Summer is a big time for reading lists, usually focused on lively page-turners for the beach. But it’s also a good time to catch up on books about business, management and new ways of looking at our rapidly changing world. So, with the summer winding down, I wanted to recommend a few books - both new and old - that have influenced the way I think about business and management.
A good place to start is with the latest book by Wired editor Chris Anderson, Free: the Future of a Radical Price (2009). Its thesis is that in a digital world, price is rapidly falling to zero. The new world he describes is the digital equivalent of the Gillette model of selling razors at a loss and making money on the blades. We’re seeing this with everything from software to photo sharing and editing sites, where online businesses attract customers with free basic services and make money on more feature-rich premium services. It’s a model engrained in those under 30, who are accustomed to getting their information for free.
A good example is the recent decision by online travel companies (OTC) like Orbitz Worldwide to eliminate booking fees. For a decade, the OTCs believed they needed to charge consumers to book flights in order to make money. The fees had the effect of leading many consumers to find a flight on the OTC but book it on the airline’s own Web site. Since eliminating booking fees, more consumers are booking their flights through the OTCs. At Orbitz Worldwide, for example, air transaction grew 22 percentage points in the second quarter compared to the first quarter of 2009, when fees were still in place. Read more »
Jeff Clarke
Jeff Clarke is Chief Executive Officer and President of Travelport and serves as a Director on the Travelport Board of Directors, appointed in May 2006. He also serves as Chairman of the Board of Directors of Orbitz Worldwide.
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In reading articles about the distribution of travel services, it’s not uncommon to come across the phrase “traditional GDS.” In a 21st Century context, “traditional” suggests the old way of doing things – more Betamax than Blu-ray. Although I don’t think this is actually true of the modern GDS and the advanced technology that drives our business, it’s a reminder that the future of our industry depends on more than the scale and presence the GDSs have today. We have to evolve to meet the growing and changing needs of our customers, and this means changing some of the ways we have traditionally done business.
The travel industry today is no different than any other industry; it is driven by an explosion of information, new and more flexible technologies, and an almost insatiable demand from companies and consumers alike for rich and varied content, presented in a way that enables them to make an informed travel choice. This is driving significant change for our suppliers and customers, and GDS providers need to be equally if not more fleet of foot in anticipating their needs, delivering services ahead of the curve and doing so in an open environment.
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Gordon Wilson
Gordon Wilson is Deputy CEO of Travelport and President and CEO of Travelport GDS, responsible for its global activities across 160 countries. Travelport GDS is a provider of next-generation IT solutions for airlines worldwide, as well as innovative data intelligence solutions for airlines and other companies that rely on travel industry intelligence for growth and success.
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The global recession has taken its toll on airlines, hotels and the rest of the travel industry. Travelport market research data show air traffic bookings in June were down 12% from a year ago. But for consumers – particularly leisure travelers – the result is a very attractive summer travel season as airlines and hotels entice travelers with lower fares and promotional packages.
It’s all about supply and demand, and there’s a lot more travel supply than there is demand today. Hotel occupancy rates in May fell to 56% in the U.S, 59% in Europe and 61% in Asia Pacific*. June aircraft load factors at several major airlines in the US were stable or even slightly higher than last year, but that is on the back of substantial capacity cuts (a feat which is not easily replicated on the lodging side). Some major European airlines saw load factor drops in June.**
To generate more demand, airlines and hotels are cutting prices on key routes and in key markets. Read more »
Jeff Clarke
Jeff Clarke is Chief Executive Officer and President of Travelport and serves as a Director on the Travelport Board of Directors, appointed in May 2006. He also serves as Chairman of the Board of Directors of Orbitz Worldwide.
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It wasn’t long ago that various pundits were proclaiming the death of the dinosaur Global Distribution Systems (GDS) and declaring that the Internet would replace us all. But for all the success of travel “supplier.com” sites – and they have had some considerable impact on GDS volumes – consumers have demonstrated that they still want choice.
I don’t mean to suggest that there isn’t room for improvement in the GDS model, particularly in how we provide and present content to travel agents, corporate travel managers and other users and I’ll address some of these improvements in upcoming blogs.
Most consumers do not consider that they will receive an unbiased selection of all the travel options available when they go to a web site which is branded to a particular supplier. And they would be right. There was a tendency some time ago for consumers to believe that the only place they would see a travel supplier’s lowest price was on the branded web site of that supplier. However, through what are known as “full content deals”, the GDS industry has largely contracted with the vast majority of airlines and indeed hotel chains to ensure that all publicly available fares, seats or rooms are shown through the channels using the GDS. These channels include all of the major Online Travel Agencies (OTAs) as well as the high street leisure agencies and business travel management companies. Read more »
Gordon Wilson
Gordon Wilson is Deputy CEO of Travelport and President and CEO of Travelport GDS, responsible for its global activities across 160 countries. Travelport GDS is a provider of next-generation IT solutions for airlines worldwide, as well as innovative data intelligence solutions for airlines and other companies that rely on travel industry intelligence for growth and success.
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I returned a few days ago from the annual World Travel & Tourism Council (WTTC) Summit in Brazil. The WTTC plays a leadership role in raising awareness of the travel and tourism industry and its importance to the global economy. Members include the CEOs of about 100 of the world’s leading travel and tourism companies. You can learn more about the WTTC by clicking here.
As you can imagine, we had a lot of issues to discuss: the state of the travel economy, the impact of the swine flu virus, the ability of travel and tourism to stimulate economic growth, building public/private partnerships, and much more. It was also an opportunity to share ideas for developing the travel and tourism business in Brazil, which has huge potential as an international destination.
The Summit is also a big networking event. It’s not often that we have so many industry leaders in one place, so it’s a great place to meet with customers, suppliers, partners and government officials to discuss the key issues facing our industry – and, of course, talk about potential business opportunities. Read more »
Jeff Clarke
Jeff Clarke is Chief Executive Officer and President of Travelport and serves as a Director on the Travelport Board of Directors, appointed in May 2006. He also serves as Chairman of the Board of Directors of Orbitz Worldwide.
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