May 21, 2018
CarTrawler’s Bobby Healy and Ryanair’s Kenny Jacobs took part in a keynote address at the CAPA Airline Leader Summit in Wicklow this week, where they considered what travel’s digital ecosystem will look like by 2030 and what opportunities it presents.
Kenny kicked off by challenging the definitions of Low Cost Carriers (LCC) and Legacy Airlines before touching on how the consumer in Europe is changing. He explored how it suits airlines to sell more varied products and that customers want to be able to behave like a miser or a millionaire, depending on the trip.
Kenny then explained that Ryanair aims to become the “Amazon of Travel” by creating a seamless shopping experience within their app and website where customers can purchase third party travel products, anywhere in the world. Amazon developed from an online bookstore to a cross industry shopping behemoth and Ryanair want to mirror this concept by developing from an airline to a one-stop, travel-shopping portal. He looked at the steps a one stop shop for travel needs to follow, from flights, to rooms and transfers, and onward to tickets, destination guides and even selling clothes and skincare products. In order to develop into the ‘Amazon of Travel’, Ryanair needs to grow beyond 1billion visits a year, sell more products to existing customers and increase their margins over time by making it simple to shop in app.
Next Kenny looked at how digital performance drives returns by examining the growth in revenue, social followers and all round interactions Ryanair experienced between 2013 and 2018, before examining the importance of getting digital right today. His examples of learnings from Ryanair’s approach included the importance of having a retail front-end that is distanced from the backend booking system, owning your own media and the distribution of your product, and why data driven retailing is key.
Kenny believes that every airline should aim for 75% of their bookings to come through its own website instead of Google search. He is of the opinion that companies shouldn’t pay for web traffic unless they really have to, nor should they pay to reacquire the same customer or leak traffic to other websites. Also, when possible, middlemen and paid digital media should be avoided in order to reduce marketing spend per visit.
He then moved on to the opportunities and work that needs to be done in terms of ancillary sales, particularly things like Ryanair Rooms and at-destination revenue opportunities. According to Kenny, Ryanair needs to own and manage their customers if they’re to avoid disruption from Online Travel Agencies (OTAs) and should aim to disrupt the other trip pillars by offering better value and experience than competitors. Ryanair’s development in the ancillary space was displayed as Kenny showed the benefit for its customers of moving from Hertz to CarTrawler in order to give them more options and choice.
His predictions for 2030 included the dominance of global travel retailers and the decline in undifferentiated OTAs. Kenny also spoke about the danger of Google and how it will steamroll airlines if it continues to be unchecked, before telling the audience to plan for the death of desktop and that they need to make sure their app and mobile services are top class in order to remain competitive.
CarTrawler’s CTO Bobby Healy then took to the stage to discuss what the future holds. He kicked off by looking at why the West has fallen behind on mobile and what China is doing right. The huge rewards that can be reaped from property adopting and utilising conversational commerce was high on the agenda, with the ever-popular example of weChat deployed. Bobby told the conference that 5.5 trillion transactions were completed on mobile in China, according to the Financial Times, a market that is a staggering 50 times larger than its American contemporaries.
CarTrawler CTO, Bobby Healy
In the next ten years, we will see the rise of micro-transactions carried out in a conversational style completed through a voice operated interface and airlines need to promptly prepare or risk having their market dictated to them by Google, who will be able to accommodate for this style of transaction within in the next ten years, according to Bobby. He then further warned the packed conference room that many airlines are thinking more about online than mobile, which will cost them in the long run. He said that this is going to result in them being left behind, a point that further demonstrates the need for airlines to move towards the ‘Amazon of Travel’ model, which would allow them far more control over their own market by collecting data on customers and correctly implementing it to make their engagements seamless and sticky.
Bobby then spoke about the importance of collecting customer data and that airlines haven’t been banking this data enough to compete with Google, “airlines need to set up data science teams if they want to remain competitive in years to come” he said. Bobby appealed to CEOs to own their customer journey because if airlines miss the boat the bigger players in the digital world will take advantage, which could eventually result in airlines being charged to be introduced to customers or even to appear in search results. This, Bobby warned, is a pending cost the airline industry will have to prepare for.
He then went on to speak about how vital and convenient AI and voice interfaces are becoming, before showing an example of booking a CabForce taxi with the help of Alexa. The seamless, fast and accurate process drew nods of approval from the audience.
Since the new General Data Protection Regulation (GDPR) is on the lips of every business with a digital footprint, the topic of security couldn’t be ignored. Bobby spoke at length about why the industry needs to consider Blockchain because of its inherent safety and its transparency. This technology, if correctly adopted, will lead to frictionless, safe payments that will lead to customer confidence. “With the possibility of pending EU constraints and ever-present concerns about data leaks, now is not the time to be relying on legacy systems, said Bobby, “when we consider Blockchain we see it as a safe solution which will mitigate against leaks and hacks.”
Bobby closed up by returning to the ‘Amazon of Travel’ idea, noting that for airlines to thrive they must become a one stop shop and control their own ecosystem, he then concluded that partnerships within the industry are going to be key in the coming years in order to avoid being consumed by the digital giants.
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