Previously when an industry event that I am excited about is cancelled, all of the opportunities, potential contacts and personal development vanish with it.
However, that did not happen when ITB Berlin finally succumbed to the ‘should we / should we not’ responsibility of the COVID virus spread this week and cancelled for the first time in its 54 year history.
This time the cancellation only made me want to come more - because for the past 6 months a few colleagues and I have become increasingly interested in how the travel industry reacts in terms of bookings, refunds and exchange to these types of changes... fluctuations, volatility and in this case - all out cancellation. And I’ll tell you now - not very well.
There are, as in most of the best dramas, a number of players…
Firstly, you have the thousands of delegates (I think 150k+ were expected here this week) - already booked on trains, flights, transfers and in hotel rooms, who now mostly wish to cancel. Now for those with fully refundable everything (very rare!) - they cancel and move on. For those who have not - they sit at home counting the cost and sending off angry tweets and Insta’s to hotel groups and airlines for showing little compassion and not giving them a 100% refund.
Then you have the hotel owners - who were at one time looking forward to 100% occupancy - suddenly facing a deluge of cancellations and dealing with multi-channel abuse from those that booked the non-refundable option.
Lastly, you have the middle men - typically online travel agents (OTA’s) such as Expedia, Booking and hotel.com etc - who have taken the 15-20% commission (sometimes even more) for the booking, paid most of that to Google (OTAs spent $10.6bn of that hotel commission on marketing in 2018) to be at the top of the rankings for ‘hotel in berlin’. They are reluctant (quite understandably they would argue) to give it back when someone cancels.
I can order a KFC to my lounge in minutes (Deliveroo); order and cancel a taxi from my door in seconds (Uber); make people offers on antiques around me (eBay) and place bets live on the soccer as the striker runs up to take a penalty (Betfair). Yet travel remains slow and rigid - It’s extremely hard to know what the ‘right’ price is and, when something goes wrong that is out of my control, I can’t reasonably cancel and get my money back.
Everyone is committed - travellers, hotel owners, OTA’s and Google – but only the middlemen seem to come out the winners every time. Given the huge transformation in our almost completely digital economy - this just will not do.
The key here is this - Rory Boland of Which? ( https://www.which.co.uk/news/2020/03/why-youre-paying-too-much-for-your-hotel ) says 8-out-of-10 hotels will match or better the price if asked directly but OTA ‘price parity’ agreements mean hotels can't advertise better deals or don’t want to because the competition just adjust their own prices accordingly.
We became interested in this global problem because our background is one of free markets and exchange - where everything has a fair price and can be freely-traded. People become buyers and sellers, where the price changes based on supply and demand and there is always a price to cancel.
We began to think of a world where both traveller and hotel owner (and one day perhaps airline owner) could respond automatically in real time as things change. A world where the coronavirus hits, ITB Berlin is cancelled yet travellers have the opportunity to sell rooms back to hotels or sell them to other people trying to find a hotel for the night. A world where a traveller wishes to send an offer for what they are prepared to pay that goes directly to the hotel’s front desk. A world where hotels understand for the first time what travellers are prepared to pay for their rooms, not just setting prices that are in line with the competition - creating a direct connection with the traveller.
A world where hotel rooms might become a commodity and can be freely bought and sold on an exchange…..but perhaps I am getting ahead of myself a little bit on the last one!
Back to my trip to Berlin - I have tweeted over 100+ times to cancelled travellers and hotel owners to try and see if I can buy a hotel room that is going empty that I could buy off someone direct or make an offer directly for it to the hotel front desk - with no success. The barriers are clear to me - do we (hotel room seller and me) trust each other? How do I pay them? How do I know the room is really available to be legitimately sold? How am I trusted and will the hotel even let me stay in the hotel once I’ve bought the room? (and that’s even if I have managed to change the name ...manually via an outsourced telesales line!).
There are clearly some obstacles to jump - but that’s the exciting bit. When ITB Berlin was cancelled a brilliant group of resilient travel industry enthusiasts started the hashtag #strandedinBerlin (https://www.strandedinberlin.com) and as I write I am off to meet hotel owners, channel managers and travel bloggers as if nothing has been cancelled. Obstacles are there to be overcome - and I look forward to seeing a world where travel can be freely bought, sold, exchanged and cancelled.
Watch this space and please leave a comment below.
Sebastian Lewis is an entrepreneur, previously working on the EURONEXT and LIFFE Financial Exchanges - visit bookhoo.com to register your interest.