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IT and the Customer Travel Experience

IT and the Customer Travel Experience. IMPACT OF THE INTERNET AND INFORMATION TECHNOLOGY ON THE TRAVEL INDUSTRY. http://www.youtube.com/watch?v=SLjOv6YUo4c. Industry Overview. Travel industry has historically been an early adopter of IT

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IT and the Customer Travel Experience

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  1. IT and the Customer Travel Experience

  2. IMPACT OF THE INTERNET AND INFORMATION TECHNOLOGY ON THE TRAVEL INDUSTRY http://www.youtube.com/watch?v=SLjOv6YUo4c

  3. Industry Overview Travel industry has historically been an early adopter of IT Online travel bookings were $5B in the US in 1999 and grew to $20B by 2003 in the US Worldwide bookings were $54B in 2003 and are projected to reach $91B by 2010.

  4. Impact of IT on Travel Industry Improved accessibility of information Reduced operator cost Enhanced customer experience

  5. Deciding where to go… Where to stay? Where to go? What to do?

  6. Deciding where to go…past Travel shows, expositions Travel agents Talking to friends Travel brochures, magazines, newspaper travel columns

  7. Deciding where to go…past Luxurious rooms First class service Family getaway Honeymoons Shopping & dining Beautiful location

  8. Deciding where to go… present Americans making travel plans online 2004: 64 million 2005: 78 million Of online bookers 82% purchased air tickets 67% secured lodging 40% reserved rental cars http://www.imediaconnection.com/content/7663.asp

  9. Deciding where to go…present Virtual tours Internet travel agencies Travel social networking

  10. Deciding where to go…future Broader adoption of travel social networking More personalized and relevant travel marketing Virtual tours become an alternative to travel Snapshot from www.secondlife.com

  11. Deciding where to go… …what’s been missed? How to provide the personal touch Online model that is both customer friendly and supports revenue No one in the market has managed to maintain differentiation based on their customer online experience Establishing legitimacy on cost and advice

  12. was the norm Airline ticketing…past SABRE- Semi Automated Business Research Environment http://www.sabreairlinesolutions.com/about/history.htm http://www.airlinenews.aero/magazine/article.html?articleID=1163

  13. Airline ticketing…past • Ticketing based on the Airline-owned CRS system from 1964 • Each travel agent had access to up to the minute data and pricing to issue paper tickets • Airline Tariff Publishing Company (ATPCO) serves as a clearing house/publisher of airline fares from > 500 airlines. • ATPCO creates efficiencies, giving each CRS/GDS the opportunity for a single source of fare-related data. http://www.sabreairlinesolutions.com/about/history.htm http://www.airlinenews.aero/magazine/article.html?articleID=1163

  14. Airline ticketing…present • Online sales and distribution of tickets by intermediaries with no inventory or product has cut into Airline profits • By 2008, all ticketing will be electronic • IATA estimates $3 Billion industry savings due to e-ticketing • E-ticketing provides customer flexibility and convenience http://www.iata.org/workgroups/jptc.htm

  15. SEA to SFO AS Flt. 2015 departs gate 1, 1345hrs Passenger Kumar, S FIRST CLASS SEAT A1 Airline ticketing…future • Adopt mobile technology system based on a global cell standard to speed check-in service using bar codes • IATA effort supporting shift to 2-D bar code • Benefits • $500M Industry savings • Adds to customer choice and flexibility • Risks • Interference or system outages causing delays • Counterfeit UPC codes • Theft/loss of phone http://www.atwonline.com/channels/airlineprocurement/article.html?articleID=2189

  16. Airline ticketing…future SABRE to NewSkies/aiRes? • Replacement of an industry wide legacy CRS systems • Navitaire’s “NewSkies”- used by LCC (JetBlue, WestJet, AirTran), based on Microsoft’s .NET framework • Travelport’s “aiRES system”- (Virgin Blue, Flybe)- allows legacy activities like code sharing • Navitaire/aiREs in modular formats, are an integrated combination of back office and CRS systems to reduce operational costs and improve efficiencies http://www.iata.org/workgroups/jptc.htm

  17. Airline ticketing… …what’s been missed? • Global standard for accessible, simple, and counterfeit-proof ticket • Easy and transparent pricing and reservation system • Integration of cash (non-credit card) transactions

  18. From home to seat…past Call a reservation agent to make sure the flight is on time Wait in line at the ticket counter to be assigned a seat, check your luggage Cursory or no inspection of bags. Basic x-ray technology for bags, people went through a metal detector

  19. From home to seat…present Easy access to flight status information via the web and SMS text messaging Orbitz TLC program Alaska Online Flight Status

  20. From home to seat…present Significant adoption of web check in, streamlined airport experience • -Over 50% of passengers utilize web check-in • -Redesigned check-in processes can cut wait times in half Alaska Airlines Airport of the Future (photo courtesy of Fast Company)

  21. From home to seat…present Significant wait in security lines calls into question efficiency of air travel for shorter distances Complaints were up 88.1% in August 2007 Wall Street Journal, November 20, 2007

  22. From home to seat…future Streamlined check-in via widely adopted “Airport of the Future” Place your fingers on a kiosk, drop your bag on the belt, walk through a universal scanner, and you are on your way Enablers Carry-on Baggage Real Time Assessment Sensor fusion Adoption of Registered Traveler program

  23. From home to seat… What’s been missed? Data fusion to simplify and guide entire home to seat experience. Drop your bags in the unmanned curbside receptacles, swipe your ID, and they will be automatically tagged, scanned and routed Potential application of RFID

  24. Takeaways IT adoption in travel is highly attuned to operator cost savings Customer-centric innovations are quickly commoditized and therefore not a sustainable point of differentiation The future is about global standardization, security and enhanced access to information

  25. References http://www.youtube.com/watch?v=SLjOv6YUo4cFinancial Times, August 15, 2004 www.FT.com http://www.imediaconnection.com/content/7663.asp Scott McCartney. Wall Street Journal. (Eastern edition). New York, N.Y.: Nov 20, 2007. pg. D.1 Dave Demerjian. Fast Company. Boston: Mar 2008. , Iss. 123; pg. 60, 3 pgs Bryon Okada. McClatchy - Tribune Business News. Washington: Dec 12, 2007. Clint Swett. McClatchy - Tribune Business News. Washington: Dec 6, 2007. http://www.airlinenews.aero/magazine/article.html?articleID=1163 http://www.sabreairlinesolutions.com/about/history.htm From Back Office to Cyberspace, http://www.atwonline.com/channels/airlineprocurement/article.html?articleID=2189 http://www.iata.org/workgroups/jptc.htm http://www.airlinenews.aero/magazine/article.html?articleID=1163 http://www.secondlife.com Jerome Greer Chandler, Perry Flint. Air Transport World. Cleveland: Dec 2007. Vol. 44, Iss. 12; pg. 29 PR Newswire. New York: May 7, 2007. John Croft. Air Transport World. Cleveland: Spring 2005. pg. 10

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