Tuesday, September 12, 2006

RIP Cendant - goodbye Mr Truwit

You might not believe me but I am actually determined not to blog about Cendant/Travelport. Really determined. I wake up each morning hoping that Expedia, Priceline, Sabre, Wotif, Webjet etc will do something cool or outrageous and I can give my spin. I scour the web for info on less talked about companies such as Rakuten Travel in Japan, Venere in Italy, HRS in Germany hoping to scoop the rest of the web with the detail. And I have news feeds and subscriptions honed in on the Internet VC scene to keep you informed on who's investing what in emerging search and niche travel areas. All aimed at talking about something other than Cendant and Travelport - but they wont let me because there is still so much going on there that I cant stop my fingers typing.

Moments after the funeral for the name and seconds after my "where are they now" post comes news that Mitch Truwit has left as the Head of Orbitz Worldwide (including Cheaptickets, the now dead Lodging.com, eBookers, HotelClub, RatesToGo, OctopusTravel and some other stuff) is following the trend of travel into private equity by joining Apax Partners to be replaced by CFO Steve Barnhart. Best wishes to both.

I promise to try harder to avoid blogging about Cendant/Travelport but really this will only be possible once they settle into a business routine that does not involve changes in owners, managment staff, brands etc....hmmm...sounds unlikely......

4 comments:

Anonymous said...

WE have some new toys,

how does this sounds..........


A booking request is made to the supplier booking IT.

It shoots over to our technology.
We then takes a base price and using + or – or % values builds a price based on criteria set in the system (as many as 1,000)

We tests the price against your competitive set and makes adjustments based on criteria set.
We will also take economic, currency, cost of fuel and other data live data feeds and will also make adjustments based on that.

We return the rate back to the supplier booking system.

A very, very rudimentary model as to how this works is:

Base Price
100.00

RMS Feed
-5.00

Frequent Guest
+1.00

GDS Channel
+5.00

Smoking Room
+7.00

Competitor Adj.
-5.00

LOS
+1.00

Airport Shuttle
+5.00

Method of Pmt
+2.00

Suggested Price
111.00


Imagine booking a flight and now you start ordering from a meal selection, express check-in, express security, premium service in coach, prepaid cocktails, one time use of the executive lounge, airport parking, selecting the seat by row with each row having its own value, etc. Then, start bundling in all the factors associated with a car and hotel booking, bring in frequent traveler programs and status, credit card programs, etc. and it gets very complex however this technology brings all that together and can dynamically price all these components together in real time.

It is a spot price system meaning that the price you get is your price based on your set criteria and you are dynamically creating your own experience and on the supplier side you are building real time pricing so as to maximize profits and your competitive position.

The other thing you have to remember is that pricing in this model is market opaque. That means that the only ones that know the price are the supplier and the user/guest.

This system kills the bid based systems like Priceline.com and Hotwire.com in that you can now offer a booker the ability to choose exactly which airline or hotel they want to book because the pricing and service bundle is unique to them and no one else.

These are just a few very basic examples of how this pricing system takes it to a level that does not exist today.

The simulator is much more complex and forthcoming to an office in Surry Hills.

Watch the newswire..........

Tim Hughes said...

Thanks for the comment - though not sure if this is the right post for it.

Looking forward to hearing more, especially who the "We" is. Dynamic pricing rules and automated yielding systems that include ad ons are generating a lot of buzz right now, especially with airlines and hotel chains doing more an more to have single channel transparent pricing which by definition erodes the price advantage that online intermediaries enjoyed for so long.

Anonymous said...

We" shall reveal ourselves very soon.

Yes the hotel space is going through an Evolution which will see a major shift in whom wears the pants in the the tradional relationships with the likes of Expedia, Hotels.com, Cendent etc.

Hotelier’s access to "smart toys" are becoming cheaper and more affordable.

In 18mths the new process’s will become a firm entrenchment in the new rule set.

Have a nice day

oli said...
This comment has been removed by a blog administrator.