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Introduction
The way the travel product is distributed and consumed has rapidly evolved over the years. The focus has shifted from just sellers and the purchase transaction to customers and their travel planning process. Competition, technological changes and demanding customers have contributed largely towards this radical shift. But recently, the online world was swept by a new wave of change – Web 2.0 – a set of technologies, concepts and philosophies which will have a huge impact on the way business is done over the web, and travel would be no exception. This whitepaper, named “The Next Generation of Travel Business”, takes a look at the impact of Web 2.0 on travel – Travel 2.0 (or any other higher version!!) – the effect of which could alter the travel landscape completely in a few years’ time.
Evolution of Online Travel
It was in the early 1990s, that the internet and related technologies started having a profound impact on the way travel products were sold and distributed. If reach was the biggest concern in the pre-internet era, the internet allowed travel suppliers and distributors unlimited, fast and cost-effective access to a global audience. At the same time, it helped travelers gain access to a plethora of information to make informed decisions about their travel needs.
With the rise in internet population and increased internet penetration, online travel companies mushroomed and slowly newer business models emerged. The new online travel agencies and meta-search engines allowed travelers to search and compare travel products across the globe right at the click of a button. Today, more than $115 billion worth of travel product is sold online worldwide and it is estimated that about 72% of online travelers usually rely on the internet when shopping for vacation travel. Jupiter research predicts that by 2011, 38% of the total US travel revenue will come from online bookings alone.
But this rapid surge in online travel business is not without its own share of problems for the suppliers and distributors. As the travel product became increasingly commoditized, customer loyalty started eroding rapidly and companies struggled to differentiate their offerings. Armed with multiple travel options and changing preferences, customers too started demanding far superior service and flexibility. As a result, the need for a successful travel company was not just sound business models, transparency in online transactions or well polished customer touch points, but innovative ways and means to engage the users and to improve the overall user experience in their websites.
According to Tim O'Reilly, the man who coined the term, "Web 2.0 is the business revolution in the computer industry caused by the move to the internet as platform, and an attempt to understand the rules for success on that new platform."
Essentially, Web 2.0 describes a new generation of internet based services, tools and technologies that facilitate users to collaborate and share information online. The underlying message is to embrace the web as a platform and to utilize its inherent strengths. Technologies such as blogs, social bookmarking, wikis, podcasts, RSS feeds, mash-ups, web APIs and online web services encompass the essence of Web 2.0.
But Web 2.0 is not just about technology. Collaboration and information sharing is made possible by generous user participation and accumulation of user generated content. And this has shifted the balance of power right to the masses. A rich, interactive, user-friendly interface is another distinguishing feature of Web 2.0.
The term Web 2.0, as such, is not clearly defined, and a lot of its critics have written it off as a marketing gimmick. But the fact remains that the internet, and related technologies that emerged along, has already started exciting the online world at large. To survive this massive wave, businesses need to embrace and adapt to these changes in the cyber space.
The concepts of Web 2.0 when applied to online travel gave rise to travel 2.0. According to Philip C. Wolf - President and CEO of PhoCusWright: "Travel 2.0, our industry's collective fulfillment of Web 2.0, embodies how companies can differentiate themselves in a vast, dynamic space”.
With online travel scaling new heights, the impending need of travel companies to differentiate their businesses from competition, is well facilitated by Web 2.0. As compared to its predecessor, Travel 2.0 is characterized by higher levels of interactivity between travelers and more efficient ways for travel suppliers to aggregate content and reach out to a wider audience.
Perhaps, the most important concepts and technologies of Web 2.0 that are relevant for travel are:
1. Social Networking
2. User Reviews & Ratings
3. SOA & Open APIs
4. Rich User Interfaces
5. Syndication
Social Networking
Social networking in the form of user collaboration and free information sharing is one of the key concepts in Travel 2.0. The collective wisdom and intelligence contributed by this social network is very powerful and can be effectively used for gaining market dominance. Social networks empower travelers to share information in the form of experiences, reviews and ratings, audio, video, etc. The concept requires the traditional travel houses to think beyond their existing boundaries and make radical changes to their business models.
Blogs and wikis are perhaps the best examples of social networking where travelers across the globe are turning to the World Wide Web, sharing information, knowledge and experiences. Blogs (short form for web log) often provide commentary or news on a particular subject (travel) and usually combines text, images, and links related to its topic. Most blogs are primarily textual although some focus on photographs (photoblog), videos (vlog), or audio (podcasting), and are part of a wider network of social media. Similarly, a wiki is a group blog that can be edited by its readers (as opposed to a regular blog, which one person writes and everyone else reads). Starwood Hotel’s thelobby.com and Orbitz’s orbitzinsider.com are examples in the travel domain, where social networking is effectively used to market products, share information with customers and facilitate user conversations.
User Reviews & Ratings
User reviews and ratings, another manifestation of the social networking concept, has become one of the most influential aspects in the travel buying process and this explains the popularity of travel review websites. User reviews and ratings is a feature by which travel products and services are rated and ranked by the collective opinions of individual traveler experiences. Taking a leaf out of this social networking effect and considering the overwhelming impact of blogging on cyber space, travel companies have started integrating traveler blogs, ratings and reviews, guides, etc. on their websites. TripAdvisor is one of the popular travel review sites which features advices, ratings and reviews from travelers all around the globe.
SOA & Open APIs
Web 2.0, and hence Travel 2.0, advocates the use of open source software either completely or partially, such as the LAMP solution stack. The disparate nature of the travel industry also calls for sharing and aggregation of information across the various components in the complex travel supply chain using open Application Programming Interfaces (APIs) and Service Oriented Architectures (SOAs). This would make a lot of content easily accessible over open architectures and allows data to be accessed across organizations defying traditional boundaries.
Mash-ups are yet another offshoot of open APIs. A mash-up is a website or web application that seamlessly combines content from more than one source into an integrated experience. Content used in mash-ups is typically sourced from a third party via a public interface or API. Other methods of sourcing content for mash-ups include Web feeds (e.g. RSS or Atom) and JavaScript. TravBuddy utilizes open APIs from Google to provide a mash-up of Google maps in the TravBuddy website.
Rich user interfaces
According to Amadeus, travel companies have only about 11 seconds to capture the customer on their websites or risk them getting bored and going elsewhere. With so much of choice and variety, the overall internet shopping experience becomes crucial and travel companies need to have their applications designed for ease of use. Usability Engineering has thus become a focused area of attention for online travel websites.
Rich internet applications and technologies like AJAX (Asynchronous JavaScript and XML) and Flash, provide travelers with a seamless web experience by minimizing page refreshes and by providing a user interface with the features and functionality of traditional desktop applications. Travel websites like Farecast uses AJAX for providing a rich interactive user interface to customers. Widgets (or gadgets) are yet another useful tool by which travel companies can easily connect with the end users. Widgets are small client-side applications that can deliver weather information, travel news/deal updates, traffic maps, internet radio streams, and slide shows of online photo albums to the user’s desktop. Vail Resorts’ SnowMate and Travelocity Desktop FareWatcher are examples of specialized widgets for the travel community.
Syndication
Really Simple Syndication (RSS) is a technology that allows online businesses to stay connected with their customers. RSS helps deliver customized content, as chosen by the user to his feed reader. In the case of travel, online travel sites can deliver the latest prices on trips of traveler's choice, travel deals, special offers, etc. on a feed reader service. Expedia and Orbitz provide RSS feeds that can be subscribed by customers to get personal notification about the latest travel deals and promotions.
Conclusion
The customer has changed and the technologies have evolved, and change is inevitable for businesses that are to survive this new internet revolution. Not withstanding the arguments for and against the terms “Web 2.0” and “Travel 2.0”, the fact remains that over the past few years, the underlying concepts have shaped a different and powerful community woven around the internet. Online business models need to recognize this shift and align their social interactions by adapting the principles encompassing Web 2.0.
Of all the online business communities, travel would be the one to have potentially the biggest gains due to the innovations brought in by Web 2.0. The early adopters of Web 2.0 in the travel marketplace would certainly have a headstart to acquire new customers and to retain them in the long run. It seems to provide a perfect solution to the travel suppliers to differentiate their offerings and at the same time provide a high level of transparency in the travel buying process. The new generation smart phones and PDAs bring in unimaginable possibilities of accessing and delivering near real time information to the travel community. Travel companies need to realize this fact well and early and gear up to survive the challenges posed by this positive shift.
References
1. What is Web 2.0:
http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/
what-is-web-20.html
2. Making Sense of Travel 2.0:
http://www.phocuswright.com/fyi/fyi.php?article=287
3. Capture travel web customer in 11 seconds or they're off:
http://www.cthotnews.com/reportages.php?sequence_no=11071
4. Online travel spending on way to $128 billion:
http://www.travelmole.com/stories/1114087.php?mpnlog=1
IBS has been in the forefront of developing state-of-the-art, new generation solutions for the travel industry for the past decade. With over 4500+ man-years of expertise in the domain, 17 new generation technology products and over 150 customers, IBS has helped many of its clients garner the benefits of Travel 2.0 technologies.
The travel industry being disparate in nature, the software applications developed by IBS have been integrated with a number of external interfaces and gateways using SOAP, XML messages, Web-services, file transfer, mail servers, third party tools such as Message Net/JMS over MQ and other communication protocols such as TCP/IP, FTP, and SMTP. IBS has also utilized Enterprise Service Bus (ESB) and tools such as IBM DataPower Appliances for implementing the messaging capabilities of the Service Oriented Architecture (SOA). IBS promotes open specifications and interoperability in travel systems and is also an active member of the OpenTravel since 2006.
A combination of Rich Internet Applications (RIA) and AJAX is increasingly seen as an effective means to provide faster and interactive/ “closer to desktop” experience to internet users. IBS has extensive experience and knowledge of Java Web Services, Java Distributed Applications and Java based frameworks - JSF, Struts, Spring & Web technologies like AJAX. IBS has leveraged this experience in providing better user experiences to its clients in multiple projects.
Combining the best of Travel 2.0 with conventional web technologies, IBS has recently worked with a travel technology company to develop a User Ratings and Reviews application to enable its clients to collect feedback from their customers. Collection of feedback and reviews enables the clients to make improvements to their products and also helps with marketing their products and services by enabling customers to make better buying decisions.
IBS maintains a team of certified usability engineers who are capable of handling User Analysis Expert review, User group workshops, Standards preparation and Usability testing. Apart from its involvement in all projects undertaken by IBS, the usability team has recently helped an online group travel company by evaluating its website from a user-centered ergonomics perspective and providing prioritized recommendations for short-term and long-term modifications to the website.
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SOFTWARE SERVICES 
