Using digital platforms against travel commoditization

Industry expert identifies the key factors for effective product differentiation


By Allie Sanchez

Travel has become such a commodity, like sugar, oil or steel such that the only thing that differentiates products and services from each other is their price, so much so that there is little difference among seats in low cost flights or budget hotel bookings.

This reality is a clear challenge for travel vendors who depend heavily on product differentiation to remain competitive, a recent report pointed out.

To counter the curse of commoditization, Carlson Wagonlit Travel senior manager Carlos Sanchez advised vendors to use the leverage of information technology, specifically, big data.

“The only way to overcome commoditization in the travel market is through personalization and smarter use of big data,” he emphasized.

Sanchez added, “Suppliers need to understand who their customers are, where they are traveling, when and why. With this data they can work out what they need to do to make themselves stand apart from the competition.”

One way to make specific products stand out from the rest is to create an experience around it, the report further said. For instance, airlines are beginning to see the boon of improving the travel experience by improving the end to end experience with ancillary services. These services include improving mobile apps performance and functionalities, simpler booking processes, faster check-ins and convenient access to extra services such as airport transfers.

“Everything is geared to turning the trip into the best experience it can be, an experience that sticks in your mind so that you ask for the same supplier next time you travel,” Sanchez further explained.

Delivering these services is possible with the use of big data and other related technology tools, Sanchez said. To develop and implement these kinds of technology-enabled services, he said business intelligence platforms should be based on a user-centric and event-based data model; they should encompass different platforms, such as the core application, mobile site, and website; they should be able to perform real time tasks; and allow easy access to diverse data.

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