Making Sense of Travel 2.0

Online travel isn't what it used to be. Startups and established players alike are working to understand the dynamics of Travel 2.0, our industry's fulfillment of the Web 2.0 promise, and define their role in it. This has been a year of experimentation, beta launches and observation, as travel companies that have unleashed Travel 2.0 tools wait anxiously to see how they are received by freshly empowered consumers.

Travel 2.0 is being enabled by a plethora of new technologies, trends, practices and standards somewhat reminiscent of the dot com boom. Some of these new technologies and trends will survive because they generate business value, have strong social network support or both. Others will atrophy. The same holds true for the startups that have been formed to capitalize on the new trends and technologies and while some in the travel establishment appear to be working under the assumption that Travel 2.0 is a make-or-break proposition only for newcomers, others are making inroads that are likely to lead to share shift in the near future.

Below are the areas of focus that show the greatest potential business value and an assessment of which travel companies stand to benefit from them:

Syndication

Really simple syndication (RSS) is an easy way for businesses to build a following of clientele or to stay connected with existing customers. By feeding information over a broad range of topics but allowing the customer to choose the information desired, it puts the user in control while providing a context-sensitive channel for businesses.

RSS has been adopted by a range of both established travel companies and newer entrants. Online travel agencies, airlines, even hotels, have launched RSS feeds in the past year, primarily focused on travel deals and advertised specials. It is relatively easy and economical for travel companies to test out feeds as a supplemental means of communicating with more tech-savvy travelers. More creative applications will crop up as the leading innovators continue to integrate a range of Travel 2.0 technologies.

Open APIs/Web Services/Mashups

This area already has momentum and value in the short term, but will continue to develop. The ability to capture information from multiple sources and aggregate that information to provide a new or enhanced form of value will create a new generation of intermediaries.

Portals like Yahoo! and Google have attracted a great deal of attention for the popularity of their free application program interfaces(APIs) and the mashups that novice and professional developers have used them to create. A mashup is a Web site or Web application that seamlessly combines content from more than one source into an integrated experience. Google's map APIs, for example, have enabled mashups from FareCompare (www.farecompare.com), Kayak (www.kayak.com) and others.

This trend is inherently democratic, and while the ability to utilize open APIs can certainly boost startups, established players should be embracing this opportunity to develop visually compelling, information-rich applications, which consumers will soon come to expect.

Advanced User Interfaces

Rich Internet applications (RIAs) using technologies like Flash and Ajax are slowly cropping up, creating a more seamless user experience by minimizing page reloads, making Web sites feel more like desktop applications. A number of travel companies have also launched widgets desktop applications that enable them to get between the consumer and the browser. Southwest Airlines's Ding! application, for example, can be downloaded onto a user's computer to notify them when special fares that might be of interest are available.

This is a growing area, and one that established travel companies are well positioned to capitalize on. A better user experience may well be the key to share shift among online travel agencies.

Contextual Advertising

This provides the best opportunity to improve click-through rates. As this technology becomes more refined, the value of online advertising increases. Contextual advertising is providing a revenue opportunity for a new generation of intermediaries and, for niche travel companies and startups, will be a robust tool for increasing visibility.

Group-Forming Networks

The potential of leveraging the power of group forming networks in a business context is substantial. To do this, established travel companies may need to rethink current business models and practices.

This area has inspired a huge number of travel startups focused specifically on building community and enabling group travel. TripAdvisor was among the first to capitalize on this opportunity, and a range of general and niche social-based startups have followed suit. Some are designed to help travelers benefit from the experience of others, while companies like Groople and TripHub are enabling groups of travelers to actually plan and/or book their trips.

Social networks empower travelers and, in one respect, enable them to operate outside the establishment, sharing information and ideas that are unfiltered and (hopefully) free of marketing bias. This might appear to favor newcomers, but online travel agencies and portals have the benefit of a high volume of site visitors and a large customer base and should be looking for ways to exploit these assets. Yahoo! in particular has been busy integrating a range of Web 2.0 tools with its new Trip Planner tool, which enables travelers to view and rank trip plans produced by its large customer base.

Transparency, community, personalization, experience: the buzzwords associated with Travel 2.0 have been thrown around at industry events and have clearly already created a buzz at some travel companies. Others appear to be lagging behind. While the various Travel 2.0 technologies and trends stand to benefit startups and established travel players to varying degrees, the winners in both categories will be those nimble enough to adapt their business plans to the new dynamics of the online marketplace.