EyeforTravel's San Francisco Summit 2017

April 2017, San Francisco

Technology with a human touch: travel’s new super power?

Pamela Whitby has been finding out if the days of purely self-serve online travel are over

“Metasearch on steroids,” is how industry veteran Krista Pappas, the vice president of Lola, describes the firm’s new agent console, a state-of-the-art piece of kit that delivers “super powers” to the group’s living-breathing travel agents.

The console, which communicates back and forth with Harrison, Lola’s artificial intelligence (AI) engine – its answer to IBM Watson – gives the firm’s 20-strong travel agent team “all these new, amazing and efficient tools”. Tools that will help Lola, a startup leading the charge away from purely self-serve online travel, to deliver a truly personalised experience.

Says Pappas says: “With travel factories spitting out thousands of results that aren’t personalised for the customer, we want to prove that it really doesn’t have to be one size fits all…what we are really trying to do is weed through all the noise and clutter that you get from the big agencies.”

With travel factories spitting out thousands of results that aren’t personalised for the customer, we want to prove that it really doesn’t have to be one size fits all

Krista Pappas, Vice President, Lola

Though she isn’t naming or shaming anybody, the travel industry veteran’s argument goes that whether you like it or not, the results of the agencies are influenced by who pays the highest commission.

To highlight the point, she refers to her own experience:“No offence to Best Western – this is simply a personal choice – but given the number of times I have booked on a particular OTA, they really should know by now that I am never, ever going to stay in one of their hotels…This is just one of the ways where we [at Lola] aim to be a different. We are 100% focused on giving the customer the hotel that is right for them.”

This isn’t easy but with a further $15 million awarded in recent Series B funding, taking Lola’s total investment to just under $35 million, the tech-driven vision seems within reach.

Delivering uniqueness

As a quick recap, Lola launched its limited beta version in the app store in May 2016. Led by former Kayak co-founder Paul English, Lola’s target audience is the tech-savvy frequent traveller, fed up with having to sort through the thousands of generic search results spat out by well-established OTAs. Though everybody in travel is talking about ‘personalisation’ more often the results don’t deliver, and end up costing travellers time and productivity.

Pappas explains: “One of the big lessons from the launch of version 1 was just how unique everybody’s needs are…In the next iteration [due for launch in Q2] we are going to give people a much higher level of personal travel service, which means personalised answers and real service when they need it.”

Following feedback, the next iteration will also include significant changes to the user experience. “It’s truly a mobile-first user experience versus just a mobile-adaptation of a 20-year-old idea of search,” she continues.

Of course, there are some simple, easy-to-complete tasks, such as booking a regular weekly business trip from Boston to JFK, but there are still enough times when things go awry. “When a flight is cancelled, and you’re stuck in a cab, or there is a problem with hotel check-in, people absolutely do want to talk to an agent and with Lola, 24/7 service is always one touch away,” Pappas insists.

In essence then, Lola is now set on building a true personalisation engine for hotels, flights and other travel components that will deliver a “self-service travel plus agent” model.

This trend away from pure self-serve travel is one that Jared Alster, VP and co-founder of San Francisco-based startup Stride Travel, a go-to market place for baby boomers, sees playing out in 2017.

He says: “We believe that travellers will want more guidance when booking travel online so we see a shift a bit away from the OTA ‘self-serve’ model to one that is not exactly a traditional agency [aka Lola].”

Lola’s investors also seem convinced. In the latest funding round, led by Charles River Ventures, previous investors General Catalyst and Accel both came back to the table.

The real messaging deal

On the journey to personalisation, a core focus will be to perfect messaging tools using AI. Says Pappas: “What we have found is that people really do prefer messaging when looking for travel. It is how they have come to behave and communicate.”

The numbers seem to back this up. According to Statista, by August 2015 at least 2.5 billion people were using at least one messaging app, a number that’s expected to grow to 3.6 billion by 2018.

The real test now, however, will be how this upstart tech company harnesses AI, machine learning and natural language processing to perfect the messaging experience.

“A lot of companies, who I won’t name though I’d love to, were guilty of an over-exaggerated product/reality quotient this last 12 months,” says Bobby Healy, the chief technology officer of CarTrawler, the technology platform connecting travel businesses including OTAs, airlines and accommodation providers to all forms of ground transportation. “But people are now sick of hearing about AI and bots, so I think they’ll actually start doing something in that space rather than just talking about it.”

Lola is definitely “the real deal”, insists Pappas who says we can expect to see a lot more than talk in 2017. To advance the firm’s AI ambitions, last September last year came another “best-of-breed appointment” to the executive team in the form of Bryan Healey, a former Amazon Echo technology leader.

“Our AI team’s ability to help with personalisation and natural language processing for a better messaging experience will be paramount,” Pappas says.

While some industry players are calling 2017 as the year that the mobile native app dies out, Lola doesn’t buy into this view. “The other part of our tech vision is the mobile app – so it’s Harrison, agent, console, mobile app,” Pappas says. Importantly though, the human agent will always be there to “ensure that Harrison is getting it right”.

To ensure this happens, Lola has adopted an approach which helped Kayak to take the tech lead – insisting that engineers sit with the agents to hear first hand the customer’s pain points in order to build the most effective solutions.

Human capital

That humans will remain central to this fledgling business is an important one in the current climate.Recentlythe Financial Times reported on the pressure being felt by senior Silicon Valley executives at the World Economic Forum in Davos. With Brexit and the election of Trump, here executives including the chiefs of IBM, Salesforce.com and Microsoft were anxious to present themselves as more responsible and sympathetic to the potential impact of AI. Salesforce.com’s Marc Benioff is quoted saying that “advances in AI are beyond what we had expected,” and the concern is that it could lead to job losses.

Artificial Intelligence fuelled job losses are less likely in travel

In travel, however, Pappas argues that this is less of a problem. “Booking travel is inherently complex and we believe there are always going to be things that humans are better at doing than the engine,” she says.

Yes, lots of tedious tasks that agents have been doing manually can be automated, but that gives them the flexibility to handle the more complex problems.“The agent remains integral to this; we are a long way from the idea that this doesn’t require an agent to be involved,” she says.

Building trust

Like all consumer-facing brands Lola is keen to show that it’s all about putting the customer first but as a commercial organisation, whose first stage investors have come back to the table in round 1, it must also deliver returns.

“The team has raised a tonne of money and we have a lot of work to do, so pressure is on,” Pappas admits.

While positive feedback from users is the end game, like other agencies its business model is commission-based so it cannot ignore the importance of building the right partnerships. Lola’s promise to the travel suppliers it chooses to work with is “to complement their own marketing programme”.

Already it is working directly with hotels, as well as other third-party suppliers and global distribution systems Amadeus and Sabre.

Pappas is clear that Lola is not trying to take control of hotel loyalty data, which it could be argued is Expedia’s goal for its relationship with Red Lion, and ultimately other smaller chains. Last year, the online travel giant convinced Red Lion to allow it to auto-enroll guests to its hotel loyalty programme, in a move some commentators have called shortsighted.

Not so for Lola. “We want to ensure our customers are getting the best rate from hotels, that their loyalty is in check and that hotel recognises them when they arrive,” she explains.

Next steps for the firm are to “use the dough from the Series B funding round to for continued product development and marketing”; to date marketing efforts have been largely word-of-mouth.

Though the idea is still germinating, a longer-term vision is to become the Uber of the travel agency world, with Lola talking through the idea with prospective partners.

Says Pappas: “It’s a way down the road but we envisage that like Uber, you would be able to use Lola to both plan a trip or remotely join up to be part of a wider network of agents.”

One of the biggest challenges facing companies in the digital age is the ability to build trust 

That’s for the future, perhaps, but Lola’s immediate priority is building trust, one of the biggest challenges facing companies in the digital age. On this subject, Lonely Planet CEO Daniel Houghton, who joined in 2013 to engineer its digital turnaround and was recently named one of Forbes’ 30-under-30, has this to say:

“In our case, the business was built on the trust of our content, because we go to the places we write about. That’s what always set us apart and that is just as important today as our content appears on more and more platforms and in different ways.”

English and Pappas have been in the business long enough to know that it is trust too that will set them apart. “It’s truly amazing when you know you can trust somebody to book travel for you,” says Pappas.

As Lola ramps up to deliver on this vision, the industry will be watching closely.

Krista Pappas, Daniel Houghton and Bobby Healy will be speaking alongside other online travel industry innovators at EyeforTravel’s San Francisco Summit (April 24-25). Click here for details.

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