Pamela Whitby has been finding out if the days of purely
self-serve online travel are over.
“Metasearch on steroids,” is how industry veteran Krista Pappas,
the vice president of Lola, describes the firm’s new agent console, a
state-of-the-art piece of kit that delivers “super powers” to the group’s
living-breathing travel agents.
The console, which communicates back and forth with
Harrison, Lola’s artificial intelligence (AI) engine – its answer to IBM Watson
– gives the firm’s 20-strong travel agent team “all these new, amazing and
efficient tools”. Tools that will help Lola, a startup leading the charge away
from purely self-serve online travel, to deliver a truly personalised experience.
Says Pappas says: “With travel factories spitting out
thousands of results that aren’t personalised for the customer, we want to
prove that it really doesn’t have to be one size fits all…what we are really
trying to do is weed through all the noise and clutter that you get from the
big agencies.”
“With travel factories spitting out thousands of results that
aren’t personalised for the customer, we want to prove that it really doesn’t
have to be one size fits all” Krista Pappas, Vice President, Lola
Though she isn’t naming or shaming anybody, the travel
industry veteran’s argument goes that whether you like it or not, the results
of the agencies are influenced by who pays the highest commission.
To highlight the point, she refers to her own experience:“No
offence to Best Western – this is simply a personal choice – but given the
number of times I have booked on a particular OTA, they really
should know by now that I am never, ever going to stay in one of their
hotels…This is just one of the ways where we [at Lola] aim to be a different.
We are 100% focused on giving the customer the hotel that is right for them.”
This isn’t easy but with a further $15 million awarded
in recent Series B funding, taking Lola’s total investment to just
under $35 million, the tech-driven vision seems within reach.
Delivering uniqueness
As a quick recap, Lola launched its limited beta version in
the app store in May 2016. Led by former Kayak co-founder Paul English, Lola’s
target audience is the tech-savvy frequent traveller, fed up with having to
sort through the thousands of generic search results spat out by
well-established OTAs. Though everybody in travel is talking about
‘personalisation’ more often the results don’t deliver, and end up costing
travellers time and productivity.
Pappas explains: “One of the big lessons from the launch of
version 1 was just how unique everybody’s needs are…In the next iteration [due
for launch in Q2] we are going to give people a much higher level of personal
travel service, which means personalised answers and real service when they
need it.”
Following feedback, the next iteration will also include
significant changes to the user experience. “It’s truly a mobile-first user
experience versus just a mobile-adaptation of a 20-year-old idea of search,”
she continues.
Of course, there are some simple, easy-to-complete tasks,
such as booking a regular weekly business trip from Boston to JFK, but
there are still enough times when things go awry. “When a flight is cancelled,
and you’re stuck in a cab, or there is a problem with hotel check-in, people
absolutely do want to talk to an agent and with Lola, 24/7 service is always
one touch away,” Pappas insists.
In essence then, Lola is now set on building a true
personalisation engine for hotels, flights and other travel components that
will deliver a “self-service travel plus agent” model.
This trend away from pure self-serve travel is one that Jared
Alster, VP and co-founder of San Francisco-based startup Stride Travel, a go-to market place for baby boomers,
sees playing out in 2017.
He says: “We believe that travellers will want more guidance when
booking travel online so we see a shift a bit away from the OTA ‘self-serve’ model to one that is not
exactly a traditional agency [aka Lola].”
Lola’s investors also seem convinced. In the latest funding
round, led by Charles River Ventures, previous investors General Catalyst and
Accel both came back to the table.
The real messaging deal
On the journey to personalisation, a core focus will be to
perfect messaging tools using AI. Says Pappas: “What we have found is that
people really do prefer messaging when looking for travel. It is how they have
come to behave and communicate.”
The numbers seem to back this up. According to Statista, by
August 2015 at least 2.5 billion people were using at least one messaging app,
a number that’s expected to grow to 3.6 billion by 2018.
The real test now, however, will be how this upstart tech
company harnesses AI, machine learning and natural language processing to
perfect the messaging experience.
“A lot of companies, who I won’t name though I’d love to,
were guilty of an over-exaggerated product/reality quotient this last 12
months,” says Bobby Healy, the chief technology officer of CarTrawler, the
technology platform connecting travel businesses including OTAs, airlines and
accommodation providers to all forms of ground transportation. “But people are
now sick of hearing about AI and bots, so I think they’ll actually start doing
something in that space rather than just talking about it.”
Lola is definitely “the real deal”, insists Pappas who says we can
expect to see a lot more than talk in 2017. To advance the firm’s AI ambitions,
last September last year came another “best-of-breed appointment” to the
executive team in the form of Bryan Healey, a
former Amazon Echo technology leader.
“Our AI team’s ability to help with personalisation and natural
language processing for a better messaging experience will be paramount,”
Pappas says.
While some industry players are calling 2017 as the year
that the mobile native app dies out, Lola doesn’t buy into this view. “The
other part of our tech vision is the mobile app – so it’s Harrison, agent,
console, mobile app,” Pappas says. Importantly though, the human agent will
always be there to “ensure that Harrison is getting it right”.
To ensure this happens, Lola has adopted an approach which
helped Kayak to take the tech lead – insisting that engineers sit with the
agents to hear first hand the customer’s pain points in order to build the most
effective solutions.
That humans will remain central to this fledgling business
is an important one in the current climate. Recently the Financial Times
reported on the pressure being felt by senior Silicon Valley executives at the
World Economic Forum in Davos. With Brexit and the election of Trump, here
executives including the chiefs of IBM, Salesforce.com and Microsoft were
anxious to present themselves as more responsible and sympathetic to the
potential impact of AI. Salesforce.com’s Marc Benioff is quoted saying that “advances
in AI are beyond what we had expected,” and the concern is that it could lead
to job losses.
Artificial Intelligence fuelled job losses are less likely in
travel
In travel, however, Pappas argues that this is less of a
problem. “Booking travel is inherently complex and we believe there are always
going to be things that humans are better at doing than the engine,” she says.
Yes, lots of tedious tasks that agents have been doing
manually can be automated, but that gives them the flexibility to handle the
more complex problems.“The agent remains integral to this; we are a long way
from the idea that this doesn’t require an agent to be involved,” she says.
Building trust
Like all consumer-facing brands Lola is keen to show that
it’s all about putting the customer first but as a commercial organisation,
whose first stage investors have come back to the table in round 1, it must
also deliver returns.
“The team has raised a tonne of money and we have a lot of
work to do, so pressure is on,” Pappas admits.
While positive feedback from users is the end game, like
other agencies its business model is commission-based so it cannot ignore the
importance of building the right partnerships. Lola’s promise to the travel
suppliers it chooses to work with is “to complement their own marketing
programme”.
Already it is working directly with hotels, as well as other
third-party suppliers and global distribution systems Amadeus and Sabre.
Pappas is clear that Lola is not trying to take control of hotel
loyalty data, which it could be argued is Expedia’s goal for its relationship with Red Lion,
and ultimately other smaller chains. Last year, the online travel giant
convinced Red Lion to allow it to auto-enroll guests to its hotel loyalty
programme, in a move some commentators have called shortsighted.
Not so for Lola. “We want to ensure our customers are
getting the best rate from hotels, that their loyalty is in check and that
hotel recognises them when they arrive,” she explains.
Next steps for the firm are to “use the dough from the
Series B funding round to for continued product development and marketing”; to
date marketing efforts have been largely word-of-mouth.
Though the idea is still germinating, a longer-term vision
is to become the Uber of the travel agency world, with Lola talking through the
idea with prospective partners.
Says Pappas: “It’s a way down the road but we envisage that
like Uber, you would be able to use Lola to both plan a trip or remotely join
up to be part of a wider network of agents.”
One of the biggest challenges facing companies in the digital
age is the ability to build trust
That’s for the future, perhaps, but Lola’s immediate priority
is building trust, one of the biggest challenges facing companies in the
digital age. On this subject, Lonely Planet CEO Daniel Houghton, who joined in
2013 to engineer its digital turnaround and was recently named one of Forbes’ 30-under-30, has this to say:
“In our case, the business was built on the trust of our
content, because we go to the places we write about. That’s what always set us
apart and that is just as important today as our content appears on more and
more platforms and in different ways.”
English and Pappas have been in the business long enough to
know that it is trust too that will set them apart. “It’s truly amazing when
you know you can trust somebody to book travel for you,” says Pappas.
As Lola ramps up to deliver on this vision, the industry
will be watching closely.
Krista Pappas, Daniel Houghton and Bobby Healy will be speaking
alongside other online travel industry innovators at EyeforTravel’s San
Francisco Summit (April 24-25). Click here for
details.
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