Lee McCabe, global head of travel strategy for Facebook, recently sat down with BCG partner Jason Guggenheim to discuss how digital and mobile technologies are reshaping the travel industry. Here are some excerpts:
Q: What are some of the critical dynamics influencing the landscape and consumer behavior in the travel sector?
A: There are several that will impact both the near and the long term. First, travel is very personal to people, and it is now infinitely shareable through digital technology. Not only is there a dramatic rise in connectivity all along the travel journey but also, now, when you add large, people-based platforms such as Facebook to the dynamic, travelers can have more personalized, more valuable experiences during every phase of the journey.
Second, mobile and mobile apps. Mobile has been the major disrupter, particularly in the last couple of years. Given the intersection of mobile usage and the personal nature of travel, Facebook’s large ad format and creative canvas make it prime digital and ad real estate for hotels, airlines, OTAs, and other travel companies. Third, the rise in mobile makes the proliferation of apps ever more critical. No question that digital usage is shifting away from desktop and laptop to mobile—and specifically to mobile apps. When people use mobile devices, they’re using apps, which means the influence of Web-based searching will continue to decrease.
Q: As mobile usage evolves, what are travel companies doing to capitalize on it?
A: Successful players are adapting faster than their competitors. They increasingly invest in digital and bring innovation—new functionalities in their mobile apps, for example—to market earlier. This usually means shifting investments from traditional marketing channels to digital. Many marketers fear that moving dollars from television or print will decrease the efficacy of those channels. But companies that make the move find repeatedly that allocating more resources to digital augments other channels and drives higher impact across all channels.
Q: Looking out five or more years, how do you see new technologies such as wearables, virtual reality, and artificial intelligence affecting travel?
A: We’re really excited about these technologies and how they will continue to improve people’s experiences online and offline. I’m not in the predictions business, but what I do know is that people are “always on,” and that’s not going to change anytime soon. I do think it’s a safe bet to say that a mobile-driven world will be powered by apps, which drive increased brand loyalty and disintermediation. And as we continue to move from a world of the Web to one of apps, the travel-booking paradigm will continue to shift. People will stop browsing 20 or 30 websites in the booking purchase path and will use apps instead. We’re already seeing this shift.