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Luke Bujarski, founder of LUFT, will join Caroline Bremner of Euromonitor and Caroline Boone of Airbnb Experiences in an Adventure Travel World Summit plenary session on 17 October in Tuscany, Italy, called Convergence.
Where does everyday life stop and travel begin? This could be the fundamental question of our modern age and one the travel industry will wrestle with in the years ahead.
Technology is now eroding various arrangements across the travel value chain and customer journey. No more asking for directions, no more currency exchange issues, no more taxis, no more asking the local shopkeeper about the best hidden gems. Mobile computing and a select handful of companies and apps have made access to information and local services universal. How has that changed things?
Industry professionals often talk about eliminating friction from the travel experience. That precious friction is also what had previously defined us as an industry. Now, the apps we use in daily life are the same brands and platforms we use while traveling.
This universality has also created new points of friction between residents and visitors, between incumbent firms and new players, and between local businesses and global platforms.
Convergence is all about this blurring of lines between the local experience and the travel experience, the products and services we use, and how we define ourselves as travelers. Where and how we travel will continue to change. Who capitalizes on our desire to move about this great planet has and will continue to change. Convergence also reflects on our response to this transformation. It means stepping outside of our comfort zone and merging different disciplines in order to stay relevant and competitive, and, ultimately, how we define ourselves as an industry.
Overall, my view is that adventure travel operators and intermediaries are in a unique competitive position, largely because access to adventure travel experiences remains outside the scope of mainstream platforms. Staying relevant for the long term will center on having both a differentiated and desirable product as well as a direct relationship with the customer. Much of this will pivot on understanding and working in line with evolving business models, platforms, and technological innovation inside and outside of the travel value chain.
This is a big topic, but here are a few of the issues related to convergence I think are most important to understand and address.
New Players, New Rules
In a recent LUFT strategy report, I shared my thoughts on why I believe big tech (think Google, Facebook, Apple, Microsoft, and Amazon, for starters) is in a moment of convergence with travel. First and foremost, it is because travel represents a massive opportunity. The World Travel & Tourism Council (WTTC) puts the size of the global travel industry at approximately $2.3 trillion USD. Clearly these big tech companies have the means and capital to enter the space, but these companies also operate on a different competitive playing field guided by different rules and motivations compared to traditional travel players.
The Mobile Digital Layer
Internet-enabled mobile computing is clearly now an integral part of modern life. According to the Pew Research Center, 77 percent of the U.S. adult population owned a smartphone as of January of 2018, with 95 percent owning some type of handheld device. Many key life functions are now transacted over mobile networks. Banking, shopping, staying informed, socializing, mobility, and travel now happen on our devices. Try living without Google Maps, Uber, the App Store, WhatsApp, Instagram, Facebook, and LinkedIn (or the local equivalent) for any extended period of time. People who do this exist on the social fringe.
Shifting Competitive Fabric
On this mobile digital layer, the distinction between everyday life and life on the road becomes blurred. We once looked to travel agents, tour guides, visitor centers, currency exchange kiosks, car rental firms, and a host of other specialized service providers that would cater to our needs as travelers. We now use the same platforms and services regardless of location.
Uber from anywhere. Navigate from anywhere. Connect with friends and family from anywhere. Bank from anywhere. This new competitive fabric transcends traditional barriers to entry. Global companies can now disrupt local markets without dedicating any hard investments in personnel and infrastructure.
Platforms and Suppliers
I would argue that suppliers — those closest to the customer — are in unique position. Expedia, Booking.com, Airbnb, Viator, and other travel companies have a wide but arguably shallow relationship with the end consumer. Google is approaching $1 trillion in market capitalization, yet it is nearly impossible to find someone to speak with at Google. Airbnb is valued at roughly $30 billion yet owns no real estate. Booking.com owns no hotels. Viator does not operate any tours. These players have gotten big by building the connections between product and the customer. Ultimately, however, it’s the supplier that dictates the experience.
By “experience innovation,” I mean leveraging technology to enable product innovation. And by “product” I mean the entire traveler journey from inspiration through experience and into reflection and sharing.
It’s easy to be overwhelmed with technology. There’s social media, mobile marketing, personalization, the internet of things, artificial intelligence, automation, platforms, decentralization, blockchain, 5G, virtual reality, augmented reality … the list goes on.
In travel, technological innovations are driving changes across the value chain — from how individual experiences are created and marketed to how they are sold. And that’s not to mention how these experiences are shared and promoted by travelers, who themselves are being shaped by the presence and ease of bringing technology along on their adventures. Adventure travel operators should consider the entire value chain and look for ways to innovate beyond this new digital layer and competitive fabric.
Distant Spatial Realities
Distant spatial realities refers to the next generation of edge technologies that will allow us to literally transcend space and time. These new applications, such as augmented reality and virtual reality, are less about recreating real-world alternatives (such as biking the Tour de France route from your living room) and more about offering new alternatives that may one day cannibalize real-world travel experiences. How will these new platforms evolve and how can adventure travel brands get in early as innovators?
Owning the Customer
It is essential to recognize the value of staying connected to the customer. The complex itineraries commonplace in adventure travel, the personalized attention from guides, the dedication to communities, nature, and wildlife — these elements are inherent in adventure travel’s DNA and now constitute a competitive moat isolating it from the more commoditized portions of the travel value chain. Building strong, direct relationships with customers and within customer networks will work toward strengthening the industry’s competitive advantage.
Convergence as the Catalyst
Being mindful of how the adventure travel industry responds to this new set of circumstances, ”convergence” also means embracing change and welcoming new ideas and concepts. It also means always remembering, as ground-level proprietors and innovators, we enable change that ultimately filters up the entire value chain.
The whole process starts with connections among local cultures, nature, and, ultimately, visitors who come to experience additional and enhanced life opportunities when they travel. Those working at the ground level — employees at local establishments, tour operators, local guides, and shop owners — need to feel empowered to use technology to become experience innovators as the adventure travel industry continues to merge with the tech industry.
Though the Summit is sold out, the Adventure Travel Trade Industry (ATTA) is debuting a digital access pass. Unlocking educational content, this feature allows those who want to attend the event but cannot be a part of the Summit in person to learn, improve, evolve, and prepare to successfully advance into the future. Attending Summit delegates will receive a special discount to the video content. Sign up for Summit updates to be alerted as more details on the digital access pass are released.