The truth behind innovation and disruption

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Innovation in the travel technology industry often occurs without much fanfare: an improved search algorithm, a new OTA mobile app, or the like. Disruption, however, shakes the entire industry, making startup success infinitely more challenging.

Innovation is often an improvement on how something works or operates, whereas disruption is a “game changer” in doing business. In her Forbes blog post, Caroline Howard explains the nuances: “Disruptors are innovators, but not all innovators are disruptors.”

Each day, Amadeus for Startups interacts with many innovative entrepreneurs, yet true disruptors are harder to find. Many would classify the millennial wave of technology as a travel industry disruption; an example would be the replacement of travel agents with artificially intelligent online agencies and metasearch sites. This is simply innovation, or the evolution of the business model.

In contrast, the introduction of commercial air travel in 1914 began a slow-yet-steady disruption of ground transportation. This highlights one of the most counterintuitive facets of disruption: It can take a very long time! Disruption begins with a “model-breaking” idea that leads to adoption once limiting factors – such as fear of change or technology, regulation and distribution – are reduced or eliminated.

So, what will be the next big disruption in the travel industry?

In my opinion, it is already happening as a result of the sharing economy. Ride-hailing services like Uber and Lyft have changed the travel model for short distances, allaying fears of finding parking, freeing up time for working/relaxing, and reducing the number of cars on the road. These disruptors’ relatively quick rise will make way for the next wave of disruption: self-driving, autonomous vehicles that could eliminate drivers, and in turn, jobs.

Meanwhile, in the hotel and hospitality industry, travelers are increasingly booking short-term rentals through home-sharing services like Airbnb, which enable homeowners to rent extra bedrooms and apartments to vetted and verified strangers. This trend has enabled homeowners to earn additional income from their investment, while allowing travelers to enjoy a more “local” experience than hotel chains can offer. While this may seem like disruption, from an industry prospective it is simply innovation in the way consumers shop for vacation rentals and how inventory is distributed.

Just as millions of Airbnb rentals will not take away the need for hotels, I can’t imagine taxis being replaced by autonomous, remote-hailed rides anytime soon. On the other hand, anything is possible. It took years for the airline industry to disrupt the rail industry – or for the telegraph to disrupt the courier industry – and it may take many more years before we see New York City’s famous yellow taxis sitting in a museum next to London’s iconic red phone booths!

What’s the key takeaway here? It’s important to review a startup’s business model through a long-term lens. While many of the young entrepreneurs we meet set their sights on “disrupting” the travel industry, they could be equally as successful by simply focusing on innovation.

 

What do you think will be the next disruptor in travel and technology?

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