crowd, is still nowhere near a household brand.

The “build a great product and they will come” approach? The startup ecosphere is unfortunately littered with the cadavers of great products the public never got to know about. Reaching consumers is, in a word, hard.

But before we get too pessimistic, let’s take a look at some well-known consumer travel startups from recent years:

1. TripIt

Solving the pain-point of managing travel plans was clearly a success with business travelers, who still make up the majority of the service’s user base.

After raising $13 million over the course of three years, the company exited to Concur for $120 million in cash and stock last year.

A great result for a team with impeccable pedigree (Hotwire, anyone?). But could TripIt ever have been a bigger consumer brand on its own?

2. AirBnb

One of the most successful travel startups to emerge in recent years, the community marketplace for accommodations is by all accounts connecting with consumers.

Having raised $120 million at a reported $1 billion+ valuation, AirBnb has turned from startup to acquirer of startups.

One could argue they already stand shoulder-to-shoulder with some of the giants above.

3. Farecast

One of the first travel startups to use big data, Farecast predicted whether airfare would rise or fall for a consumer’s trip.

The company raised nearly $21 million over the course of four years before being acquired by Microsoft in 2008 for somewhere between $75 million and $115 million.

The fare prediction feature is still a central part of what is now Bing travel. But what would have become of the site without Microsoft’s audience?

4. HomeAway

The clear leader in vacation rentals is an amazing story by any standard. Growing from its founding in 2005 to an IPO in 2011 and a current valuation of $2 billion is quite a feat.

Even more interesting was its approach to rolling up the then very fragmented vacation rental market by raising more than $400 million, buying the most important players, and combining them into one.

In essence, HomeAway skipped the struggling startup phase and became the acquirer almost right away.

Risky? You bet. Successful? Obviously.

5. Skyscanner

As one of Europe’s most prominent metasearch players, Skyscanner has over 14 million users a month and an aggressive expansion plan in Asia.

With only £2.5 million in funding, Skyscanner has built an impressive brand in Europe and is posed for further growth.

It stands as perhaps the best example that there is still hope for entrepreneurs to build a real consumer travel brand from the ground up.

Reality

This list is an admittedly very small sample of consumer travel sites, but it does show that it’s certainly possible to build a big consumer brand without the resources of a behemoth behind it.

But does an acquisition actually help build broader reach?

This is one of the more difficult questions to answer. In many acquisitions, the original website is rarely left standing on its own.

For example, Microsoft took less than a month to integrate Farecast into what was then Live Search. TripIt’s traffic has been relatively flat since it’s acquisition, though its mobile usage has been increasing.

Companies acquired by some of the big travel brands seem to be faring better: Away.com has remained largely independent since its acquisition by Cendant (now Orbitz) and is still generating a great amount of traffic.

Swoodoo, the German metasearch engine acquired by Kayak, seems to be increasing its traffic as well.

The magic formula

As outlined above, being acquired doesn’t always help startups find wider reach. Nor does remaining solo mean eternal life as an unknown travel site.

What then, is the magic formula to make it? Like most startups, it all depends on team, timing, product, and a whole bunch of luck.

NB: Exit sign image via Shutterstock.

Earlier this year, I sat on a panel which had the title “Don’t be a supercreep!”, covering privacy issues in the era of big data.

During the panel at the EyeforTravel conference, the mention of some of the personalization methods already in use today caused more than one gasp in the audience.

The travel industry audience in attendance was, in a word, surprised.

What could cause such surprise? Let’s take a look at a couple of the methods discussed and their implications:

1. Use of third party data

One of the biggest uses of big data technologies is the ability to find patterns and information by combing through multiple large datasets. One of the examples given during the panel was the ability to find out about a user’s complete online identity with just an email address.

The implications of this are worth a moment of pause: imagine the possibilities. With your email address, one is able to determine what you talk about publicly — for example, on Twitter. Or Facebook likes?

If you haven’t updated your privacy settings, they’re fair game too.

LinkedIn profile? Yup. Even your music tastes are discoverable. And this is just the start.

2. Public records databases

As above, with an email address or name, public records databases can unveil a host of interesting information about you, including income level, what kind of house you live in, and more.

Is this necessary and/or useful if you sell travel? Perhaps.

Imagine your favorite travel brand starts recommending vacation packages based on what people with a similar demographic profile and income level bought.

3. Location

Mobile is the obvious next big frontier in data collection. Most major mobile operating systems already support technologies such as geofencing, which enables developers to draw a virtual “fence” around a geographic area and trigger application events when you (or your phone, at least) enters that geographic area.

Imagine if your favorite hotel brand knew just how often, when, and at what time you went near one of their properties?

Starwood’s iOS app is already using this technology to completely personalize the app around the property you’re staying at. Hotel information, weather, and local activities are put front and center when you launch the app.

Creepiness in action

A lot of the technologies above are not in widespread use by travel brands — yet. However, early experiments of travel brands using 3rd-party data, even if not automated and brand-wide, are already causing consumer backlash.

Take, for example, the Westin Edina in Minnesota, part of the Starwood group of hotels. According to several reports, the hotel’s front office staff were using LinkedIn data to verify whether guests qualified for the corporate rate they were booked under. Consumer reaction was blistering.

How could Starwood allow such a thing?

Turns out, this was just one example of a Starwood initiative called GPS (Global Personalization at Starwood). GPS, in Starwood’s own words, will “allow us to connect with guests on their own terms, in and outside of their stay”.

In fact, Starwood’s privacy policy explicitly allows for the collection of social media data to “better assist guests in understanding [their] interests”.

As with any new technology, it will likely take consumers some time to get used to and comfortable with practices like this.

Limits

The obvious question begging to be asked is “How far should this go?” In other words, when do personalization efforts stop being useful and really just creepy? The answer will differ for everyone and isn’t clear-cut.

For example, one could argue brands using a consumer’s purchasing habits to target discounts and coupons is incredibly useful.

However, the technology is now so good that in one famous case, it figured out a teenage girl’s pregnancy and started sending her pregnancy-related coupons before her family even knew.

With technology enabling so many possibilities, the limits are, ironically, very personal.

Regulation

The usual reaction to any consumer-threatening technology or practice is regulation. However, the global nature of data severely hampers any sort of broad law covering the topic of personalization.

In the US, for example, regulators have taken the approach that as long as a practice is disclosed, it’s fair game. European regulators are bizarrely still worrying about cookies, which in the age of true personalization and data mining should be the least of their concerns.

In other words, the personalization party is without a parent or chaperone right now. Does this bode well for the industry? It’s not clear.

On one hand, as an industry still in its infancy, one doesn’t want overreaching laws to squash technical innovations that could be incredibly useful. On the other hand, unchecked innovation will always test the boundaries and often crosses them.

Perhaps it would behoove the industry to figure out some of its own limits before someone else does it for them.

The future

Undoubtedly, the future of personalization is bright. Several startups are already preparing for a world in which personalization data is a key currency.

Imagine marketplaces where retailers could buy, sell and trade personalization data such as your buying habits.

On the flipside, imagine a marketplace where you, the consumer, can choose to open up some of your personal data in exchange for some sort of consideration or restrict how your data is used.

All of these things are being worked on right now and bode for an interesting future for us all.

What do you think about the possibilities in personalization? What goes too far? I’d love to hear your thoughts in the comments.

NB: Eye big data and spying eye images via Shutterstock.

UPDATE:

Some web users started getting access to United.com at around 5.45pm Eastern. The problem is likely to take hours to revert back to business-as-usual as, similar to the Qantas outage earlier this year, passengers are being issued hand-written paper boarding passes.

The total outage time was said to be two hours.

ORIGINAL:

United Airlines lost all ability to transact online, in person and over the phone following a reservation systems failure earlier today.

At approximately 1:15pm eastern time in the US, United passengers started to report issues with United’s web site, including ability to buy tickets and view previous reservations.

Soon after, reports started circulating on Twitter and other forums that passengers were unable to board their flights due to the systems failure. As of 4:45pm EDT, the system appears to remain offline and passengers are being advised to call back later.

United’s web site currently displays a simple white page advising passengers that they are “experiencing technical difficulties”.

Following its merger with Continental Airlines, United transitioned from its Travelport-operated reservation and hosting system to the HP-backed SHARES system.

The March transition caused a wide variety of issues which still plague United months after the transition, including delays in the posting of frequent flier miles, failure to process automated upgrades, and gate agent frustration with the command-line interface.

While United has promised improvements to the system later this year, a worldwide outage is sure to cause further questions whether the transition was a good idea.

The United outage comes after an awkward 2012 for airlines with their hosting arrangements. In January this year, Amadeus was blamed for a major failure of its ALTEA system, leaving a string of major airlines without services for hours (this followed a smaller incident just a few months before).

In July, Amazon hosted systems such as Room 77, Qantas (again) and Virgin Australia collapsed after a storm hit its hosting center in the US.

Imagine a world where someone owns a record of everything you do in life. Went shopping? Safeway owns that act. Watched a movie? Netflix owns a record of that. Grabbed a quick bite to eat? McDonalds owns a log of that.

That world — for better or worse — is not far away, and in many cases, already reality.

Companies far and wide are reaching into our daily lives more and more to personalize our experience via “loyalty cards” and, lately, by just analyzing your credit card transaction data.

Some might say this is the way of the future and a way to enjoy the conveniences of modern deal and offer targeting. Others might say it’s a massive invasion of privacy. But in general, many would agree that the actions they take in their daily lives are, in the end, theirs and therefore owned by them.

Airlines, seemingly, would beg to differ.

Flying by the seat of their pants

If you’ve recently taken a flight, airlines claim that a record of that mere fact is their “proprietary information.” This verbiage, among others, is currently being used by airlines to bully a number of travel startups, and even some established companies such as TripIt/Concur.

Airlines are also using similar excuses to shut down tools that automate certain aspects of a consumer’s interaction with the airline’s web site — whether it’s checking in for their flight, reviewing their mileage account, or performing other tasks which road warriors rarely have the time for.

Let’s take a look at some recent cases:

• This past spring, Southwest Airlines sued a small Phoenix-based company named SW Software Development, operators of a site called MySouthwestCheckin.com. Southwest (Market Cap: $6.65 billion) sued SW Software Development (Market Cap: A lot smaller) for enabling consumers to automatically check in on Southwest’s website 24 hours prior to a flight, enabling those consumers to obtain an early boarding group – and therefore get better seat on the plane. Southwest alleged, among other things, that MySouthwestCheckin.com “trespassed” on Southwest’s website, violated Southwest.com’s terms of use and deprived it of advertising and other opportunities.
• In 2011, Southwest sent a cease and desist letter to the popular frequent flier mileage tracker tool AwardWallet, barring them from accessing the Southwest website on a customer’s behalf. The proffered reason? To protect their customers’ data.
• Also in 2011, American Airlines sent a similar cease & desist to AwardWallet, citing “security concerns.”
• Delta Airlines joined the AwardWallet bashing party just this week, with perhaps one of the more aggressive legal threats waged against a travel startup in recent memory. It accused AwardWallet of “trespass” on its computer systems.
• United Airlines last week stopped displaying Award and Upgrade inventory on its site, infuriating their frequent flyer base in the process. Among other things, it blamed “automated scripts” that “re-display information in ways for which it was not intended.”

While the above cases seem fairly clear instances of airlines trying to set the rules of how their web sites (and in United’s case, data) can be accessed, the issue is a lot more complex than that.

For example, like any problem-solving startup, AwardWallet went to work after they received their cease and desist from American and came up with what it thought was a clear solution: instead of its servers accessing American’s website on the customer’s behalf, it wrote a browser plugin that used the customer’s own computer to access American’s site and download the required mileage information.

In other words, it wrote a plugin that specifically mimicked the exact same actions a consumer might take to track their mileage, using the consumer’s computer.

AwardWallet never saw the user’s American Airlines credentials and its servers never talked to American’s. A clever solution and the end of the problem, right?

Of course not.

Earlier this year, American again demanded AwardWallet cease providing this functionality to users, citing “security concerns”.

Command, control and conquer

Clearly, airlines want ultimate control over the data you’re generating. They want you (and only you) using their website. Under their terms – terms they can change any time.

All this leads to a few questions: Do airlines actually have the legal grounds to do this? Do they actually own the data you generate, and can they restrict your ability to give others access to it?

Legally, the answer leans towards “yes,” but is not fully settled. Interestingly, both American and Southwest were involved in some early precedent-setting legal cases almost a decade ago.

In 2003, the airlines took issue with FareChase, a travel startup that used screen scraping technology to retrieve live fares from airline web sites.

FareChase was accused of “trespass” by both airlines, while Southwest went further and alleged “Interference with Business Relations”, “Harmful Access by Computer” and “Misappropriation and Unjust Enrichment.” FareChase eventually settled with American but was was shuttered by its parent company Yahoo before the Southwest suit could reach higher courts.

Unfortunately for the industry, the cases were never really tried and tested to their full extent in the courts.

Of course, both of those cases involved traditional screen scraping, and not mere automated enablement of access to data as in the clever AwardWallet solution above.

One would expect the courts to side much more favorably with authors of these tools, but this too remains to be tested and seen.

In an industry with a number of large companies whose businesses rely on screen scraping, this issue remains a big question mark. For consumers and startups, I fear the only true representation will come when their interests happen to be aligned with these large companies.

Until then, it seems the airlines’ legal warchests will continue to set the precedent.

NB: Globe data routes image via Shutterstock.

When one reads articles like Tnooz’s recent piece on Foursquare accepting instant restaurant bookings, it’s easy to jump to the conclusion (as our dear editor did) that tours and activities must be next.

After all, a popular app enabling instant bookings of tours and activities nearby is just so obvious that a casual observer might wonder why FourSquare (or indeed any of the popular location-based mobile services) hasn’t done it yet.

Turns out, while there are some great efforts towards this already, it’s still incredibly hard for most tours and activities companies to deliver on.

In a travel industry where electronic ticketing for airlines is (for the most part) a reality, where you can make a hotel reservation literally in the lobby and then stroll up to the desk to check in, the activities space is still comparatively in the stone age.

But why?

The consumer problem, part 1

Let’s get under the hood of a typical booking for one of the most popular activities sold online today: The city bus tour. Let’s say you book this bus tour online on your favorite activities site. You choose your date, the time, and the route.

You then enter your credit card information and check out. A few clicks later, and you’re confirmed. After this, in many instances, you’re sent a voucher.

This voucher is a PDF that contains all the instructions on where your bus tour starts, when it departs, etc. You’re requested to print this voucher and bring it to the bus tour’s office to start your tour.

The above is already problematic for a consumer. He just booked online, and then is instructed to print something out and bring it along.

This often means added expense and/or hassle for customers that are already in-destination, leading them to the obvious conclusion that booking the bus tour online requires more effort than just turning up at the bus tour’s office and booking there.

The consumer problem, part 2

Since many activity suppliers have to plan for the upcoming day’s bookings (imagine the bus operator having to allocate drivers for the coming days, or the kayak operator having to allocate guides), the activities sector still throws yet another hurdle at the consumer: booking cut-offs.

While decreasing in occurrence, it’s still more common than not to encounter a minimum 48 hour booking deadline to book an activity online. Again, problematic for the consumer. The industry is telling him to book online, but at the same time, preventing any sort of impulsive buying.

For the consumer it’s more tempting to turn up at the supplier’s office and book there in person than even think of using a mobile app.

The supplier problem

With the assumption that the consumer was convinced to book ahead, print out the voucher, and actually remembers to bring it, we end up with a customer showing up at the suppliers’ doorstep with a piece of paper — the magic voucher.

Incredibly, his piece of paper may look very different from the piece of paper the next customer is holding. Or the one after that. In fact, some popular activity suppliers have entire binders of all the vouchers they’re able to accept.

There could be dozens of variations. But either way, without this magic voucher, the supplier won’t let you board.

Why?

Because that’s how the supplier gets paid. That’s right: The very piece of paper the customer is holding is collected by the activity supplier and added to a redemption report.

This report is then sent back to the online seller of the activity, who then pays the supplier for all the vouchers that were redeemed.

“Paper currency”

Much like the airline sector with its paper tickets, the activities sector invented its own form of currency called vouchers. It’s been this way for decades. And like any established system of currency, getting people to change is hard.

Really hard.

From the inherent inefficiencies (online sellers of activities love breakage: selling a voucher that’s never redeemed) to the well-oiled operational efforts that suppliers are used to, changing to a new form of currency looks near insurmountable.

Where we are today?

Established players and startups alike have been working on this problem for years. Some have made great headway into solving the consumer problem: allowing him book instantly and just show up with a photo ID.

But so far, these efforts have been both commercially and technically fragmented. For example, each major seller of online activities has their own extranet for activity suppliers to manage supply and inventory on their site.

So, today, an activity supplier may have to divide their available inventory between the extranets of all the online sellers that are delivering him sales.

And if something changes (say the activity supplier’s kayak guides call out sick), he has to log on to every one of those extranets and adjust his availability for that period.

Some activity suppliers are doing this with up to 25 extranets. Day to day, a herculean task. And on the redemption side, having to log in to a variety of extranets to verify whether the customer standing in front of their office has actually paid can be quite the hassle on a busy day.

Learn from industry peers

Strewn with problems, is this situation solvable? Absolutely. The activities sector need not look very far: Both air and hotel sectors have worked this out for their incredibly complex, and, in the case of hotels, very fragmented spaces.

In air, electronic ticketing started in 1994 but was languishing with only 20% adoption a decade later.

Things only really got moving after IATA, the industry body that represents the supplier base in the airline industry, set an aggressive deadline of 100% adoption in four years.

They mostly got it done. And it happened with a standard that every supplier talked to, no matter their underlying technology system.

While air’s solution is not entirely appropriate for the activities sector, the idea of any supplier or distributor being able to sell and validate a ticket is an important one.

Just do it

As mentioned above, current efforts to solve these issues in the activity sector have been led by resellers of activities. While all noble in their intent for the consumer, they’re creating further silos and barriers for an efficient distribution market.

In an industry with hundreds of thousands of suppliers, the fragmentation for back office and technology systems will only grow as suppliers move their business online, meaning it will be incredibly hard to establish a commercial standard.

The sector desperately needs a common, neutral way to handle these issues. So far, only a select few have stepped up to the plate to offer a solution. Even fewer have bothered to pay attention or to try to run with those efforts.

Perhaps it’s the industry’s biggest suppliers that need to come together via a standards body like OpenTravel to solve this incredibly important task.

A task that, all sector hype aside, is the true key to unlocking the tours and activities sector.

NB: Tour bus image via Shutterstock.

If there’s one thing travel startups like, it’s sexiness. Not the raunchy kind, but something that sets them apart from the status quo and has some kind of wow factor. Or at least that’s the aim.

As a studious reader of every Tnooz TLabs Showcase for the past year and a half, it’s always great to read a startup trying to create a new market, kill an industry giant, or create a new sector entirely.

But what many startups know (or should know) is that their chances of success are small. And while it’s always great to swing for the fences, it’s often a great idea to play in the part of the field where few others are playing.

And in this industry, the field has many empty spots. But before we get into the where, let’s take a look at the why.

Antiques = Profit

It’s no secret that there’s a ton of companies in travel which are based on tried (read: old) technology.

• Mainframes? Yeah, still plenty of those.
• Built on Active Server Pages? Yup.
• “Requires Internet Explorer”? It’s out there.

The startup crowd out there might be thinking “So what? They’ll eventually die and go away”. But the interesting thing about a lot of these companies is that they consistently turn a tidy profit, and have been for decades.

Year after year, these antiques keep generating cash, with little or no innovation required.

Not what you were thinking

If you’ve been in travel for a while, you might be thinking I’m referring to GDSs. But there are tons of other sectors in travel that are ripe for some restoration. Here’s a few on my list:

• Tour operator systems
• Hotel property management systems
• Meetings and conventions
• Ancillary products and services
• DMO systems
• Cruise systems

By no means comprehensive, the above list is just a sampling of sectors where large, established players are in what could best be described as maintenance mode. Old, antiquated systems with decades of patchwork offered for tens — if not hundreds — of thousands of dollars per install.

These are classic opportunities for startups, but few are successfully attacking them.

It doesn’t have to be sexy

Why? Likely because these are sectors where there will be no Techcrunch love on your launch. No furious investor bidding for your first round of funding. No coverage in the travel section of your favorite media publication.

As a startup, would you be willing to trade all of that for a significant increase in your chance of success? If your answer is no, you should probably just start buying lottery tickets instead.

Sectors with low barriers to entry and incumbents that are funded by support contracts required by their blindingly complex systems are about as good as it gets for startups.

These opportunties are as boring and vanilla as it gets. As a startup, you can build a modern and competitive solution for one hundreth of the cost it took the established guys to build theirs. You can define your success by old fashioned selling – not having to get a million pageviews.

You can make a whole swath of customers happy that currently have no choice other than to buy expensive antiques.

Not just B2B

While the above examples mostly fall into the B2B category, don’t assume that’s where the opportunities end. There are numerous examples of B2B startups using tried and proven B2C methodologies to widen their markets.

Further, the lines between B2B and B2C are starting to blur across many other industries. Travel won’t be an exception.

Cash money

And finally, you’ll be able to work on converting paying customers. Your revenue model will be clear – whether SaaS/monthly or whatever you chose, you’ll be counting on a tried and true model: People buying your stuff.

The glory of eyeballs, page views and tech blog coverage will be replaced with money in the bank. A pretty good trade-off.

How to get started

So, you may be convinced to take a crack at one of the above (or different) sectors. But where do you start?

I recommend following some of the guidelines I outlined a while ago in Life Lessons for Travel Startups, especially Lesson 1: Customer development.

Get out there, network, and find a customer of one of the dinosaurs in your chosen sector. Find out what’s making them unhappy, and what features they’ve been missing.

Then, go out and find someone in a similar boat. Pretty soon, you’ll start noticing some trends. The rest is all about iterating on your product and finding product/market fit.

Conclusion

I hope the above has inspired some thought and shines the light on some of the rather dusty nooks and crannies of the travel industry. Which sectors do you think could use a bit of startup love?

I’d love to hear your thoughts in the comments.

Did you notice? Google recently indicated exactly what it is aiming to ultimately become in the travel industry.

Thanks to the new Google Maps Beta and its integration of Google Flights into the main Maps product, Google has signaled its aim to be the new owner of the #1 spot in the travel industry as the world’s largest metasearch.

Heresy (or heresay), you might suggest? Well, let’s first do some calculations together.

The math

Without even third-party API usage, Google totals roughly 170 million visits to its branded Maps web and mobile assets each month, with users on average racking up at least ten pages per visit.

This number doesn’t even include the myriad of API integrations and the massive potential for incremental growth via the recently announced Maps Engine API for the enterprise business.

So, let’s make some rough, but conservative assumptions to put this into perspective.

• Each Google Maps mobile app visit represents one unique route query.
• Each Google Maps web visit represents two unique route queries.
• That averages out to around 1.6 unique route queries per visit.

Here’s where it gets interesting.

Out of every route query performed via Google Maps, today there is no public data specifying how many of those involve an origin location and a destination location that are far enough apart for a flight to be a potential mode of transportation.

But for the sake of this analysis, let’s assume 5% of all nearly 300 million monthly route queries would have an air travel option available.

Almost instantly, simply by flipping the Google Flights switch, roughly 15 million new flight search queries would be performed and presented to travelers each month directly inside of Google Maps.

Does 15 million sound familiar? It happens to be roughly the average number of unique searches performed on some of the biggest online travel agency and travel information sites each month.

It’s not all the same… or is it?

True, those OTAs are serving customers that have the clear intent to book travel, while Maps users may just be looking for directions to Grandma’s house.

However, let’s show a quick example of how easy the new Google maps might convert someone. Say you’re looking to drive from Denver to Salt Lake City:

Eight hours, not too bad. But wait. That grey line offers me another tempting option. Fly an hour and 15 minutes, and it’s only $138?

With today’s gas prices, I might be tempted. Let me take a closer look:

And:

Well, that’s pretty darn tempting. And look, not only are airlines represented well, I’m already being led into the hotel purchase funnel on the right.

And so it all starts coming together.

Silly us

Over the past year, there’s been a ton of dialogue in the industry about the lack of traction for Google’s Flights product.

For all that time, it’s likely Google hasn’t cared one bit about the short-sightedness of that criticism, instead focusing on building the next-generation Maps product currently being rolled out by a very proud set of engineers and designers who have invested months and some years into its new, arguably flawless interface.

While we’ve all been scurrying around debating cache speed versus inventory availability in flight search API-land, Google has been patiently investing in a bigger mission to turn Google Maps (“more than just a map”, as its tagline reminds us) into an engine upon which it will usher in the true beginning to Google’s potentially devastating reign in travel.

Google isn’t starting from scratch to build a new travel product like we’ve all been so gullible to believe.

As has been pointed out, it knew better than any of us that the two most popular travel products in the world were already in their portfolio: Google Search + Google Maps (lest we forget about YouTube, the second most popular search engine around, also owned by Google).

It stands to reason that Google Maps just might be the best “top of the funnel” anyone could ever dream up.

Beyond its branded assets, the forthcoming update to the Maps API could be the inevitable catalyst for Google Flights data to also be integrated as a core part of the Google API platform.

Why wouldn’t Google want to open up the ability for long-tail developers to build out their own map-based flights app? Or “apps” plural, as the case is likely to be with over one million sites integrating Google Maps API functionality and data already.

And even beyond the next API update?

Google (always) remains tight-lipped about the specifics, but during the Google I/O keynote a few noteworthy statements were reiterated.

The first was that Google Maps will now be “more than just a map” and a second statement shared a future vision for Maps in which each person has a personalized map unique to their preferences, data and is able to predict future needs.

It’s easy to imagine per the screen shots included above an even more “personalized” map experience as they referenced with the cross-app integrations they’ve rolled out over the last 12 months.

For example, Google Calendar could easily provide the unique intelligence necessary for the travel dates included in the Google Maps flight option to be intelligently auto-populated based on days most appealing to me in terms of my schedule compared to best fares available.

Even when predicting the total travel time for each “travel mode” in Google Maps, where I’m currently located or where I live can help give end-to-end time estimates.

Further, layering historical traffic data to help calculate drive-time to the airport plus curb-to-gate walking time thanks to Google Indoor Maps data could give travelers the power to make even more informed choices than ever before.

If you haven’t taken the new beta for a spin, these bold visions for the future will start to feel a little more realistic when you do. And prepare to utter a “wow” or six to yourself while you explore what the new tool has to offer.

Both hated competitors and fanboys alike agree it’s incredible.

Tolling the bell

So, what comes next? Hopefully the industry waking up to the idea that Google Maps is the name it has included way too infrequently as a part of the discussions on Google Travel’s master plan.

And if this assessment is even remotely accurate, we’ve got the final nail in the coffin coming for a fair number of players in the lucrative world of online travel.

• Multi-modal? We’ve already talked about that one.
• Flight search by amenities? I’d start looking at other ideas.
• Flight search API-as-a-service? The Google Maps API may be your new worst enemy the day its next update is released.
• Trip planning? You’re better off charging people $5 to watch the Hipmunk mascot punch you in the face.
• Hotel search? It’s only just begun with hotels. And between places, neighborhoods and the rapidly growing indoor mapping capabilities, that’s not a segment I’d want to be in a losing battle with them over. Perhaps Priceline’s Jeffery Boyd is right?

Oh, and one more thing…

The entire new Google Maps is fully integrated with, and conversely by Google Plus. Every single result it delivers will eventually have the potential to be influenced by your social graph and your individual tastes and preferences.

It won’t be long before your flight results are influenced by not only calendar and location data, but specifically this Google+ data including the notorious Circles which finally may crack the code of segmenting out your social graph into buckets that add relevance to both your leisure and business travel map-based shopping experiences.

In closing…

Google Maps has, to date, not been great at pulling users into the various funnels it can power. This new release has the greatest potential of anything before it to change that.

At the end of the day, there are too many possible funnels for Google to own in travel to list them all in this one article, but suffice to say, with the new platform architecture finally coming into its own that they’ve been planning world dominance around for the better part of a decade, it’s time now more than ever to take notice.

We each have to look in the mirror and accept that for almost every one of us, in some small and some massive parts of our business, Google Maps and it’s 20 billion annual page views are officially a much more terrifying and direct industry threat than we ever gave it credit for.

Whether we accept it or not, we are all a part of travel industry history in the making.

It’s time to stand clear of the tracks because Google Travel and its 20 billion-passenger train is finally approaching the station.

NB: This article was influenced by other nodes on the Tnooz contributing team.

As 2013 comes to a close, we’ve seen another year’s worth of travel startups trying – and in most cases failing – to gain traction.

To long-time observers of travel, this is of course not a surprise.

Indeed, “travel innovation” as a phrase, let’s face it, is hard to come by or over-egged by many in the industry.

To wit: fellow Tnooz Node Timothy O’Neil-Dunne’s advice to a packed house at last week’s World Travel Market to “just don’t do it” when asked about founding a travel startup.

Naturally, entrepreneurs won’t take this kind of advice at face value. They’ll keep forging ahead with the wild, the crazy and the unexpected. Some of them will time it just right and revolutionize a sector, or invent a new model.

Others will just keep going, year after a year, trying to find their groove. But those entrepreneurs are few and far between.

Most of them will adopt the Silicon Valley mantra to iterate, fail quickly, and move on to the next thing. And for a fair number of them, the next thing won’t be in travel due to the inherent nature of travel’s complexity.

For all of us in this wonderful industry, this represents a true shame.

It’s all about the volume

Not a week goes by where a travel startup’s dreams aren’t dashed by feedback such as “You’re never going to get the traffic” and “What if OTA X, Google, etc do this?”

The feedback is mostly correct.

Getting traffic for consumer travel startups is nearly impossible. Between the noise and the competition, it will take a truly innovate, one-in-a-million approach that is timed perfectly to succeed. In a phrase, it’s all about attracting eyeballs.

Travel insiders know that OTAs and metas with the volume – the Gatekeepers of Eyeballs (GoE) – won’t easily relinquish their status.

They’re performing; they’re out-spending the startup sector in advertising by a magnitude of a thousand, and battling each other for share, all while innovation in consumer experience suffers.

Can we get some innovation please?

Sure, the GoE are performing well because they’ve found a formula for success. The biggest fear is messing with that formula and impacting the next earnings call.

But could the GoE find a way to try innovative new approaches by leveraging the scrappy ideas that startup founders generally have? Those ideas that have zero chance of ever succeeding without a massive amount of traffic?

It’s already happening

Humbly, I suggest the answer is yes. Let’s take a look at a company that’s already doing this. You may have heard of them: Google. Stop sighing and hear me out.

Those of you who use Google regularly will find certain queries being handled in a somewhat special way. Take a look at a few examples:

You may be asking what’s so special in the above: The answer is that certain queries are being answered in a better and more informative way than a regular query.

They’re returning much more relevant information for a query in the boxes and carousels at the top, and they’re much more helpful to a user.

And in effect, you can think of them as apps. Apps — undoubtedly developed by independent teams — that pay attention to the trillions of search queries passing through Google, and pick out the ones they can perform better at than the regular Google results engine.

Couldn’t the GoE’s try this?

Imagine a world where your good old mega travel booking site doesn’t just ask you for the usual quadrant of information (From/To, Start/End Dates). Imagine instead a search box that serves your needs, just as you’d query for them in Google. (Yes, GoE’s, I know you’re working on it).

But what if that search box wasn’t just served by code written by a GoE’s engineering team?

What if the GoE offered their own reverse “app store” – inviting developers, startups, and geniuses the world over – to find new, innovative ways to service a consumer’s search and booking behavior on a term-by-term basis.

Imagine a world where your trip planning needs are built in to your GoE’s search engine.

A query like “I want to go to Miami with Andrew” could be an irritating Q3 2021 roadmap item for a GoE’s engineering team. But an innovative startup could help the GoE service that query instantly by passing it on and having the startup’s engineering deal with it.

The results would be returned in a completely native way to the user, with the GoE’s branding, never knowing that a third-party’s innovation helped them with their query.

The GoE would pay the Innovator on a per-query basis for the work served, therefore rewarding the innovator monetarily, and leaving the GoE with a satisfied en-user.

But, but, but, but, but, but!

Yes, there’s a lot of but’s. From engineering certification, to control issues, to load testing, to branding issues, to privacy issues, there are a lot of risks and challenges for anyone who would try this.

I submit my own “but”: Apple is doing this, every single day. Its app store process is stringent, thorough, and borderline intrusive to a developer’s business.

But in the end, Apple guarantees a certain level of service and experience standards for their users. There are few reasons a GoE with the gusto for true innovation couldn’t try this.

And, if you’re looking for a more relevant example of this happening today, take a look at your nearest GDS desktop, which is already returning advertising-style result overlays based on the queries being typed in the green screen: agent searching for flights to Miami?

Surface an image ad for the Hilton Miami right away.

Risk vs reward

So, yes, there is a ton of risk. But a ton of reward will follow: the reward of a GoE being able to free themselves from engineering resource constraints, and from having to study and copy innovation.

Instead, they could be the epicenter and enabler of it. The scrappy startup would suddenly have a (shock!) real business model based on getting paid for effort exerted.

And the ultimate winner?

The customer.

NB: Crazy idea image via Shutterstock.

If industrial unrest wasn’t bad enough, Qantas is now being widely criticized for its social media efforts during the recent 48-hour shutdown.

Critics are charging the airline with being “too corporate” on Twitter and not responding to individual customers’ needs.

In addition, so-called social media “experts” far and wide have come out of the woodwork to pile on, charging the airline with being completely ineffective in talking to its customers during this time and effectively turning its @QantasAirways Twitter account into a one-way monologue.

Which begs the simple question: how could Qantas have handled this crisis differently?

It’s quite easy to say that Qantas should have responded individually to the approximately 98,000 passengers affected by this shutdown.

But would anything have changed? Probably not.

The airline was, for all intents and purposes, in completely uncharted territory – it had grounded 108 planes in 22 cities around the world.

Would thousands of individual “I’m sorry, but we’re not flying today” responses changed anything or made any customer feel more appreciated?

Extremely doubtful.

While social media is an effective communications medium for dealing with individual service issues, it’s fair to say that even the most well-staffed social media department is ill-equipped to handle a situation of this magnitude, especially in the sort of compressed timeframe which kicked off early on Saturday and was on the path to comeing back on-stream by Sunday night.

But things obviously could have been handled better.

The core of any social media crisis response should be not only informational as Qantas was trying to be, but an attempt to control the message.

In this, Qantas failed and demonstrated that even internally, social media staff were reacting to a fast-developing situation rather than having been prepared for it.

A recent report by Altimeter Research – Social Readiness: How Advanced Companies Prepare – shows that Qantas isn’t alone: more than half of companies with advanced social media strategies haven’t developed a social media crisis plan.

Amongst the recommendations cited in the report is a clear, top-down level blessing of a team that has the full authority to speak for and on behalf of the company.

In Qantas’ case, one could argue that on the day the shutdown started, this was all the company was prepared to say. But it clearly didn’t sit well with customers.

On the second day of the shutdown, thw airline’s social media tone shifted and it started responding by literally sending hundreds of individual replies to customers.

At one point, Qantas even exceeded a Twitter-imposed limit on the number of @replies it could send, showing the company was making an effort to gain ground on this customer service crisis.

The company has since then ratcheted up its response rates even more, demonstrating that critiques about its social media reaction being too “one way” were unwarranted.

The lessons learned are two-fold:

• First, there is no good answer or response when an airline stops flying entirely. No matter the communication channel, customers will be upset, afraid, and full of uncertainty. The natural human reaction to these feelings is to try to talk with someone who can fix the situation as soon as possible. But just like its call center agents, Qantas’ social media staff had very few options for fixing anything or making customers feel better.
• Second, preparedness for a crisis such as this is paramount, and airlines in particular should have well-prepared social media response plans so that they can effectively communicate with their customers and deliver as much information as quickly possible.

In the end, that’s all customers really want.

“Let me recommend something for you” – it’s a concept as old as retailing itself.

Especially in the pre-internet era of travel booking, this phrase was a key tool in a travel agent’s arsenal to monetize every aspect of their customer’s trip.

From ground transport to parking to things to do, a travel agent acts as the user’s trusted advocate and ensured his or her customer had a great trip.

Personalized recommendations are a fairly basic part of the customer service experience in other industries such as retail, and, in many of them, an essential part of it.

But in the travel industry, the drive towards efficiency, self-service and away from travel agents has mostly shifted this part of the travel experience to mid- and high-end hotels equipped with a concierge desk, leaving a lot of money on the table for the rest of the industry.

But thanks in part to Big Data and predictive analytics, the travel industry is starting to get equipped to bring this critical part of the customer experience back to front and center.

Enter the Next Best Offer

In an article in the Harvard Business Review titled “Know What Your Customers Want Before They Do”, several Deloitte executives termed the sending of an automated offer at the right moment, at the right price, and in the right channel as a “Next Best Offer”.

Following on from that analysis, this article will take a high-level look at how Next Best Offers (NBOs) could be used by the travel industry to further monetize their existing customers’ itineraries as well as significantly enhance customer experience and satisfaction.

First, some definition: Next Best Offers should not be confused with in-path upselling currently employed by many travel brands.

While there are many logical and successful upsell processes employed in the travel industry, these almost always happen pre-purchase and encourage a user to essentially add more items to their shopping cart.

An NBO differs in that it is typically sent after a purchase or order has been made and is designed to be relevant and complementary to that purchase.

Examples of NBOs in other industries

Let’s take a brief look at some real world NBO examples in other industries:

1. In retailing, Amazon is perhaps the best practitioner of NBOs. Have you ever purchased an item, only to get an e-mail offer for a related item a few days later?
2. In dining, after ordering a main course at a restaurant, the sommelier recommends a bottle of wine that perfectly pairs with that main.
3. Grocery store “club card” programs frequently target consumers with offers and coupons based on past purchase behavior

What a Travel NBO might look like

Thinking about the above examples, some obvious examples might look like this:

• A hotel engages their customer with a welcome e-mail offering a selection of top activities for the city they’re visiting
• An airline sends their customer an offer for discounted ground transport after a delayed flight to expedite the customer to his or her destination
• A car rental company offers their customer hospitality options on a 1-way rental over 400 miles.

Aside from the merchandising and monetization opportunities, the above also represent stellar customer engagement and satisfaction opportunities. A customer receiving the above airline offer might think:

“My airline actually thought about me. Wow.”

A different customer receiving the above hotel offer might build an affinity for the hotel’s brand, always choosing that brand due to the welcome experience program.

Travel NBOs are simple? Think again

In the travel industry, merchandising opportunities based on past purchase behavior may seem obvious, and even endless. But scratch the surface a little, and things become more complex.

This is because we all have varying personas when traveling:

On a business trip, I’m likely to buy (or not buy) very different products than when I’m vacationing with my family. But even the business/personal trip criteria can be too simplistic. A one-day overnight business trip means my schedule demands are very different than when I’m spending a week with a client. A weekend getaway with my significant other will also look very differently than a week with the kids.

In summary, it gets complicated, quickly.

A tempting solution to the above is what many ancillary providers do today: Conclude the above problem is too hard, and send the traveler a link to a plethora of options so they can figure it out themselves.

This typically results in the traveler being sent to a white-label booking engine with thousands of options. When prompted with this overwhelming amount of options, the typical result is the traveler choosing nothing and “figuring out later.

Even worse, they’re likely to completely ignore any future offers since their time was wasted the first time.

Thinking about a Travel NBO: The basics

In the HBR article, Deloitte split the process of designing an NBO into four basic tenants:

1. Define Objectives: What goal is the NBO trying to fulfill?
2. Gather Data: Utilize any and all data sources required to make an intelligent offer.
3. Analyze and Execute: Use gathered data to match customers to offers. Make offers sparingly and monitor engagement.
4. Learn and Evolve: Analyze performance of previous offers to improve the relevance of future offers.

Let’s take a look at the above in a bit more detail from a travel angle:

• Defining your objectives as a travel brand should be fairly straightforward. Are you just considering further monetization of existing customers? Are you looking to spend some of your marketing budget to subsidize certain offers for high value customers? Can you design an offer that your customer will always remember you for? All of these are things to consider.

• Gathering data is perhaps the part requiring the most preparation in designing an NBO. You’ll want to utilize every data source you can to assemble a detailed profile of your customer, including demographics, psychographics, purchase history, the itinerary the customer is traveling on, who he/she is traveling with, etc. You also might want to consider things such as what is happening around the traveler (events, weather) and how the products you’re offering in your NBO can relate to all those data points.

• Analyzing and executing, as always, are the most critical. Aside from finding an efficient delivery vehicle for your offers – whether e-mail, mobile app, or in-person – you’ll most want to consider the timeliness and relevance of your offers. A business traveler is likely to not engage an offer for a city bus tour. Worse, offers sent too frequently will quickly annoy the traveler and make him disable any offer functionality. Relevance is a key point: Understanding what persona a traveler is traveling under will significantly increase the chances of conversion and a meaningful engagement. Determining a user’s persona requires large-scale statistical analysis and data science experts, and should not be taken lightly.

• Learning and evolving should not be overlooked. Consider each offer sent – and its success or lack thereof – as a way to fine tune your future offers. Did the traveler delete your offer without opening it? Perhaps you need to look at how the offer’s subject line was phrased. Did the traveler not engage at all? Perhaps you got your persona classification wrong. How long after making the offer did the guest engage with it? Perhaps your timing was off. All of these – and countless more – are data points to learn and evolve from.

Tread lightly

Especially when starting out, you’ll want to design your NBOs to be extremely lightweight and broad. As your learning evolves, you can begin to be more fine-tuned and laser focused in the types of offers you send and how often you send them.

But beware: NBOs can and will backfire if executed poorly. The most critical things to avoid are:

• Sending frequent offers: Start with one offer per trip. Don’t annoy your customer at every turn.
• Don’t creep out your customer: Big data and data sciences enable a level of insight into a customer’s behavior like never before. But being “too good” can backfire: A creeped-out customer is a dissatisfied customer.

Start your engines

All of this may look too complicated for you or you may want to just keep retailing the way you’ve been doing it. But don’t rest on your laurels – major travel brands are not only heading down this path, but may trap you in a place you don’t want to be: The last guy to engage the guest.

Imagine a scenario where your friendly online travel agency is sending your guests more relevant and timely offers than you are as a hotelier or airline. Imagine their offers taking your guests off-property (in case of hotels) or directing business to competitors (in case of other travel products).

The race to engage the traveler intelligently has already started. Don’t be the last to the finish line.

NB: For further reading, here is the HBR article “Know What Your Customers Want Before They Do” as well as the associated Deloitte webinar.

NB2: Clock beach image via Shutterstock.

In a move that surprised more than a few, Google recently licensed booking technology from Room 77 to “remake its search experience for hotels to look more like travel sites such as Priceline & Expedia”.

This was how the WSJ portrayed it, with no fewer than two additional pieces from the media outlet hailing the move as “bold” and “risky”.

Based on that kind of press, you’d think Google had just entered the hotel business for the first time. Except, of course, it’s had a competing product for a few years now.

That leads to the question: What exactly did Google buy that it didn’t have already?

After a thorough exploration of both Room 77’s public site and Google Hotel Finder, it’s pretty easy to conclude “not much”.

Let’s take a look in detail and score each site:

SCORE SHEET

User interface/Search experience:

Since the WSJ touched on it, I’m going to tackle this one first. I’d classify both interfaces as being – at best – adequate, and certainly nothing revolutionary.

While Room 77’s is more visual, Google’s approach to most of its travel products is very search centric. Reason for a licensing deal? Nope.

Pricing/inventory:

A fair amount of speculation around this deal centered around Room 77’s aggregation technology as well as its ability to display AAA and Government rates, something other OTA’s (and Google) haven’t featured on their sites.

But, aside from the aforementioned AAA rates, some basic searches on Room 77 returned less than stellar results compared to Google.

For example, let’s take a look at the first Room 77 result in the image below, The Mosser hotel.

Clicking the “Get Deal” icon through to Booking.com results in a slight price discrepancy: the $109 rate touted by Room 77 is a dollar off.

(NB: UPDATE – Room77 advised us this was due to a rounding issue)

Not a big deal, but certainly not indicative of revolutionary tech. Let’s take a look at Google:

Occasional price discrepancies aside, can Room 77 technology help Google customers actually find a better deal? A deep look suggests that, unless you’re a AAA member, the answer appears no.

A search for a one night stay in the San Francisco area resulted in over 500 results on both sites, and the only cheaper rates listed on Room 77 were AAA rates.

Supplier contracts:

Can Room 77 help Google with more supply? Broadly, it’s difficult to believe this as well. Much like in other travel verticals, when Google makes a call, people tend to pick up the phone.

As for implementation help, well, Google’s nearly 20,000 engineers surely could figure that one out as well.

AAA/government rates:

As discussed above, AAA and government rates are not currently shown inside Hotel Finder, and getting access to those rates likely took a bit of work. Score one for Room 77.

Room views:

Before it was even a meta player, Room 77’s unique value was in its virtual reality-style room views.

But, as demonstrated by its own shift to meta, Room 77 undoubtedly learned that this feature alone wasn’t going to draw a significant amount of travelers to use the site as their primary booking tool.

Direct booking:

Like Kayak, Room 77 experimented with a couple of ways to take booking directly. This is still visible on the Room 77 site today, especially when you look at higher end hotels.

Is Google interested in getting closer to handling the booking? Extremely doubtful.

Even a Google-branded booking form would necessitate providing end-user customer service, something which Google is (1) not great at and (2) unlikely to want to attempt.

Relatedly, what about Room 77’s oft-talked-about Room Concierge product? Again, extremely doubtful Google would want to attempt this kind of high-touch service. Differentiator for a startup to attract new customers? Yes. Necessary for someone with the reach of Google? Absolutely not.

Mobile:

Room 77’s mobile app could be considered one of the smoothest apps out there when it comes to actually booking a room. Not quite HotelTonight efficient, but close. Could Google be looking into ramping up its efforts in that area?

Doubtful. The smoothest booking experience can only be provided by booking direct, and, as discussed above, going direct is something Google is likely to shy away from.

Further, Google already has a wildly popular app that can handle hotel bookings: The Google Maps app. If that wasn’t enough, Google Hotel Finder on Mobile is also available.

To sum up: Publicly, there aren’t any obvious clues as to what Google saw in Room 77. Was there perhaps something behind the scenes? Let’s explore some ideas:

BEHIND THE SCENES

Did Room 77 have any un-launched technology that Google saw value in? With tens of millions in funding, it’s possible Room 77 had some unlaunched, under-the-cover features in the development that could change the way people shop for hotels. So it’s a possible scenario.

Engineering and talent:

A much more likely scenario, however, is that Google simply wanted to pick up a great engineering team that had spent years “in the weeds” building hotel connectivity technology.

With Google’s willingness to value engineers upwards of $800,000, this represents the strongest likely scenario on what Google saw in Room 77. It may be a soft acqui-hire.

Further, there’s history: Room 77 CTO Calvin Yang used to work at Google, and will be re-joining them with this deal.

Connectivity:

Could Room 77’s technology help hotels with easier connectivity into the Google Hotel Finder platform? Some reports have suggested that the deal could help Google move towards a similar model as TripAdvisor’s TripConnect program.

But aside from engineering expertise and perhaps a quicker path to market, this seems an unlikely scenario. As above, Google simply has too many resources to not engineer a solution like this in-house.

THE BIG PICTURE

Looking at the bigger picture, does the move represent another step in Google’s plans to become a major player in the metasearch game?

As I wrote nearly a year ago, Google is slowly, but very surely, working to ensure that all its frequently used products — Gmail, Google Maps, Search — contain deeply integrated travel components.

This move doesn’t explicitly move it any further in that direction, but the signalling is pretty clear: Google is continuing down the path of becoming the best way to search for travel across any channel.

Could it soon become so “meta” that it starts stealing the entire search experience away from major online travel agencies, leaving them to only serve results pages?

Time will tell.

Our long nightmare is over. Tours and activities finally gets the big market move it has so desperately needed: TripAdvisor has snapped up Viator.

First, a hats off to the team: perservering since its founding by Rod Cuthbert in 1995 is a feat unto itself – it’s extremely rare for a funded company to be able to be this patient for an exit. Well done.

Also a big congrats to TripAdvisor for having the foresight to make a proper entry into this space. It’s obvious this acquisition will put them way, way, way ahead of other major OTAs when it comes to T&A, with no other obvious acqusition target to play catchup with.

Ask any supplier: The only distributor that suppliers will bend over backwards for is now in the hands of TripAdvisor.

But beyond the congratulations, let’s take a look at what this will mean more broadly. A new wave of startups? The end of vouchers? Other major efforts by competing OTAs?

Perhaps all of those. Most importantly, I believe TripAdvisor’s new position will enable it to push the market forward sooner rather than later in the following key areas:

● Technology

● Marketing

● Distribution

Let’s dig into those one by one:

Technology

By many accounts, Viator has been significantly investing in its technology in recent years. Its mobile applications are great and it has made significant progress in enabling close-in and last-minute bookings.

This has all been due to the (some might say obvious) realization that the only way to get suppliers to do anything differently is to bring them sales. And Viator, as the market leader, has been able to flex that muscle.

But, TripAdvisor represents a whole other level of brand for suppliers to deal with: some might call it No More Mr. Nice Guy. “You want to work with us? Here’s how it’s going to be…” is not an unreasonable way to put it. And while this might worry some suppliers, for the market, this is going to be a major positive.

Quite frankly, years after we’ve all made it obvious that technology is the #1 inhibitor to moving a lot more sales online, suppliers, for the most part, still haven’t gotten the message.

Notable exceptions such as Gray Line aside, there are still far too many mom and pop shops that label technology as “inconvenient” or “getting in the way of their business.”

A brand like TripAdvisor is sophisticated – and large – enough to change this way of thinking.

Aside from its own supplier-facing technology, Viator has quietly made an effort to interface with third-party reservation systems and even worked on an effort to create an industry standard around availability and reservations messaging. Looking at other TripAdvisor efforts such as TripConnect, Viator’s efforts should seamlessly fit into TripAdvisor’s existing strategy.

Marketing

It’s not yet known whether Viator as a brand will survive in the long term (or even the short term), but even with it’s age and time in the market, Viator was still not a household name as far as travel brands are concerned. One thing is for sure – expect to see TripAdvisor flex its brand and advertising muscle to significantly increase sales in the market.

Viator’s SEM spend – already market leading – will likely see significant increases in key areas, leaving other nascent players that rely on SEM to play with smaller niches going forward. And lets not forget deep – and I mean native booking – integration into all of TripAdvisor’s product lines, from web, to mobile, to perhaps even third parties.

Distribution

Viator’s current distribution model relies on its B2C efforts (web & mobile), several key B2B deals, as well as a growing affiliate network. The B2C efforts should seamlessly find a home at TripAdvisor, and will enjoy significant benefits from deeper integration into the TripAdvisor website, individual product reviews, etc.

TripAdvisor’s mobile products could finally offer actual native booking for activities, with the network effect of TripAdvisor’s efforts in other areas (restaurants, etc) bringing additional eyeballs to the tours section. All great things for TripAdvisor and the market as a whole.

But the big question: What happens to Viator’s B2B and third-party deals? Viator’s largest B2B deal by volume happens to be Priceline. Might we expect to see some changes in that area going forward? It’s not unreasonable to think so.

Competing OTAs using each other’s products isn’t unheard of, but it might just make the folks at Priceline a bit uneasy contributing to TripAdvisor’s bottom line. Watch this space.

Still work to do

Finally, it’s important to remind ourselves that there’s still a lot of work to do in this space. The most important thing TripAdvisor can do right now is to ensure the best and brightest at Viator stay, and that it looks at Viator as a significant opportunity to own a large share of the market if it takes the proper care.

T&A may resemble other markets like small & independent hotels, but it comes with a whole host of unique challenges and opportunities. Viator has over 15 years of scars of trying to develop this market online. That fact alone should underline the work left ahead.

NB: Match image via Shutterstock

There is a scene in the movie Brazil, a Terry Gilliam film, in which one of the characters gets killed by an overabundance of paperwork.

Papers begin sticking to him, ultimately covering him from head to toe, and eventually taking his life.

While this is a very extreme example of how paperwork can begin to take over one’s work life, in some industries, paperwork has indeed become a repressive and costly issue.

The multi-billion dollar tours and activities industry has technologically lagged behind other travel related sectors and is one of the industries suffering from a repressive paperwork problem.

The airline and hospitality industries have both largely eliminated the requirement for paper tickets, paper confirmations, etc.

Hotels are moving towards enabling guests to use smart devices to bypass the front desk, and airlines offer mobile electronic boarding passes. Indeed, in those industries, the only time a traveler actually requires any sort of paper is when they choose to print something out.

Unfortunately, even with all the new emerging travel technologies, tours and activities suppliers are still dealing with a massive amount of paper, starting from when the guest uses paper to gain entry to the attraction right up until reconciliation requirements.

According to a research report by travel research firm Phocuswright titled The In-Destination Experience: Shopping, Dining, Activities & Tours, the in-person method for booking destination activities is still the most popular at nearly 40%, followed by calling directly, using online travel agencies like Expedia, and other non-mobile interactions (see figure below).

All of these various booking scenarios lead to a surprising amount of required paper transactions (in the form of receipts, confirmations, vouchers, etc.) in order to experience the tour or activity.

Often, the paper delivered the traveler via an online travel agency needs a secondary piece of paper to be verified, and then yet another piece of paper is printed prior to the guest participating in the attraction.

This is simply annoying to the traveler and is much like the way things were done in the 90’s not 2016.

In the same report, Phocuswright states that there are specific reasons why travelers do not tend to book attractions online.

The primary reason noted is that tours and activities suppliers are not merchandising their products as well as hotels and other travel brands.

They have poor activity presentations online, no option for mobile ticketing, and searching for attractions on the internet can be extremely confusing. Often, suppliers offer no real advantages to booking online.

Unlike more mature travel segments, there is also a lack of system integration.

Only a small percentage of suppliers have electronic connectivity enabling their resale partners to sell their tickets electronically, meaning most transactions require a paper-based manual redemption process.

More wide-scale use of electronic connectivity would decrease paperwork dramatically.

Paper needs to go, Part 1

The excessive use of paper in tours and activities negatively affects all aspects of the business, providing friction at every touch point.

It affects the guest purchasing the tour or activity, and it has use-cost ramifications for the supplier due to the need for reconciliation of vouchers as well as converting reseller paper to their own POS platform.

The most inconvenient issue is the fact that travelers still require a piece of paper to enter most attractions.

• …they must print the voucher
• …they need to make sure that they do not lose it (and if they are already in destination and they require the voucher to be printed)
• …they have to wait in long lines so that operators can validate their paper vouchers.

During the entry process, the traveler needs to have their paper voucher scanned, then issued a ticket from the operators’ ticketing system. The admissions staff usually does this.

Unfortunately, these staff members are often overworked, having to recognize paper vouchers from hundreds of different resale partners in varying formats.

This effort can equate to significant errors that will cost the attraction’s owner and impact the bottom line.

Having staff manually count, verify for accuracy, and reconcile paper vouchers every day, many times a day is highly inefficient.

In some cases, they must reconcile all paper with two separate systems (their ticketing/POS system AND their accounting system).

They also need to manually invoice some resellers, while for others they need to manually review payment invoices for correctness.

There is significant inconsistency in how things are handled from reseller to reseller, and it is almost always wasteful, inaccurate, and a lot of work.

Paper needs to go, Part 2

Our research shows that some tours and activities providers will spend up to $5 to reconcile each voucher due to paper handling costs and staff time.

To have a tourism business so focused on the use of paper restricts its capability to grow and meet the demands of today’s tech-savvy travelers.

Channel sales people who are overworked begin to feel as if they can no longer deal with more resellers because the paperwork overload is too burdensome already.

This lack of new prospect sales generation can be not only a moral killer – but also has an extremely adverse effect on the activity provider who is constantly rejecting new and possibly more innovative resellers.

There is no question the industry must find a way to eliminate paper from its landscape to stay competitive.

The capability to accept mobile tickets, as well as the conversion of paper vouchers to a technological ticket redemption platform, is paramount for the tours and activities industry to thrive.

The challenges that face this industry are not that different from the trials that travel sectors have had to deal with in the past, and have since begun to successfully overcome.

It is finally possible, through the implementation of new technologies like Redeam, that we can – and will – make paper a thing of the past.

NB: Brazil image via Universal City Studios.