The Most Guarded Travel Industry Secrets

Transcript

however you guys pronounce it sorry french speakers there anyway let's get started so my name is max or maximus mile found from russia but i love to travel i really do i visited a whole bunch of countries uh my bucket list is mostly travel really um so i do travel a lot and i love travel i love seeing new places new cultures eating new things meeting new people i love that but i hate traveling i really do i mean when things go well they go well but whenever things are starting to go south uh it's a problem

so i want to fix travel mostly for myself really like i just want to have cheap comfortable weights of getting from point a to point b enjoying my stays there um so that's my mission i guess for now let's see how it goes um and yeah therefore i love building things to make trial better i started a few companies that combined tech and travel and scenes 2014 around 2 15. as a software engineer which i am i was very frustrated with state of technology and travel and i was trying to figure out what it is what what's the

what's the problem what's the underlying thing that makes travel so funky i don't want to swear today because this is recorded right um so let's get started let's talk about some of those problems that that maybe you know about maybe you don't hopefully i'm going to blow your mind once or twice today all right so secret number one are we really in the travel industry like none of the challenge the people who have who travel uh people who go on all those different booking websites we have a vision of choice um and the problem is that

it's just an illusion right so we think that oh there's a whole bunch of different websites that i can go to there's booking there's chicago there's hotels.com and the secret here is that all of those different websites the majority of them really are owned by one of the two companies that you see on the screen one is expedia group and another one is booking holdings and you can see uh logos some of the companies that they own uh it's definitely not all of them they own literally hundreds of different brands each one does um and yeah we have we have this feeling that those

different companies and those different websites they compete with each other and therefore we're getting price we're getting a good deal but in reality not really um and if you want to dig deeper a little bit into into this of course you can look up all that information online uh yeah you can read about how those companies they go hand in hand they want changes i don't know the way they do business another one follows suit and they just kind of go hand in hand like that um there were different probes uh you know and uh investigations whether those companies are monopolies or they're

they're breaking some anti-trust anti-monopoly laws um yeah none of those quite went anywhere so yeah that's one of the secrets um all right going further all right so no booking on credit card fees really uh this is kind of a small ish screenshot but this is a screenshot from booking.com if you if you book a hotel there uh to the right uh down under that button that says reserve there's this little inscription that says no booking on credit card fees i mean really we know in the travel industry

everyone knows that um up to really i was looking it up uh yesterday up to 36 which is in the same number to me of the total amount of money that you are sending to booking.com goes to actual booking.com not to the hotel that's an insane commission at least i think so um that's a lot of money and really you're spending a couple minutes on the ota website and ot by the way stands for online travel agency basically that's the website that combines what we call inventory from different hotels and uh

again you yeah you have the ability to choose from all sorts of different hotels there you spend just a few minutes there but you you pay you it's the consumer that pays 36 um not the hotel and that's why booking.com says no it's not you customer doesn't pay anything it's zero right it's the hotel that will charge 36 but again i mean we're not fools right at the end of the day the consumer pays all of those different fees um yeah let's see secret number two they tell you that there are no fees but there are crazy fees all right let's get going

uh they often say we price match those different ots or travel agencies um and it's a very interesting very interesting tool for them right so again we have an illusion here that those guys they care about us they're saying hey if you find a better price anywhere will match it well again it's a hotel to hotel kind of uh comparison of course so if you see on one of those ota websites uh i don't know let's say hilton hotel and london somewhere and then you find somewhere price that's

better uh theoretically that's what they're trying to say with this uh you can i don't know what to screenshot or send them you the url or something like that and they will match that that low price in reality in reality this is a tool for them to punish those poor hotels um and this is how it works uh those otas is those big intermediaries they use uh what's called price parity agreements wherever they can and whatever they can right because in most countries really it is illegal in most countries and european uh union i think in all countries uh in russia definitely it's illegal i

think north america it's illegal so um really countries in latin america maybe somewhere in asia they're suffering uh quite a bit from the price parity agreements which are really detrimental to to the business of those hotels and airlines and other players um what about those countries where it's illegal you're saying oh i'm here so i'm protected not really as you probably but you can figure it out right and those agreements that hotels have with those otas the zots are saying well uh we can't enlist your hotel for whatever reason we don't have to

provide that reason to you uh and in reality uh maybe that prize parity clause is not in that agreement but the otas are saying um yeah you put a lower price on your hotel website so we're going to punish you and again they have a variety of different tools that they can use to do that so even if you are going directly to the hotel website probably their price matches the price on the booking website or expedia website or whatever um and yeah you end up paying more because of that crazy setup

that they have even though you're booking direct and that's why a lot of times when you go direct you don't see a lower price uh but let's say on the website but uh they provide you all sorts of perks on top of the sale let's say i don't know whatever it is free breakfast or maybe maybe some some vouchers some other things some some miles and of course you don't get any of that if you go uh through an intermediary through one of those ota websites so again this price matching uh tool that or idea that some of those otas are promoting

it's just a tool for them to find those hotels that are violating violating uh the written or spoken agreement to match the price that those hotel posts on those ota websites uh yeah pretty crazy situation this is a big one um fake reviews and um we we talk to to many many hotels and this is one of the most pressing issues for them they they care about of course this is this is one of the best tools for well any company really not just for a hotel uh to to promote

their brand uh online well where else are you promoting yourself this is right um and fake reviews is is absolutely such a hurdle in in the travel industry and not just in travel of course again i was looking up statistics for this talk and it's it's just absolutely insane so some studies uh show that about a third of all tripadvisor reviews are fake so tripadvisor of course being the website where all travel related ratings are are compiled um so this was an investigation approach from this paper it's called the times of

london that was done in 2018 and they found that i don't know their methodology but that sounds like a respectable outlet the times of london um yeah they found that about a third of all their reviews that's posted on tripadvisors tripadvisor are vape and they're created by accounts that are newly created accounts that have just posted one review and then never never done anything else um then the garden guardian another uk uh paper they did another investigation and i think as

far as i remember uh there was a collaboration with some other uh outlet or journalists and that was done in 2019 and they found that about 15 of all the troop advisors reviews are fake um and in that investigation that they found that 93 uh of hotels this was specifically about hotels uh that found uh that were found to to to violate supervisor terms of course they're saying no fake reviews no nothing no fraud but 93 of those hotels that uh had fake five-star reviews

uh have done that before so tripadvisor of course is their business uh the more comments the more stuff they have on the website the the more higher rating hotels they go start there the better it is for tripadvisor um and troop advisors didn't do anything about it so they found those hotels that were guilty in promoting their brands using this really fraudulent method and they just allow them to stay on the website and do that again uh yeah very big problem for for hotels out there for all sorts of different brands uh and i guess it's not just hotels that uh our

tripadvisor it's all sorts of different uh restaurants perhaps tours and activities and yeah how do we deal with that well we'll talk about it a little bit later so maybe this is not a secret per se but we've all heard uh about how you could try and let's say use vpn or open private browser window and go to an airline website and try

and do and perform the same search that you've done in your uh you know regular environment and try to compare the prices i do that sometimes sometimes it works sometimes it doesn't but the fact is uh hotels airlines all sorts of different companies specifically in travel because it doesn't happen anywhere else at least i haven't seen that or at least i'm not aware of that perhaps it's happening as well but the idea is that let's say airlines that are selling tickets uh what they're trying to do because it's it's perishable inventory right so on date of the flight all those

seats disappear whether you feel them or you didn't right so uh hotel synchro so what they're trying to do they're trying to feel all those seats and all those rooms uh at the highest price possible right so and they're trying all sorts of different strategies in order to find basically a person uh who is going to pay more for the same seat and just as an experiment try to if you're flying at your home country or on ct after this try and talk to your fellow passengers and ask them whether they paid the same price as you did for for the flight that

you're taking um yeah i'm curious about the results um but airlines and hotels they have uh all sorts of tracking capabilities and and they're they're hiring all these companies specifically to find people that again according to those companies are according to to to that data that they're collecting will be able to pay more and one of those very very simple examples is business travelers right they're uh highly sensitive uh uh regarding the dates that they're traveling right if you're a leisure traveler maybe you can fly on i don't know

friday or saturday or sunday it doesn't matter to you really but you're if you're a business traveler and you're uh going somewhere for business meeting of course you have to be there on time um so those people generally are able to pay more for the same ticket uh so yeah very simple example of that but in reality uh that those tracking capabilities are much much more complex right so of course they're tracking your location if you're looking up a ticket or a hotel stay from a country in europe or from one of the developed countries it's going to be probably more expensive than if you were to open the same website

from a location tower i don't know in africa in asia and one of the developing countries um and and as i said it's much more complex than this those are are just very simple examples um and by booking direct here what i'm trying to say is when you are not booking direct when you go to one of those ota websites the aggregators as we'll call them there's a whole uh chain of companies in the middle that are profiling really it could be up to 20 companies probably there's uh i'm not going to go into into details of

this maybe probably it's not very interesting but um you would be surprised how many companies are in the middle really when you book on one of those aggregated websites um so if you have the patience and the time call it out directly uh or or book on their website directly and but even if you even if you go directly and try to book on hotel website uh most of the time you will find that when you click book on the hotel website it takes you to a completely different website with a different url uh with the i don't know name of the provider

uh in in the url that provides the booking capability to their website and it's it's a message really uh try and call them direct and from what i know and from my experience if you notice to the receptionist they can give you a better pricing so try that next time just call them say hey can i can i have discount they should be able to provide that to you and all sorts of different other perks um another benefit of booking directly is um of course yes they are able to provide all sorts of different perks if you're not going through an mte well sometimes they're ceiling as well

uh and meantime said call a hotel and i'm like hey if i see it's 200. from booking.com how about 150. no uh well whatever you're lost um all right moving on this was a crazy revelation to me really and i was baffled by this back in 2014 2015. um that really hotels and airlines don't have an aps but it's the case today still and every year it gets more and more

baffling so let me tell you a little bit about this um of course hotels and airlines are not software companies so they have to either hire someone to have an api capability uh or or do or or i don't know for a procure software that has the capability but the promise the moment you buy into into software like that let's say you're a hotel you buy software from let's say oracle which is a major provider hotel software in the world um it's kind of a tricky situation where

what we call it vendor lock-in right so you cannot very easily switch to another provider if you want to so guess what you need all sorts of features in your software that needs uh to be turned on and you call oracle and say hey i need this i need that and every time you request something from them it's a few thousand dollars right uh of uh expense that you have to incur uh in order to have those features so there's a hotel if you want to have an api well it's gonna be what about ten thousand dollars um airlines generally are bigger companies and

i really don't know why they cannot take on the responsibility to develop those apis themselves um they already have good enough standards in the airline industry uh one of those standards uh that one of our advisors uh used to work on for a long time at iata the international uh air transportation association uh it's called ndc news distribution capability and it's a decent standard right um they've been developing it for a long time uh and finally released it several years ago and everyone it was it was really uh amazing it's an amazing

development uh all in all um don't guess what airlines did they went to all the same intermediaries that were giving them a hard time for for decades literally now and they said hey now we have this new standard can you you know build that api for us because we don't want to um and it's kind of a situation right now where we have a standard and airlines could have developed those apis themselves but they didn't and really whenever you're connecting most of the time you're connecting you're thinking you're connecting to an airline api it's not the airline that owns that api and if you call that

and you say hey can i connect to your api and they say oh yeah of course yeah just call that guy you know how to do that they're dealing with all that just just do that um and of course xml it's year 2021 as far as i remember uh xml is still all the rage in the travel industry that's like the best possible thing that you can probably have of course there are new companies and some some of the smaller startups that are trying to depart from from that and just xml is a symptom right of course it's a useful technology but um yeah it's good it's an

interesting indicator interesting litmus test so this was a fun one i was talking to uh to this guy from a company that uh handles your language in like 50 of the airports everywhere in the world um so probably yeah you use that company you don't know about it but yeah they touch your stuff all the time um and he told me about some of the problems that they have and and i was even more perplexed than before to learn that airlines still use

technology that was developed back in the 80s in 1880s technology is called teleprinter really the first use of that technology was in 1887 as far as i remember and of course went through a few iterations but uh today is called airline teletype uh but it's the principle is the same it's it's the teleprinter kind of thing so you press a button on your keyboard somewhere i don't know in zurich and the same uh letter or number is being printed somewhere else

and this is actually a major major cost contributor to your air travel so they they change information about luggage but all sorts of different things using that technology technology from 1880s so you wonder sometimes you call an airline uh trying to make a change uh change it very small last time not even two weeks ago i think i don't know i installed my name someone something went wrong but i needed all i needed to do is change my name in on the resolution um about ten dollars cost you know just changing changing the

string in the database somewhere um so yeah airlines uh still use tech that's quite outdated uh they use style printer things they use mainframes um cobol engineers are quite in demand uh if you know coal of uh in in that industry so just uh jumbo opportunity for you guys uh geeks so uh moving on an airline industry of course is tremendously complex and that's something we don't really know we don't even need to know but um airlines they outsource

a lot of their stuff so the api capabilities that they upsource to to another company that's nothing they outsourced pretty much everything and to me again i see it as kind of a problem i so years ago i started calling into uberization where well basically the problem is companies that make most money they don't own any of the assets right so it's a cougar yeah the guy owns a car he drives it for uber uber makes tons of money you guys barely surviving uh airbnb same situation right and so with airlines they don't have just one company that sits in the middle of all those

different transactions different types of transactions even um there's a whole bunch uh so airline industry is very complex uh in that regard they use uh one company for calculating the correct airfares for them basically determining the price of all sorts of different teachers another company to publish those fares so that travel agencies can get access to to those numbers and to that data to those different packages they use another company to get paid from those travel agencies they use another company to calculate the the route um it's just insane um well

another secret um yeah i encourage you if you're interested in this it's it's fascinating how how that stuff works especially the airline fairest fascinating topic very complex so we're looking at all those things at winding train for several years now and we were thinking how can we take all those different things what can we do with that some of those problems they seem to be again very complicated um and some of our advisors say some of the people from the trial industry say uh what what can you do about it um

we need a fresh start so that's kind of what we're doing point and tree i'm going to give you a very brief overview with uh about what we've done here and really what where what we're building um [Music] so we created a lot of those problems uh the problem of coordination on a marketplace right so how do we go uh directly from buyer to seller without an intermediary right so and during our work uh in the course of our work on this problem we realized that well really without blockchain we didn't have any tools to allow buyers and sellers on a marketplace on

any decently sized marketplace to talk directly to each other we always we have to have an intermediary that of course is going to put a crazy commission fee because they become a monopoly inevitably almost um and uh and that's the situation that we have right now where we have a lot of those different uh novel only a few of those different intermediaries that create this illusion of choice so we created this technology that's called org id uh org id is of course stands for organizational identity and the idea is that without an intermediary org id is a set of smart contracts some tooling

around it um where companies create their profile and they can have a sort of uh trust score right so the only thing as a buyer and seller trying to connect to each other the only thing that they need to do the only thing that they need to know about each other is it can i trust you will you pay me at the end of the day and uh from the buyer hey will you provide the goods that i'm buying for you from you uh for my customer in our particular case right um so how can we go from illusion of choice to to choice really because today you have no choice you have to if you're a hotel or if you're a travel agency you have to work with one of those intermediaries

um so that's something that we want to give to the trial industry both buyers and sellers both hotels and travel agencies and again the silly thing booty and credit card fees they're saying they don't exist of course they're there uh you just don't see them um they're blatantly lying to you um okay how can we decrease those seats again going direct if you don't have an intermediary you can do that very easily uh you don't want to pay you shouldn't pay for just a few minutes to spend on the website uh

hundreds and hundreds of dollars every time you travel um the market the problem is that we visit in the areas we really don't have a free market because even the pricing you can't price your own products and again how pound-same it is that as as a merchant you can't even do that you can't make almost any decisions here you have to work with this one guy you have to give him the price that he tells you to to post and that's it so very very bad situation um yeah the market we should have a free market

at least in this industry and preferably everywhere else of course uh so we have this this concept of organizational identity and the topic of self-sort of identities blowing up right now ours our solution is specifically for organizations but if you couple it with a personal identity individual identity you can solve a problem with uh fake reviews where yes the organization provides a cryptographically signed message that yes this particular person that particular identity stayed at my headtails and therefore they're

entitled to liver cube right um very easy to solve um [Music] and of course you shouldn't worry about whether you're being tracked whether you're being measured whether you are uh whatever your step you've been taking into account in order for your price to be increased at the end of the day and that's really again what these companies are doing and i'm a maximalist but i think that anyone and everyone who wishes to do so should be able to remain anonymous on the internet so we should be able to do that and only reveal the information that we want to reveal whenever it's beneficial for us so let's

say i have a i don't know some sort of mileage program or some loyalty program with a hotel yeah of course i will reveal that information uh but if it makes me if it gives me a better price but if i try and sign up uh for a vpn and connect to the same hotel website from somewhere in asia and i see that that price is 20 better than the discount that i get with my oils product well that's that's not a very good business practice is it um again we just don't know about it uh keep moving up

so yeah org id is one of our core it's a technology it's not a product really you can't just go and use organi um we have a few different products on top of this this is kind of fundamental layer that we built here uh of course it's all open source of course of course it's all decentralized um but on top of that what what can you do uh so we have let's say i said a few different products uh here so i mentioned that let's say hotels they don't have api capabilities at all uh i'm sorry i'm talking about travel agencies here uh we're trying to show and teach travel agencies how to work in in a new environment where you are not dependent

on an intermediary so we build this tool that's called glider it's completely open source you can go onto our github profile and you can see that this is a it's essentially a booking ui that uses some of the formats some of the standards we created it uses org id et cetera et cetera um yeah and actually it's a fully functioning website uh it is a travel agency we don't want to create a travel agency we just want to show uh how this could be done and of course has to function so check it out uh so on another side of the marketplace on the other side of the marketplace uh i mentioned that hotels they don't have apis uh so we're providing for small hotels absolutely for free we're providing this

tool that's called rooms which has api capabilities that's connected directly into into this whole ecosystem with org idk and winding tree uh and stuff like that so yeah very simple uh well it's called we call it ims inventory management system um yeah very simple tool so uh i'm getting towards the end of my presentation and my allocated time i don't know how it works actually if we have any questions from the audience here and whether i can receive them at all but happy to answer all of those uh questions if you have them and my email i haven't done the first slide it's max twiningtree.com

and i just wanted to mention that we're hiring uh quite a few people so feel free to send an email uh to this one working financially.com or go on our website check it out uh send me a question i'm i'm max with waikinushi.com and thank you so much okay all right i hear you what is the

question right so we have uh there's a there are a few open source business models here uh we raised uh our money during the ico boom actually the exact lead the worst time uh so we still have uh some of that money left so for the next two years i think we're good but in terms of earning money we have to build other things on top of the infrastructure that we created things that cannot be decentralized today right of course a really good question because with decentralized technology if

everything is open source everything if everything is decentralized you can't charge the user for the access to this right um but things that you can't quite essentialize right let's see payment capabilities or support that's what i don't know i'd say red hat linux is done right yeah you can take linux use it for free but hey your corporation you want support you want some sla uh yeah call us we'll give you we'll give you a quote right so open source business models and building useful tools on top of the decentralized infrastructure that we created tools that cannot be decentralized good question

[Music] yeah we do uh we have quite a few companies that are interested in resolving and solving the problem but uh and that's not a secret um that companies especially those that are struggling with technology already they have a really hard time grasping the blockchain stuff right so again i'm gonna give you an example so we're talking to to to this guy who's saying hey i i can lobby your solution uh in in this one european country so you will get

all the hotels uh in this in this country which is pretty big but anyway and we're saying wow this is amazing he's saying okay what should a hotel owner do uh in order to to put their inventory on one entry or in order to use the platform saying okay so first of all install nanomask generate your seat phase then acquire some ether which is you know quite an ordeal for a new person who's doing that um then you go on our website you create an account you fill up a form you connect your api oh you don't have an api use rooms so this whole process is quite

complicated and it's going to be a couple years before several years probably i don't know two three five before smaller hotels and medium-sized hotels or stuff start catching up to that but right now we're working and pandemic was kind of a blessing to us because a lot of companies that didn't have time to innovate i guess in in in the regular course of business but a few really gigantic companies that i've been working for about a year year and a half right now we're working with them and they are interested in innovation we have the capacity to do that

so yeah we're connecting a few companies right now as we speak uh together through this open platform and showing showing them how things can be done differently those companies will literally be saving hundreds of millions of dollars every year uh on on travel specifically corporate travel in this particular case so yeah quite a few companies [Music] thank you thank you too have fun you