Here’s a quote from an interview in today’s Wall Street Journal with Steve Ridgway, CEO of Virgin Atlantic:
The most famous example was our Club Houses [Upper Class lounges] — they go way beyond what other airlines do with their lounges. When we did the first one back in the early ’90s, we went to consumer groups with a whole plethora of features and options, and most of them, they couldn’t get their heads around.
They wanted somewhere that was quiet, somewhere they could get a snack, and somewhere they could make phone calls. When we said to them, “Would you like to have your hair cut or your shoes shined?” They said, “We don’t want any of that.” We put it all in there anyway, and they all went, “Oh, wow — this is great.”
It confirms an opinion I’ve long held about what’s happening in the online travel industry. Today all major travel websites offer in principle the same way of buying travel components and combinations thereof that they did at the start of their businesses, with few compelling innovations.
This has led to the situation that the entire market is purely price driven and running the risk of total commoditization. When asked about innovation such as multi-destination, multi-component dynamic packaging for the response is often that the customers are not asking for that. That might be true, but most online travel shoppers wouldn’t be able to describe how that would work, so they will not ask for it. It’s the same case as Ridgway describes above. The market players will have to introduce it and the leader in pulling this off, will be a winner.