5 Takeaways from PhocusWright
As with many times before – I attended the 2023 edition of the PhocusWright Conference. I had many conversations with different players across the ecosystem. Here are my top learnings.
2024 is FUD city. If 2022 and 2023 were all about Revenge Travel – then the tail end of 2023 and now 2024 are headed to a world of Fear, Uncertainty and Doubt. What is causing it? Both demand and supply are affected. Supply is constrained and inconsistent. Basic economics say that when supply is constrained – prices go higher. Airlines are operating at 90% load factors. Further supply itself (aka the number of planes and people to keep them flying) are so constrained that there is only one place to go. Yes higher prices. Demand is going to be constrained. Wars, disease and well, can we please just take a breather? All of this affects demand. Politics are just getting very nasty and people are far too nervous to actually stray far from home. The amount of false information around is astounding. Who do you trust?
Tactical, Tactical, Tactical. Did I say Tactical. I could have easily said just one key word R-E-V-E-N-U-E. Many players are not thinking long term, they are just thinking tactically how do I make revenue work? Look for the R word to be on most people’s lips. Risk and risk amelioration will be words to live by. The price of money ran up so far and so quickly it caught investors by surprise. They are keeping their powder dry in these uncertain times.
Innovation has gone back into its decade of sleep. Way back in the heady days of the Internet before Google even, Innovation woke up from it’s 1980s slumber and roared back into life. Much of what happened in the 1990s was as a direct result of heavy lifting that occurred in the decade before. Well I have watched so many start up pitches – you know the ones… “my friend and I were in (pick exotic place) and we realized that trip planning is messed up… “ Thank god for Tik Tok is what I say. Seriously though, we are stuck in the long tail with little big changes occurring. There are many claiming to be innovative but perhaps not so much. One key word which needs to be on everyone’s lips is “Trust”. In an uncertain world safe harbours look awfully inviting.
Laggards and Adopters, plus the odd Pioneer. Normally when innovation is hard driving – it's the other way round. But now, Laggards seem to have the ascendancy. This is especially pronounced in the Indirect channels of product distribution. Some Travel Sellers (aka Agents) and their cohorts (let’s call them GDSs) are really digging in and not wanting to change. Pioneers and yes there are some great ones are in disruption. Pay attention chaps Next year despite being Tactical – Pioneers like Spotnana, AmTrav and others are going to demonstrate that NDC is actually not that hard. I wouldn’t wait for that Purple Pill to take effect either. Now about you adopters… you need scale. That is tricky. The big question is where is the fork? Look to the new aggregators who are able to bridge the gap between the old and new worlds. Look for players who have been around a while with dirt under their fingernails.
Service is not a dirty word. However, I do believe it needs some better clarification. I would split it into two. Serviceability and Service Delivery. The latter was always the panacea but increasingly the gap between the two has increased and there are many instances -especially in NDC where physical service cannot make up for the lack of Serviceability of a reservation record. The airlines need to up their game and address some of these issues ASAP or it will continue to be a big drag on the NDC adoption curve.
So, my dear readers... think of where you stand. Gird for battle. Best of luck to you. And if I can help, just call me. And bring some popcorn with you.
Cheers
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