Travel, flight-shaming and technology: opportunity abounds
Travel, in its various forms, has been the beneficiary of virtually unbridled growth for decades. Interrupted sporadically by temporary road bumps like SARS, terror threats and financial crises, over time it has maintained its upward trajectory, transporting billions of people at ever more affordable prices while making a lot of people a lot of money.
As the planet has digitised over the past twenty years, travel tech has been the art/science that has delivered the product to the people. Travel tech started with the major GDS companies (global distribution systems like Sabre, Amadeus, and Travelport). Then came the OTAs (online travel agencies), supported by an array of their own and third-party technology applications. With the OTA and GDS communities consolidating in the past decade, the rest of the travel tech ecosystem has become quite fragmented.
Travel tech today is cheaper, faster and better than any of the tools at our disposal only a couple of decades ago. It’s being fuelled by a myriad of start-ups whose tools are mobile phones, the cloud, SaaS platforms, personalisation/data, blockchain and AI (and much more).
And using those tools, travel tech entrepreneurs are at the forefront of improving the traveller’s experience, and price discovery. That’s not likely to change any time soon.
Road bumps
2019 has been one of those road bump years, with Brexit biting in the UK, Thomas Cook collapsing, China cooling and the Nordics getting decidedly warm on rail and tepid on flights, lest they incur the wrath of a certain 16 year-old Swedish environmentalist.
Carbon anxiety landed in the media with a noisy thud during 2019. Significant (and noisy) pockets of the global population are reacting to climate change - perhaps not in Detroit, Jakarta or Shanghai yet, but certainly in Northern Europe. Generation Z is beginning to take personal responsibility for the perceived sins of the Baby Boomer generation - by reducing meat consumption and by substituting rail for flights, or by flying less, to do its bit to save the planet.
Will this dent global travel in its broadest sense? I think not. Most people aren’t going to stop travelling. But many will do a range of new things that fit their own beliefs and circumstances. They’ll seek product substitution (like rail), or where there’s no substitute available, they may buy carbon offsets. Or they will fly on planes and on routes that offer a reduced carbon footprint. Some will make a statement by not flying. But for every non-flyer there’ll be dozens of new travellers from places like the Indian Subcontinent, Indonesia and China, delighting in taking their first international trip. So the global juggernaut will continue, but there will be a different mix of people travelling.
What does this particular road bump mean for travel tech? It means more opportunities to develop new products to meet consumers’ changing needs. Carbon is probably going to become a very big business.
On that note, here are two technology start-ups that are seeking to capitalise on the flight-shaming movement:
Save a train from Israel is building a global GDS for train fares. Sensing the opportunity to tap into flight angst, Israeli entrepreneur Udi Sharir is building the ultimate platform to democratise rail, dragging the booking process into the 21st century. Regions and countries with significant investment in rail infrastructure like Europe, Japan and the USA are obvious candidates for growth.
Carbon Click, which recently launched in New Zealand, is one of many carbon offset schemes aiming at providing travellers with solutions to address their carbon footprint. It’s not just aimed at flights, it’s going to be available as an annual personal or corporate subscription. And in a highly ambitious move, it is targeting being available nationally at all points of sale across New Zealand, enabling the traveller to pay a carbon levy at point of sale. Buy a meal, pay your carbon tax. Rent a car, pay your carbon tax. Buy gasoline, pay a carbon tax. If it works locally, this surely has global application.
There are plenty more carbon-related tech platforms being developed out there, and we are watching closely to see what the consumer uptake is, and who the winners are.
Roger Sharp, Founder - North Ridge Partners
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Disclosure of interest: The writer chairs Webjet (ASX: WEB) and is Deputy Chair of Tourism New Zealand. The opinions expressed herein are personal and are not attributable to Webjet or Tourism New Zealand.