Travel Innovation: A Field of Dreams? Not Quite…

This field will cost me how much??

Good morning, Cafe Patrons.

I may be going a bit “American” today in my references, but perhaps you’ll indulge me a bit so that I might be able to make a salient argument.

An oft-referred to approach in technology, consumer goods, electronics, etc. is the idea of “if you build it, they will come.”  And for fans of American Baseball, you’ll know what movie I’m referring to which originated this now commonly used business buzzphrase.

Over the past few weeks, there have been the annual 3rd/4th quarter flurry of events and conferences within the travel industry – ACTE Berlin, WebInTravel, TheBeat Live, EyeForTravel Distribution Summit – to name a few.  And it seems as though much of the talk from these conferences was focused on what seems to be a growing ennui amongst industry veterans that innovation in travel is stagnant at best and downright disappearing at worst.

The blogosphere and online industry publications are also full of similar rants and exasperated viewpoints; some examples for your “light” reading pleasure: Travel Tech consultant Norm Rose - http://www.tnooz.com/2010/10/19/mobile/the-gap-between-emerging-technologies-and-the-travel-industry/ ; Travel Analytics founder Scott Gillespie - http://gillespie411.wordpress.com/2010/10/14/four-barriers-to-travel-innovation/ ; and a host of GDS, OTA and travel .com leaders sounding off at WIT: http://www.tnooz.com/2010/10/19/tlabs/there-is-no-innovation-in-travel-only-creativity/

Throughout all this debate and dialogue, it’s become apparent to a few, but not to enough of the many, that there is a fundamental issue with respect to driving innovation in travel.  I would go on to argue that this is especially true for corporate travel, which is summed up by a reply to Scott Gillespie’s posting from Michael Boult of hotel technology experts Lanyon: "Innovation is constrained when those whose problems will be solved by new approaches are unwilling to pay to be helped."

Spot on Mike.  All too often in our industry, the expectations of buyers (and I’m including both corporate travel buyers as well as TMC’s and travel agencies here) is that vendors of technological solutions have to completely build out their technology, run it through comprehensive beta and user testing, launch it to some “brave” customers, and then – and only then – might a customer say “OK you can start invoicing me now.”

The problems with this approach are many.  First off is a simple matter of cash flow dynamics.  The expectation is that the technology company has to completely fund the development of their products before earning any revenue from them, putting them deep into a hole which may take years – if ever – to dig out of.

Second is that due to this overwhelming need for the technology to start earning revenue as quickly as possible, the capabilities of many products are either dumbed down to try and attract the broadest customer base possible, or rushed to market relatively incomplete, in the hopes that “if we build it they will come.”  Yes but will they?  And if so, when?  And will you have burned through your capital by then?

The result of this is then that what’s launched to market often doesn’t really meet anyone’s needs, is looked at as being un-innovative, and therefore results in negative impressions about new technologies which stifles innovation and risk taking by the tech companies in the future.

Now I realise I’ve not provided any examples of this, although we all know some from our own experiences and I’d rather not hang out any dirty laundry outside the Cafe.  There are certainly some successes out there too of course, otherwise we’d all still be writing out airline tickets by hand.  And since I’m a guy who likes to look to the future, rather than re-hash the past, I think that’s where this dialogue now needs to go.

On that note, Cafe Patrons – where to from here?  How can we build a mutually beneficial, shared-risk culture in this industry whereby those who will benefit from new innovations are ready to stand shoulder-to-shoulder, technically and commercially, with companies ready to deliver these opportunities to our industry? 

Or – to tie this all back to my “Field of Dreams” analogy – I would argue that the approach cannot continue to be “if you build it, they will come,” but rather “if we build it together we can both be successful.”

Take that, Kevin Costner.

(image courtesy IMDB.com)