September 2005 Archives

Almost a third of UK travellers who book online do so because they are able to openly compare holiday options, a survey has revealed.
A further 27% said they use the Internet because it offers the lowest prices while 22% regard the web as far easier than trekking to a travel agent or picking up the phone.
The findings were included in a survey on online travel shopping and buying behaviour compiled by research analysts PhoCusWright.
The pattern was repeated in Europe's other key markets, France and Germany, where the ability to compare was the main reason for using the Internet for 36% and 23% respectively.
In France however, only 16% said price was the key driver while 22% cited speed as the main reason. Two in ten German online travel buyers said price was key with a similar number claiming ease of use made it their booking channel of choice.
"Online travel buyers access many of the same travel sites and visit many of the same places but European markets differ in the way they purchase their holiday travel," the survey stated.
According to PhoCusWright, 20% of Germans and 27% of the French purchased travel in person in the past year compared to 9% in the UK.
Elsewhere in the survey, figures showed the typical online buyer searched 4.76 websites before booking while increasing numbers are prepared to book longer-stay holidays through the Internet.

THE travel industry has been warned against allowing the search engines to hold them "hostage" over pay-per-click listing.
Great Hotels Organisation chief executive Peter Gould urged the travel industry to concentrate on natural searches instead of the pay-per-click sponsored listings.
Gould admitted he does participate in the paid-for listings to support his natural search campaign. However, he expressed concern at the focus on the paid for listing telling delegates at the Travel Technology Initiative that natural searches are "half the cost but create double the business".
Gould feared pay-per-click prices could dramatically increase or the search engines could start to even charge for natural listings.
"Consumers want natural searches not pay-per-click," he said. "If companies do not take part in natural search then they face being held hostage by the search engines."
"We must do this as an industry so the search engines do not hold us to ransom."
Google UK head of travel Daniel Robb said the search engine had no control over the price of keywords. However, he did admit that he "retreats to the natural listings over the PPC listings as they are more relevant".
Meanwhile, Teletext on TV managing director Nishma Patel dismissed the role of search engines in selling travel- rather astounding bearing in mind the amount of usage they get in locating travel products and brands. She said consumers only book with well-known brands....she's obviously never come across e-Bay, which carries some 700 unbranded holidays, many put together by consumers, every day.

ONLINE travel agencies could start operating a pay-per-click model to fight back against the rise of the meta-search engines which access multiple websites.
Anite product marketing director Ed Spiers predicted the price comparison meta-search engines would take over the travel industry and become more powerful than the agencies and the search engines.
He described them as "travel agents without the fulfillment" that have the potential to develop "household brands in their own right to rival Expedia and threaten agents".
Spiers was speaking as part of a debate at the Travel Technology Initiative's Autumn Conference, held in London earlier this week.
Online research firm Hitwise revealed the meta-search engine market is growing rapidly. UK director of research Heather Hopkins said the number of visits to meta-search engines has increased by 216% over the past 12 months, while the number of hits on online agencies has only increased by 1%.
However, the online agency market is still 32-times bigger than the meta-search arena.
Despite this, Hopkins predicted the online agencies would start to operate a pay-per-click remuneration model, as the rise of the meta-search engines has started to erode the agencies' commissions.
Hopkins said that she effectively uses Expedia as a meta-search engine checking for the best price before booking direct with supplier.
"Online travel agencies would offer the option to go straight to the supplier’s site to book the product. This way they get a pay-per-click fee instead of missing out on the commission (with consumers booking direct with the supplier)."

Well, one truism of the web is that when certain site functions become reasonably established ( consumer reviews, forums, multimedia content)- consumers expect them on every site they go to. e-Bay's purchase is all about recognising that telephony and the interent work well as merged channels- talking to someone via the internet whilst you are both interacting with a site is useful. For e-Bay, having buyers and sellers talking over the internet makes perfect sense- as well as the potential to increase bid frequency: Being able to telephone in a bid from your mobile- just as you're about to lose that crucial 1973 Blue Peter annual (Noakes, Singleton, Purvis in construction hats)- and have that voice bid logged on the site- has user benefits, and will help e-Bay drive bid prices up, which of course underpins their model.

The potential for IP telephony in travel is huge- where consumers often take responsibility for trip research via a site, and then phone a call centre. If the integrated web/voice becomes an established consumer channel (and e-Bay are a pretty good driver), they'll expect it from travel providers. So keep an eye on IP telephony and its applications.

And let us know if you spot that '73 annual anywhere.

Hmmmm. We took some pride at Travolution at having coined the term 'virtual integration' a few months ago. This was an observation that Vertical Integration- buying elements of supply and distribution up and down the chain- was old hat- look at the problems VI has caused the big 4 travel operating companies. In the online world the network of affiliates, portals and the component-ised nature of inventory and content means that you don't have to own anything- apart from brand and the relationship with the customer. This is the world of 'virtual integration'.

And then e-Bay go and buy Skype for $2.6 billion. Wouldn't a licensing deal have been easier and, erm, cheaper? Can someone please explain the rationale, because it suggests that owning channels in the new the online world (in this case IP telephony)is in some cases more important than accessing them. This sounds like history repeating itself, and e-Bay aren't alone: By owning online aggregators (Expedia, Hotels.com); a search engine(Ask Jeeves) and trusted content (Trip Advisor), Interactive Corps have pursued virtual integration by acquisition- their scale has allowed them to acquire some of the key customer relationship points that underpin online travel.

Is this vertical or virtual integration? Are we too bothered by semantics? What does e-Bay and Skype have to do with travel anyhow........

Kuoni is in an enviable position. It is a well-established brand with a reputation for good value, quality holidays.
Which is precisely why it feels it doesn't need to get involved with this new breed of online players - namely the search engines of this world.
Speaking at the EyeforTravel conference in Berlin this week Kuoni Travel Holidays head of strategic development Eva Ludwig said: "We see the Internet as an additional distribution channel. We know the majority of our customers still want to book with our retail shops or through the call centres."
And even though Ludwig accepts the fact that Kuoni faces competition from online rivals, she said there are no plans to have sales through third party online intermediaries.
"We're not giving our brand away to other people on the Internet. We sell on brand, not on price and we don't want to commoditise our brand."

Expedia and Travelocity have predicted a blurring of the lines between offline and online players in the future as business models merge.
Travelocity Europe managing director Germany Jan Oetjen said: "Business models will get closer and closer.Traditional tour operators will be more dynamic in their inventory buying and they are all trying to get more flexible models and move into the dynamic packaging arena."
Expedia Europe director of key accounts Bruce Redor said: "There's going to be some significant evolution in everybody's business models. The tour operators will want to be more dynamic and reduce their risk, but online agencies will wants to control the inventory."

VisitBritain will kick off a three year marketing strategy next year putting the web at "the heart of everything we do".
Britain's tourist board said almost half of its enquiries came via its website in May 2003. In 2005 that rose to almost 96%.
Total online enquiries have moved from 160,000 to 515,000 a month in the same period, while total enquiries are up from 320,000 to 535,000.
International head of CRM and online marketing James Keeler said: "Everything we do on an international scale, including work with brands and products and the relationship we have with our customers, will be online."

Expect an announcement soon on the European launch of US destination review site Tripadvisor.com.
The website has more than 2.6 million reviews and opinions on hotels, attractions and restaurants around the world, and claims to have one review submitted every minute of every day. It was bought by InterActiveCorp in 2004 and became part of Expedia Inc in August.
Asked about expansion into Europe, TripAdvisor.com vice-president international development Robin Ingle said: "Expect an announcement to come soon."

Search engines have come under fire from travel companies for a lack of accountability and failure to protect the conusmer.
Speaking at the EyeForTravel conference in Berlin last week, Travelodge director of brand marketing Alistair Buckle said he was annoyed at search engines’ trademark protection policy, which protects brand names but not the misspellings of organizations.
“You would not believe the number of people that type in Travelodge as two words. If the consumer is in charge then why does the law not protect them when they are booking?
It’s up to the search engines to do something about companies advertising against names they are nothing to do with.”
Buckle said his concern was not just for himself and other advertisers – but primarily for the consumer.
"It's not a case of hotels or airlines whingeing about these pirates, it's the customer who will get irrelevant information thrown at them and ultimately go elsewhere."
Buckle, who was head of marketing at EasyJet for five years, called on Google to wheedle out the guilty companies advertising on their rivals names.
"Why doesn't the law not protect the customer against being misled? If someone types the word EasyJet into a search it's because they want information on that brand, not on a site called 'reallyreallycheapfares.com' or something. Customers hate irrelevant information."
Columbus Travel Insurance managing director Sydney Henderson said it had been forced to threaten legal action against brand pirates. He said searches for its direct brand, Columbus Direct, sometimes produced companies using Columbus Insurance and Direct Line in the same sentence.
"We have to take legal action when this happens, the solicitors letter is not good enough."
EasyJet, despite having already trademarked its names with Google and Overture, said there are still companies using its name in their websites.
Digital and customer marketing manager Angelina Demetri said: "There are always companies that slip the EasyJet name in their website pages and we have a group of people having to trawl through the Internet to find them."
Demetri denied EasyJet used rivals names within its own pages.
Based on the results of a survey by US search engine marketing company Enquiro, which found 70% of consumers choose click natural listings and only 30% click on sponsored results, Travelodge is experimenting with not bidding on its own keywords to see what effect it has on traffic.

Pay per click advertising has been described as the "crack cocaine of marketing" by Cheapflights vice-chairman Hugo Burge.
Speaking at the EyeforTravel conference in Berlin, Burge said there was a danger in companies becoming addicted to pay per click advertising, and obsessively outbidding their rivals.
"It's the crack cocaine of marketing," said Burge, Cheapflights vice-chairman and head of international.
"Some companies put 80% of their marketing efforts into it, but you have to put it into context with your marketing mix and your competition. Some companies will have a different return on investment strategy and will be able to outbid you."
Hilton International director of channel development Ivan Imhoff told delegates to think of website content as a way of appearing further up the list on search engines.
Hilton has created website guides at www.hilton.co.uk/guides with the objective of bringing in 150,000 new visitors to the site from search engines.
A total of 45,000 new visitors have come to the site since it was launched six weeks ago.
"Creating guides is something we've never done before, but it's a unique offering for us and it's brought in new visitors to our site."

Lastminute.com claims to have seen a 50% increase in conversion rates in online bookings following the launch of a direct-debit facility on its German website.
Head of marketing and PR Alexandra Rieck said the success was due to understanding the habits of the German market - one which is highly security conscious and where credit card bookings over the Internet are not that prevalent.
Rieck said the company worked with local specialists to launch the direct debit facility on its site.

Travel search engines have been warned the more expensive they become, the more advertisers will shift their spend elsewhere.
During a panel debate at the EyeforTravel conference in Berlin, Hilton International director of channel development Ivan Imhoff said: "We speculate they [Google, Overture and Yahoo] are all going to be more expensive and you will see advertisers shifting their money elsewhere."
Rather than constantly outbidding rivals to be listed at the top on search engine listings, Imhoff urged companies to look at the lower positions.
"I'd rather have 20, 30 or even 40 11th positions than being in first place. Don't accept some of the excrutiating bid costs that some of these guys are asking for," he said.
Predictably, Overture UK category development director Nick Jones defended the search engines. He said rates for cost per clicks were lower now than they were a year ago and urged advertisers not to feel threatened.
"Customers do their searches on the Internet because they want choice. Until people stop wanting to search for 500 companies and just want the choice of two, then we'll continue to offer it."

Sometimes it’s the ones who aren’t there you notice more.
The absence of anyone from TUI, Thomas Cook, First Choice and MyTravel at the EyeforTravel sales and marketing conference in Berlin didn’t go unnoticed, first by Hoseasons chief executive Richard Carrick and later, publicly, by conference moderator and Genesys senior partner Paul Richer.
Both said they were surprise no-one from the big four vertically-integrated groups were represented – especially given the online content of the conference.
"I think it sends out a message that they are not embracing the web quite as much as they'd like us to think they are," said Carrick.
Well maybe TUI was represented. A quick scan of the delegates list revealed Timo Frenzel, a student from TUI AG. Is this just a coincidence or could he be any relation to TUI AG chairman
Michael Frenzel?