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| Apple, Google, Microsoft To Take Over The Travel Industry? |
After recent announcements there is now the great fear that Apple doesn't just enter the travel industry but even takes over as they did the music industry (over 25% of the songs are sold via iTunes). What people don't realize is that it is our self made lack of innovation which allows strong players outside of the industry to step up. Apple revolutionized the music industry because the industry itself did not want to migrate into a new era and tried to save the status quo, while complaining about illegal Internet downloads. |
| Instead of adapting to a new time and being innovative and creative with the new tools provided by the internet, the music industry chose to fight popular music sharing sites such as Napster, unknowingly creating a lack of innovation. The demand for new ways of distribution was there, but the music industry wanted to "preserve the old days." The telecommunication industry has had a similar experience: since 1998, traditional phone manufacturers failed to make money with mobile data beyond short message service (SMS). They tried to force their clients to adapt to a limited keyboard and a small screen. Cell phones progressed from bulky to flat, from long to flip phones and from black/white to color while at all times the price was the center of attention. It was expected that people wouldn't pay for a high quality device although it is the one device which they carry around at all times. |
| Then along came Apple changing two simple rules: combine keyboard and screen so that you have a larger screen and a full keyboard; and also have the customer pay a premium for a high quality designer phone. Thus a "nobody" entered and took away significant revenues. In fact while the stock price of the largest phone manufacture worldwide crashed from $40 to $15 (Nokia), Apple's increased from $120 to $260. Don't get me wrong: Nokia has still almost 40% market share worldwide and Apple is not even among the top five, but I'm sure, Apple caused some serious headaches at the headquarters in Finland. The difference to us is that neither the music – nor the telecommunications industry took the newcomer seriously while we in the travel industry at least show the respect - which is a good thing. |
| As I mentioned in many earlier publications our degree of innovation in the travel industry is poor and major players decided to negotiate instead of innovate. So we created this gap which is now about to be filled by players outside of the community because we as a group did not have the guts to work together for a better user experience. We were so busy with protecting our achievements that we lost track of reality. |
| It's not just Apple, Microsoft already runs its own travel service, and Google is in the process of acquiring the dominant shopping engine (ITA software). Eventually it might become a battle between the three Internet giants while the traditional players of the travel industry will fight for the "Oscar of the best supporting role." |
| Passengers might decide to store their profile and preferences in one trusted place – which might be Google. For Google and alike it is also a piece of cake to create or acquire a service such as TripIt enabling travelers to forward their itineraries and store them in one place no matter where booked. This means travelers take control of their own travel needs, book direct, and store everything in one place eliminating the need for distribution at all. |
| An interesting new world order! But we should not yet stick our heads into the sand. We should rather work together – even with the internet giants – and rethink how each of us adds value to the supply chain. Protectionism is outdated and we all need open systems which build on each other. We all underestimate technology, but it is that piece of the overall puzzle that will provide us with innovation while keeping the flexibility we need. The world will go on – so should we! |
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The author, Michael Strauss, CEO of PASS Consulting Corporation – a provider of multi-GDS technology and travel front-ends, is in the process of publishing a book about the potential future scenarios of travel industry: evolution, revolution or evolution with revolutionary actions. |
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