I have been in online travel (and offline, before that) long enough to experience a number of distinct eras.
The first travel startup that I founded, in 2000, was billed as the first brochure-less tour operator in the UK.
Seriously – at that time, not having brochures as a tour operator was genuinely newsworthy.
Then the era of automation really took off.
To become a leading online travel agency you had to master a single process – such as flight search or flight booking.
In the period between 2000 to 2010, most of the leading OTAs as we know them found their feet and became the 10,000-plus employee monsters that they are today.
But what skills were required by the founders to achieve that?
Primarily, they were tech-related – you had to source data where no data sources existed (well, at least not those designed for millisecond response online use).
You also had to make a process efficient. And then you had to scale it (generally, a commercial problem).
You had to be first, or at least very early.
This took talent. It was a commercial talent once the initial tech solution was created.
The discovery and artificial intelligence era
We are moving into a new era, now that automation is largely done.
You can buy the tech that used to give a business a competitive advantage off the shelf – similar to how I can now use WordPress to manage content on a website, when I used to have to pay $1 million for a Broadvision licence 15 years ago. It’s a commodity.
You want flight, hotel, car rental or tour and activity data. It’s available.
This is where the OTAs have an Achilles Heel.
Full control of the experience from shopping to delivery enabling them to innovate or remove friction at every level. That’s why they are winning.
The tech and commercial skills that got the OTAs to where they are is not the talent required to thrive in this new era.
Creating differentiation in this era requires you to be able to devise features, interactions, tone of voice (especially important in voice UIs), and know how data insights can be applied.
This is all much more emotional than technical. A different part of the brain. A different type of person. Individuals can flourish rather than teams.
Restructure the companies
The OTAs should copy the music industry. There it is all about finding talent, young and old, and making the talent the story. You only hear about the musicians/singers, not the commercial people (Simon Cowell excepted).
The OTAs need to find it, promote it, enable and empower it and then reward it.
Online travel, it’s the commercial people we hear about at conferences. Wrong narrative, sorry!
How would the new structure work?
Put the talent in charge of user experience. Of the product. Of the direction. Make the commercial organisation support the talent rather than the other way around as it is today.
This is what startups do (out of necessity or situation) and big OTAs don’t.
Name a famous musician you admire. Right, now tell me who their music label is… I bet you can’t.
Yet it doesn’t matter. What matters is the TALENT, not the commercial team.
Sure, you would not hear about talent without the commercial team, but the talent is what is at the front and what you, as a fan, care about.
You buy that musician’s next album (if you buy albums at all), not the label’s next output.
One challenge OTAs have is that this new talent won’t take a mid-level job at a business. They may find themselves there due to an acquisition and stick for a few months, but they don’t hold them.
The only place talent is comfortable is in startups, where they can show off their talent, even if they are on a secondary stage.
They want to be the guitarist facing 500 ecstatic fans, doing a ten-minute solo, rather than an off-stage roadie in a larger show.
The OTAs have become very commercial and unattractive for true talent to work at.
In the previous commercial era, OTAs could afford to lose the talent they had acquired as part of their acquisition programmes as long as they kept the customers/partnerships/tech/brand from that acquisition.
But in this new talent-led era, this isn’t the optimal outcome.
Likely to mean that when customer experience expertise becomes the differentiator, as it will in the new non-tech differentiating era, OTAs may no longer be king of the hill.
Buy the popcorn!
NB: U2 concert image via BigStock.