May 2009 Archives

[The following post was written by Mark Seall of MapVivo. Mark previously worked for GreenOptions, an environmental, web-based media start-up...]

My interest in online travel was sparked after realising that one third of the cost of my expensive Christmas skiing holiday had been spent by the agency on marketing.

I'd blindly assumed that the internet revolution in the travel industry had increased efficiency. Far from it.

Now having been involved in the travel industry for a few months, I think I can see what's wrong.

Travel has basically had an easy life on the Internet.

Although one of the first industries to take advantage of the web - effectively disintermediating agents whose phones went quiet while sites like Expedia and Travelocity glowed red hot - it did nothing other than automate some very simple processes.

Online travel agents are no more innovative than an ATM.

Elsewhere on the web people have had to work harder for the dollar, which has led to an Internet full of innovation, culminating in the social web that has emerged in recent years.

The web is no longer a simple information resource, it is at once a library, a conversation, a market, a social gathering and a lifestyle.

Users exist in groups, networks and crowds, filling it with personal information and searching it passively through friends and not just actively through Google.

And it's not just the younger generation - the fastest growing group of Facebook users is in the 35+ age group.

Emerging from this is a breed of web service that gets close to a customer in contrast to one that bombards them from a distance.

While the travel industry tries to divert then convert customers, the future lays in steering them by knowing them better, understanding their needs and offering them travel suggestions with value instead of managed search results.

This is the key to social media, which is far more and offers farm more than allowing simple user interactions through ratings and links to Facebook - which is pretty much where the leading edge in travel is right now.

Many of the books I buy have been cleverly recommended to me by Amazon based on an understanding of what I like to read.

Yet despite having given the web intimate details of my travel habits I've never received a useful suggestion, let alone a relevant deal.

Web 2.0 users reveal a lot of information about themselves, including where they have been, where they are going, who with, what activities they enjoy, and what they rate highly and poorly.

This behavioral information allows filtering of travel information and precise targeting that provides value to customers tired of the information overload that a travel related Google search brings.

Web 2.0 not only enables genuine personal recommendations, but it has the potential to spread them virally.

If you can win one social customer then you have a good chance of winning their friends over at the same time.

Considering my click-behaviour I'm about 500 times more likely to follow a link from a friend than from a paid search result.

The obvious gap is starting to be filled by sites like WAYN and WhereI'veBeen who are developing travel focused social networks, but you don't need to build your own community. Just as people are connecting, the web is connecting.

APIs and widgets allow close integration with and within social networks enabling travel providers to provide intimate customer services in the form of trip planners, destination guides and travel journals which provide value for customers and sales opportunities for providers.

But...

The trouble is that all this is difficult to conceive and hard to implement in an industry that still has deep roots in past paradigms.

In much the same way that the electrification of factories took decades to bring about real productivity benefits, the same may be true for the Internet in travel.

The most likely outcome is that Facebook or similar services will end up owning travel customer relationships and neatly fit itself into the part of the value chain that travel agents vacated whilst the rest of the industry races to the bottom with spiraling acquisition costs through SEO and contextual ads.

That's where a third of my ski holiday costs went.

EasyJet has a distribution dilemma.

About 18 months ago the budget airline made concessions to the business travel market opening up access to its inventory via an API to Amadeus and Travelport. Sabre joined the pair earlier this year.

Then, last year, came distribution deals with Multicom and Comtec, again on the face of it targeting the corporate marketing. But, those two companies are known for their distribution in the leisure space and more importantly including the UK's big two operators.

Was the airline testing the water with the leisure market to see whether the four Euros per segment would add up to significant enough volume to keep a link open?

With players such as Co-op Travel, TUI and Thomas Cook potentially involved and sources saying the API accounts for 9% of all bookings (and predominantly leisure) it sounds like a sizeable chunk of business.

EasyJet is now believed to be reviewing those leisure bookings. Could it get them to go direct to the website? - Possibly not, if they haven't so far.

The carrier needs the revenue from ancillary accommodation sales and so deals with accommodation providers in the past two weeks would suggest it is widening its consumer offering to cover all bases.

That might attract a few more people direct but this year consumers are shopping around a lot more, tapping into traditional agents and the internet - direct websites, online agents and meta search sites.

If, as insiders suggest, easyJet switches off its leisure agents from September, do all those players go back to screen-scraping? 

If that's the case then no one has learnt a thing and easyJet may as well have adopted the Ryanair stance.

Other factors to watch are easyJet's legal proceedings against InteRes in Germany and Multicom's complaint to Brussels over Ryanair and screen-scraping.

Oh and by the way, according to a slot on the BBC's Working Lunch this week, MPs believe the whole principle of cheapest fares online is unfair - so they could wade in at any time!

Anyone for a summer of closed doors and intense meetings?

Car hire is the ugly duckling of online travel, waddling alongside trains, coaches and ferries.

Quite often the importance of car hire as an ancillary revenue opportunity is overlooked. Bobby Healy, chief technology officer for CarTrawler, told the EyeForTravel summit that car hire was the most lucrative of easyJet's ancillary revenues.

The key message from his presentation was that airlines need their car-hire partner to offer more than one car-hire firm.

Its experience from working with Hawaiian Airlines showed that the more car hire firms available, the more bookings are made. "You're leaving money on the table if you limit the number of providers you make available."

And interestingly, inserting the car hire option directly into the booking path didn't have any noticeable impact on drop-out rates. A sign that airline dot-com shoppers are used to upselling and don't penalise an airline for trying to do?

Sharon Lee, product development manager for Avis Europe, revealed some stats which suggested that car hire companies could sell ancillaries rather than just be sold as an ancillary.

She asked people who booked with Avis Europe online whether they would be interested in buying other products from the web site. More than 40% of them would consider buying flights, hotels or parking at the same time.

The figures were such as surprise that Lee's boss made her go and do the research again to double-check! The findings came back the same.

With around two-thirds of car hire sold supplier direct rather than through intermediaries, this could be a revenue opportunity for the car hire firms, or a partnership opportunity for third parties.

Lee also deserves a mention for raising a laugh in the room with what could be the industry's first-ever ancillary revenue and car hire gag.

"I wish we could charge our customers extra for putting luggage in the boot, but we can't!" she said.

Martin Cowen

Twitter has become so omnipresent in conversations involving marketing execs that it is now quite refreshing to hear when people foresee the problems its use can cause.

Such is the pace in which the 'microblogging' phenomenon has grown and the way people have used it that problems are already beginning to surface - remember, this is just months after many introduced it the mainstream as a brand new and innovative marketing channel.

[Indeed, with remarkable timing, Troy on the Travel 2.0 Blog posts today: "How the travel industry should use Twitter"]

No-one can doubt that as a one-way distribution channel it works. Followers make a conscious decision to see what you're saying - simple.

[Though one seriously doubts whether the "I'm having a bagel" or "I'm on the bus"-type tweets will stand the test of time, unless you're Stephen Fry, of course]

As a two-way distribution channel it gets slightly trickier for travel companies, but the conversational element of Twitter still remains one of its finest attributes.

Consumers are able to ask questions of travel firms in a quick and easy way, sometimes getting assistance quicker than they would via email (but probably not by Old School telephone methods).

Twitter, regardless of what the refuseniks say, should be explored simply because it is the social network of the moment...

However, some elements of Twitter are showing similar signs to email, which went quickly from the great new disruptor to simply being a vehicle for uninspired and lazy marketers.

Speaking at the EyeForTravel conference in London yesterday, the always fantastically honest Viator boss Rod Cuthbert explained how his people were using Twitter in an interesting way.

It goes something like this:

Random Twitter User X posts the following update: "Heading to Paris with the girlfriend. Anyone know what we can for a dreamy evening out?"

Using Twitter Search to track mentions of cities in which it operates tours and excursions, Viator's staff would then @reply the user with a friendly message: "Try a romantic boat ride along the Seine. Lovely views. [Some kind of TINYURL here]. Have a great trip!"

The TINYURL link would land the user on the Viator page for a supplier which happens to sell trips along the gloriously romantic river across Paris.

Hats off to Viator. This is a great and extremely simple idea, probably taking just a minute or two to arrange at Viator's end.

The process - shock, horror - may lead to a product sale, but if nothing else it plants the idea that Viator sells tours of all kinds around Paris.

But what happens if every travel company starts doing the same thing? Random Twitter User X might suddenly find 20 or more @replies peddling similar things. Ggrrrrr...

In the Q&A following the presentation, Cuthbert admitted the practice - generally - could become "spammy" very quickly.

Despite it being a clever idea, this particular practice could be a problem for travel firms using Twitter when trying to proactively engage with potential consumers.

Not only will users quickly become fed up with the reams of @replies (especially if the messages are not helpful in the slightest), meaning they will not bother clicking on the links (wasting the travel firm's time), but users will perhaps avoid mentioning travel plans at all if the message triggers such a response every time.

And that would be a shame...

Would be keen to hear your thoughts on this.

The three panellists for the session at EyeForTravel about new business models in travel represent companies whose existing models are responsible for around ten billion dollars-worth of travel transactions.

So it's little surprise that they deviated from the topic and talked instead about how they make their current model work.

Europe's biggest travel business, TUI Travel, was represented by Sandra Leonhard, director of web strategy and business development.

The key take-away from her twenty minutes was that TUI Travel is very much active online - the segmentation of its SEO based around yield and selling price is a sign of how one of the old vertically integrated travel companies is very much on top of its online presence.

She said that its own video content has been seen 30m times over the past year, on its sites and those to whom the content is syndicated.

It has 700K customer reviews, which is small change compared with Trip Advisor but a sign that user generated content is now an industry norm rather than a Trip Advisor USP.

Talking of TripAdvisor, Martin Verdon-Roe shared some observations about how the hotel review site is branching out into flight reviews, in the US at least. It has developed a metasearch engine for flights to monetize this interest, and is integrating related sister businesses such as seat guru to add value to the customers.

"Nobody saw the customer review model coming", claimed Ed Kamm from lastminute.com.

His slant of business models is that customers ultimately are in charge, and you can't shoehorn a model onto a behaviour that doesn't exist. He is a big advocate of testing things out, and suggested that you can learn more from your failures than your successes.

In the middle of a decent enough session to kick things off this morning at the EyeForTravel conference in London were these wise words from Brian Clark, SVP of fly.com, Travelzoo's new meta search engine.

Fly.com is getting a fair amount of attention following its launch in the US a few weeks back and plans for a UK roll-out later this year.

There was, understandably, a captive audience to hear what he had to say about the new engine, etc.

No new details emerged there, but he explained what could be seen as six principles of better travel search - relating especially to the plethora of meta search engines out there on the market and what fly.com is trying to do.

1 - Communicate the 'value' of a product in a more transparent and helpful way.

2 - Merchandise better.

3 - Create context for search results and additional information on the site.

4 - Aim for the elusive 1:1 relationship with the user.

5 - Stimulate demand (don't just re-arrange the deckchairs!).

6 - Inspire consumers to travel in the first place.

Now some of these aims are easier to do than others.

Indeed, number six is perhaps the Holy Grail for meta search engines. How to become a player and an important part of the research>purchase journey much further forward thanthey are currently are.

Let us know what you think...

Or so asks the Times today on Twitter...

It's good, but not THAT good. [Gets a bit dull at the end]

News that Kayak's top man outside of the US, Faisal Galaria, quit suddenly a few weeks ago following an apparent disagreement with the top brass at the company is, inevitably, triggering all manner of speculation.

[Faisal Galaria, second left, in happier times at Kayak during the Travolution Summit 2009]

The facts are these: Galaria joined in August 2008 with a remit to grow Kayak in Europe and launch into Asian markets.

Eight months later and he's gone, the company says, "to pursue other interests", though we now know (with a direct quote from Galaria himself) that his departure was a result of a difference of opinion over the direction of the company, one might presume, about its plans overseas.

There have been shorter tenures in business, of course, but the general perception amongst most industry watchers was that a company such as Kayak was hiring a heavyweight like Galaria (someone with decent experience in growing international businesses - like Skype) to do exactly that same kind of role.

So it is a bit of mystery as to why Galaria left so quickly.

Let's look at what Kayak is trying to do in Europe.

Kayak launched in 2006 amid rather gushing praise for its technology and user experience, but in terms of traffic and brand recognition it has remained behind the likes of Travelsupermarket and Skyscanner in the pureplay meta search sector, and Cheapflights and Teletext Holidays in the often confusingly parallel price comparison site arena.

A question to ponder is how was Kayak expecting to reach the heady heights in which, for example, Travelsupermarket has found itself in recent years (a top ten trafficked site, according to Hitwise)?

The reason to ask is because Kayak is in a very different position in the UK and Europe than it is in the US, where it has - especially with its 2007 acquisition, Sidestep - recognition and, most importantly, first-mover advantage.

One can speculate that perhaps Kayak is hoping for the same strategy will work in Europe as it did in the US in the mid-2000s when it's, let's be honest, far superior user experience to traditional travel agency sites captured the public imagination.

Since then, however, European OTAs have improved their web user experience and search capability and the existing and early riser meta search engines have consolidated their position.

This is not to say that Kayak's proposition is not as good as some of the OTAs - it clearly is far better, in many cases - but to grow the business against well-established and stiff competition perhaps requires a different strategy.

And this, we presume once again, is perhaps how the conflict between Galaria and his masters back in the US surfaced.

Up until very recently, some argued that a branding campaign for Kayak would have at least helped push it some way into the minds of consumers.

Take one extreme: it would be hard for almost all but a few travel companies to justify the sums of money Travelsupermarket spent on its TV campaigns of recent years, but it certainly now has a brand of which many consumers are now familiar.

There are obviously other, more subtle, branding efforts. But there have been none, apart from the omnipresent keyword buying programmes favoured by everyone else.

So perhaps this is the inherent problem new meta search engines in Europe (and the US) now face - creating volume (frankly, the ultimate way to build a meta engine commercially).

Presume for a moment that the status quo remained (little to no branding activity, quick and dirty launches in new markets, some white labels here and there), perhaps Kayak would have eventually seen some of the growth it required outside of the US.

But perhaps this all changed when TripAdvisor announced its decision to enter the meta search arena with flight search (expected in the UK in Q3) and Travelzoo launched fly.com, also due for a UK launch later this year.

With the addition of these two players into the market, backed perhaps by either branding campaigns of their own (in fly.com's case) or existing voluminous traffic (sans TripAdvisor), there could be perhaps even more pressure on Kayak and others to rethink their strategy.

Meta search is a complicated beast as far as growth is concerned. And the market in the UK has just got even more complex.

And maybe this is why Galaria felt at odds with the direction of his colleagues in the US...

The last two nights were not only a drain on the emotions of three of the UK's football teams, but also may have tested the servers of some of the industry's leading online travel brands.

Figures obtained from Travelsupermarket reveal a huge influx of searches for flights and hotels for the UEFA Champions League final in Rome following Manchester United's (outrageous, it must be said!) win over Arsenal in the semi-final on Tuesday night.

Flights to Rome:

* The busiest hour on flight searches to Rome on Tuesday 5 May was 10pm (following the final whistle). Searches were up 1366.86% on the same time the week before (28 April)

* The meta search site monitored searches to Rome from 12.01am to midnight on Wednesday 6 May and found that searches were up by 596.17% on the same time last week (29 April)

* 773% uplift in searches to Rome (pre-match compared to post-match on Tuesday 5 May) - nearly 8 times more searches.


Hotels in Rome:

* The busiest hour for hotels in Rome on Tuesday 5 May was 9pm. Searches were up 110.53% on the same time the week before (28 April).

* For searches in Rome from 12.01am to midnight on Wednesday 6 May, searches were up by 141.40% on the same time last week (29 April).

* 122% uplift in searches for hotels in Rome (pre-match compared to post-match on Tuesday 5 May).

A bit quieter last night, it would appear, after Chelsea's disappointing (for some) exit at the hands of Barcelona.

Today's announcement from Microsoft about its integration - finally! - of Virtual Earth and Photosynth opens up some fascinating possibilities for travel website owners.

Until now travel mapping was primarily restricted to standard charts, aerial/satellite views, and placing of images into pin-pointed boxes.

Both Google (via Google Maps) and Microsoft (Virtual Earth) were doing this as well as could be expected given the technology, allowing travel firms to embed maps into websites.

Google took things to the next stage recently with its controversial Streetview project.

And now Microsoft's fantastic Photosynth platform will be available for everyone to play with.

One of the pilots of the new integrated platform is VisitBrighton in the UK.

Here are some examples of other tourist attractions which have been 'synthed'.

* Venice
* Martello Tower
* Moszna Castle

And finally a decent enough corporate video explaining the integration with some excellent visuals:

Sitting on a panel discussion for the PhoCusWright Bloggers Summit in Berlin earlier this year, I told the audience that the Queensland Reef Island Job was a perfect example of new ways of marrying PR with social media to produce the perfect marketing campaign.

Pondering the question on Twitter this morning, others seemed to agree.

PR expert Adrian Johnson said: "It's a glorious PR & soc med campaign. Can't think of a better travel 1. Ever. Queensland=paradise is what world now thinks."

William Bakker of Tourism British Columbia spoke of its "brilliance".

I still stand by this assertion.

As we've said before, campaigns such as these - hooking something like the 'Dream Job' into its fabric - are nothing more than clever ways of grabbing attention away from the traditional marketing methods.

However the conclusion of the 'competition' element of the campaign today - err, well done Brit Ben Southall - has thrown up some interesting data.

Hitwise figures obtained by Travolution today reveal a number of things.

* UK web searches for 'queensland' are up 40% year on year, which says something about the relative success of boosting the profile Queensland itself as a destination or the popularity of job campaign. [As Hitwise UK research director Robin Goad said in an email, this was from a low starting point]

So far, so good. But...

* In the 12 weeks to the week ending 2 May 2009, there were around 7,500 search terms containing the word 'queensland'. Of the top ten, only three ('queensland', 'queensland australia' and 'time in queensland' would be seen as tourism related). These three accounted for around 5.5% of the total.

* Although there was uplift in traffic to one of the Queensland tourism sites (experiencequeensland.com), probably as a result of campaign as it was the main site to which visitors to the job portal were subsequently directed, the other main site (queenslandholidays.com.au) actually saw a decline year-on-year. This could be economy-led, of course.

As mentioned above, buzz over the 'job' resurfaced today and the mainstream media duly obeyed.

However, in a post yesterday, the BBC highlighted briefly the impact of the campaign from a marketing perspective.

And the Guardian, perhaps rather unfairly, compared the final stages of the competition to the latest series of Britain's Got Talent, suggesting the media had lost interest (apart from itself, of course) in the campaign.

We suspect, however, the organisers are probably more than pleased with the much more subtle coverage they are getting and do not need the circus which is following Susan Boyle et al.

Further reading: Other best jobs in travel.

With exactly four months of trading in 2009 now behind the 20 travel companies included on the Travolution Index, we thought it would be useful to take a look at the numbers and performance.

The overall Travolution Index has increased by almost 15% over the four months since we started the programme on the first day of trading in 2009.

Listed below are the companies on the Index and the percentage change in market capitalisation from 2 January 2009 to 30 April 2009.

All Leisure Group - down 49%

Anite - down 13%

Avis Europe - up 314%

British Airways - down 18%

Carnival - up 61%

Daily Mail and General Trust - up 19%

Dart Group - up 61%

EasyJet - up 11%

Holidaybreak - up 27%

InterContinental Hotels Group - up 8%

Moneysupermarket.com - down 1%

National Express Group - down 47%

Park Plaza Hotels Limited - up 43%

Peel Hotels - up 1%

Stagecoach Group -down 4%

Thomas Cook Group - up 44%

Travelzest - down 6%

TUI Travel - up 9%

Western & Oriental - down 32%

Whitbread - up 1%


NB:

* Four of the top five companies in terms of market capitalisation (Carnival, TUI Travel, Thomas Cook Group and Intercontinental Hotels Group) saw increases - British Airways did not.