Sunday, March 04, 2007

Online Travel, Travel 2.0 and More - when it there too much choice for consumers?

I had a very interesting conversation a week or so ago with the CEO of 2.0 start up Travelgator - Chris DeBrusk. Travelgator is a two year old company, their site came out of beta in August 2006 with their major release hitting the cyberways early last month (Feb).

Like a lot of the new travel services companies Travelgator are looking to build a community around travel – around helping people find out what they want to do next in travel and help them draw on the experiences of other to decide. More on the company and how they are trying to differentiate themselves from the pack in a latter post - first, the prospect of speaking to Travelgator turned me to thinking about the market history that has led to this new wave of travel companies and what inherent needs they have for success.

In thinking through this I thought back on the phases of online travel - I decided there have been three broad overlapping phases.

Phase 1 (1995-2003) – I know where I want to go, find me the cheapest price.

Expedia, Travelocity and (the subsequently acquired) Preview started the market by turning the green screen around and giving early Internet uses access to travel agent booking processes. This made visible the dark art of booking travel. The low cost carriers followed quickly as did start ups on other locations such as Lastminute in the UK and (with much less success at the time) in Australia;

Phase (2000-2006) – I want to find a deal on where to stay, can you help me with rates, availability and advice.

Expedia buys Travelscape (and eventually HRN) and the merchant model goes mainstream (by the way good Expedia history here). Soon everyone is contracting directly with hotels, a pace that accelerates as the hotel industry tries to recover from the horrors of 9/11, SARS and more. TripAdvisor (soon to also be part of Expedia) adds the next piece to the puzzle with the power of group based recommendation.

Phase 3 (2005 – now) – what do I do next, where should I go next.

A global audience that has travelled, enjoyed booming economies and is comfortable sharing everything and anything with a keyboard and mouse, has bought the wisdom of crowds mantra and wants to know what the world knows. Out of this comes social networking in TripAdvisor, investments in WAYN and start-ups like Travelgator.

I remember meeting in 1999 the founder and members of a company called TravelDonkey. Now little more than a traffic page – at the time the business model was to capture the experiences of travellers from the entire world and share them. People would be able to write in with their trip notes in real time. Search and matching algorithms would match like minded travellers and enable them to interact and build community. The CEO of the time (Sally Meecham – side note I had forgotten Sally’s last name but Googled “Sally Travel Donkey” and naturally found it) shopped this story throughout Europe – door-to-door and conference-by-conference. No-one bought it but looking back it was simply out of phase.

The big question for Phase 3 (and something I will discuss in the context of Travelgator in a later post) is - when does the provision of options, choice and possibilities confuse customers. In Phase 1 and 2 I sat through usability labs and customer surveys that showed that the more choice you gave a customer through buttons, links, options etc, the less they did. There are famous surveys in old school retail proving that a point is reached when you give a customer so much choice that they choose nothing. Each of the phase 3 business models therefore have an near impossible challenge – how do you provide choice, how do you meet the need from the consumer to find out “what to do next” without either providing too much choice or (to go to the other extreme) targeting in on a niche that is so small or focused that there is no money in it. Don’t know the answer but am looking forward to thinking on it more, watching others and finding out. What do you think?

Will target this thinking in tighter with comments on Travelgator soon.


Anonymous said...

I think that there is already so much choice for consumers, which ends up immobilising them. I've had enquiries from potential customers asking about a very specific location and accommodation e.g. holiday apartments at Italian lake. When I get back to them with availability and price , they either never reply or say they are going to do something compeltely different e.g. stay on a kibutz in Israel or reading one negative user generated comment has sent them scurrying off to look at alternative options.

Many consumers appear to demand iron glad guarantees that every aspect of their trip will be exactly to their liking. In some ways I think that shrinking from taking a chance and looking for this level of protection is unrealistic. If you end up in a mediocre hotel for a couple of nights, it's not the end of the world. especially if you like the location, you may only be in the hotel at night to sleep.

I still think there is a lot of emphasis given to price in the UK travel market. Travellers have to be realistic and not think that they can get something for nothing.
Are you prepared to spend 3 hours looking for hotel room that costs £1 less per night?

Anonymous said...

I agree there is too much choice for consumers out there. With the amount of user generated websites that have unfocused and sometimes biased advice it is no surprise the process of elimination and selection is an overwhelming one.
We have addressed this at On the Road Travel by providing a solution that is focused on a niche market - independent travelers who have left their backpacker days behind, looking for cultural experiences. Our editorialized content is enhanced by our community members who can voice their opinions on our recommendations through reviews and also they can contribute their own recommendations through filling out their Travel CV. Also, through member profiling we can filter the list of recommendations available to a member, to make their travel planning process easier.
We think this hybrid approach is a solution to the inaccurate, broad-based solutions of the third phase you pose we are currently in.