Adam: I think the term Big Data is so vague these days as to be nearly meaningless. Travel companies have always been early and massive adopters of analytics tools—whether for loyalty, yield management, or marketing. I believe this trend will continue. But because it’s been happening so long anyway, I don’t think there’s going to be any single “wow” moment that people look back on and say, “that’s when Big Data transformed travel.”
Javier: How is using your company Big Data and what is planning for the future?
Adam is a full-time travel nerd and founded Hipmunk just weeks after his graduation from MIT in June 2010. At MIT, he earned degrees in Electrical Engineering/Computer Science and Mechanical Engineering, and was North American Debating Champion in 2010. Prior to Hipmunk, Adam co-founded BookTour with Wired’s Chris Anderson, and was also the youngest author ever at O’Reilly, writing AppleScript: The Missing Manual at the age of 16.
Who is Hipmunk
Hipmunk is the fastest, easiest way to plan travel. The site and mobile apps save you time by comparing top travel sites so you don’t have to. Hipmunk offers the most comprehensive travel search, bringing in more travel options from commercial flights to trains, to charter flights, and offers more accommodations, from large hotels, to home and apartment rentals through Airbnb and HomeAway.Insights from a World Travel LeaderIn this interview I have asked Adam to share his vision about Business Model & Opportunities, Demographic segmentation, Big Data and Metasearchers. Thus, the next questions/answers provide very valuable insights, clearly food for thought for the travel industry players.
Javier: Which elements are more different and which do you consider are key success factors in your business model?
Adam: We focus on creating a faster, easier way to plan travel. There are two key ways we differentiate. First, we provide a better user experience, through factors like our “agony” index and recommendations based on your calendar appointments.
Second, we search a broader range of travel choices than other sites. For example, we search Amtrak trains and Airbnbs in addition to flights and hotels.
Javier: Do you think there is really an opportunity for OTAs to become technologic partner of traditional travel companies (not only travel agencies)
– If so, how big do you think is the opportunity and what is required to make it happe
– Could be a company both B2B and B2C minded or it should be divided into different companies, under a common umbrella and a global coordination?
Adam: We’re not an online travel agency; we’re a comparison-search site. Having spoken to suppliers, they have mixed feelings about OTAs. On the one hand, suppliers appreciate the volume OTAs bring. On the other hand, suppliers would generally be happier getting the business directly (e.g. from metasearch sites like Hipmunk). Most OTAs self-identify as marketing companies, not technology companies, and consequently I think it would be a risky gamble for them to get into the B2B business.
Javier: Does you company study the demographics of your clients and customize products and communications to each of them. If not, is it because you consider that the differences in the travel phases between baby boomers, Gen X and Gen Y are not relevant enough to justify the cost?
Adam: We absolutely examine the demographics of our users and make decisions on that basis. We’ve found our greatest success with younger users, who are naturally more technologically aware.
Javier: What do you expect from Millennials in the next 5 years in terms of travel consumption (destinations, types, volume, etc..)?
Adam: There are two key trends we believe will be exemplified by Millennials. The first is the shift to mobile searching and booking. The second is uptake of alternative travel options (e.g. Airbnb). Both are true of the market in general, but I believe the biggest growth will come from younger customers.
Javier: What is your vision about Big Data in Travel?
Adam: There’s not much we’ve said publicly about our plans with data and analytics. Needless to say, it’s something we think about a lot.
Javier: Do you think that Big Data will increase the gap between travel companies with techy DNA and those born as travel companies?
Adam: Possibly, but I think many people underestimate how many travel companies have been using “Big Data” since before many tech companies were born. It’s important to remember that being good at data is different than being good at technology; the former requires mathematicians, while the latter requires engineers. Travel companies have had mathematicians working on their hardest problems for decades. But many of those travel companies either spun out or outsourced their technology.
Javier: Do you see differences between metasearchers specializing in hotels and those in flights?
Adam: Absolutely. You can tell in the quality of the products which ones have gotten the resources to be best-in-class vs. “just good enough.”
Javier: Do you think metasearchers are a distribution channel, or a “set and forget” marketing initiative, or an advertising model that typically utilizes the CPC advertising format and requires daily spend and bid management, daily reaction to what other advertisers are doing, monitoring of budget spend on a daily basis and monitoring of rate parity?
Adam: I think both metasearch and OTA services should be thought of as a hybrid distribution and marketing mechanism. Drawing a distinction is convenient for internal organizational purposes at suppliers, which is why it persists. But the smartest suppliers are managing all online, offline, CRM, etc. marketing and distribution channels on consistent metrics.
Javier: What is the impact you forecast in the future of metasearches in the OTA´s business? Do you think that their value proposition will improve if finally the rate parity rule ceases due to legal constraints?
Adam: I think metasearch sites’ value proposition will only get stronger with time. Whether price parity is the dominant paradigm or not on the web, it’s clear that it’s becoming blurrier elsewhere. Mobile-only and last-minute rates, for example, are becoming the new competitive zone between OTAs and suppliers. So at a minimum, I think the value proposition for metasearch will improve in those areas.
