Travel Players Predict 2013 Trends, Concerns

Though companies are focusing on different aspects of the industry, there’s one thing everyone seems to be keeping top of mind: the consumer.

Distribution, marketing and Apple
Starwood Capital Group, for example, is going to tweak its distribution mix to keep up with the evolving consumer.

It’s the classic question, said Ash Kapur, VP of revenue management and distribution for Starwood Capital. “What percentage of spend should be online, and what percentage should be spent offline? I think we are going through that exercise now for hotels in ’13.”

“Fundamentally, we’re looking at digitizing our marketing, distribution approach in 2013,”Kapur said.

One trend the company is seeing is that intermediary bookings are growing faster than property-direct booking. It is not a bothersome issue yet, Kapur said, because he sees working with intermediaries as a partnership.

But if growth of the intermediary channel becomes significant, it will create red flags about the allocation of marketing spend.

“If it’s a partnership that’s growing faster than direct channels, we need to address it,” he said.

Rumors of Apple entering the travel industry is another distribution issue hoteliers are beginning to show concerns about, but Kapur said there’s something the industry needs to keep in mind: “The bigger question is if Apple were to get into the travel space, how would they get access to the inventory? Who provides them that inventory, and who provides them that rate?”

When it comes to distribution, hoteliers are in control of their inventory, he said.

Consumer-focused innovation
For Expedia, the main focus in 2013 will be consumer-focused innovation, according to Abhijit Pal, senior director for global strategic accounts and gaming at the company.

Expedia has to meet customers at the level which they are now in, Pal said. “They care about choice, they care about transparency and they care about convenience.”

That means investing in social and mobile, he said.

The trends the industry sees today regarding same-day and 90-day bookings might be different five years from now, which plays a role in how the company invests in its mobile platforms. It’s important to look at where the customers are and where Expedia needs to be to meet them, Pal said.

As for social, “(it) can easily become a double-edged sword,” Pal said. “On Expedia, we have to invest in social because we know our customers are social. Consumers that interface with our social sites are twice as likely to convert than those that do not.”

“Social can also be the amplification of consumer complaints. It can go either way, and you have to be prepared to invest either way.”

Catching up to consumers
Tran Hang, head of travel industry at Google, said 2013 will be the year of catching up to consumer behaviors.

“We’re going to see mobile this year represent 35% of all searches. Next year, it will be about 45%,” Hang said. “These are outstanding growth rates we can’t ignore.”

Part of the search experience for consumers is finding room availability and pricing information, she said. “Part of what we want to do is more than you see today.”

What Google is seeing in its data is that its users want something really experiential, Hang said. In thinking about how to scale and differentiate what consumers want, it becomes less about the experience and more about delivering the rate expectation to the customer.

“We see that as a very large data challenge,” Hang said.

Part of that challenge will be working to get data from third-party providers and even partners within the travel industry, she said.

Experiential travel
Consumers don’t want the same thing as everybody else, said Travis Katz, founder and CEO of Gogobot, a travel-related social network.

“Everyone’s an individual, they like choice,” Katz said. On top of that, “consumers are very, very time constrained, and they’re price sensitive.”

Google is the dominant player in the search space, he said, but information overload also overwhelms consumers.

What Gogobot will focus on in the coming year is how to make experiential travel preferences easier to discover. “It’s just too much information … not enough time,” he said.

“I think setting the right expectations is important, but the question is: What is the right data to communicate?”

By working with partners and continuing to focus on unlocking consumer data, Gogobot sees opportunities to help travel consumers make easier decisions in the mobile space.