Why Not The Computer Business?

This analysis appeared February 24, 2014 in Cornerstone Information System’s “Insight & Opinion” section.


Travel and technology are very different businesses. While technology supports and enhances much of the travel and transportation industry, difficulties begin when the two are confused.

You need competent people to help you address technological challenges, but you don’t need to be in the computer business. There are enough products and services on offer now, too many developers who don’t know what they’re doing, and too much imprecision hiding behind innovation.

Because technology is an important part of travel distribution, it’s easy to be overtaken by the sights, sounds, and outright glamour of technology. In recent years it’s become much easier (though by no means simple) to find investors for technology companies.

We’re used to hearing about technology start-ups with modest resources and still more modest ideas, to the point that people start to believe they should be part of the fun.

The Essential Differences

Succeeding as a technology developer is difficult, time-consuming, risky, and costly. While the marketplace makes room for genuinely good ideas, finding them is almost always harder than building them.

I read a recent contribution from a travel technology developer who suggested a few strategies for starting a travel technology venture. Among these were “doing the opposite of what already works,” and “recycling old ideas.” i

There’s a certain logical flaw in basing development projects on practices that, by definition, don’t work. The notion of having a genuinely good and innovative idea is something that entrepreneurs frequently neglect along the way.

Nor is it more than a remote possibility that most technology start-ups will succeed. It’s true that some start-ups pay big rewards to a few early investors and employees, but most simply spend their early capital without delivering more than the most trivial results and products.

There is a significant difference between having what seems to be a good idea and transforming that idea into a commercially practical product or service. Most travel technology products, web sites, and related gadgets accomplish very little and quickly fail the consumer’s “why should I care” test.

Although this may seem to be a heretical view, most travel technology is neither good nor useful–never has been. Apart from the handful of start-ups who are struck by the lightening of unanticipated success, most travel distribution success stories are told by people who had the rare talent of discerning between what works and what doesn’t.

Travel is a service business and successful participants in the industry must never lose sight of their customers and what they really want to buy. Understanding and correctly answering that question usually means the difference between success and failure–and is the essence of delivering customer service.

Travel customers, as an example, want to take vacations, do business in distant cities, visit their families, and a variety of other things. They don’t want someone to give them data, collect their data to give to someone else, or offer them pointless Amazon-like product suggestions because of past purchases that are no longer relevant.

I’ve frequently observed that almost nobody in travel distribution delivers customer service, or is able to do so. ii We’re so obsessed with recycling old ideas and focused on what our customers have bought that we can’t discern what they will buy, and therefore act accordingly.

Suggestions

Here are my own ideas for you to consider as you look for ways to employ technology as a business tool in travel distribution, and profit from it. They may sound simple, but effectively putting them into practice is sufficiently challenging to assure their competitive merit.

1)  Become The Best User Of Other People’s Tools

Skilled travel industry managers decide what their business goals are, how technology can help them reach those goals, and what partners have the requisite expertise to make that happen. They then move forward with those partners and don’t let themselves be distracted by short-term events and new but irrelevant ideas.

I’ve been CIO of multinational travel and transportation companies more than once. It was always a challenge to convince other parts of management that being the best user of tools that other people build can be as much, and often more, of a competitive advantage than was our own technology.

We want to believe that access to proprietary technology in itself creates an advantage, while we overlook the expense and risk creating that technology imposes and assume that we can succeed at maintaining and enhancing it.

In most instances using technology and what it provides well is more important than proprietary tools. Your competitors are usually not good technology managers, and you can exploit opportunities when they assume technology risks that you don’t have to.

2)  The Best Tool Is No Tool

Technology is attractive and we are conditioned to believe that the solutions it delivers work better, last longer, and are more efficient than answers we find elsewhere.

The secret here that takes experience and insight to understand is that many problems “solved” through technology were really unresolved management problems that could have been cured more efficiently in other ways–or the problems never existed in the first place.

Look for business opportunities and solutions that don’t depend upon new technology developments and you’re ahead of your more development-inclined competitors.

3)  Seek Scarcity, Then Exploit It

Forget recycling old ideas. If you’re looking for technology-driven opportunities, you’ll find them where people have demonstrable business needs that are not addressed in other ways.

These are difficult to find and still harder to develop, but unless you’re counting on that bolt of lightning, they are the only reliable path to successful products.

There’s plenty of scarcity, in ideas, management, products, and customer service throughout travel distribution to provide more than enough profitable opportunities that don’t depend upon starting a technology venture for entrepreneurs with the foresight and skill to pursue them.

Not Quite That Special

Here are a few final questions for you to consider:

  • When was the last time you heard a law firm say that the “LexisNexis” user interface isn’t what it should be, so it’s time to build our own legal database search engine?
  • Do you know of an accounting firm that is developing software because Oracle, Microsoft, Best, or SAP have nothing to offer and don’t understand the company’s unique business objectives?

Travel distribution has always been and remains a unique business but it’s essential to separate qualities that make business better from the costly specialization that it’s tempting to ask technology to make for us.

 

[i]     Alex Bainbridge, EUREKA! Where Could Your Travel Startup Ideas Come From?, (Tnooz, February 3, 2014).

[ii]    As many times as I’ve made that observation over the last 20 years, I’ve frequently been told what a shocking thing it is to say. I’ve almost never had anyone question whether or not it was true.

What Would A Proof of Open Booking Look Like?

One can spend considerable time and energy developing specific and detailed reviews of flawed theories and business proposals. Although appreciative comments and note are often the result, it’s important to recognize that this isn’t how business strategies should be developed.

The burden of proof rests with the proponents of new strategies and theories to use adequate and appropriate reasoning, and specific proofs to show that these are valid–not with everyone else to show why they are not.

Open Booking, as presently announced, is an ill-conceived business strategy that rests upon faulty logic, inadequate data, poor research, and a suspension of belief in how the real world operates. Its proponents have, or should have, certain obligations to correct these errors and show how Open Booking then remains a valid business premise.

Absent a much improved business case, the travel community is justified in rejecting Open Booking’s imaginary benefits without further argument. The disinclination of others to spend time refuting unsupported theories gives them no credence whatever.

Here’s a concise outline of how Open Booking must be proven. It’s not unrealistic and doesn’t assume more that a correct application of available evidence.

I’ve also attached a “conclusion” as to how likely we are to ever see any of these points addressed.

1)    Assume the Burden of Proof

Advocates of any theory, business or otherwise, carry the burden of proof which requires them to adequate demonstrate why their ideas are valid.

Statements about Open Booking such as “travelers are booking directly with suppliers and often times spending less money than if they go through a managed program,” or “there have been studies that have validated this but unfortunately, the status quo has swept them under the rug” are irrelevant commentary and establish nothing.
When you make such claims, it’s your job to substantiate them. Produce your evidence or abandon your claims.

Conclusion: The Burden of Proof is troublesome and inconvenient. It’s much more fun to make random, unsupported claims and suggest that people who disbelieve you should know better. The logical basis for Open Booking is so shaky that were unlikely to see a rush to defend it with more that opinion and speculation.

2)    Clearly and Comprehensively State the Proposition

Any business theory requires a detailed, comprehensive statement of what it is and how its proponents expect it to work. For Open Booking, that means more than the vague statements about how everyone is doing it so the result is therefore inevitable. The business proposition needs to be positively defended in order to be valid. Simply because flaws can be identified in the travel management process does nothing to advance the cause of Open Booking–there are other equally choices available.

The case for Open Booking also needs to consider business operations in the real world in detail and discuss how Open Booking affects each of them. A few short PowerPoint presentations do little to advance this discussion.

Conclusion: Building a correct business case is a lot of work, and Open Booking is a moving target that seems to evolve along a new line as soon as someone points out its shortcomings. It’s unlikely that anyone will expend the effort to improve this picture.

3)    Define Specific, Unambiguous Proofs That Your Assertions Are Correct

Once you’ve explained the business case for Open Booking, show us the clear proof-points that demonstrate the theory is valid and worth the effort. Not travelers are booking directly with suppliers and often times spending less money than if they go through a managed program” but how much, how often, under what conditions, and to what degree does this have to be so to offset costs and business risks?

Conclusion: If Open Booking could be substantiated in this way, someone would have tried to do so by now. The fact that proofs and evidence are abandoned in favor of opinion and anecdote is itself a demonstration of Open Booking’s failure.

4)    Use Objective, Comprehensive, Accurate, and Scientifically Correct Data

Forget self-selected surveys, tiny samples, biased questions, and the general lack of controls that infests almost all travel industry research. Produce data that can be defended, use it to establish your proofs, and then your Open Booking business proposition might have some validity.

Conclusion: Almost all travel research is useless and contrived to establish the preconceptions its authors want to perpetuate. This is unlikely to change anytime soon. As best (and this is conceding a great deal) the data in support of Open Booking are ambiguous.

Open Booking’s proofs and research should be straightforward and, if correct, should silence critics when accompanies by a comprehensive business proposition. It’s time this evidence is forthcoming.

5)    Comprehensively Describe How You Did Your Research

What precisely was your sampling methodology? How are your conclusions sustained by the raw data? What is an alternate interpretation of the data and how do you answer that interpretation? What would researchers have to do to replicate your research? Who sponsored your research and what are their and your predispositions?

Conclusion: Real research is transparent, fully explained and disclosed, and replicable. Spurious research sustains one-time conclusions or hides behind a proprietary cloak. This type of transparency and disclosure is very rare in the travel industry and non-existent as concerns Open Booking.

6)    State What You Cannot Yet Prove and How This Affects Your Conclusions

Scientific research acknowledges its shortcomings and identifies what cannot yet be proven as well as what can. It also admits areas where future evidence might disprove the theory. The quality of your interpretation of the evidence in support of your claims is as important as what that evidence specifically shows.

Open Booking lacks a real statement of its comprehensive business case, real proof-points that are offered to establish its validity, scientific evidence sufficient to establish the vague claims made in behalf of it, and a rational analysis of its very real deficiencies.

Conclusion: Open Booking’s proponents are no more likely to improve their process or develop their evidence in this area than they are in any other. Remember, if you are an advocate of Open Booking, you have the responsibility to develop and present your adequate evidence before anyone is obliged to give your ideas credence.

It’s not up to me or anyone else to disprove Open Booking–the burden rests with you. The six areas discussed here should be a minimum expectation.

The Business Reality of Open Booking

This analysis appeared October 9, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Open Booking, noun: A travel industry term concocted to describe the process whereby problems that don’t exist are solved using techniques that don’t work, so as to produce savings that can’t be defined.

I’m not specifically against Open Travel or Open Booking, but if it’s such a good idea a straightforward case should be made in favor of it, using real data and sound business arguments. The fact that this doesn’t happen is very telling.

Open Booking rests upon a theoretical foundation that is distant from the real world and requires us to suspend belief in how travel distribution works if we are to adopt it. A few business concerns and examples may bring Open Booking’s contradictions into focus.

Travel Management Companies

The “M” in TMC represents Management. TMCs provide value because they appropriately manage the travel process on behalf of their customers; when they fail that value disappears.

Open Booking’s proponents speak of the evolving role for TMCs looking like a subscription-based service where agents provide support regardless of where and how reservations are made. How this might be an improvement over a TMC’s involvement in the current online booking process is left somewhat mysterious.

In the real world, TMC experience and expertise can shorten the path to correct decisions and avoid the wreckage from bad ones. While it’s not impossible to clean-up problems after the fact, it is typically more difficult and expensive–as anyone with experience at a subscription-based 24-hour travel support service could tell you.

To suggest that TMCs should support corporate travel in this mode by default is to say that their services have little or no value–which is clearly not the case.

Whatever its flaws, travel management operates the way it does because it works. Desiring to correct those flaws is not a testimonial for Open Booking.

Duty of Care

Corporate travel managers should have concerns beyond the basic cost of travel services, one being duty of care. Broadly speaking, in the real world this is a generally accepted principle which says that individuals must take reasonable care when performing actions that could foreseeably cause harm.

It applies in business as in other areas of life. Concerning travel, the possible implications are obvious, as there are numerous services informed and prudent people should not use, places they should not go, and things they should not do.

Allowing or even requiring travelers to bypass a source of expertise that is well-known, established, and otherwise available to them might not cause a duty of care problem, but the potential is real and shouldn’t be dismissed in the quest for imaginary travel cost savings.

Managed or Not?

Open Booking supporters often affirm that it is not the same as unmanaged travel–a distinction without a difference. When you stop managing in the real world you allow events under your control to be handled in whatever ways the people involved feel is appropriate.

That is the essence of Open Booking. The fact that you might be able to collect data, count the cost of the result, and disagree with choices made doesn’t compensate for the lack of control.

Since 2002 public companies in the United States have operated under the Sarbanes-Oxley Act (SOX), which is a complex set of financial regulations that are intended to correct the financial and management errors that caused the financial scandals of that period. Among many other things, it requires the management of public companies to take specific responsibility for financial reports and for their own actions.

It also imposes requirements as to internal financial controls, conflicts of interest, and the level of understanding management and auditors must have over internal processes and procedures.

Travel is a significant part of most public company finances–often among the largest expenditures. While the specific implications of SOX vary substantially by company, why would it be in the interest of any manager facing such obligations to forsake management-based controls over expenditures that might be counted in the millions in exchange for unproven lower costs and a somewhat lesser level of employee complaints?

SOX is very difficult to reconcile with Open Booking–counting what has been spent or even establishing budgets for travel is not sufficient, as SOX requires control and meaningful representations that proper procedures have been followed.

The Business Reality

Open Booking as it is currently represented is a bad idea for travel agents who have no realistic role in its operation. It’s equally bad for corporate travel managers who are asked to abandon the tools that are central to doing their jobs.

 

The Productivity Pit

This analysis appeared September 17, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Innovation in the travel industry is much more difficult than you may imagine. Not only is there a famine of genuinely innovative ideas and programs but gaining acceptance for them can be close to impossible.

Nowhere is that more clearly in evidence than through industry productivity. There are some variances depending upon the activities being measured, but in general industry productivity hasn’t moved significantly in many years–except perhaps in the wrong direction.

It’s tempting to think that today’s online-enabled world must represent productivity at its best. For individuals and businesses, everyone has to have a smart phone, a tablet, and usually also a PC–all online and just waiting to make them more productive.

Personal computing, in whatever form, has caused us to confuse “busy work” with meaningful work. Finding the latest and greatest applications for tablets and phones, or innovative ways to make things happen on hand-held devices that were never designed for them are examples of nonproductive tasks we tolerate because our gear has to work the way everyone says it should.

We also simply must be “online and mobile” in order to get anything done. Highly paid people waste their own time with this high-tech tinkering instead of doing something useful.

The industry is so suffocated by information that people have started accepting irrational actions as normal.  According to some reports, it’s “usual” for travelers to consult 20 or more different web sites prior to making a reservation.

When you recognize that many of those sites simply take information from other sites and repackage it, one can only wonder what people are thinking.

I believe productivity in most areas of travel distribution hasn’t shown a real increase for at least 10 years, and that developments on the commercial horizon that promise change are indeed rare.

New Inventions, and Other Fallacies

“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible.”

 

– Bertrand Russell, British author, mathematician, & philosopher (1872-1970)

I was head of technology for one of the country’s largest travel management companies for years. More than once I remarked to my colleagues, who were worried about competitors copying our technology, that most everyone will ignore anything truly useful that we might develop.

There are serious problems with expecting technology to transform industry productivity again, as has happened twice in the history of travel automation. Almost everyone is so absorbed by the mythology of surrounding popular devices and the online world that few developers really know what productivity enhancements to build.

The answers are not obvious, little help from the user community has been forthcoming, development is expensive and the risk of failure is great.

Equally as important is the unrealistic pricing and user expectations that are pervasive in travel technology.  Where developers cannot reasonably expect real financial returns and sensible ongoing support commitments, it is difficult to find the basis for worthwhile new projects.

There is no alternative, however to diligently seeking productivity improvement.  Even very modest increases can yield enormous financial benefit. Developing automation solutions that are effective, sustainable, and that can truly be used to increase basic productivity without requiring a higher overall skill level should be a standard by which travel technology is measured.

Present travel technology gadgets usually focus upon correcting the deficiencies of other systems.  Reengineering, used in the sense of defining new and better methods rather than simply staff reductions, has largely bypassed travel distribution.

The industry usually looks at illusionary productivity standards and hence achieves illusionary results–what I refer to as digging and then falling into a productivity pit.

Productivity Through Compromise

If you diminish overall workloads you create the impression of being more productive.  Such tactics, as an example, are tried by those who eliminate quality control steps for certain segments of their business.

Productivity Through Redirection

The travel industry has been training itself to believe that the most efficient way to make reservations is for managers and executives to use what are often inferior tools to do the job themselves–and become the company’s highest-paid, bad travel agents. People and systems do not become more productive simply because direct service charges are lowered and work distributed over a larger and more expensive labor pool.

Productivity through Weird Science

So-called artificial intelligence, knowledge-based systems, or automated booking systems occasionally pop-up as productivity solutions.

Aside from the fact that the technology most developers employ is of questionable worth, such projects can only be classed with traditional tools that try to correct older system deficiencies–none as yet has tried to reengineer the basic elements of travel agency inefficiency.

This reengineering looks like:

  1. Tools that assist in getting work right the first time or that transfer meaningful functions wholly to automated systems.
  2. Delivering true customer service (defined as the ability to organize product presentation so as to give people what they really want to buy).
  3. Organizing decision support so that knowledge relating to customer service is equally and readily accessible to experienced and inexperienced operators and can empower correct business choices.

Finding and implementing productivity solutions isn’t easy, but they may mean the difference between survival and failure–where competition promises even tighter margins and increased costs.

 

Open Travel and Industry Mythology

This analysis appeared August 12, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


You may have heard of something called “open travel” or “open booking,” that is about to change corporate travel procurement. It says that travelers will book whatever they want as long as they don’t exceed budgets and fulfill other vague management requirements, such as paying with a corporate credit card.

Travel Management Companies will have to find new roles (no one is quite sure what those might be) and corporate travel managers will see their responsibilities changed, or substantially diminished.

Proponents of this new travel management strategy, which include some substantial travel buyers and data managers, assure us that travelers are buying where the want anyway, so clearly it’s best to make the best of the inevitable.

What’s interesting is that this isn’t new.

Prior to the mid 1980s, when consolidating travel procurement with a few designated travel management companies became popular, it was the default purchasing system–set your budget and let the rest take care of itself.

I’m confident that proponents of “open travel” believe that technology has advanced so much over the last 30 years that the essential management problems that resulted in consolidated travel management are no longer issues.

If we simply wait long enough, smart phones will solve everything–they’ll even change human nature.

Can Less Be More?

There are few analytical reports describing open travel’s effectiveness–those that do exist are contradictory and most are poorly executed(i). As a business strategy, open travel advances several logical fallacies that we should try to avoid:

Hasty Generalization

It doesn’t necessarily follow that because some, even most, travel management programs perform poorly and that they are at odds with new technology, that all such programs must do the same.

It also doesn’t follow that travelers in general will make informed and rational purchasing decisions absent a centrally managed travel program because some travelers appear to do so, for some of their trips, at least some of the time.

Open travel’s proponents need to conclusively demonstrate that the business rules they suggest the industry adopt are not based upon the behavior of a small sample operating under exceptional conditions.

Faulty Dilemma

Because there are clear shortcomings with travel management practice, we are not necessarily left with a “strength through weakness” strategy that allows travelers to book whatever they want as the alternative. There are other choices.

The Big Picture

Centralized travel management exists because it is effective. Vendors extend favorable pricing and other services to purchasers because they believe the benefits exceed the cost.

Part of what vendors presume is that travel managers will influence selection and behavior. Travel programs that consistently deliver such results are those that succeed.

Why would vendors offer similar benefits where buyers stop trying to do these things Control is an essential component of preferred pricing, and open travel is signal for higher prices, not lower.

The mythology of the travel industry asserts that technology allows individuals to find as good or better discounts in the marketplace as are available through managed travel programs.

Again, that’s nothing new, the assertion has been made for as long as there have been centralized travel programs. In practice there are always exceptional situations, but consistently poor discounts are signs of a poor travel programs, not testimonials for open travel.

Technology makes traveler shopping somewhat easier, but it doesn’t make informed buyers or change human behavior. Again with exceptions, travelers do not usually share the management goals of their companies–part of a travel manager’s role is to provide structure for those goals.

A traveler’s agenda is more personal and can always be validated by countless rationalizations and “this time is different” conclusions. There is no lack of creativity in this area.

To expect individual and company goals to align so as to correctly and consistently influence individual traveler behavior is to assume that people will stop behaving like people because they have better smart phone applications and are free to use them.

Open travel is less efficient than centralized travel management, not more. It assumes pricing practices that don’t today exist, people acting in ways they don’t normally do, and, even if these point are granted, that it is the best use of a traveler’s time to research prices and keep sufficiently informed so as to make good decisions.

It’s a theory that assumes much and delivers little.
(i) Unless a study describes a sound methodology, an adequate sample size, and the precise questions it tried to answer, which is almost never the case, it falls into this category. Please see my paper on this topic.

IATA’s New Distribution Capability (NDC)

This analysis appeared July 15, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


In an industry as diverse as travel distribution, there is rarely a shortage of controversial ideas. Recently, critical voices have been raised against IATA’s “New Distribution Capability” (NDC) initiative, variously asserting that its development was closed to most outside input, that it is unfair to travel agents, technology providers, and other stakeholders. It is claimed that the NDC harms consumer interests, and that its implementation requires unacceptable privacy compromises and financial expenditures from distributors and consumers alike.

Curiously, I’ve yet to hear the simplest and most concise justification for opposing the NDC from anyone:

It’s a fundamentally bad idea that probably won’t work.

As these posts must necessarily be brief, I’ll only touch on a few of the NDC’s strategic and business flaws–operational and technological shortcomings must await another discussion.

What Is the NDC?

According to IATA1 the NDC is a business and technological initiative best understood as a process that allows “indirect channels” to enable the same capabilities that exist on airline websites, while preserving an airline’s control of the product. It also proposes to enable product innovation, differentiation, and personalization by directly accessing expanded information as to a traveler’s purchasing profile and history.

The NDC’s “initial scope is the shopping process.” As an example of how this might work, supporters maintain that the NDC will modernize air travel distribution and benefitconsumers by giving them an experience similar to Amazon.

Perhaps, but the NDC mistakenly confuses multiple goals in a package that delivers capabilities few people want. It’s technical features represent one way, certainly not the only or necessarily the best, to enhance shopping data. Other intended benefits are more dubious.

Amazon is a poor service delivery model–air travel distribution has little to do with selling books or consumer products.

The personalized shopping experience, whether through Amazon or an airline, is largely a chimera without real-world application. Frequent Amazon shoppers are aware of the annoying and usually irrelevant suggestions the site continually offers–transferring this unhelpful dialogue to benefit air travel strains the imagination.

One Bad Idea Begets Another

IATA is criticized for failing to adequately consult with distributors and consumers as the NDC was developed–perhaps justly so, although interpretations disagree as to how meaningful the prior industry dialogue was. It’s worth noting that however worthwhile these discussions might have been, IATA isn’t obliged to hold them in any particular way, or to do so at all.

There is also a serious question as to who might participate. There are no industry-wide trade associations with adequate technology capabilities, credibility, and resources to represent even segments of distributors or consumers. Individual companies may have meaningful input, but are not in a position to speak for anyone else, or even their own customers.

Industry discussions to develop and refine technology policy are exceedingly rare–much more so that IATA’s critics would have us believe. Those who feel excluded would do well to upgrade the forums, expertise, and messages they might use to make meaningful future contributions.

Who Benefits?

Shouldn’t airlines know more about the consumer prior to booking so they can “personalize” the product offering, as the NDC promises?

If that were so, it should be easy to describe what that “personalization” would look like–but it isn’t. Beyond the vague “more like Amazon” promise, “personalization” sounds like a more technologically advanced bundling of the many obscure fees and charges no one likes or wants.

If the result isn’t higher consumer costs, what is it?

Many airlines have had access to personal data that were supposed to enable better offerings for decades (through frequent flyer programs, for example). The fact that these enhancements have been meager causes consumers to rightly question whether the new expense and privacy compromises the NDC imposes are justified.

The New Distribution Capability proposes to solve problems most consumers don’t see as problems and deliver ill-defined benefits they haven’t asked for and probably won’t appreciate–at an undetermined cost they are unlikely to embrace. Wholly apart from the clumsy way it has been developed and presented, this is not a formula for a successful project.

IATA was ill-advised to start down this path and its airline participants are likely to see more customer grievances, direct and indirect program costs, and few of the NDC’s promised benefits.

  1. International Air Transportation Association (IATA), NDC Update, November 2012, page 8.

Perspectives on Data Ownership: 2013

This analysis appeared March 15, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Recent popular discussions of “big data” (a surprisingly ill-defined term) are curiously silent on where these data may come from and who should decide where and how they are used. Perhaps this is because the current social media wave encourages individuals and businesses to surrender a degree of privacy (and hence control over data) in return for the promised benefits of whatever service is on offer.

While we may believe that travel data ownership questions were settled long ago, control and ownership questions are more complex than many assume and require careful review regardless of how open or restrictive data access should be.

Everyone’s In Charge

Most travel businesses you speak with will assert either that passenger travel data belong to them or that they have a right to use and distribute them essentially as they see fit.

Corporate travel managers usually maintain that, since they pay the bills, they both own and control the data. Airlines and other vendors often assume the right to use and distribute data about the use of their services, and travel management companies believe they have a degree of ownership because much of the most valuable travel data comes from their systems and exists because they expended energy to create it on behalf of “their customers.”

This travel data ownership conflict is a familiar story, but there are other less evident or considered levels:

A number of processing intermediaries including payment systems, ticket processors, GDS companies, and on-line booking tools assert a right to distribute travel data and reports for their financial benefit, apart from any direct or indirect benefit travel buyers receive. Typically this is done with individual travelers remaining anonymous, but the degree to which “anonymous” travel detail is widely available, down to specific itineraries and dates, would surprise most travel managers.

Many sources also make data available to third-party aggregators, who also operate for their own financial benefit under the assumed anonymity of individual travelers. Such companies produce an array of usage and comparative models, predictions, and similar data projects which find uses far removed from travel management.

Assumed Anonymity

I use this term to describe the broad assumption that, if my name isn’t present, whatever follows doesn’t matter. Anonymity can unravel quickly. It’s hard to argue that the kind of industry-wide data aggregations used by the DOT and others to predict economic trends are threatening, but under the care of a skilled analyst, extensive company-specific and individual travel patterns could be deduced, especially by combining multiple sources.

Interesting Questions

The extent and depth of travel data distribution and usage should at least cause travel managers some reflection, even if they decide they need not be concerned.
Here are a few specific thoughts:

  1.  complete chain of custody affecting anyone’s travel data is unknown–sometimes adequate, elsewhere non-existent. Many companies with data responsibilities have no real data security program in place that runs deeper that simply saying the right things.
  2. How is it that so many travel industry business intermediaries are selling data produced by customer activities for their own benefit? Aggregate industry analytical reports are one thing–distributing detailed raw data to third parties is another. Where did that permission come from?
  3. Have corporate travel managers looked at the type of data being distributed about their travelers in detail and rationalized it with their own company privacy and security practices?
  4. Are travel management companies comfortable with the extent of peer comparison by vendors and subsequent data aggregation that has become commonplace in the industry?

Whose Customer?

This analysis appeared April 9, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Talking about “the travel industry” often invites criticism that it’s impossible to generalize–travel companies of any description are not identical and can’t be expected to behave as one. This ignores the experience of even casual observers, who see business decisions, successes, and failures widely replicated and frequently repeated throughout the travel industry over time.

There is a continuity within companies that operate in the same field, face similar market challenges, and who must compete with each other that causes them to align similar practices and strategies to an often surprising degree. What is referred to as “institutional memory, (the phenomenon where groups of people working together circulate and perpetuate the same ways of thinking over time), makes such alignments difficult to change.

One such area is ownership and management of the customer relationship. Travel vendors largely think they should be interacting with their customers directly and with as few intermediaries as practical.

This belief predates the coming of The Internet and electronic commerce–it’s varied over decades but never disappeared. In many ways it’s a stronger business force than on-line selling.

The fact that travel vendors generally don’t do an especially good job of interacting with their customers, or of listening to them, doesn’t cancel the desire to remove intermediaries.

If it Were Only True

If travel suppliers deal directly with customers, costs and inefficiencies should decline. More important, it should be possible to protect and preserve loyal customers.

It almost never works that way.

One major impediment is that, to provide effective customer service, you need to listen to your customers and understand what they say. Translating these simple requirements into appropriate actions proves particularly difficult for the travel industry.

With exceedingly rare exceptions, nobody in the travel industry delivers customer service and nobody can–where “customer service” is defined as delivering what the customer truly wants to buy when it is needed.

Airlines are a reasonable example. Do you know anyone who thinks the excessive and capricious baggage fees most carriers are anxious to charge are a good idea? I’ve asked that question before groups of hundreds; apart from a few people with a specific viewpoint to represent, I’ve yet to get an affirmative response. I’ve never even heard of such a response.

The “ATM machine in the sky” approach to airline pricing is a major profit contributor, but it wasn’t designed to please the consumer.

If travel purchasers received everything they wanted by removing intermediaries, they’ve had the past 18 years (since the availability of Internet-based tools) to eliminate travel management companies, on-line travel sellers, and corporate travel departments. There remain necessary services that suppliers can’t or won’t provide.

Listen Here!

Travel management companies usually fail the “customer service” test as well. Even the most sophisticated are good at order-taking, exceptional at listening to customers (much better than vendors), tepid at data analysis and product innovation that addresses real customer needs, and non-existent at informed communication–when was the last time you received a newsletter or e-mail bulletin from a TMC that wasn’t an immediate, no-consequence throw-away?

Customer relationships are the product of continued, frequently arduous investment. They are earned, not simply claimed. Intermediaries such as TMCs and OTAs are valuable travel management participants because they meet real needs, despite their own failings.

Efforts to change that without adding equivalent value are destined to the growing list of management theories that simply don’t apply to this industry.