Daring To Hope – As Travel Faces New Restrictions Will An “Appetite For Innovation” Survive
Let’s face it – after the year that’s just gone by, the great majority of us are probably in sore need of a holiday.
And we might be tempted to think – as vaccines are rolled around the world – that we can begin to make vacation plans that won’t necessarily be thrown into disarray by new waves of Covid-19 and sudden changes to any restrictions applied to taking flights and crossing borders.
In the UK., the hope that the most vulnerable groups – demographically speaking – will have received at least the first dose of a vaccine by the end of March has apparently prompted a surge of bookings, with the over 50s leading the charge. Earlier this month, travel group TUI said 50 percent of its bookings for the summer were coming from older customers. Against that, however, concerns are rising about new variants that may prove resistant to existing vaccines. In response to that fear, Britain this week announced a whole raft of new restrictions, including travel bans and quarantine hotels for those who do fly.
So what does the immediate future look like for the travel industry – or to be more specific, travel tech businesses that rely on the health of the industry as a whole. Steve Domon is co-founder of Duffell, a company that has just launched a new service promising to open up the bookings market to a wider range of operators. I asked him if the beleaguered travel industry is daring to hope for a better future.
He isn’t so sure. “There is a lot of optimism at the moment,” he says. “But we are very conscious that it will take more time to return to normality than people would want,” he says.
Domon is doubtless right to be cautious. The vaccine certainly offers light at the end of the tunnel, but even in countries like the UK where the rollout is proceeding reasonably quickly, the restrictions imposed this week on incoming travelers are likely to be in place for some time.
Meanwhile, with no guarantee that the various approved vaccines will prevent transmission, early recipients could still face quarantine arrangements when they travel abroad.
So why his company has chosen this moment to a new air ticket booking platform? Travel tech companies entering the “bookings arena” face at the very least a double challenge. First and foremost, there are a lot of online travel agents and aggregation services already, so competition is intense. Secondly, you can’t escape the fact that relatively few people are boarding passengers jets a the moment.
An Inflexion Point?
But Domon believes the travel industry – and in particular – the bookings space is at an inflexion point. “The travel ecosystem has not really changed since the first wave of booking sites,” he argues..
From the consumer perspective, he says that incumbent sites acting as agents often don’t offer much in the way of post-booking services – for example, adding more luggage. Rather than using their online travel agents, customers usually have to make changes via the airline in question.
Meanwhile, in terms of the industry, third parties wishing to set up booking services don’t find the airline booking infrastructure easy to access.
Duffel offers software interfaces that allow travel agents and other third parties an opportunity to access airline systems quickly and easily. Domon says this will open the door to new services and operators. He cites an example. “Sites selling concert or festival tickets will also be able to offer airline tickets as part of the package,” he says.
This is, in part, possible because of the New Distribution Capability (NDC) initiative launched by the airline industry with the aim of “enhancing communications” between airlines and retail sellers. According to airline industry body, IATA -which is piloting the NDC program – retailers will be given access to rich content and a “transparent” sales experience.
As Domon acknowledges, Duffel’s founders were not aviation industry insiders when they launched their company and thus had to overcome a degree of skepticism about their API-led (application programming interface) service. “The NDC initiative definitely made it easier for us,” he said.
But what about the dreadful state of the market? Domon says the crisis faced by the industry over the last year has created an appetite for innovation. “The industry is looking for ways to build back better,” he says.
The question is, of course, will that appetite survive the current crisis. Only time will tell if the pandemic will ultimately speed rather than impede innovation.
But the Duffel launch has gone ahead, with incentives included in the mix. The company is charging a subscription fee to access the platform and transaction fees. However, in 2021 users will get 1,000 free transactions.
Will this new platform help the industry to, indeed, build back better? If Duffel’s plans gain traction, more operators will be able to access the booking ecosystem while also being able to offer a wider range of services. For instance, Australian digital bank Pelikan is offering airline bookings. In the future, Domon foresees companies such as Uber taking advantage of the service, perhaps by using customer booking data to offer extra services such as fast-track checkin, if a trip to the airport is running late.
This is likely to be – as Domon acknowledges – a competitive arena, with other startups seeking to offer new services against a backdrop of the NDC initiative. We could see a wave of new services. That’s assuming of course that the airline industry (and travel more generally) bounces back.