Over the last 10 years, the travel business scenario has changed significantly. Today selling travel products is all about ‘best’ rates. To sustain in the battle to offer the ‘best deal’ and ‘best fare’ to the consumers, travel business owners have been forced to reduce almost all of their possible profit margins.
I still remember when a service fee of $6 was a norm across online sales of air tickets. Commissions and contracts were available to travel agents. Cancellation fee on hotels were healthy.
As a travel technologist, I have many motivations to say “buy my software”, but in my experience that’s not a good pitch. After carefully analyzing various successes and failures in the industry, here is what I feel I have learned:
Step 1: Identify what Travel Technology you need
Well, it is easier said than done. Most of the time not articulating the technology needs well is the biggest hurdle in Technology Strategy. As a travel business, here is what you could do to clearly articulate the need for technology.
Pen down the technology needs of the organization as envisioned by the business owner / key management personnel Consult with people external to the organization such as technology consultants, Travel Technology companies, GDS account managers, CRS / Suppliers and Travel Technology bloggers Let a technology company interview you and recommend a solution. This is generally free most of the times. Pursuing one or more of these three exercises diligently will build enough knowledge base about what your internal Technology Strategy should be. Identify and validate these thoughts with inputs from internal operations and marketing teams.
Step 2: Build vs. Buy?
This is considered the most complex question. The answer lies in dividing Travel Technology needs in three buckets.
Out of the Box
What is proprietary?
It is important to identify your differentiator as a travel business. Most of the time, proprietary defines a piece of technology which reduces OPEX corresponding to your business operations or is the biggest revenue generator corresponding to your business model.
What is a customized need?
Is there any part of your technology needs that could be sourced through an existing technology solution, customized per your need?
What can be out of the box?
This might be the most effort intensive part of your technology needs and may require a tremendous investment to build. Getting an out of the box solution that meets the majority of your requirements and configuring it as per your needs, is the ideal way. How to evaluate an out of the box solution is in itself a comprehensive process.
Now we come to the next complex part of this exercise.
Step 3: Identify the right budget and vendor
Identifying the right budget and the vendor is the most common shopping problem in every business sector. It takes a lot of time and energy to reach to a decision.
Let’s compare technology acquisition to the decision of buying a laptop. There are many vendors to choose from. There are laptops priced from $300 to $3000. Your decision to buy would be shaped by the life of the laptop, and the continuity of business (your work) it will guarantee.
Similarly, the continuity of your travel business would significantly depend on the Travel Technology you choose. That is why identifying the right budget, and the vendor is a complex decision.
I would attempt to breakdown the process of identifying a vendor into simpler steps since just asking a vendor for a quote would not necessarily help find the right one.