Perfect storm predicted for travel
March 6, 2008
Maybe it was the unexpected snow. Or perhaps the transport strike. But when Philip Wolf, CEO of travel industry analyst firm PhoCusWright, addressed the bloggers summit at ITB Berlin yesterday, he was putting his neck on the line and predicting big storms on the travel industry horizon.
A perfect storm in fact.
Not the kind featuring a wet George Clooney in a fishingboat, but a convergence of three separate stands of online behaviour and technology that look set to impact travel purchase both dramatically and profoundly.
Philip is predicting a perfect storm of search, shop and buy.
But what does he mean?
“A perfect storm is born when several events occur simultaneously which if occurring separately would be far less powerful. What we’ve identified is that the advance of search technology, online shopping and buying will lead to a whole technological revolution.
What are these converging fronts? Well people can now find needle in haystack online. Additionally, in a longtail environment of unlimited travel choice online, it can also be economically viable to be the niche seller of a needle in haystack.
Social media have also shifted power to consumer. There is now a closer blurring of search, shop and buy. The process of conversing about travel, watching travel images and video, reading user reviews and sharing knowledge drives the sale process. It inspires travel decisions and influences the purchase specifics. In his presentation this morning, Tom Klein, Group President of Sabre Travel Network used the unattributed statistic that 75% of shoppers spend more on online travel after consulting reviews.
What does this perfect storm mean for travel and tourism businesses? Philip explains that:
“Unlike the metrological kind, this digital kind of perfect storm provides perfect opportunity. That will be provided to travel companies that exploit new technology and the momentum and they stop worrying about business model preservation. When you concentrate on trying to preserve business models instead of preserving customers, sometimes really scary things can happen.”
He predicts that as with earlier industry transformations, there will be new agents of change, new winners and losers. That maybe the new generation of online travel firms that ousted the establishment a decade ago, will themselves then be ousted by if they fail to respond to converging customer needs.
Philip adds that in these times of upheaval, it is more important than ever before to trust your instruments and consult your intelligence, but that the stage remains set to exploit opportunity everywhere.
Good news for researchers and industry analysts then 
?
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7 Responses to “Perfect storm predicted for travel”
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[...] Julia Rosien wrote an interesting post today onHere’s a quick excerptBut when Philip Wolf, CEO of travel industry analyst firm PhoCusWright, addressed the bloggers summit at ITB Berlin yesterday, he was putting his neck on the line and predicting big storms on the travel industry horizon. … [...]
I think that a storm is looming on the horizon, with relatively low barriers to entry a plethora of new, more customer focused, niche companies could start to erode the market share of some of the big names in travel.
If a travel company can identify and exploit a profitable niche, it could drive a fair amount of targeted traffic to its site without paying for advertising if it chooses keywords carefully and produces a steady flow of quality posts around these keywords in it’s blog and is active in a travel social networks.
Hello,
I am not realy familiar with the phrase “perfect storm”. Can you help me, to understand it better?
Where does this phrase come from? What does it exactly mean? Who introduced this phrase into the economy?
It sounds very interessting having a perfect storm in the travel industry and therefore raising problems for the OTAs.
Hi Jens, It is originally a meteorological term, meaning that three different storm fronts converge, creating a super-storm whose joint power is exponentially more damaging than the three storms individually, or even added together. Basically, when three storms collide, its wild, bad and no one knows what will happen.
It became more widely known after the publishing of the book and subsequent film, about ships lost when the first recorded perfect storm formed off the coast of Massachusus in the USA.
In the last few months, I have heard it enter the vocubulary more widely (though I don’t know why). PhoCusWright used it in the correct sense of a convergence of three factors, but I’ve heard it used incorrectly too.
I think the implication in travel terms is big waves, big upheavals and who knows who’ll still be floating at the end!
hello!
“perfect storm” is, as Vicky said, a meteorological term. It links with the concept of complex systems and i think is very interesting to move this terms and concepts to the tourism.
I don´t sure P. Wolf wants to refer exactly this, or if he uses the term correctly, but I think is very important begining to hear this terms in relation with the tourism system. It is an interrelationated, dynamic and complex network system.
thanks to blog the conference! cheers
edu
Thank you for your explanations about the perfect storm. It is getting clearer to me, what a perfect storm can be.
@Edu: why do you think, he uses the term not correctly?
Jens
@Jens.I don´t say he don´t use it correctly…only I don´t sure. It is complex term and it is depend of the whole tourism structure or ecosystem.
He refers a techological revolution and I like to say a tourism revolution. Only I like to think Internet is one part of this revolution, but it is depend of other social changes. And more, Internet is not only a distribution channel. It is a relations tool. Relations to get a network tourism, on the demand side as supply side.
But I think P.Wolf, one more time, introduces a very important term to think and analyse the sector as a complex ecosystem. From lineal to non-lineal studies. Very important!