Abta 18: Beware the ‘efficiency trap’ and ‘accountants running businesses’

One of the leading figures in UK marketing has told travel industry leaders to be “careful of allowing accountants” to run their businesses.

Rory Sutherland, vice-chairman of the Ogilvy Group, told Abta’s Travel Convention in Seville: “Business is trapped in an efficiency bubble, [but] efficiency is inimical to trust.”

He said: “We trust our friends, and nobody has a friend because they are efficient.

“Maybe you can’t trust anyone completely until you have a chat [with them].”

Sutherland told the Convention: “Be really careful about allowing your business to be run by accountants. Trust and brand loyalty are ultimately where profits come from.

“Trust is a way of signalling through inefficiency – through a commitment to the customer that goes beyond the single transaction.”

He argued: “Silicon Valley is a purveyor of efficiency prompts. Be careful about looking at the benefits of automation without considering the costs.”

Sutherland also questioned the assumption “that what people do is what they want”, saying: “Don’t assume everyone is desperate for cheaper flights [when] price is presented as the only salient choice.

“Stop assuming something is either good or bad. It depends on the context. The best meal in the world would be ruined by a bad smell in the restaurant. The value of everything depends on how you perceive it.”

Sutherland warned the industry risks “its own destruction” if it does not diversify tourists away from a small number of overcrowded destinations.”

He said: “There is a problem where tourists all go to the same place. It has to change. [Technology] makes individual decision-making uniform. It makes behaviour work at a collective level.

“If we can’t find ways of diversifying, the travel industry will bring on its own destruction. We’ll have cities overrun. It’s already happening.

“We want individual behaviour to be messy for collective behaviour to be rational, otherwise we create tourism hotspots.”

He added: “Most technology innovation is about psychology. Uber’s success comes from a psychological insight that humans hate uncertainty.

“We would rather wait 10 minutes for a train knowing it will come in 10 minutes than wait five minutes not knowing. Uber gives certainty – you can watch the car approaching.”

“Sutherland said: “Apple is not really a technology company, it’s a psychology company. It is supreme at understanding what humans want from a phone, [and] that has not meant a lower price.”

Travel Weekly is trade media partner of The Travel Convention
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