Travel and Cruise

The case for a next generation enabler for the travel industry

The case for a next generation technology enabler for travel

"I have the advantage of knowing your habits, my dear Watson," said he. "When your round is a short one you walk, and when it is a long one you use a hansom. As I perceive that your boots, although used, are by no means dirty, I cannot doubt that you are at present busy enough to justify the hansom."

"Excellent!" I cried.

"Elementary," said he.

Thus goes the conversation between the legendary Sherlock Holmes and Dr Watson in "The Adventure of the Crooked Man". After having been in the travel industry for close to two decades and having interacted with several leading travel companies across the globe, IBS is certainly blessed with an advantage of knowing the travel industry pain points from close quarters, and it almost sounds elementary to deduce the panacea for most of the problems faced by the travel industry today.  

Few established sectors of the global economy have felt the impact of the Internet and changes in consumer behavior more than travel and tourism. Booz Allen Hamilton in their seminal & visionary paper on the future of the travel industry talked about Travel Industry Convergence and how the industry is coming up with solutions that appear to be higly similar in nature, pushing the industry into a sweet spot.

Travel suppliers such as airlines, cruise lines and hotels are increasingly bundling ancillary offerings along with the assets they own, thereby becoming travel intermediaries themselves. One of the qualitative shifts that have already started taking place in the travel industry is the burning & progressive desire of a travel supplier to be a total vacation provider. On the other hand, conventional tour operators who come from a history of selling fixed escorted tours are increasingly investing in capabilities that would allow them to offer tailored or dynamically bundled packages. Online travel agencies, who started off by establishing direct connects to various suppliers and obtained Availability, Rates and Inventory (ARI) on a real time basis without taking inventory risks, are increasingly adopting a hybrid strategy of taking inventory commitments to meet "certain" demand and obtaining real time ARI to meet "variable" demand. Overall there is a high degree of similarity in the offerings of various types of players in the ecosystem. 

How can an enterprise differentiate if all constituents of the travel ecosystem seem to come up with similar products? Or rather, what are the capabilities required for a travel company to differentiate itself going forward?

Industry experts have been unanimous that the following technology enabled capabilities are essential for a travel company to differentiate in an era of convergence and increased competition: 

1. Personalization of engagement

Despite the investments made in this area, most travel companies know little about their consumer base. The 21st century consumer is connected, pampered with travel choices / recommendations and mostly brand-disloyal. Hence it is important that travel enterprises personalize their engagement with the travelers across the trip life cycle. Ability to personalize is heavily predicated on the ability to generate better consumer insights from the fragmented array of big and small data points. Companies must use the myriads of data at their disposal to create a better model of the consumer's buying patterns and needs and should be able to personalize at an invidual or at a personal level, thereby transforming a product centric model to a customer centric one. Customer centricity has to be at the heart of transformation initiatives.  

2. Unconstrained access to product sources 

As travel companies go global and increasingly start catering to global audiences, global destinations and diverse customer segments, it is important that they get access to a wide range of specialist travel product sources.Proprietary and less understood API formats, platform capabilities and IT staff bandwidth have historically placed significant constraints on the ability to get seamless connectivity established on a timely basis.

Newer technology must deconstrain this aspect and allow travel companies and their partners to develop connectors on a self-service mode. Further, technology must not only support retrieval of ARI but content as well and provide ability for travel companies to created curated products. 


3. Unconstrained distribution capabilities 

The travel industry grew faster than the global economy last year, according to the latest World Travel and Tourism Council (WTTC) reports. Asian countries continue to be the engine of global tourism, with South East Asia showing growth of 6.7%, North East Asia growing at 7.4% and China leading the vanguard at 9.8%.

In some of these countries, a generation of people have bypassed the web and exlusively conduct transactions on mobile or social media channels. Clearly, a travel company must have unconstrained capabilities to distribute through both conventional as well as self-service channels. 

4. Flexible/dynamic production models 

While there exists a market for pre-bundled vacation packages, companies must further boost their capabilities for producing tailored and dynamic packages. The key aspect of flexibility comes from rules that allow one to execute policies based on consumer or business context. Travel companies must be able to adopt different models including a-la-carte bundling of travel products drawing inventory from different product sources as well as obtaining bundled content from 3rd parties and then selling with or without value addition.  

5. Synchronize demand and supply 

A significant amount of money is left on the table because of lack of synchronization between travel demand and supply. Whilst revenue management systems are typically employed to achieve this end, the objective functions for optimization in a travel company are quite complex and solutions therefore elusive till date. The travel industry has to adopt a combination of heuristics and smart technology to ensure that market based allotments are shifted based on changes in consumer demand emanating from a certain market.  


6. Efficiencies through automation 

The travel industry has been notorious for the amount of time it takes to set up various travel products. The problem is so widespread and precarious that many companies have departments called "Set-Up" or "Loading" which eponymously reflects the sheer amount of effort taken for creating and maintaining travel products and managing mid-office and back-office processes. Companies are seeking efficiencies so that they can deploy more staff in sales and front office processes.  

7. Consultative selling capabilities 

The basic premise of consultative selling is to view the selling process as helping a customer to solve a problem or achieve a goal through the use of the seller's offering. However, while most companies are familiar with the concept, they have no idea how to go about implementing it. This is because most sales agents have been trained to believe that the best way to sell a product is to educate the user on the product. The problem is even more compounded considering the high levels of churn in call center and agency staff. Technology must facilitate the sales agents from being mere order takers to consultative sellers.  

Conclusion: An open and shut case 

All in all, the case for a next generation technology enabler seems to be clear. However, the sheer energy and investment required to put together the travel technology of the future has resulted in several companies adopting more myopic strategies such as prolonging the life of existing technology assets or creating band-aid solutions. All this serves nothing but delay serious commitment to the new order of things.

At IBS, fuelled by our deep conviction that there exists significant opportunities to redefine how the travel industry packages and services changing consumer needs, we have taken a bold and uncompromising approach. The iTravel initiative, to create the next generation digital platform enabler for the travel industry is fast taking shape. To paraphrase Victor Hugo – there is no stopping an idea whose time has come.


Asish Z Koshy is the Head of Travel & Cruise business at IBS. He is an accomplished & passionate leader with more than 20 years of experience in the travel industry and comes with significant experience in enabling business transformation through use of technology.

He has conceptualized a number of game changing products for the travel industry that have been successfully adopted by major global brands. He enjoys travelling, reading non-fiction books and a game of badminton. Asish is a founding member of IBS.

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Saturday, 23 September 2023

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