Valuable insights for the travel industry: Change your strategy, or else

I’ve spent the past week at what I consider an incredibly valuable “sneak peek” into what’s ahead in the travel industry. The PhoCusWright Conference is a crystal ball of predictions, insights and a reality-check for marketers. Here are my top takeaways from the conference:

1. Change your strategy now, or else
Travelers today connect and get content in distinctly different ways. Many strategies are out of sync with the marketplace. The pool of prospective travelers will double in the next 20 years to four billion and most companies will not be able to engage with these travelers unless they change. The next generation of travelers are raised on rich media content and use devices that are visual and touch-oriented. They have little tolerance for yesterday’s stuff.

2. Share is the new search
“Social is underhyped – it’s a big deal. Share IS the new search,” said Rich Barton, founder of Expedia, chairman of TravelPost and Co-founder & Chairman of Zillow.com. That is something both Rich and PhoCusWright CEO Philip Wolf agree on. “Social networks are the most powerful thing that has happened to the web since it’s launch.” This is so true. There was a lot of info about social discussed and I will get into this and mobile in my next post.

3. The mobile social web is the most powerful tool in history
“Companies need to accelerate their mobile strategy and not just repurpose their websites,” said Philip Wolf, PhoCusWright CEO. It is very clear that mobile requires different tools and information than websites. Many companies talked about how they are now investing more development and resources into mobile than their websites.
* In 5 years more people will connect to the internet on mobile than on PCs
* FourSquare has 4 million users, and one million of them joined in the last 7 weeks. Location-based mobile is here to stay and quickly becoming mainstream.

4. Ensure success by building a product that is naturally social
Rich Barton built five brands with collectively 20 million unique users a month with no advertising dollars. It’s a “power to the people” approach where transparency is key. He also believes that media companies make a mistake when they spend money on advertising to drive traffic and as it makes them lazy on product. His secret to success? Build something that’s unique and people will come.

Shortly he will reveal the new TravelPost site. You can sign up to be the first to see the new beta here. The other four sites include:
Glassdoor.com: Enables users to anonymously share salaries, executive reviews and company reviews.
Zillow.com: Quickly becoming the authority on real estate, reviews, information and price comparisons.
Avvo.com: Attorneys are rated and reviewed. This site is becoming the source of info on the web for legal information.
Realself.com: Find, share and discuss cosmetic surgery procedures. This is a big business.

5. Hot topics: Group-buying, private sales sites, vacation rentals and rail

Groupon redefines travel: COO, Rob Solomon says that travel is any time you leave your door and showcased examples of how Groupon is driving room nights up at hotels. Groupon’s growth has skyrocketed over the past 10 months to 30 milion subscribers, 3,000 employees, 30 countries, 500 cities, and it now takes the title of the fastest growing company EVER.

Private sales sites: Voyage Prive, after huge success in Europe enters the US market; Gilt’s Jetsetter has already proven this will work; Ruelala, with its Virtuoso partnership steps it up with luxury travel sales and LuxuryLink announces Vacationist, a partnership with Travel+Leisure magazine/American Express Publishing. Big players like Expedia/TripAdvisor enter the market with Sniqueaway.

The growing vacation rental market is $25-$30 billion of sales in the US and is $100 billion worldwide. Hotels and hotel sites can expect competition as travelers, especially families, welcome this alternative. HomeAway CEO Brian Sharples explained how he is building a global marketplace through acquisitions.

Surprisingly, the fastest growing sector in travel is rail. European air carriers need to watch out. According to SilverRail, the growth of high speed rail directly correlates to the decrease of air demand for certain sectors. Rail between London to Paris has an 80% market share over the air travel market. Rail represents a $300 billion marketplace. Currently $500 billion is being invested in high speed rail tracks in Europe.

For the new innovators, my personal favorites sites to watch are Hipmunk.com, taking the agony out of flight search, and OffandAway.com, the ebay for the luxury traveler.

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3 Comments on “Valuable insights for the travel industry: Change your strategy, or else”

  1. Jeremy Head November 22, 2010 at 4:54 pm #

    Hi Mindy
    Nice summary. Looking forward to your other posts. One thing I absolutely disagree with is ‘Build something unique and they will come’. From my experience
    1) There are few things that are genuinely unique so doing so is very very difficult
    2) Given that this is the case, you have to engage in outreach/marketing/promotion to make people aware of what you have created. There is so much stuff out there online that your likelihood of success otherwise is very limited. (Or else success will take so long to arrive you will have burnt through all your start-up bucks and be bankrupt long before)
    Cheers
    Jeremy

    • Mindy Joyce November 22, 2010 at 6:52 pm #

      Hi Jeremy,
      Thanks for your comments! It’s great to meet you. I checked out your blog. Very nice!
      Cheers,
      Mindy

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