Sasha Kamenetska | Senior Platform Analyst
January 21, 2014

Improving Customer Satisfaction in Travel with APIs

 

As part of Mashery’s Travel Industry Spotlight our Strategy Services team has authored a series of four blogs that describe how the adoption of APIs and API Management will transform virtually every corner of this important industry. The central theme argues that improved data flow via APIs will allow each player to better control their own destiny while at the same time dramatically improving customer satisfaction.

When you look at the last few decades in technology, we have progressed in leaps and bounds: personal computers, Internet, smartphones and connected devices have all drastically changed many aspects of our lives.  The travel industry, however, lags behind in terms of technological advances and its customers are just as frustrated with the level of service as ever.

Change is happening, however.  New innovators are constantly coming into the market, just take a look at some of the participants at the recent PhoCusWright Travel Innovation Summit (Olset, Routehappy, CheckMate), but many of the large players (airlines & hotels) in the space are still lagging behind.

Suppliers (airlines and hotels) are in a tough situation – their already tight margins have been falling. The advent of online travel agencies (OTAs) such as Expedia and Travelocity have allowed for flights and hotels to be commoditized, with price becoming the most important factor in the selection process.  OTAs, and other travel booking engines, also further eat into margins by charging fees for offering up flights. 

Suppliers are now fighting back by offering travelers another option – booking directly through their own web site properties.  And although this now seems like a common practice, not so long ago it wasn’t: in 2000, booking directly on an airline website made up only 5% of all US airline revenue, while in 2008 that had grown to over 30% (The Role & Value of the Global Distribution Systems in Travel Distribution; PhoCusWright, November 2009).  This means that the booking process, which was once dominated by traditional travel agencies, is becoming more and more fragmented with an ever expanding array of choices for consumers to use: from OTAs, to suppliers, to meta-searches and niche booking engines, consumers have more choices than ever of where to book their travel.

All this fragmentation has contributed to an even more frustrating travel experience for the consumer. An Expedia Media Solutions study, done earlier in 2013, found that consumers made 38 visits to travel sites before booking a single trip.  Consumers are demanding technologies that make the whole travel process easier.  New apps and web experiences are popping up to enable consumers to create travel itineraries, view reviews, book travel and activities all from one place.  The consumer experience is key to being successful in travel, and more and more companies are realizing it.

But the data that would improve the consumer experience is still hard to come by.  The OTAs get their rates and availability information either through direct deals with suppliers, or through the GDSs (Global Distribution Systems) and other intermediary services (such as DerbySoft).  They have built out their own bookings engines that then work directly with suppliers back end systems to ensure reservations on consumers’ behalf.  Smaller players don’t have the time or money to build out the same systems.  To create a better a consumer experience, all players in the travel space need to open up their data and services to allow innovators to innovate. 

By opening up data and services, suppliers can focus on what they do best (fly planes, offer great places to stay), and unload the burden of creating a great customer experience around finding a flight to others.  This is where APIs and API management come in.  When suppliers open up data and services in a secure way via APIs, they can control who has access to their data and what they can do with it.  They maintain control and can drive more direct bookings through an API powered affiliate network.  Additionally, via a well-managed API program, suppliers can expose data and services to strategic partners that can help drive ancillary sales (such as seat up-grades) and allow for a more efficient and scalable development process with internal or vendor teams across all mobile platforms and devices.

The industry should take note – APIs have the ability to transform the way business is done in every part of travel.  Industry players need to make sure they are not left behind as suppliers’ start to take notice of the potential APIs offer.