On April 26, Skift hosted its second Europe Forum in Berlin. Trying to manage tourist and citizens’ expectations, Berlin has been grappling with its response to disruptors like Airbnb, and for that reason alone, the city offered a fitting backdrop to a conference where discussions so often careened towards the “disruption” topic.
Digital continues to disrupt travel sector
In this hyperconnected world, consumers are facing an abundance of moments to digitally engage with brands but how does the travel industry strike a balance between ‘seamless’ and ‘overwhelming’? Rashesh Jethi of Amadeus IT eloquently described the situations consumers are in: “Fifteen years ago we went to the digital world to distract ourselves from the real world whereas now we go to the physical world to escape from the digital one”. It is clear that technology will transform the experience when travelling with Tina Edmundson, Global Brand Officer of Marriott International believing the industry needs to think past technology as just an enabler for booking and mobile keys: “we are moving to a world where your 6:30am wake-up call will be able to play your yoga workout on a magic mirror before having a shower at the perfect temperature which is all done through voice activation”.
Social media is one of the tools that brands can use to bring technology innovation to the consumer with Facebook Messenger being influential in this space as around 2 billion messages are sent per month between companies and consumers according to Henner Blömer of Facebook. Messenger has also been a hotbed for innovation in artificial intelligence through the introduction and use of chatbots. There are now over 500 travel-related bots and Dutch airline KLM sees chatbots as a key customer channel with 15% of its boarding passes now delivered through Facebook Messenger. Booking.com has also utilised a chatbot – the Booking Assistant – and in December 2017 after a successful pilot stated that 30% of English-language enquiries are now automatically answered by its chatbot within 5 minutes.
Beyond by… pretty much everybody
This summer, Airbnb will launch Beyond by Airbnb, its luxury travel planning service. With this, Airbnb is moving further and further away from its early-day core service: privately-owned room rentals. But Airbnb is not alone in moving beyond its core product.
AccorHotels wants to become a full service provider. In the Q4 2017 earnings call Chairman and CEO Sébastien Bazin said: “How come Apple, Amazon, Alibaba and Facebook are so powerful? They’re in your minds every day because you use them every day. So they’re in your homes, in your field of vision, in your minds and many are actually dependent on them. What is [Accor's] point of contact with our customers? Well, average four times a year would be [maximum].” Bazin reiterated this at the Skift Forum, noting that 17 recent acquisitions (for a total value of €630 million) were made to increase touchpoints with customers.
AccorHotels CEO Sébastien Bazin in discussion with Skift’s Deanna Ting at Skift Forum Europe 2018.
Bazin was, however, very candid about his efforts and investments when he said he believes that 20% of the start-ups he acquired will fail. Another company – going about things slightly more conservative – is Marriott, who announced a partnership with Hostmaker the day before the conference. Through Tribute Homes, Marriott is piloting a move into short-term rentals, a market which AccorHotels itself is exploring through its acquisition of Onefinestay. Edmundson of Marriott stressed it is currently very much a pilot, and that the company might consider future acquisitions to grow in the short-term rental category, or conversely decide that it is “not the right space for us”.
A company that always does things different than its competitors is Ryanair, but the airline is also focusing on peripheral activities in the form of added content on the destination and activities on its website, as well as the recently launched Ryanair Rooms. Ryanair CMO Kenny Jacobs noted that the hotel industry is ripe for disruption where Ryanair Rooms can establish itself as a new brand that stands out. When booking a room on the platform, consumers get 10% of the value back in flight vouchers to be used with Ryanair. While OTAs Expedia and Booking Holdings have a stranglehold on much of the hotel booking landscape, you would not bet against Ryanair taking a piece of the pie.