Anyone who has done business with Uber or Airbnb has experienced the platform economy. Put simply, these are technology-based business models that facilitate the exchange of goods and services between producers and consumers. The platform connects the driver and the passenger, the homeowner and the renter, and so on.
The power of the platform
Platforms are the heart of the digital economy. They reinvent how companies do business. They empower the creation of ecosystems of producers that do much of the work and grow companies through an organic network effect. Platform companies do not necessarily just sell products and services. They make connections and curate experiences.
The travel and hospitality industry is well suited for platforms. Online travel agencies are platform pioneers and have transformed how people book their trips and stays. Airports are exploring how they can use platform strategies to improve the in-airport experience. And hotels are investing in platform approaches to win the stay in a highly competitive environment.
The next wave of travel platforms will focus on tying together spaces, physical equipment, on-property and vendor technologies with partners and various types of devices and other digital channels. They remove friction from the end-to-end travel journey for people, and allow them to personalize their travel in exciting new ways. Platforms allow companies to reduce the IT complexity inherent in point solutions, offer next-level personalization and grow ancillary revenue through revenue sharing opportunities with ecosystem partners.
Take the lead in platforms
The platform revolution has begun, and there is no turning back. Forward thinking travel and hospitality companies that set the foundation for their platform strategies now will lead the way. It is a choice between becoming the platform player in the industry or just another player in someone else’s ecosystem. This is what platform leaders do differently:
Pursue open API models. Leaders make their services, digital and physical, more consumable. Companies that hold tight to their data risk not being “where customers are.” They also cannot provide their customers with the distinct and value-added travel experiences that their competitors will.
Master big data. Becoming part of a larger travel ecosystem will mean that companies are collecting more data than ever. Leaders use sophisticated analytics to capture and analyze data insight that they use to continuously enhance customer experiences to travelers’ surprise and delight.
Get lean and agile. Leaders never let perfect be the enemy of the good in platform development. They use lean engineering, rapid prototyping and agile methods to develop initial market solutions that they refine based on performance and customer feedback. They emphasize building, measuring and learning.
Put people first. The experiences that platforms enable—from turning on a light switch with a smartphone to ordering dinner from the city’s hottest restaurant while at a hotel pool—mean nothing if people do not see their value. Simplicity, convenience and relevance must guide development.
Platforms are already driving innovation in travel and hospitality. Soon enough, the experiences they deliver will drive traveler preference. Now is the time to get ready.