Innovation against the odds
At EyeforTravel’s recent North American show, travel executives explained how they screen new travel tech ideas. Tom Bacon reports
We all seek digital transformation – increased use of technology to serve our customers better, drive new revenue, and increase profitability. However, there are so many possible opportunities across the technology landscape – this could anything from technology that is internally developed to proprietary solutions that use scarce technology resources or partnerships with entrepreneurial start-ups that have their own implementation challenges. Each travel supplier needs to choose what to pursue, they need to decide which among the long list of opportunities can become real, tangible initiatives that will work best. This isn’t always straightforward. At the Eyefortravel North America 2019, which was held in October in Chicago, Amy Burr, Managing Director of Operations and Partnerships at jetBlue Technology Ventures explained just how seriously they filter new ideas. In fact, of the 5,500 start-ups considered, jetBlue had only invested in 25.
How travel executives approach and filter revolutionary ideas was up for discussion in Chicago. Lindy Andresen, Director, Global Accounts at Expedia, outlined three obstacles to innovation: cost, complexity, and scale. Technology innovation, she said, must somehow fit into the existing system – which is generally a costly affair and can create greater complexity. To justify such an initiative the concept must scale efficiently and this often entails working across different languages, cultures, contexts, technology platforms and customer segments. It’s a real challenge and it is easy to see why most great ideas fail to take off.
According to Burr, jetBlue champions the application of an explicit corporate strategy. Defined along five pillars or priorities for tech innovation, this ongoing screen is applied to all potential new initiatives. She also echoed Andresen’s concerns about the cost and complexity of integrating with existing systems, joking that part of her job was telling start-ups that their idea wouldn’t work with SABRE!
Moderator John Peters, MD of Brush Creek Ranch, noted that one of his start-up ideas was rejected by a potential investor because it didn’t pass the ‘toothbrush test’. Toothbrushes, of course, should be used twice a day religiously. Likewise, the most promising new ideas are for things that engage directly with customers on a frequent basis - that can become a habit like toothbrushes. Less frequent usage, even if value-added, may never become ingrained and is unlikely to develop into a real opportunity. Hyatt’s Amy Weinberg observed that digital engagement has an edge here – customer digital engagement can become higher frequency than the associated product (flight, hotel stay) if it addresses customer needs and is easy and fun to use.
Brian King, Global Officer of Digital, Distribution, Revenue Management and Global Sales at Marriott, said he uses two basic innovation ‘screens’ for selecting tech innovation:
Scout for scale: A great idea that can’t apply across Marriott’s diverse product and geographic portfolio becomes too limited – King is looking for technology applications that work across its broad network.
Show me the use case: King complained that many innovators don’t think through the details of the customer experience: how will customers interact? What new steps will customers need to take? What will motivate them to change their current, ingrained behaviour?
These are tough hurdles. From the perspective of start-ups - and for internal change agents - the take-away is that you are likely to face tremendous odds. Easy integration with existing systems, potential for large scale, and detailed thinking around the desired change in customer behaviour – including the opportunity for frequent (digital) engagement – all contribute to a likely higher success rate.
Tom Bacon has been in the business for 25 years. When he isn’t penning his regular column for EyeforTravel, he is an industry consultant in revenue optimisation, and leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Want to find out more? Email Tom or visit his website