travelinsights100

For many in travel, distribution would be considered the lifeblood of the industry.  The triumverate of travel, or the BIG THREE of distribution, would tend to agree.  These companies, born from the days when the only products you could distribute were airline tickets, have now expanded into other products like hotel rooms, cruise, and car rentals.  But we are now at the point where many of the systems required to distribute the basics of travel are quite mature, so what is the next frontier for distribution? In a recent PhoCusWright Roundtable discussion, the big discussion was around vacation rentals and the value of this disparate and fragmented market estimated to be around $24 Billion annually.  This vertical in addition to the destination product (tour & activities) market, also estimated to be worth $24-27 Billion dollars are, in my opinion, the emerging markets for distribution.  Both these markets share many commonalities that make them ripe for distribution:

• Little to no representation in the supply chain - In both the vacation rental market and the tour & activity market, there is very little distribution in the current supply chain.  Except for a few larger players like Viator, Isango, and Homeaway, these products are not distributed at all and there are certainly very few vacation rental or tour operator software solutions out there for small tourism businesses or individual property owners to use that allow for distribution.
• Lots of non-traditional marketing opportunities - A lot of tour & activity products can be sold on a freesale basis (unlike hotels and air), and as such, they are a great candidate for non-traditional marketing opportunities more commonly associated with traditional tangible products.  These may include Ebay, Craigslist, Vast.com, or other on-line marketplaces.
• Ripe for consolidation - There are many smaller software solutions out there that provide small tourism businesses and individual property owners with reservation capabilities but there are only a few leaders that have embraced distribution and, it is these products that will set the stage for the next step in distribution.
• No distribution standards - This is where organizations like OpenTravel Alliance can play a significant role in determining the standards for this sector.  Unlike air, hotel, and car, there are no widespread standards for this sector of the travel market.  Tour and activity products, adventure products, and attractions can (at their core) be supported by a common set of xml messages.  Additional messages can be appended to support new media and content distribution requirements.
• Destinations & Travel Resellers are looking for products - Destinations around the World are not generally in the booking business and as such offer only limited capabilities to stakeholders.  By providing standardized methods of connectivity, destinations can get access to a wider range of products and simplify their technology requirements.  This is always a good thing when working with shrinking technical budgets.

Over the next few years I am convinced that we will see standards developed that will shape the future of distribution for a wider array of travel products.  Our role as travel technologists and industry insiders will be to encourage the development of these standards and to educate suppliers and vendors alike to embrace these standards.  Unlike air, hotel, and car, we have the opportunity to shape the systems that develop around the standards rather than trying to build standards around systems that already exist.  What a great opportunity this will be to shape the largest untapped segment of the travel marketplace.