There were several elephants in the room during the Phocuswright conference in Los Angeles this week.
Ctrip’s Jenny Wu on stage at the Phocuswright Conference.
Airbnb launching Trips, taking it into Experiences and Places, with Flights and Services to be added in the future; Google Now being rolled out on top of Google flights now available in 27 countries; Booking.com rolling out experiences pilot in Amsterdam, New York and soon in other cities; Expedia spending US$1 billion on a new tech platform to bring it all together – will dynamic packaging finally deliver its long-awaited promise of unlocking Expedia’s treasure trove of tours & activities; Ctrip’s chief strategy officer Jenny Wu mentioning “globalisation” at least 20 times in her talk …
But the biggest elephant, on and off stage, was the potential impact of President-Elect Trump on the US travel market, specifically inbound. A survey done by Phocuswright right after the elections showed one in 3 Germans less likely to visit the US for leisure compared with one in 5 in the UK, and women were less likely to than males.
In my interview with Amsterdam-based Gillian Tans, CEO of Booking.com, I asked her if she would be less likely to visit the US for leisure and she said a diplomatic “No”. She said currently there’s a lot of sentiment around the subject, and added it would depend on policies.
Chip Conley, head of global hospitality and strategy at Airbnb, said with 60% of its customers travelling across borders, “it could affect us”. Calling the situation an “emotional thermostat”, he expressed the hope that Trump is a pragmatist and there was room for cautious optimism.
Dara Khosrowshahi, CEO of Expedia said we had to wait-and-see to understand the full impact. Steve Hafner, CEO of Kayak, candidly said, “Who the …. knows?”
Off stage, every conversation was peppered with concern over what the new Administration would mean for not only travel, but also diversity and open borders, the very pillars on which travel thrives.
Tans said that post-Brexit, Britons still travelled, just that they changed their travel patterns to more domestic destinations.
The overall prognosis is, people will still travel, which means the more global your business, the less likely you are to be affected by anything that’s happening in particular regions of the world.
In this regard, Booking.com, which has been able to build a truly global business, is in good shape to weather whatever storms that happen anywhere and it explains Expedia’s intent to grow its 32% share of international business. Khosrowshashi said ideally it should be the other way round and “we have a lot of work to do”.
Hafner (pictured right) said while Kayak “had made a ton of money in the US”, overseas was where the opportunities were because there were more airlines, particularly low cost airlines, that were not integrated with the GDSes.
Ctrip, the world’s third largest OTA, after Expedia and Priceline, is also clearly intending to establish itself outside China and be where its customers are travelling and that means establishing itself in the US as well as Europe.
Other than globalisation, one other common thread was the battle to own experiences, that is, the $160 billion tours and activities market.
Airbnb rolled out its Trips launch on Thursday at its host event, Airbnb Open. At Phocuswright, Airbnb’s Conley said this was the first time in eight years since the sharing accommodation giant was founded that it was doing something new and big.
“We are starting small with a roadmap to scale out. The fact that we can acquire customers cheap is an advantage,” he said.
Trips launched with around 500 Experiences in 12 cities worldwide, including Los Angeles, San Francisco, Miami, Detroit, Havana, London, Paris, Florence, Nairobi, Cape Town, Tokyo and Seoul.
With three million listings and 100 million customers, Conley said the company had a natural customer acquisition channel and a treasure mine of data. “We can offer hidden treasures and bespoke experiences,” he said. When asked about the transactional model, he said, “We are a transformational business, not a transactional one.”
This puts Airbnb right into the space where everyone wants to be at. Khosrowshahi (pictured left) made it clear that Expedia, already a leader in tours & activities, was stepping up its game. It is an increasing part of Expedia’s app and again, with 50m loyalty members, it also has a natural customer acquisition channel even though he also indicated Expedia wouldn’t be spending less on Google next year, as did Tans of Booking.com.
Asked if there was a danger of Booking.com losing focus as it rolls out new products including its destination pilots – its success over the last 20 years has been due to its relentless focus on accommodation (it now has more than 1m listings with instantly bookable vacation rental properties increasing 39% year-on-year to 529,000) – Tans shrugged off the notion, saying the company remain focused on customers.
Could the winner thus be Google whose VP Travel and Shopping for Google Oliver Heckmann demonstrated the new Google Now voice-activated search on stage? Even as it rolls out a comprehensive suite of products, from Flights to Hotels to in-destination pieces, it remains the dominant marketing channel for travel brands, which means it’s getting two bites of the travel pie.
Conley is of the opinion that the travel world is big enough for everyone – but increasingly it seems only for the big with the resources to scale, both across the world and across travel sectors, to reach you and me, through our best friend, our mobile device.
I am thus tempted to quote the African proverb, “when elephants fight, it is the grass that gets trampled.” Or is that “trumpled”?