The Travel Industry Should Get Itself a Smartphone - The European Business Review

The Travel Industry Should Get Itself a Smartphone – The European Business Review

Posted by Admin July 21, 2024 Bussiness

Connectivity is a fact of the modern world. Yet fundamentally the travel industry operates as it did fifty years ago. An attachment to legacy systems, one-size-fits-all regulations and old models risks squandering opportunities. Companies across the travel spectrum need to focus on recognising and offering real value through improved technology.

As a former aviation CEO and trouble-shooter, I turned around challenged airlines and helped launch new ones.

Among my proudest achievements was helping Sir Richard Branson create one of the world’s first budget airlines against the many nay-sayers.

So I’m a big fan of what disruptive technology can do for travel businesses and their customers.

Here’s the problem. While today’s industry, especially airlines, may appear dazzlingly modern, the technology, systems and operations are mostly the same as forty years ago.

Recent headlines alone indicate an industry that has seriously under-invested.

Southwest’s ‘brief technology issue’ for example, that caused delays, two years after a major meltdown stranded American travellers at Christmas¹.

The wing of a United plane apparently breaking up mid-flight². A detached door plugs on an Alaska flight³. That’s just the dramas.

The whole travel industry is rife with fails of the more everyday kind – delays that seem to come as standard, booking inconvenience and poor customer service.

Airlines today operate within a rigid business infrastructure with little flexibility in IT, operations and regulations.

Examples include:

Short-haul aircraft models B737/A320 largely unchanged in three decades
Major airports regulations since 1992 favour legacy carriers over regional carriers, airports and start-ups
Airline reservation systems still rely on mainframes and Edifact messaging unchanged for fifty years, dominated by generic Sabre and Amadeus

Costing customers

I recently spoke to industry specialists at the Third Aviation Network Conference for Southeast Europe on the issues. I was staggered by the response. ‘You’re so right,’ many said.

It’s not just planes. Travel remains wedded to models and ways that no longer work well for agents, suppliers or their customers.

Non-integrated booking systems and online travel sites hit suppliers (and ultimately the customer) with high commissions and in many cases several as there is always a middleman (so called agitator) that needs to facilitate the connectivity.

Small-scale suppliers are often excluded as they can’t afford the technology and the complexity associated with it. The very suppliers who may be offering experiences current trends indicate travellers want⁴.

Consumer champion ‘Which?’ recently published a survey which found that travellers paid up to 12 per cent more via online platforms⁵ because suppliers pass the costs onto customers.

Advanced technology is simplifying and improving life in other sectors. It’s often said a farmer in a developing country with a smartphone has access to more information than US President Ronald Reagan had in the 1980s.

The travel industry needs to get itself a Smartphone.

Legacy systems

Why continue using legacy Revenue Management Systems (RMS) that since the pandemic no longer work when other technology is available?

Why continue using complex booking systems and online travel sites that charge high commission?

Why do you have to book one component of a trip, hotel say, on one site then switch to another for other services?

Come to that, why do I need 30+ separate loyalty scheme cards?

Technological advances enable lighter, more effective working that would make companies more competitive and satisfy customers, thereby ensuring loyalty.

Like the humble Swiss army knife, why carry around a ton of cutlery and tools in a big rucksack when you can have a single piece of multi-purpose kit in your pocket?

Investment would also help solve pressing problems like staff shortages and delays.

Personalisation can allow travel providers to better anticipate individual customers’ needs and create more relevant offers.

Airlines that update to modern, more fuel-efficient fleets would reduce operating costs, delays, and environmental impacts, streamlining operations from the ground up.

Disruption management is an area that could cut egregious delays using tech advances such as textual and analytical Artificial Intelligence (AI) to re-route travellers around disruptions.

Not able to change or now willing to change…. That’s the question

Companies across the travel spectrum need to focus on recognising and offering real value through improved technology. Inter-connectivity is a fact of the modern world now. In 2024 you do not have to be a member of a vast or expensive global networks to connect agents, airlines and suppliers.

Policymakers also have a role. EU regulations take a blunt instrument approach to how different countries and regions may support new airline initiatives. In many cases this favours larger carriers at the expense of regionals and start-ups.

Separate regulations for main hubs, regional airports and island states would introduce creative competition and consumer choice. The industry needs to engage more with regulatory bodies to achieve this.

Some challenges we cannot do much about or they are cyclical – economic instability, say, cyber-security threats and rising geopolitical tensions.

However, two of the biggest threats are the industry’s apparent reluctance to change, and the dominance of legacy aircraft, technology and outdated paradigms.

These can be changed but as new technologies emerge travel providers must be willing to innovate and invest.

Otherwise… anybody remember the Blackberry?

About the Author

Paul Sies is President and CEO of Journey Mentor. He has held C-level positions with various airlines (ex.: Cyprus Airways, Air Malta, etc…), travel providers (Hillman Travel) and travel IT companies (Sabre, Fare Direct) over the past 37 years. During this period, he has been instrumental in turning around 12 challenged airlines and hospitality companies, and launching 13 new airlines.