By Bill Furlong, CEO
The deep thinkers at PhoCusWright -- the leader in travel and technology research -- have just published their travel technology trends for the year. Escapia was selected last year to present at PhoCusWright's travel innovation summit. So we're always interested to see what they see coming soon in the travel industry. As you'd expect, their trends cut across all segments of travel -- from flights to car rentals to travel content. I've added comments below some of their trends (in italics) with thoughts about how they impact the vacation rental business.
If you'd like more of the trends below, an excerpt of the report is here with information about how to receive all of PhoCusWright's technology information.
PhoCusWright's 2009 Travel Technology Trends
Despite Market Woes, Pockets of Investment Still Exist "During economic downturns, innovation is the single most important condition for transforming the crisis into an opportunity." (Sami Mahroum, Research Director of Britain's National Endowment for Science, Technology & the Arts and a Visiting Reader at the School of Management, Birkbeck College, University of London).
>> As you'd expect, we see vacation rentals as one of those "pockets of investment" and areas of opportunity. Innovations Escapia is driving like yield management, online distribution, and ratings and reviews are all designed to help vacation rental managers capture more of the consumer lodging dollar.
The Entire Trip Experience Will Be "Informationized"
In the past, the main focus of the travel value chain has been those components that resulted in a booking. Access to further information was a challenge because of limitations of mobile devices, lack of acceptable technology in hotel rooms, language barriers and no clear business model. This is all about to change.
Software as a Service (SaaS), Cloud Computing and Open Source Spawn a New Flock of Innovators
>> Escapia was one of the early flock of innovators embracing software as a service. Consider this -- Escapia was writing the first comprehensive SaaS solution for vacation rental managers at about the same time Salesforce.com was doing the same thing for CRM more broadly. Now, Escapia's SaaS platform has powered more than half a billion dollars of vacation rental bookings for managers.
Suppliers (Finally!) Provide Personalized Shopping/Booking Tools
Today, most OTAs look much the same: Where do you want to go? When? Air only or hotel and/or car? To provide convenience and value to the customer, future learning and shopping screens will adapt to the users' stated profiles, observed profiles and shopping style. Similarly, the content presented will be the most meaningful to the customer.
>> This is certainly an area where the vacation rental industry is playing catch-up. Reliably providing travelers with the basic ability to get accurate availability info and rates and to book a rental online is still very rare. We're proud that our clients can offer it to travelers. Providing personalized tools will have to wait in our industry until the basic tools are more widely available.
Technologies Will Continue to Converge
Ten years ago, television networks were distinct from the Internet. Video was limited to TV and you went to see a movie at the theater. Now you can make a phone call anywhere to anywhere in the world using your laptop. You can watch movies and TV and browse rich content on your mobile device. You can watch content from the Internet on your TV and wirelessly network your house for all manner of content.
A Flood of New Mobile Travel and Location-Based Applications Come to Market
Mobile usage in travel applications has languished for years with a poor technology capability and an even worse business model. The mobile platform finally has interactive capability that makes it the fully functioning "3rd screen" alongside the desktop and laptop. With the growth of 3G (broadband wireless) subscriptions and smartphone adoption, apps will embrace location and context in a new way, enhancing the travel experience.
Advertising Technology Transforms Travel Distribution
Pure play booking fee models will become dinosaurs as blended models involving highly targeted ads, referral fees and fees for service establish peaceful coexistence. The technology convergence discussed in Trend 5 will enable the convergence of business models.
Still Searching…for Better Search
Last year the trends were "Semantic Technology and the Semantic Web will drive the next wave of Internet technology" and "Search will evolve to become more effective." These are still true. Lack of adoption of the formal semantic Web does not mean that search is not getting better. There are several instances where semantics are being used to improve search. As they begin to show differentiated business value over normal search, they will gain traction.
>> Clearly there is still plenty of room for improvement in vacation rental search. Our segment of travel is just getting to the spot where structured data allows filtering on multiple criteria. And the quality of the data for vacation rentals is still a big question -- search plays by the "garbage in...garbage out" rule. Ultimately, vacation rentals will have opportunties to improve search in very interesting ways. As we all know, it can be very hard to capture the character of a vacation home in structured data like number of rooms and a handful of amenties. That's where many of the creative advances in search will really help travelers filter from hundreds or thousands of vacation homes to the one that's right for them.
Democratization of Supply Levels the Playing Field
In the beginning when the airlines created travel distribution, the GDSs (they were called CRSs then) controlled the distribution of travel content. This created an oligopoly. But times are changing. The implementation of standards for interconnection, the transparency of the Internet, Web services and mashups, new search tools and SaaS models have all contributed to the development of an open marketplace for travel distribution.
>> We're still in a pre-GDS phase in vacation rentals. The reliability of the underlying software to connect to distributors is highly variable. Doing that well is a top priority for Escapia. The day will likely come when the basic connectivity is widely available (either because all software platforms offer it or because the supply gravitates to those who do). At that point, the ability to build in the ability to merchandise the inventory well (richer content, pricing and promotions, etc.) will be a key differentiator.
Business Intelligence and Analytics Move to the Forefront
In tight times, you need to squeeze as much as possible from your existing operations and capabilities. This involves understanding what your competitors are doing, how efficient and effective your own operations are and what your customers are saying.
>> If you've followed our blog, you know that I am an avid data hound. So I couldn't agree more. And we've put our development resources where our mouth is by creating a custom reporting module for EscapiaONE software that lets vacation rental managers mine their data for kernels of brilliance.
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