1

& Travel

Web 2.0 – Basics & Impact On The Travel Industry

Nirat Bhatnagar

Co-Founder

Chahiye.info

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What is Web 2.0

Web 2.0 Business drivers

Value Chain Impact & Opportunities / Risks

Content Cycle Impact Assessment

Recommendations

Agenda

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What is Web 2.0 really?

Beta-test long-tail widgets

Remix social life-hacks

Syndicate semantic weblogs

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What Is Web 2.0Case Study 1: Travelistic

Mike likes the video a lot and puts it on his blog. It is seen by his 1300 daily readers

Anne travels to Paris and

uploads a video on Travelistic

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2

3

Mike sees the video while

planning a trip to Paris

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What Is Web 2.0Case Study 2: Rrove

Anne travels to Paris and tags a Moulin Rouge on

the Paris map

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2Mike sees the comment while

planning a trip to Paris and

decides to visit Moulin Rouge. Tags it as night

life

3Geena searches night life in Paris

on Rrove and discovers the Moulin Rouge

tagged as night life by Mike

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What Is Web 2.0Case Study 3: WikiTravel

• The Wikipedia of travel• Background & travel related info on

16,900 + destinations worldwide & growing!

• Received the Webby Award for Best Travel Website

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• Web 1.0= “Web as an information source”; Web 2.0= “The participatory web”

• Web 2.0 is about collaborating, sharing, expressing– Blogs, Wikis, Podcasting

• There have been fundamental changes in technology and user adoption which have led to a Web 2.0 explosion– Technology evolution; open standards– Network effect; critical mass in almost every niche

• Not a fad!

The opportunity (and challenge) from Web 2.0 is significant for all industry players- offline and online.

What Is Web 2.0A few loose definitions

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What Is Web 2.0Web 2.0 Growth Trends

0

20

40

60

80

100

2003 2004 2005 2006 2007

No

. of

blo

gs

(m

illio

ns

)

050

100150200250300

2006 2007M

illi

on

s

MySpace Facebook Others Total

Source: Technorati

Blogs Social Networking Membership

Source: Comscore

0150300450600750900

2005 2006

Mill

ion

US

D

US Europe Total

VC Investment in Web 2.0

Source: Ernst & Young

• Significant VC investment in Web 2.0 - its here to stay

• User adoption of blogs & social networks to rise rapidly until 2012

• Gen X & Gen Y prolific users of Web 2.0• Gradual but certain adoption by enterprises

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Why Web 2.0Adoption of Web 2.0 by enterprise

• Campaign: “Up Your Budget”• Tools used: Blogs, Internet

Videos• Spend: < USD 500,000• Results

– 1 million unique visitors– 10 million page views

Budget Rent A Car

• Campaign: User submitted video adverts

• Tools used: Blogs, Internet Videos, Company Website

Southwest Airlines Starwood Hotels

• Campaign: W Hotel designed and put up on Second Life

• Tools used: Second Life

• Adopted by a few early adopters in the travel industry – with impressive results• Adoption increasing as with emergence of platforms / standards emerge & references

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What is Web 2.0

Why Web 2.0 ?

Value Chain Impact & Opportunities / Risks

Content Cycle Impact Assessment

Recommendations

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Why Web 2.0Web 2.0 Business Drivers – Cause & Effects

Technology Trends

Participation By End Users /

Seamless Information Re-

composition

Rich media/ RIAs / Improvements in

Usability

P2P Reliance In Buying Behavior

Reduction of Information Asymmetry

Social Behaviour

Web As A Platform

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Why Web 2.0Enablers – The Web 2.0 Toolset

Blogs

Wikis

Online Videos

Podcasts

Photos

Creating Content

TaggingRSS / Atom

Feeds

“Loose” APIs

User ParticipationOpen

Architectures

Applications (maps , Facebook

apps etc)

Embedding Into Applications

Mashups

Social NetworksDiscussion

Boards

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What is Web 2.0

Why Web 2.0 ?

Travel 2.0 Web & Travel Value Chain

Travel 2.0 Content Web

Value Chain Impact & Opportunities / Risks

Recommendations

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Travel 2.0 Web & The Travel Value ChainThe Travel 2.0 Web

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

MetasearchPlanners

Comparator

Reviews

Tags

Commerce Value Chain

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Supplier / DMC Tour OperatorOnline Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

MetasearchPlanners

Comparator

Reviews

Tags

Supplier / DMC Tour OperatorOnline Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

MetasearchPlanners

Comparator

Reviews

Tags

Travel 2.0 Web & The Travel Value ChainAnalysis Approach

Travel 2.0 Content Web Travel Value Chain

• Customer Perspective

• Industry Perspective

• Value Migration

• Player Specific Strategy

• Web 2.0 Business Sensitivity

• Value Chain Impact

• Opportunities & Risks

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What is Web 2.0

Why Web 2.0 ?

Travel 2.0 Web & Travel Value Chain

Travel 2.0 Content Web

Value Chain Impact & Opportunities / Risks

Recommendations

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Travel 2.0 Content WebCustomer Perspective: Confused By Info Overload

3 Week Trip To Australia For 2

What The Customer Wants

Blo

g

Wiki

Travel videos

Social network

RS

S

What The Customer Sees

Goog

le

Metasearch

OTA

Planner

What organizations need to do

• Customers wants a trip and not just a travel component• Travel research has high transaction costs• Information is available piece-meal & proliferation of Web 2.0 content sources leads to confusion• Travel 2.0 players need to help rather than confuse – provide clear paths to planning & purchase.

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

Metasearch

Planners

Comparato

r

Reviews

Tags

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CommerceContent

Reach

Travel 2.0 Content WebIndustry Perspective: Value Migration

Social Media Commoditized

• Reach, content or commerce no longer sufficient on a stand-alone basis• Value has migrated to owning the customer

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

Metasearch

Planners

Comparato

r

Reviews

Tags

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Travel 2.0 Content WebResulting Strategy: Piecing It All Together Is Key

Enabling one stop travel planning & transaction is key.

• Wants trips, not components• Transaction costs• Information proliferation• Planning & commerce

facilitation are key

Customer Perspective Industry Perspective

• Content, commerce & reach value poor independently

• Owning the customer & being the SPOC

+

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

Metasearch

Planners

Comparato

r

Reviews

Tags

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Travel 2.0 Content WebPiecing It Strategy: Depends on how you fare on 2 attributes

Customer Benefits

(Your value add)Customer Costs

(pain points) Availability

Reliability

Time

Anxiety

Effort Quality

Transactability

… the size of your user base and what kind of value added travel components you provide.

Attributes that drive value to the customer

User base

Components

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

Metasearch

Planners

Comparato

r

Reviews

Tags

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Travel 2.0 Content WebSegment Wise Strategies

• A large user base and end to end coverage of travel planning and transactions through Web 2.0 components is the sweet spot• Players with a few components and small user base should

• Become best of breed• Feed out to solution players and complementary product players

• Players with large user base should aggregate relevant feeds to develop an end to end offering to enter the sweet spot

Co

mp

on

ents

Size-

+

+

Rrove Wikitravel

Expedia

Tripadvisor

Triphub

Solution play

Product play

Planning sweet spot

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel Blogs

Social Networks

RSS

Metasearch

Planners

Comparato

r

Reviews

Tags

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Travel 2.0 Content WebAn example of putting It All Together : Trip Hub

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel

Blogs

Social

Networks

RSS

Metasearch

Planners

Comparat

or Reviews

Tags

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What is Web 2.0

Why Web 2.0 ?

Travel 2.0 Web & Travel Value Chain

Travel 2.0 Content Web

Value Chain Impact & Opportunities / Risks

Recommendations

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Value Chain Impact AssessmentWeb 2.0 Business Sensitivity: Will You Get Impacted?

• Customer purchase patterns in different segments vary in their sensitivity to – Peer opinions– Hard facts• Commodities are fact sensitive; experiences are opinion sensitive• Sharing of opinions impacts experience oriented / less defined products far more

Customized tours

Imp

act

of

Fac

ts

Impact of Customer Opinions-

+

+

Standard tours

Flights

Tickets

Boutique hotels

Event ticketsCruises

Car rentals

Base Impact

Strategic Impact

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel

Blogs

Social

Networks

RSS

Metasearch

Planners

Comparator

Reviews

Tags

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Value Chain Impact Assessment

Base Impact

• Direct channel to communicate with customers• Customers & critics get an easy platform to discuss organizations. Form cliques • Additional medium beyond traditional PR & marketing

• Participate in community discussions• Showcase thought leadership• Bypass traditional PR for speed &

customer intimacy• Build deep customer relationships• Leverage word of mouth to develop the

brand

• Corporate indifference to the new Web • Negative blog swarms • Being viewed as plastic / unauthentic

Impact

Opportunities Threats

Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel

Blogs

Social

Networks

RSS

Metasearch

Planners

Comparator

Reviews

Tags

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Value Chain Impact AssessmentCase Studies & Do’s / Don’ts

• Assign adequate marketing resources• Identify mavens and understand

context • Listen … and then talk … to add value• Showcase thought leadership

Do’s

• Be too “salesy” or pushy• Be un-authentic

Don’ts

Promotion

Crisis Management

Success Failure Supplier / DMC

Tour Operator

Online Agent / Offline Agent

Customer

Wikis

Travel

Blogs

Social

Networks

RSS

Metasearch

Planners

Comparato

r

Reviews

Tags

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Value Chain Impact AssessmentStrategic impact for sensitive product categories

Supplier / DMC Tour OperatorOnline Agent / Offline Agent

Customer

Impact

Opportunities

Risks

Supplier / DMC

Tour Operator

Online Agent /

Offline AgentCustomer

Wikis

Travel

Blogs

Social

Networks

RSS

Metasearc

h

Planners

Comparat

orRevie

ws

Tags

• Greater reach/ visibility

• Disintermediation

• Context relevant distribution / promotion

• Service quality exposed

• Comparability

• Product design based on most popular ratings online

• Customer service becomes key

• Bundling for price opacity

• Service quality exposed

• DIYers can go direct to local suppliers

• Reduction in need/ value of advice

• Comparability

Offline Agent

• Sell complex / difficult itineraries

• Target non-web savvy market share

• Personalized marketing / offers to customers on your database

• Go online

– Leverage Web 2.0 tools

– Position yourself as a travel guru reviewer on social media

Online Agent

• Invest in Web 2.0

• DIY travel

• Further disintermediation

• Biggest beneficiary

• Info overload

• Comprehensive, quick & effective comparison & planning enabled

• Collaboration / group travel made easier

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What is Web 2.0

Why Web 2.0 ?

Travel 2.0 Web & Travel Value Chain

Travel 2.0 Content Web

Value Chain Impact & Opportunities / Risks

Recommendations

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RecommendationsTo Summarize

• Web 2.0 is already impacting all types of industry players

• Online players will need to figure out their strategy along:– Re-assessing customer value proposition– Sharing content and tools: data in and data out (‘co-opetition’)

• Bricks & Mortar players will need to harness web 2.0– To connect to customers, foster loyalty– To understand (and even influence) demand– …and fine tune offering

• There is no single formula. Be prepared to experiment and figure out– Social media is an important part of your marketing agenda

Thank You