Although the online travel industry has grown substantially over the past decade, like any business, there are issues facing the sector. Technology issues, competition and learning curves, are among the major issues causing turbulence in the online travel industry.
Although technology has improved significantly over the past decade, there are still major connectivity issues which cause considerable problems. As recently as September 17, 2015, American Airlines grounded approximately 300 flights, due to connectivity issues. United Airlines had similar problems in March of this year, grounding the majority of flights for almost an hour. As travelers know, when delays like this happen, connection flights are missed, people are upset and a general state of chaos usually ensues. Although occurrences like this happen less often, the fact that they happen, highlights the imperfections with technology.
Competition is a double-edged sword when it comes to the online travel industry. Although most mom and pop OTA’s cannot survive and compete with the likes of Priceline and Expedia, especially in the U.S. marketplace, the few that can offer strong growth value propositions, are often prime acquisition targets for these dominant technology players. Turbulence in the online travel industry, just like challenges facing every industry, make it harder to compete in this market. At the end of the day, the consumer generally searches and purchases the best deal, regardless of which company is offering it. If it’s between the mom and pop OTA and the Expedia’s of the world, consumers will almost always go with the better deal.
As with any technology-related product or service, there is always a learning curve which comes with new ideas and innovations. While previous generations would visit their local travel agents, or maybe have the opportunity to book a trip by phone, times have changed considerably. Today, a person can book their entire trip; flights, rental cars, hotels, excursions, all within minutes from their smartphone. Turbulence in the online travel industry comes with many positive and negative results. We will continue to excitedly monitor the emerging innovations within the global tourism industry.