Disruptive Technology Threatens Established Brands Most

Disruptive Technology Threatens Established Brands Most

What does it mean to say that Disruptive Technology Threatens Established Brands Most? It simply means that the established brands have the most to lose and are most vulnerable.

This applies across all industries. Recent examples have seen major tourism brands fall because of the dynamic and Disruptive Technology in Travel.

WHY Established Brands are Most Vulnerable to Disruptive Technology

Here is the scenario: You have built a massive infrastructure of database, information and marketing systems. It’s a huge investment. Many people have worked over several years fixing bugs, fine-tuning, adding features and perfecting it. A decade of building massive systems with code that is a patch-work of tangles adapting to ever-changing needs.

The problem is that it is not on the right platform. It was build before we had the right tools. And tomorrow there will be better ways to implement solutions using AI, machine learning, payment and bookings that are built into the apps from the start.

At any time, a startup may launch a sleek and effective solution that does it all better, faster and easier. It uses new data services, new hardware and software, new gaming theory, new profiling and new automation. It’s disruptive technology because it fundamentally changes everything. It is like a kick in the stomach. You are going to struggle to backward-engineer a legacy system or start from scratch. Both tasks are daunting.

What Form Will Disruption Take?

The disruption may be big or small. A major disruption like autonomous cars can transform many aspects of society and have a major impact on the auto industry, taxis, and consumer behaviors. It will spur new entrants and new industries that we can only imagine now. Other technologies such as robotics and chat bots will impact many aspects of hotel and tourism – from marketing to reception and in-house services.

Building a better product or service is not necessarily disruptive. An example is Tesla: consumers love it, but it does not offer a service or convenience at a lower price to existing cars. It’s a bettered product, one may argue that it is a game-changer, but it is a disrupter.

The same can be said of the new Meta Search companies like Kayak and Tripvago. Or new Online Travel Agents like Hotel-Bonanza that drastically slashed commissions. They may have a better service than alternative travel sites, but by the Christensen scale, they are not disrupting the market. The fact is that established operators could offer the same service and several have already done just that.

To be a true disrupter, hotels, airlines and other tourism organizations must constantly innovate and evolve in the way they serve their customers. The disrupters will deeply analyze needs in order to offer experiences tailored to individual travelers. The forerunners are already building transparent, personalized search and booking experiences that will be more cost effective, efficient and will not be easily emulated by the establishment.

The Next Tourism Disruption Threat

Tourism is very vulnerable to major technology shifts. The distribution landscape is dominated by major Online Travel Agents such as Booking.com, Expedia and the Meta Search Engines. But Amazon, Google, Apple and others have plans that may very well disrupt the status quo.

Digitization has changed the mindset of what travelers expect. It has changed the mindset of what hotel owners and tourism operators expect and will accept. It is changing the way we do business.

The existing distribution and marketing firms, like Thomas Cook, are mired in the old legacy system. They are not using modern coding techniques or platforms. They do not easily integrate with modern systems, as Thomas Cook discovered.

Integrating new technology is not easy when you have massive outdated systems in place. The new players will be clean and swift with platforms built for today. Their full potential is a threat to all.

Tourism May be its Own Worst Enemy

In many of the world’s top tourism destinations, too many tourists are destroying the travel experience. This is largely the result of the massive advances in technology. Air transport is now affordable to the masses. Digital travel has meant that travel is eminently available.

We can discover places on our smartphone, check reviews, discuss on social media and easily go anywhere we want to. As a result, destinations around the world are suffering from overtourism. That occurs when there are too many guests and both the quality of life and of the travel experience have deteriorated to the point that they are unacceptable.

The Philippine island of Boracay had to be closed off because too many tourists were destroying the ecosystem. TheWanderfulMe website lists 10 destinations that are experiencing overtourism and the list is growing.

Digital travel may well be the biggest disrupter of tourism on the block. That is rather bizarre as it does not fit on the Christensen scale at all! It is not technology innovation but digital travel’s success that is the disrupter here.

The Thomas Cook Case Shines a Light On The Future

Much has been written about why Thomas Cook failed. Theories abound but the research by Marketing Hotels and Tourism, Markhat.com, shows that the company just did not understand the dramatic and disruptive changes in travel technology of the last few years. Again Digital Travel is the catalyst.

Cook had failed several attempts to integrate digital travel technology. It failed even in outsourcing, adapting, employing skills and buying technology and companies.

There are many lessons to be learned as the Thomas Cook analysis shows. The article lays out 6 actionable recommendations that anyone in the hospitality and tourism industry can and should apply today.

See Markhat Study for details and recommendations on lessons learned from Thomas Cook.

The Digital Travel Dilemma

Thomas Cook is a prime example of how digital travel ended the once iconic travel company. The fact is that the entire ecosystem of travel will be as vulnerable as Cook was. The pace of technology innovation is increasing exponentially but sadly, it is lacking in the existing travel platforms. They are old legacy systems that are not easy to change. New systems will be nimble and highly adaptable. They may well leave the old players out in left field.

The Markhat article is by Tourism Authority, Ian R. Clayton. Ian has published several books and magazines. He is currently completing his trilogy on Digital Media, while developing innovative technology for hotels and tourism. He is the Recipient of the Atlantic Canada Award for Innovation in Technology.

See Practical Advice by Ian R. Clayton  >>