Rod Cuthbert of Viator was kind enough to invite me to a drinks event with PhoCusWright CEO Phillip Wolf. Wolf was in Australia to attend the Tourism Futures conference on the Gold Coast. I talked all the attendees into joining in for a group photo. Rod had managed to put together a very influential group of attendees for this event - and I wanted to capture the moment. Not least of all because the photo includes local senior execs for each of Travelocity (Zuji), Expedia and Orbitz in the same room as well as me playing nice with people from Qantas.
Phillip gave an brief but interesting speech. Two things he said particularly stuck with me.
Firstly he put an new spin on how to think about the battle between the big OTAs and meta-search/content companies. Rather than defining sites such as Kayak and TripAdvisor by their business model and functionality (meta-search and user generated content) he described them with reference to their control over content. He calls them "zero percent sites". That is sites where zero (or near zero) percent of the site content is controlled or produced by the owner. I like that as a descriptor because it goes to the heart of the difference with online retail sites. In telling the story of the battle between the zero percent sites and the OTAs he mentioned a stat I had heard before by is worth repeating. Currently Kayak is generating more air fare searches than Travelocity. Not to say that Kayak is selling more air that Travelocity but more people are clicking the search button on Kayak and generating a search result. Why is that so amazing? Well says Wolf, "Kayak has 58 employees, Travelocity 5,000". Four of the top ten online travel sites by traffic are zero percent sites.
He then took this analysis a little further through taking us through PhoCusWright's current Perfect Storm thesis (The Perfect Storm: Search Shop Buy). It is one thing for us as an industry to have better means for classifying the models and categorisation for each competitor but do our customers care. We as an industry think about supplier sites, OTAs, Hotel Only, Meta/Zero, Affiliates, white-label, last minute, etc etc. But the consumers don't do any of this. All they think about is buying travel. On the whole the distinctions between the models and methodologies are meaningless to the consumer. Wolf encapsulated this through this comment "In our study of consumer behaviour a statistically significant number of consumers actually believe that they buy their travel from Google".
This resonated with me. No matter how much we want consumers to see the market segmented like with think it is and no matter how much with want to believe that brand and model distinctions are being understood by consumers, in the end the average customer types in what they want into Google and are not at all certain who they are booking on in the end. Frightening stuff.
Back to the photo. Here are the attendees from left to right: Fergus Kelly (Qantas Holidays), Rod Cuthbert (Viator), Grant Swinbourne (Qantas Holidays), Peter Smith (Zuji), Arthur Hoffman (Expedia), Me , Philip Wolf (Phocuswright) , Vicki Potts (Viator), Steve Sherlock (Oodles), Carol Hutzelman (Phocuswright) & Mike Thompson (Stella)