Travel: A Target For Social Innovation

by Allen Howell on 02/09/2011

An industry in crisis is an industry ripe for transformation.

America’s air travel system is in crisis. In response to soaring fuel prices and unprecedented air-space congestion, airlines are raising rates, cutting capacity, slowing flights, and reducing staff. These challenges follow on the heels of delays and hassles that have cost the nation almost $27 billion in the past year alone.

Some blame the problems on government regulations over airlines. Others see the problem as dysfunctional management of the airline system. Could it be that “the system of air travel” is being re-engineered before our eyes and all the current problems are part of the process?

How Big Is The Air Travel Network?

Air travel represents billions of dollars flowing through the network. These numbers only represent hard cost while the soft cost, loss of productivity, far exceeds the hard cost.

Air travel used to be a social experience. Today it is anything but social with the majority of passengers frustrated by the experience and loss of productivity.  Yet air travel has become necessary evil for both leisure and business purposes. Consider te following from USTravel :

  1. About 42 percent of U.S. adults reported traveling by air for leisure trips .  The percentage of air travelers increases to 48 percent among U.S. adults who traveled for business purposes in the past year.
  2. A  study by the U.S. Travel Association revealed a deep frustration among air travelers that caused them to avoid an estimated 41 million trips over the past 12 months at a cost of more than $26 billion to the U.S. economy.
  3. Business travel in the U.S. is responsible for $246 billion in spending and 2.3 million American jobs; $100 billion of this spending and 1 million American jobs are linked directly to meetings and events. For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits.
  4. Gen X (those born from 1965 through 1980) makes up 31 percent of all leisure travelers and 36 percent of all business travelers. Gen Xers take an average of 3.5 leisure trips and 6.9 business trips per year.
  5. Gen Y (those born after 1980) makes up 12 percent of all U.S. leisure travelers and those traveling in this group take and average of 3.9 leisure trips per year. Gen Yers also represent 13 percent of all business travelers and take an average of 4.2 business trips per year.
  6. Young boomers (those born from 1955 through 1964) represent 21 percent of all U.S. leisure travelers and 22 percent of business travelers.  Young Boomers also take an average of 4.1 leisure trips and 5.6 business trips per year.
  7. Mature travelers (those born before1946) represent 21 percent of all leisure travelers and those who travel in this group take an average of 4.1 leisure trips each year. The Mature Group also comprises 14 percent of business travelers. Mature business travelers take an average of 6.7 business trips each year.
  8. Older boomers (those born from 1946 through 1954) make up 15 percent of leisure travelers and take an average of 4.4 leisure trips each year. Older Boomers also represent 16 percent of all business travelers and these travelers take an average of 10.1 business trips each yea
  9. The Internet was used by approximately 90 million American adults to plan travel during the past year with 76 percent of online travelers planning leisure trips online.
  10. Private Aviation represents $8 Billion in annual revenue but little has been done to bring innovation to the industry and it lags way behind all markets in use of social technology.

The Social Market of Travel Is Hot

Every other day or two, you hear about a new travel app, a travel related company, or a mega travel partnering, acquiring, or developing the next industry killer app. Consider some of the recent developments in the travel space over the last year:

  1. Tripit acquired for 120M
  2. Googles purchase of ITA
  3. Facebook buys Nextstop
  4. Google’s managed to get the folks behind Ruba – a travel site – to join its organization
  5. Hotwire, Kayak, Orbitz and Farecast, are now part of Microsoft’s Bing
  6. Plancast launches a site enabling people to post and share events they are attending
  7. Gowalla Offers Trips & Travel Guides with USA TODAY
  8. Dopplr makes your travel planning smarter. Share travel plans with the people you trust.
  9. Facebook now drives 12%, and growing, of the airline’s traffic compared with Google 17.6%, and Yahoo 10%.
  10. Mobile travel apps are flooding into the market in numbers too large to follow.

I could go on with hundreds of other developments but by now you should conclude that “social” and “travel” are hot and competition between Google and Facebook will continue to rage. Will Facebook trump Google as the most important travel site? Time will tell but none of these applications or developments really do anything to improve the travel experience.

What Will Improve the Travel Experience?

Providing social technology to travelers may help people find things faster, get recommendations and collaborate with friends and associates but it still doesn’t improve the existing system of travel. Will social technology reduce delays, hassles and loss productivity? Not likely but then again it could if applied to a different travel system.

Notice point #10 under “How Big Is The Air Travel Network?” states “Private Aviation represents $8 Billion in annual revenue but little has been done to bring innovation to the industry and it lags way behind all markets in use of social technology”.

Private Aviation has a superior experience for travelers. If social technology was applied to innovate existing models just maybe the cost of flying private could be reduced. Just maybe friends could form “travel tribes” and buy seats on private aircraft. Just maybe brands would sponsor flights and thus bring down the cost. Just maybe we are on to something really big.  Stay tuned for a unique launch coming on Thursday and decide for yourself.

{ 1 comment }

Brian Driggs February 9, 2011 at 6:04 pm

It’s a good thing I didn’t get a chance to catch up on feeds until this late in the day. Given this blog’s proximity to private jets, the closing sentence is really exciting.

I love flying. Always have. Well, not as much these days. I really dislike being herded about the terminal like cattle. TSA shenanigans don’t irritate me nearly as much as the near stampede at the gate when pre-boarding begins; a hundred or so people all standing in a mob, edging closer and closer to the gate, in the hopes there will still be room in the overhead for their 45 cubic feet of “carry on.”

I digress. I’m an American and proud of it, but I consider myself an un-national. I want to travel; to see the world, to meet all the amazing people I’ve come to know online face-to-face. Barring a $10k raise and additional six weeks of vacation time per year, it’s unlikely!

Last time I looked into it, private charters wanted something like $50k on account up front. Not sure how far that would go, but convincing nine friends to each come up with five large for a couple rock star hops to the midwest would be a stretch.

Even so, I’m really excited to see what comes tomorrow!

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