Travel Marketing and Technology

Published in ASTA DATELINE, April, 1997

In the travel industry, there is a great tendency for sales and marketing people to ignore technology. For these people, technology is cast among those "necessary things" like the seats in airplanes or beds in hotel rooms. Most believe that, while technology is revolutionizing the way travel product is distributed, technology "won't really" impact the core selling or marketing functions of travel. "After all, all those seats still have to be sold, don't they?" goes the thinking. "We just have to adjust to new distribution solutions."

When the futurist "techie" suggests impending change in the structure or processes of the travel industry, the "average" travel agent or agency owner, most of whom share business orientation origins from either sales or marketing (and the airline marketing staff's themselves) give polite acknowledgment to the comments -- and go right on living in their "marketing" world. Few give any thought to the impact of technology in the future marketing and selling process. An implied radical change in the airline settlement process -- one that bypasses ARC in favor of more cost efficient direct solutions used in other industries today -- is perceived as a "process" issue; not a structural change in travel marketing.

Yet the entire basis upon which modern day travel marketing is based in the throes of a restructuring and rebirth. Technology, particularly that aspect of it dealing with electronic communications, is ending the Industrial Age -- and with it, the era of mass production, mass marketing, and mass media. More important to the travel community -- as mass marketing disappears, so too, does the concept of "share-of-market" selling.

In the 1960's, the transition of computerized airline inventory systems into distribution platforms enabled airlines to, effectively, mass-produce and mass market through mass media, airline seats. Concurrently, expanded television and other mass media tools made airline mass marketing increasingly cost effective. Travel agents evolved from the role of consulting in travel planning to a role of being order takers supported by mass media marketing, advertising, CRS distribution, and "share-of-market" incentives.

New communication technologies in place today, are beginning to change this dynamic. Mass media is a one-way "selling medium". The "loudest voice" (best advertisements or most effective publicity gimmick) gets less and less consumer recognition -- a downward marketing spiral. In the new technologically enhanced communications world of today, it is increasingly possible for the travel sale and marketer to facilitate a two-way dialog with buyers. The concept that one seat "fits everybody's needs" will disappear rapidly -- to be replaced by travel products tailored to "individual market" tastes -- or literally, "individual's" needs based on a dialog of communication between seller and buyer.

One has only to look at the wide spread and rapid growth of the airline frequent flier programs to see the early stages of "two way" buyer dialog with key customers. Another, more global, less obvious example; the ever expanding growth of airlines that serve point-to-point, niche, or specialty markets ... services targeted to specific individual travel needs. Or consider the implications of the commission caps and the ensuing override readjustments. These are not the actions of "mass marketers" seeking increase "share of market" for airline products. Rather, they are the beginning of an evolution of products designed to serve the needs of individuals.

In the era of mass marketing, the driving measure of marketing was "cost per exposure" to reach some optimum yield. In dialog marketing, the driving measure of marketing will be "cost per sale" to effect identified yield. Marketing returns become measurable to the specific customer. The impact of this facet on travel marketing will restructure travel products -- creating outlets for travel product that serve individual's specific needs.

While "mass productivity" (lower cost per unit produced) has been the major driving force of change over the past 50 to 75 years, the new communications facilitated "driver" impacting change will be increased "individual productivity" (or an individual's optimized time). The more efficiently an individual perceives a product serves his needs, the greater the probability that the individual will buy a product again. This paradigm of the individual will be fueled by the technology of low cost access to information and solutions -- whether those individuals function independently or as units within a corporate or other team entity.

The information tools are here today. They need to be used in new and different ways. While technology will continue to enhance process control and distribution -- the use of individual customer data tracking will enable travel marketers to tailor the products that they sell to the specific needs of the buyer. In the mega-scheme of things, airlines will know which frequent fliers takes their wives on trips to Paris for HER birthday ... and when that birthday is. That same information is also available to the local or micro- travel vendor at virtually the same technological cost. Who serves the customer (i.e., gains in "share-of-customer") will depend not on mass marketing budgets -- but on which provider has the best relationship with the prospect; which vendor makes best use of an individual's available information; and which vendor enables the individual to be most productive with his/her personal time (i.e., "individual productivity").

The computer, database, and communications tools to enable this marketing transition exist today. Mostly, these technologies are used today in the travel industry to effect changes in management, settlement and distribution processes of airlines and other travel services. The remodeling of the marketing premise, which will also be technology based, is just beginning. In all probability, the remodel of travel marketing, as it is known today, will have greater impact on the travel industry's than any change in the industry's already automated process functions.

Agency owners, agents, and marketing teams that ignore technology as a marketing tool -- or see technology as only impacting physical processes such as distribution or settlement -- put themselves at risk.