Airlines Can Profit from Being Smart, But Being Smarter Can Help Them Own the Journey

Terry Jones wants airlines to follow him down a new path, which, he says, could help airlines move beyond being transport providers to single-source travel services companies, by capitalizing on the inherent flaws of the travel search process.

Jones, who started out as a travel agent, worked as a CIO at American Airlines/Sabre, was CEO of Travelocity, and was founding chairman of Kayak, has transitioned into artificial intelligence with Wayblazer. It is a travel insights platform that capitalizes on IBM Watson’s natural language and unstructured data processing capabilities to move beyond travel search to intelligent travel planning.

Been Searching So Long

“We know search changed everything, but search only gives you clues. If you ask Google for the best hotel in Hawaii, it will give you 58 million answers. That’s not an answer, it’s a clue,” he told airline attendees at the IATA World Passenger Summit in Hamburg last month.

Wayblazer can compile travel plan suggestions, listing degrees of confidence that the traveller will be happy with the journey options, based on stated travel goals, presented in plain language. The system is geared to accomplish this task by quickly processing both structured and unstructured data to find options for a trip the traveller might want.

While you might search Google for the best hotel in Hawaii, you can ask Wayblazer to help you plan a romantic winter escape for yourself and your partner, somewhere warm with a beach and a golf course. To Jones, there’s an obvious need for travel to move to this level of tailored query and personalized recommendations, and the time to start is now.

A Man, A Plan, A Hotel in Panama

“Planning is still tough. The average consumer searches almost 20 sites [to plan a journey],” he said. “Forty years ago, when I was a travel agent in Chicago, people would come in and we’d plan their trip to Europe in an hour, but today people spend three months searching the Web and they’re frustrated. So how do we solve that problem? Search gives you clues and we think the Web should give you expert advice,” he said.

Jones also suggests that today’s travel sites and apps, based on the search and ratings models, are inadequate, primarily because they are not designed to satisfy individual needs. “You can no longer know your customer as a demographic. You have to understand your customer as an individual,” he said. He also believes the limited functionalities of today’s systems create a cumbersome experience for users with no single app answering the hundreds of questions that come up when traveling.

“Kayak has 50 million users of our travel app, but most don’t use it during the trip. TripIt and TripCase have millions of users, who get itineraries, use them during the trip, but don’t have much utility beyond the itinerary. Yelp and TripAdvisor are used during the trip, and at least TripAdvisor will get you to buy a few things along the way. Expedia is pushing hard on tours. But I would posit that no one yet really owns the travel edge,” said Jones. “There’s still an opportunity here. Self-service can lead you to the edge but it won’t take you there.”

Who Owns the Journey?

He proposed that airlines should leap ahead of travel services today to control the journey, reaping the benefits of related travel services bookings.

“Airlines have done a lot of good things with monetization, to be sure, selling better seats, luggage, priority access. The question is: Can you monetize at a much higher level? Airlines have to remember that everyone starts their booking with air. Why do Expedia and Priceline still sell air? You pay them no commission. The answer is that they make money doing everything else.

“They realize, and you should realize, that you are the front door of travel. You are where people start. Why don’t you control that front door? Why don’t you make more money by selling other things? Why don’t you own the journey and sell them everything?”

Many airlines have struggled, though, with selling other things from hotels and car rentals to shuttle bus tickets. One of the challenges is to find a balance between being the gateway to the travel journey while still ensuring that passengers are purchasing airline tickets.

To own that journey, Jones suggested, companies need systems that can swiftly process what he calls “dark data”. That is unstructured data which won’t fit snugly into a field in a database; things like blog entries, images, social media comments; the natural chatter about various services and products in the journey.

Travelers can spend weeks researching online, before making their booking decision, because search-based systems are inadequate to put it all together into a limited set of reliable package recommendations, Jones believes.

“This wired world is different. We have to deal with social and cloud and analytics and mobile. It’s not easy to put all those together into something relevant and to deal with all this unstructured data,” he said.

From Systems of Record to Systems of Engagement 

He urged airlines to recognize that the world of IT has changed from systems of record to systems of engagement, and that the next move is toward systems of insights. “Insights are the strategic asset. I place my bet on cognitive computing. On Watson,” he said.

“It’s pretty hard to do with traditional airline systems, but it’s something this new technology can do,” Jones told IATA airline members. “You can change your revenue. You can own the journey.”