PhocusWright has several things up its sleeve planned for next month’s annual bash in Los Angeles. One of which is the Travel Innovation Summit. Here are their 7 big trends:
1. The growth of pure Travel 2.0 businesses is slowing—dramatically..
2. Travelers will enjoy easy access to rich subjective, objective and experiential content for trip planning.
3. Abundant, varied mobile applications are beginning to emerge.
4. The Long Tail is coming of age.
5. Air shopping is still a work in progress.
6. Attention shifts from "learn, shop, book" in the travel value chain.
7. Building supporting business applications loses its luster.
During last week’s WIT which was run in association with ITB Asia and PhocusWright – it was clear that Innovation was a hot topic. With development and research budgets likely to fall victim to the global retrenchment – innovation will get harder but perhaps better. Hard times focus the creative juices. This recession is going to be hard and deep. So will we see a bigger better faster next big thing emerge? Probably not.
In my view – it will be a coalescing of several influences. One big deal will be how to make things simpler and easier. I believe that we are beginning to experience innovation fatigue. Trial of new ideas seem to be fading and some of the biggest fads in recent years are no longer there. Witness such things as MySpace and Second Life as they fade. However it could be that the innovation of the last 12 months has been swallowed up in the other news and attention eaters such as the US presidential election and the current economic crisis. The pre-occupation with other parts of life has crowded out the innovation story. Is now a time for a comeback?
You be the judge
Cheers
Showing posts with label Future. Show all posts
Showing posts with label Future. Show all posts
30 October 2008
08 May 2007
So as an airline you have extra cash - what do you do with it?
In the boom to bust cycle of airlines - the tradition has always been buy at the top and sell at the bottom... not exactly what even your local stock broker would tell you was a smart thing. If you are a student of history you know that Airlines are highly cyclical. Yet many forget that in times of boom.
Will this cycle be any different?
Many would argue that this is the top of the cycle and we are approaching the peak of the airlines' net earning capability. Barring a catastrophe - of either an economic or socio-political variety, the airlines as a group should be very profitable this year. But the dynamics are very different this time around.
Why?
At T2Impact we believe that we are headed for a long term fundamental shift in the structure of the airline system. Here are some pointers to monitor.
1. We are approaching practical capacity constraints in certain key junction points within the system. For example - The US system is already crowded at peak times yet the investment in ATC infrastructure by successive Administrations has been laughable.
2. Barriers to entry are much higher than they have been - witness the number of new airlines starting in the US market has dwindled to a trickle. In Europe there is a surfeit of LCC startups. Even the robust growth markets of GCC and Asia Pacific are not experiencing a growth of new players.
3. The massive savings gained over the last 10 years in labor cost cuts, distribution cost reductions have been offset by massive increases in fuel. Frankly there are no more major cost cutting areas left.
4. Yields are at historical highs.
5. There is going to be significant labor unrest due to the afore-mentioned labor reductions. Is it time for payback? AMR's AA pilots think so with an opening round request for 30% pay increases.
What are the airlines doing with the cash?
Plowing it into service improvements.
Still off-loading unprofitable marginal routes to affiliate partners.
Buying new planes.
Etc.
What worries us is that there is no fundamental effort to address the core issues. Neither is there a regulatory mechanism for addressing the true scarcity value of the whole trip and the attendant resources consumed.We believe that a future airline sin tax regime will be introduced. If for no other reason than the usual sin tax revenues on cigarettes (for example) are starting to wane.Our belief is that the Government bodies - both national and pan-national - and the Industry should be working on improving the efficiency of the system.
A fair user fee basis of regulatory payments needs to replace the outmoded and clearly now unworkable 1944 Chicago Convention.
Finally - how about a rainy day fund?In the coming months we will explore different ways that the airlines should be responding to the future.
With our new partner InTheKno (www.inthekno.com) we will be examining business models for airlines and the impact on the whole of the Travel and Tourism sector.
Cheers
Timothy
Timothy J O'Neil-Dunne
Managing Partner - T2Impact LtdGlobal Travel eBusiness
Tel (US) +1 425 836 4770Mobile (US) +1 425 785 4457
Mobile (International) +44 7770 33 81 75Fax +1 815 377 1583
UNIVERSAL VOICEMAIL BOX +1 425 749 4221
www.t2impact.com
Please treat this email and all forms of communication as confidential use only for the direct recipient(s).
CHECK OUT OUR NEW PARTNER - INTHEKNO
www.inthekno.com
Insight and Analysis without the hard work
Will this cycle be any different?
Many would argue that this is the top of the cycle and we are approaching the peak of the airlines' net earning capability. Barring a catastrophe - of either an economic or socio-political variety, the airlines as a group should be very profitable this year. But the dynamics are very different this time around.
Why?
At T2Impact we believe that we are headed for a long term fundamental shift in the structure of the airline system. Here are some pointers to monitor.
1. We are approaching practical capacity constraints in certain key junction points within the system. For example - The US system is already crowded at peak times yet the investment in ATC infrastructure by successive Administrations has been laughable.
2. Barriers to entry are much higher than they have been - witness the number of new airlines starting in the US market has dwindled to a trickle. In Europe there is a surfeit of LCC startups. Even the robust growth markets of GCC and Asia Pacific are not experiencing a growth of new players.
3. The massive savings gained over the last 10 years in labor cost cuts, distribution cost reductions have been offset by massive increases in fuel. Frankly there are no more major cost cutting areas left.
4. Yields are at historical highs.
5. There is going to be significant labor unrest due to the afore-mentioned labor reductions. Is it time for payback? AMR's AA pilots think so with an opening round request for 30% pay increases.
What are the airlines doing with the cash?
Plowing it into service improvements.
Still off-loading unprofitable marginal routes to affiliate partners.
Buying new planes.
Etc.
What worries us is that there is no fundamental effort to address the core issues. Neither is there a regulatory mechanism for addressing the true scarcity value of the whole trip and the attendant resources consumed.We believe that a future airline sin tax regime will be introduced. If for no other reason than the usual sin tax revenues on cigarettes (for example) are starting to wane.Our belief is that the Government bodies - both national and pan-national - and the Industry should be working on improving the efficiency of the system.
A fair user fee basis of regulatory payments needs to replace the outmoded and clearly now unworkable 1944 Chicago Convention.
Finally - how about a rainy day fund?In the coming months we will explore different ways that the airlines should be responding to the future.
With our new partner InTheKno (www.inthekno.com) we will be examining business models for airlines and the impact on the whole of the Travel and Tourism sector.
Cheers
Timothy
Timothy J O'Neil-Dunne
Managing Partner - T2Impact LtdGlobal Travel eBusiness
Tel (US) +1 425 836 4770Mobile (US) +1 425 785 4457
Mobile (International) +44 7770 33 81 75Fax +1 815 377 1583
UNIVERSAL VOICEMAIL BOX +1 425 749 4221
www.t2impact.com
Please treat this email and all forms of communication as confidential use only for the direct recipient(s).
CHECK OUT OUR NEW PARTNER - INTHEKNO
www.inthekno.com
Insight and Analysis without the hard work
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