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The bizarre bazaar of travel transactions

The travel distribution market remains fragmented. Providers must collaborate on new technologies, such as cloud and AI, to win travelers.

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Travel distribution is broken. Providers offer divergent, often conflicting, technology to travelers, leaving them overwhelmed and confused. Travel providers are now coalescing around a few common solutions, but this isn’t nearly enough to remake the market.

Travelers remain frustrated and companies don’t derive the profits they could be seeing.

The market continues to exist in this fragmented manner because companies adopt defensive postures, rely on incremental thinking, and deploy divergent strategies. Added to this is the disconnect between the aspects of the travel journey customers most enjoy and those from which companies derive the most profits. Companies report travel shopping and time at the destination are most profitable, while travelers enjoy dreaming about and planning for their trips.

Clearly, the travel distribution market needs to see major improvements. Most travel-market experts agree. In fact, 51 percent of surveyed organizations expect travel distribution to see transformative change over the next five years.

The next phase of travel distribution should be the perfection of personalized selling that uses a mix of shared profiles, customized products and prices, targeted communications, and artificial intelligence. We call this next phase Travel Distribution 3.0.

This next era will facilitate competition on the basis of the overall travel experience. Travelers will distinguish competitors not only on the promises they make, but on how well they actually deliver on those promises.

In this report, we describe three travel distribution priorities and five strategies companies can take to get to Travel Distribution 3.0.

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How can IBM help you?

Move people and transport objects around the world at the speed of technology

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Leaders must coordinate the way travel is offered to travelers through implementation of common solutions. Currently, the travel distribution market is too fragmented. IBM can guide your organization toward implementation of travel 3.0.

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Meet the authors:

Steve Peterson

Connect with author:

, Global Travel and Transportation Leader, IBM Institute for Business Value;
Greg Land

Connect with author:

, IBM Global Segment Leader, Hospitality and Travel Related Services

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