FOMO: The Fear of Missing Out. A new acronym buta problem as old as time. It’s amazing what people will do, and where people will travel, to ensure they experience all that life has to offer. In a world where 1.8 billion photos are taken every day, we are constantly inspired to take our next great adventure. But what does this mean for the travel industry moving forward? Perhaps a new adventure awaits the industry itself?
When Online Travel Agencies (OTAs) first started to gain traction in the late nineties, times were simpler. We were in the midst of the Clinton administration, Michael Jordan had returned to winning ways with the Chicago Bulls, and the mere novelty of being able to search and compare flights and hotels took the travel industry by storm.
Many OTAs emerged as the World Wide Web took hold, and whilst it appeared that they were selling flights or hotels, it was actually information and choice that consumers were buying. By aggregating all flight and hotel choices, it allowed customers to find the best deal, and travel, as we knew it, was never going to be the same.
At the same time as the emergence of OTAs, the term "Experience Economy" was first coined in a Harvard Business Review article by B. Joseph Pine II and James H. Gilmore. Pine and Gilmore argued that business was changing fundamentally from being service focused, to experience focused. The prevailing view was that in the new economy, businesses that win would create a memorable moment for their customers, and that the ‘experience’ itself was the product.
In terms of travel, the first success in the experience economy was Airbnb. Airbnb has thrived among millennial travelers because it provides the unique, local travel experiences that this audience craves. Whilst the service that Airbnb provides is accommodation, what customers are really buying is the memorable experience that will have when they get there.
Many OTA’s emerged as the World Wide Web took hold, and whilst it appeared that they were selling flights or hotels, it was actually information and choice that consumers were buying
Need further proof that we are in the experience economy? Think about your last holiday abroad. Did you go there because it was cheaper than other destinations? Or did you pick it because it was the most “Insta-worthy?”
So what does this mean for online travel heading into 2020? Well put simply, OTAs are now focusing their attention on experiences. Focusing only on price and range is no longer enough to resonate with younger consumers. OTAs need to move away from only helping customers book a trip, to instead empowering them to have a memorable vacation. This shift changes the whole paradigm—from booking your trip to maximizing your stay.
Thankfully, OTAs have the perfect platform for delivering this experience. They have the brand power, the customers and the insights, but most importantly they have the channel. The popularity of mobile travel apps means that OTAs can not only engage with customers before or after a trip but throughout the journey. This means there is an open invitation to deliver an exceptional experience anytime, anywhere.
To take advantage of this, OTAs need to invest heavily in their mobile app capability and have a clear marketing strategy to get customers to download the app to manage their trip. Customers love effortless and personalized experiences, and mobile apps can help OTAs achieve exactly that. From getting dropped off at the airport, to seamless check-in, skipping the luggage queue and reservations at the best restaurants in town. And that’s only the beginning. The use cases to provide a memorable experience are endless.
To execute this OTAs need to build sophisticated data tracking and leverage advanced personalization wherever possible. New partnerships will need to be formed. Tour providers, restaurant booking services, parking operators, luggage collection, and travel guides can all be integrated into the app ecosystem to become a one stop shop for all travel needs. On top of that, imagine if you could easily communicate with locals through integrated translation technology. Now that’s a great experience!
In China, WeChat, a so-called “super app” has already achieved this. WeChat offers services ranging from rideshare to e-commerce and payments. WeChat’s one billion users also use their app for travel. Why? WeChat has been able to build an ecosystem that means anything and everything you need to have a great travel experience has been integrated. There are various services provided, but there is one outcome - an amazing trip.
As the old-saying goes: “We buy with our hearts, and then justify it with our heads.” Over the past twenty years, the experience economy has become the expectation. The dawn of the internet rung in a huge range of industry changes and travel was no different. OTAs have an exciting opportunity to deepen their relationship with customers with mobile apps, and move beyond just being a ticketing service. The ones that do will thrive, the ones that don’t will run the risk of having FOMO themselves.