A person waves as they leave the Radisson Blu Edwardian hotel, near Heathrow Airport, London, after … [+]
The Covid-19 pandemic has not changed anything in travel; all it has done is accelerate everything. It’s an interesting thought experiment to ask what that might mean for aviation and for tourism more generally. The path the entire travel and tourism industry was heading down leads inexorably to commoditization. Price is everything – the lower the better – and the relationship between the service provider, whether an hotel or an airline, was being destroyed by the nature of the search engines.
In recent years, the interaction between the travel industry and its customers – the traveller – has been dominated and controlled by intermediary platforms. They promised global market access, consumer choice and transparency, and at first, that promise came true. Intermediaries became trustworthy and trusted partners for travel suppliers. They filled plane seats and hotel rooms, and did it efficiently and effectively.
But, gradually, especially as regards the accommodation platforms, their constant need for market share and growth meant that they started to suck the lifeblood out of the hospitality sector. You might have had the experience of booking a hotel room via a booking engine and then being unable to change or even expand your booking directly with the hotel itself. At first, as with the airlines, the hotels tried to fight back by use of loyalty cards, but even that was eroded as the platforms demanded equality of treatment.
The platforms, catalyzed by the dominance of Google GOOG +0.3%, would cream off all, or more, of a hotel’s profitability and trigger a race to the bottom, depriving the hotel of reinvesting any earnings into the business, but also disregarding data privacy and customer relationship/ownership considerations. Airlines, which have a collective voice, tried to fight back by building a new booking process, that saw the traveler be identified – by frequent flyer card number – before searching for routes and connections in an attempt to tailor the journey to that traveler and to keep the relationship with the traveler for as long as possible. This New Distribution Capability has proved elusive to build but was, before Covid, being rolled out slowly. A number of airlines, frustrated by how slowly, took matters into their own hands. Lufthansa, for example, added a surcharge on any ticket not booked via the airline’s website.
16 February 2021, Brandenburg, Schönefeld: Lufthansa aircraft stand off the tarmac at Berlin … [+]
The pandemic gives the travel industry a remarkable opportunity to accelerate that change, and indeed extend it from the airlines to all parts of the travel and tourism ecosystem. That opportunity comes through the need, increasingly apparent, for new, electronic health certificates. Your current health status and your vaccination status is not a matter for the intermediaries, but it is a matter for the airlines, the airports, the hotels and restaurants. A new smart-phone based system can put you in direct contact with the suppliers and its customers – the travelers.
The emerging technologies, accelerated by changes wrought by the pandemic will enable travel suppliers, who create most of the value of the experience, to better target consumers, more closely control the relationship with the customer and retain more of the value created within their business so that it can be reinvested for the good of all relevant stakeholders: staff, the local community, the environment and the owners of the property.
It is an ill-pandemic that does no good.
I am the managing director of Aviation Advocacy, an independent strategic government affairs and publishing company based in Switzerland. Aviation Advocacy’s clients