1001 not out (and Happy 2011)

2010 has closed. Welcome and all the best for 2011. In time for the end of 2010 I have completed another milestone here at the BOOT.

The rate per month may be slowing but another 100 posts are live on the BOOT. In my regular "not out series" recap I post a few reminders and highlights form the last 100 posts. It started with 101 not out and continued with 201, 301, 401, 501. 601, 701, 801 and 901 not out. Here we go....

I examined search, looked at the future of recommendations and made up a lot of new words:

• Introduced the Tastegraph via an interview with LikeCube. Also talked Tastegraph with TripAdvisor's Adam Medros;
  
• On Tnooz published five tips for launching a social media strategy;
• Discussed the future of Page rank and authority also on Tnooz (with new words like memegraph, expertgraph and genomegraph);
• Introduced some new (made up concepts) of search becoming multi-destinational and multi-destinational (more Tnooz goodness)
• Introduced the concept of the Twelevator pitch - if you cant describe your business in 140 characters then something is wrong
  

Focused on Australia I looked into:

• How Groupon took over the world and the business model hit Australia with a bang (Jump on it raised millions);
• How interesting and competitive the online vacation rental/short let marketing was getting in Australia via a conversation with the boss of Occupancy.com and estimated the size of the online vacation rentail/short let market in Australia at $450-$500mm per year.
  

Some handy tools:

• Summarised all of the TripAdvisor acquisitions in a (hopefully) useful table; and
• Posted the BOOT's guide to researching the world
  

From various conference presentations and attendences I:

• Took you through how social media "hijacked" Eyefortravel asia - in a good way;
  
• Shared some Stories from TravelTech;
  
• Presented at WebInTravel and posted two follow up stories on Tnooz (part 1, part 2); and
• Attended PhoCusWright and posted reviews and comments on Everbread, Movitas, HomeAway, SilverRail and Revinate vs TrustYou
  

Speaking of reviews, the BOOT covered another 200,000kms or so and wrote reviews of

• Air NZ economy class;
• Virgin Atlantic Premium Economy;
  
• Qantas Premium Economy
  

Ultimately I ranked Cathay Pacific as my airline of the year after a close pitched battle between the Cathay Pacific and Virgin Atlantic Herringbone seats

On the quirky front:

• I shared Best looking cappuccino in the world care of the Observatory Hotel
• Qantas killed Virgin in a on-board movie; and
  
• I wrote and published on Customer Underground my biggest post ever. 5,500 words on Dell Hell.

Three more business traveller tips were published on

• Surviving 5 star hotels
• Travelling in China; and
  
• Surviving business travel in economy class

Finally - the BOOT received mentions in

• The Guardian;
  
• USA today; and
  
• The Australian

If you are still reading, I will keep writing. All the best for 2011 - see you on the road.

Thanks to Dustin Ling for the photo of the BOOT in action at ATEC

The Wanderfly Sessions: Talking travel inspiration and discovery with Wanderfly co-founder Christy Liu

Two years ago I started writing about travel discovery and inspiration sites. Interviewing start up CEOs and Chairmen about the future of travel discovery and how to build a start up business under the shadows of Google, social media and the big four OTAs. Start up Wanderfly has joined the race for inspiration in this new wave of online travel search and discovery. I recently spoke with Wanderfly co-founder and Director of Marketing Christy Liu (pictured) about inspirations, advice for start-ups and building traffic.

We have seen a variety of different approaches to the user interface for travel discover and inspiration engines. Joobili asks you start with a date, Triporati start with 64 interest areas and ask you to rank them and Tripbase have five criteria with "sliders" to select a balance. Wanderfly's angle is for a combination of sliders on dates and price and tabs/buttons for twelve interests or activities.

Review of the site

Wanderfly have tried to differentiate themselves with a very slick landing page layout. They have integrated baseline content and descriptions with booking engine feeds and content imported from lonely planet and foursquare. There is also a Facebook connect login reminiscent of the TripAdvisor Tripfriends integrate. To date the Wanderfly destination landing page is the cleanest looking integration I have seen of social media, editorial and pricing/trip cost functionality. Result is a very usable and attractive destination page. I commend them on the UI and layout.

While the page looks good, there is still a lot of work to do around the depth of content. I did a search on Culture, Outdoors, Beach and Eco. Parameters of $5,000 per person and destination Africa. The recommendation was Masindi in Uganda (shot below).

This is an intriguing answer. It is a place I have never heard of in a country with a name that invokes many positive and negative images. It is not on my list of places to go in Africa (top 2 currently are Tanzania and the Okovanko Delta). Unfortunately the Wanderfly destination page for Masindi is light on content and does not indicate why it is that this is the best destination based on my criteria. The layout is clean and clear allowing for ease of use and encouraging reuse but consumers will need more both in terms of absolute levels of content and in terms of explanatory text on why a destination is proposed. For example there is still a bit of work to do around incorporation of and depth of news feeds and improved photo tagging to help indicate what it is that has been photographed (or how to find it).

First thing to fix is the “Change Trip” option top right. This is the button that allows users to find the rest of the recommendations made. Chances are customers wont see it or understand it and assume that there is only one recommendation. Liu told me this was a deliberate tactic. They are modeling Wanderfly after real human conversations. The theory being that a human response would be one suggestion at a time rather than a list. Click tracking should point out soon enough that consumers are not clicking on options past the first one.

Collecting Data

This time last year I published my three rules for what is needed to start a consumer information or UGC based online travel start up.

In it I discussed how important it is for a content company to collect data from outside sources. I talk to Liu about where she was getting her data to build the pages and how hard it was to collect. Liu said that the team has spent part of the last 18 months integrating into more than 20 partners for data including Expedia, Kayak, Yelp, Foursquare and Lonely Planet. Many of these are open APIs but some required customer deals. She indicated that it was also important to add an editorial level. To include a manual review, writing and matching process. Much like my 2007 post on the balance between UGC and editorial content Liu said they were aware of the need for an editorial level – especially when it comes to matching a destination to the twelve designated trip themes

Themes and trip tags

I asked Liu – why twelve themes and would more be chosen. She told me that Google traffic levels were the main criteria for selecting a theme. But she acknowledged that twelve themes were not enough. Wanderfly are planning to launch a ten to fifteen more. We also discussed the challenge in attaching a theme to an individual’s needs when each individual may have a different definition of what that theme. Luxury is a classic example. One person’s definition of luxury is very different to another. Liu is aware of this and is betting that their research and search depth can help solve this.

Company background and advice for other entrepreneurs

Liu shared that the company is 1.5 years old and is working off dollars from a round of angle funding. Liu said they are actively looking for and negotiating for a new round. An announcement was expected before the end of the year - I have not see the release yet. Via email Liu tells me that there should be an announcement coming early in the new year [UPDATE - 1 Feb announced $1mm raised from a series of angles]. Once raised money will be used on product and content – I think that is the right call.

I also asked Liu for any advice she might have for other entrepreneurs trying to launch a product or business. She replied

“the big one is to trust your gut and trust your instinct. Many people offered us advice and guidance. A few times we went through with advice that we did not feel comfortable with and did not end up where we expected.”

My take

The look and feel is great and my support of the inspiration space is well known. To success Wanderfly have three challenges to face

1. Depth of Content – as per above (and my comments in a recent Tnooz search post) the future of search will need lots of content and information but will also need the reasons for the results. Consumers will want to know why a result was chosen. Specifically what elements of the search drove that result and what influencers pushed it. Wanderfly have started the collection part through their 20 plus connections. But more is needed in areas of news, photos and activities. More importantly they need to work on a reasoning index. A method for describing the reasons behind the recommendation
   
2. Distribution - with the revenue model for inspiration and discovery sites still under development and lagging the travel retail sector, finding a voice in the marketing noise of online travel is very hard for value of travel discovery and inspiration sites. This is no greater challenge for Wanderfly than any other site. Liu is aware of this - especially the challenges of search. To succeed in search Wanderfly will need to ensure that their aggregated landing pages are sufficient to meet the unique requirements of Google and can adjust to meet all the changes occurring the page rank algorithms. Liu told me in a follow up email that the longer term marketing plans are to focus on affiliate distribution through major deals and widget/link affiliate programs.
   
3. Reasons for launch “notice a problem while we were trying to book a trip” - Kevin May of Tnooz and Rod Cuthbert of Viator have a theory (that I agree with) that any business founded in online travel because some people were trying to plan a trip and noticed that it was really hard and thought they should build something to make it easier….is doomed for failure because it is being built for a very small audience in mind (ie the founders). Wanderfly will be confronted with this challenge. To ensure that the product is designed with a large enough audience in mind.

Check out Wanderfly and let me know what you think.

Tnooz Post: Authority and Page Rank in Google is changing, are you ready?

New Tnooz post live titled "Is travel ready for the Google Page Rank overhaul?". In the post I discuss Google Places and speculate on what it means for new elements in the page rank alogrithm including the tastegraph, sociograph, memegraph, expertgraph, genomegraph, contextgraph and a lot of other made up words new media concepts. Read the full post here.

QF32, A380, exploding engine and Rolls Royce - listen to the full story on what happened

ABC radio national's current affairs program Background Briefing just published a piece titled "The airline, the engine maker, the 500 passengers and their luck escape".

It contains the most comprehensive analysis I have seen/heard on what happened on that flight and the subsequent battles between Qantas, Rolls Royce, Airbus and others. What makes this reporting particularly interesting is the balance they have met between keeping the explanations simple and digestible for the less technically minded while covering a lot of ground and detail on what spun off where and hit what causing the other thing to explode. This link gives you access to a download, stream or transcript.

Thank you to the Professor for the photo

Profile of Google's Claire Hatton

The Sydney Morning Herald is carrying a detailed profile of Google's Claire Hatton. Hatton is the Industry lead for Travel, Government and Local in Australia & New Zealand. Worth a read.

The BOOT in the Australian - "search and you shall find"

Travel journo Dave Carroll had a piece in weekend version of the Australian titled "Search and you shall find". In the article he talks about some of the changes in search patterns by consumers in online travel. He interviewed me for the piece. I share my views on different measures for authority, the tastegraph and the sociograph - building on my Tnooz piece "Google instant is just the beginning in the search revolution in travel".

Full piece from Dave with my comments is here. I mention tripadvisor, jetsetter, bonvoyou, triporati. joobili and (in a where did they go moment) gliider.

11 New Yorker cartoons on being fondled by a TSA agent

In solidarity with the millions of Americans racing around the country eating Turkeys and recovering from their close encounters of the TSA kind I am posting a link to a New Yorker page with 11 New Yorker style Airport Security Cartoons.

Is the BOOT Recommended Read of the week

Thanks to Madame BOOT for sending through

Thanks to charlesfittinger via flickr for the dont touch icon

BOOT presenting at ATEC - Wed 1 December Hilton Sydney

I will be presenting Next week at the Australian Tourism Export Council (ATEC) Meeting Place event at the Hilton in Sydney.

I will be presenting on Future trends and technology in travel – innovation that will change your business

Straight after me Martin Kelly of Traveltrends will be providing a briefing from his report "Caught in the Web"

PhoCusWright: HomeAway boss Brian Sharples talks acquisitions and how far we are from instant conf in online vacation rental

The travel industry has conquered the sale of hotels online. The big four (Expedia, Orbitz, Travelocity and Priceline) as well as local players (Wotif, Rakuten, Ctrip, HRS) have been aggressively and successfully selling hotels online for nearly a decade.

I have often looked to the very under developed market for the booking of vacation rentals and wondered when it will be ready for the same level of online sales as hotels. When will the structural and supply roadblocks impeding online vacation rentals be removed to allow for the massive amounts of online research for vacation rental and pent up demand for vacation rentals translate into bookings. Actual online transactions rather than the listing and referral models that dominate.

With that background HomeAway CEO Brian Sharples took to the centre stage at PhoCusWright yesterday with his vision for the company and the vacation rental business. As a reminder HomeAway is the biggest of the vacation rental aggregators. They have raised more than $450mm in venture funding including a massive $250mm round in November 2008 - specifically targeted for acquisition spending.

Brian shared with us that they have been very active in spending that money having completed fourteen acquisitions 5 years. He made one of the most acquisition positive statements I have ever heard from an online travel CEO. "If you can't compete with it, buy it" was his rallying cry for growth through consolidation.

The potential for Vacation Rental online is substantial given the difference in the online percentage of sales for vacation rental compared to hotels. According to the recent PhoCusWright report on the industry called "Vacation Rental Marketplace: Poised for Challenge" in 2008 the total vacation rental market was about $25bb in the US and $100bb globally. But only 12% of the vacation rental market is online. PhoCusWright predict that the online market in the US will hit just $4.6bb in 2010 compared to online hotels being a $100bb plus market.

But as the report and Sharples both say, the biggest impediment to the industry is the challenge of securing inventory from property owners. To enable consumers to be able to secure instant confirmation bookings rather just kicking of an email conversation with the property owner. To enable the aggregators like HomeAway to generate merchant level margins by shifting from being a listing business to a merchant.

Sharples indicated that he is determined to get to the merchant model. Two of the fourteen companies bought by HomeAway are property management technology companies. Sharples will use these to supply property owners with the means (and rewards for) providing real time inventory. He is backing that up by "first time in three years increasing our tech budget as a percent of revenue" That is not surprising. The biggest player in the online vacation rental market should be working day and night on finding a solution.

What is surprising is how far away the industry is from the solution. Sharples believes that "it will take 5-7 years for vacation rental to be properly online" (instant confirmation). Dara Khosrowshahi (Expedia CEO) was similarly pessimistic about how long it would take. During his executive interview the next day Khosrowshahi said that instant confirmation vacation rental transactions were 3-5 years away.

It has been five years since the launch of HomeAway (crunchbase profile), seven-eight years since Cendant first started to put together a consolidation play of European vacation rental sites and 11 years after Expedia bought Vacationspot and Rent-a-holiday. Yet according to two of the best placed execs in the market we are still half a decade (or more) away from instant confirmation bookings at scale. Clearest evidence imaginable of how hard it is and will be to crack instant confirmation on the most distributed and fragment accommodation sector.

BTW - for more on this sector but in a different region see my recent interview series with Australian vacation rental boss Justin Butterworth. Part 1 here, part 2 here.

Innovation Summit: the BOOT picks two out of four

A new BOOT post on Tnooz is live discussing the finalists and runners up in the PhoCusWright Innovation Summit.

Last night I tweeted my top four picks. Two of them made the final four. My picks were all transportation search companies. I chose air search companies Everbread and Vayant, meta-search innovator Hipmunk and online rail company SilverRail. The two runners up I chose were Facebook trip planner Gogobot and social media monitoring company Revinate (competitor to finalist TrustYou). Democracy at PhoCusWright had a different view and the attendees have chosen 2010 innovation finalists up SilverRail, Hipmunk, Goby Technologies and Kony Solutions as the finalists for the 2010 Travel Innovation Summit. Runners up were TrustYou, Cruiselabs and Groundlink.

Full post on Tnooz with my thoughts here.

For more background check out my posts from yesterday on Revinate and TrustYou, Everbread and SilverRail.

Innovation Summit: Everbread - air search change that sounds good but need to see more before I can be sure it is revoultionary

Everbread is in the middle of a perfect storm of PR and buzz. A storm combining the high profile of their CEO (Morten Lund - who famously invested in Skype), the constant chatter over the need for alternatives to ITA in the wake of the Google/ITA merger and efforts by their staff to demo the product anywhere anytime (including in a suit, by a pool in 35C/99% humidity in Singapore).

Assen Vassilev Co-Founder and VP Strategy and Business Development of Everbread spoke today at the PhoCusWright Innovation Summit about his Haystack product. Haystack is an air availability and pricing search engine. A search engine but not a booking engine. They are seeking to by a B2B engine provider who separates searching from booking and fulfillment.

Their claim to a difference between existing OTA search and engines like ITA is that they are able to display fare and routing combinations not seen before. Combinations of on-GDS and off-GDS fares and routes (ie LCC) from different airports supporting the destination or departure city. Combinations that go beyond interline and carrier alliance ties. In the demos I saw at WebInTravel in Singapore I was shown fare and routing combinations that were less convenient but cheaper than traditional search results. Different to anything I have seen from an OTA or meta-search company. During the presentation Vassilev claimed that Haystack often presented results that were both more convenient and cheaper due to the ability bring in different departure airport options.

I had high expectations of this presentation coming into the Summit. The shots shown to me in Singapore were unlike anything I had seen from any other search engine. Unfortunately after the Innovation Summit presentation I was left with some of the same questions I had in Singapore and a desire to see more. The presentation needed to show more of examples rather than build up the story behind the business and the need for search revolution. The audience would have been more impressed by a series of examples of successful savings and routings rather needing to be introduced to the concept. I recommend that Everbread start a campaign of getting examples out there.

Rod Cuthbert on the Critics Circle agreed calling the presentation "entertaining" but felt it "left him in the dark about the business". Gene Quinn (also on the panel) said that "so many people are looking for alternatives to the Google/ITA combination" and thought that Everbread had "potentially a very powerful solution" but that he "did not see enough of the engine."

The people I have met from Everbread are smart and engaging and the story is a good one but I need to see more proof before we can confirm the tag of revolutionary.

For more on Everbread check out these stories - Tnooz and TechCrunch

Innovation Summit: SilverRail - is now (finally) the time for online rail?

Rail is well overdue for online travel innovation. We are into the third decade of online travel yet it is still almost impossible to book online train tickets through the traditional online travel channels of OTAs and meta-search. [ side not - At least in the west it is. In India online rail is a booming sector]

At the PhoCusWright Innovation Summit Aaron Gowell Founder and CEO of SilverRail used the of billions and billions of dollars in annual rail ticket sales to convince the audience of the potential for online rail.

He claimed that rail was a $300bb a year global market and the fastest growing sector in travel. Maps filled the power point slides showing high speed lines being built across Europe and China. Billions and billions in infrastructure spend. There are clear examples of long distance rail beating the airline business. The channel tunnel has stolen 80% of the market share in the Paris to London route. Hundred's of billions in investment and sales of rail tickets yet still 60% of the tickets are booked at the station.

Gowell told us that the only agency channel making progress in selling rail was corporate agencies. But most of those agencies have to transfer the call to separate call centres. As a result of this and complexity Gowell claims that corporate agencies are only able to do 4 bookings per hour vs 20 per hour for flights.

SilverRail also convinced us that they are well placed as a company to take advantage. They have some big name backers who contributed to a $9.5million series A round including Sutter Hill Ventures, Accel Partners, GrandBanks Capital and Brook Ventures. Gowell told me after the presentation that he has about 8 months of money left but is not worried as the potential is so great that he is confident that a new round of raising was not a problem. On revenue SilverRail are taking a transaction clip from the supplier - much like a GDS or switch.

Within 2 minutes of his presentation I was convinced of the potential for online rail. Unfortunately Gowell used nine of his twelve minutes to convince us of the market potential. This was more time than needed and cut short the time available for him to show us the SilverRail Product. What we saw of the product was impressive but I was left feeling like I needed to see more to be certain they would not end up like Wandrian.

On the critics circle (American Idol style panel at the Summit) Jim Hornthal of Triporati put a number of very important challenges/questions to SilverRail which I then had a chance to ask Gallow during an interview after his presentation.

Jim said: I am not sure what we need rail sold through OTA people are comfortable booking through the supplier direct (like the Low Cost Carrier model).

Aaron responded: model has changed dramatically in the last two years. Suppliers now need and are asking for distribution. For example you can now get a train from Germany to the UK. This is not a product that can only be sold on the Deutchebahn website. 2 years ago it was a hard sell to suppliers but now they are looking for us.

Jim said: There is not commission in rail so not attractive to OTAs

Aaron responded: packaging. With so much of the air spend shifting to rail (ie London to Paris route) the OTAs need to add more transport options to facilitate their packaging sales. Make their money out of the hotel.

I am a believer on the timing and potential for online rail. SilverRail put on a great show and have a very impressive list of staff and backers but (as like many at the Summit) I was left wanting to see more of the product and less of the power point.

update - here is what Bootsnall had to say about SilverRail

Innovation Summit: Movitas - I get the problem but not sure they solve it

At the PhoCusWright Innovation Summit Chuck Sacco VP Client Strategy of Movitas very cleanly and clearly described the problem his company was trying to solve - how to move the conversation and interaction between hotel and customer from the room to the whole property. Customers are constantly on the move on property with connected devices yet the main interaction between the property and the customer continues to be phone calls from the room or visits to the front desk.

While the problem was easy to describe, from the twelve minute presentation it was challenging to see how Movitas solved it. As a Bootsnall tweet said " kinda struggling to put what they do into one sentence.."

Sacco described the system as "developing for hotels a guest operating system"– a means for on property communications that connects a hotel and guest when the customer is outside of their room. For example a consumer can check in virtually using the tool and then go on to search local information, on property information, book tours, make reservations and pay their bill.

From the 12 minute presentation at the Summit it was hard to see how good a job Movitas is doing at meeting challenge as the presentation was delivered very quickly - too quickly. Lots of screen shots streamed a lightening speed. I would have preferred to have seen one or two examples of the product displayed slowly rather than the half a dozen or more screen shots and moving images flashing left, right, up and down. I am also not convinced that a hotel can persuade busy mobile road warrior customers to come to the hotel's own mobile platform when apps from Google, TripAdvisor, Orbitz, Kayak and more provide the vast majority of the functionality that Movitas was describing without the need for a new download or functionality learning curve.

The hotel guest is on the move and is connected - no doubt about it. They are hungry for information and content - absolutely. But they already have lots of apps and tools downloaded. I am not convinced that Movitas will be able to persuade hoteliers to persuade customers to add one more.

Update - here is what Bootsnall had to say about Movitas

Innovation Summit: TrustYou v Revinate - aiming to cut through Too Much Information for hoteliers

A running theme here at the BOOT has been the challenge the online travel industry faces from "too much information". A sub-section of this challenge is hoteliers trying to understand, track and respond to reviews and user generate content.

At the PhoCusWright Travel Innovation Summit we had back to back presentations from companies trying to help hoteliers with this problem.

Benjamin Jost - co-founder and managing Director of TrustYou presented a semantic search and sorting engine. A means for categorising and sorting through unstructured user generated reviews. This can be used to improve customer search and to allow hoteliers to understand and search the nearly limitless amount of data. His presentation focused on the "magic box" that made structured the mass blobs of text that make up the typical review. Results were technical but impressive how accurately the technology characterised and summarised positive and negative comments.

Kyle Duffy, VP of Global Accounts for Revinate showed a tool for allowing chains and properties to monitor all forms of social media for commentary on the property, area and competitors. Allows hotels to generate a social media score card and compare that to their direct competitor set.

Both are trying to solve a similar problem - helping hotels to sort through the mass or unstructured information that are on review and social media sites.

Both companies are young but doing well. Revinate is claiming it is already profitable. TrustYou say that have been in business for just 1 year but already have 1,000 customers and $1mm in revenue.

TrustYou focused their presentation on the "magic" behind the technology. Showing us the results from their machine. Revinate focused on the tools they provided to their hotelier customers to sort, manage and respond.

Revinate's presentation lacked the crisp clarity of the TrustYou and it was harder in the Revinate presentation to see how powerful the tech was in the background. That said, in focusing their pitch on the end tool for hoteliers Revinate provided a stronger business platform and model than TrustYou.

TrustYou had the better "geek factor" but Revinate looked more business ready. As a tweet from Hudson Crossing said maybe Revinate and TrustYou should get together.

PhoCusWright starts tomorrow - tweeting #phocuswright

PhoCusWright starts tomorrow. I will be tweeting via @hughestim and #phocuswright

Google Preview - another day another change in Google search

We are all talking about Google Places as a revolution in search (Tnooz story here). See the above shot where my search results for "Time In Madrid" shows a variety of links with a preview magnifying glass icon next to each link. Hover over a link and a preview appears on the right.

Where Google Places is clearly designed to drive more paid search activity, the Google preview functionality looks better suited to questions/searches that are not highly monetised (like a what time is it question.

The bigger story here is that Google is showing a new and heightened level of change, testing and innovation in their product.

See my Tnooz post after the launch of Google Instant for more

The Australian newspaper on Wotif, Webjet and other AU online success stories

Interesting read this week from James Dunn in the Australia called "Rising from the Ashes". Ten years on from the Dotcom boom he discusses some of Australia's high profile online success stories such as Wotif, Webjet, Seek (jobs site), Realestate.com.au and Carsales.

One of my favourite parts is where he points out that the combined market cap of Seek, Releastate.com.au and Carsales is more than Fairfax (one of Australia's largest media companies and one that suffered the most in losing classifieds business to the online companies).

The article is also worth a read for some of the commentary on Wotif and Webjet including this section

A lot of market share is advertising-driven, it's all about exposure: if you start to see a lot of marketing spend from competitors like Zuji, it could [affect] both Webjet and Wotif. Hotels.com is another new entrant . . . It's a sign that the high margins that Wotif and Webjet have been used to experiencing, there are now other people after their lunch."

Hopkins says Wotif is a different business model from the other four web-based stocks, in that what goes online is distressed inventory and short-term bookings. "Wotif is suffering from, one, a quite strong rebound in hotel accommodations, which means the hotels aren't putting as much inventory on Wotif; and, two, it is not strong on the international side of things, so the strong Australian dollar, with a lot of people going offshore for holidays, has hurt them quite a bit.
"The short-term earnings outlook is pretty flat, but in the long term we think Wotif is still a strong business; it's still very dominant in its sector."

Rising from the ashes is the BOOT recommended read of the week.

PS - congrats to the Australian for spelling Webjet correctly :)

Agoda 2010 turnover ~$500mm. Combined Booking and Agoda doing $780mm per year

Back in March I shared with you a report from Citigroup which (at the time) gave us the only real insight into the turnover of Priceline's Agoda. That report estimated the 2009 gross bookings for Agoda to have been US$244mm. Citi projected that 2010 gross bookings would be US$433mm

Previous efforts to trawl for comments or numbers about Agoda in earnings release transcripts resulted in very little (see here and here).

At the Q3 earnings release (see seeking:alpha transcript here) Priceline CEO Jeff Boyd had a lot more to say about the performance of Agoda. He told the meeting the the combined turnover of Booking.com and Agoda in AsiaPacifc was ~U$780m for the 12 months to 30 September. His exact quote was

I want to provide on a one-time basis some data on our progress in new markets to help size their contribution to our international results. Booking.com and Agoda have made excellent progress in building the Group’s business in the Asia Pacific region. The combined business of Agoda plus Booking.com’s business for APAC destinations was approximately $780 million for the 12 months ended September 30, and the third quarter gross rate for that business was just shy of a 150%.

Note - that is the combined turnover, not Agoda on it's own. He went on to say that

Agoda continues to build its business in the Asian region and again reported triple digit year-over-year growth in gross bookings, contributing to the overall international and merchant growth we are reporting. The business has performed well following civil unrest in Thailand and is well positioned for its seasonally important fourth quarter

Also note that in the Q&A section CFO Dan Finnegan stated that there was not real difference in the numbers/turnover from a point of sale or destination basis he said

the point-of-sales businesses [for APAC] is a comparable size and growing in impressive rates. And when you think about the Asian business to the extent that includes business for Agoda, that’s it’s whole business which is point-of-sale Agoda business. Most of that is Asian but it’s the whole business.

If we match the three data points of Citi's estimate for 2009 results, Boyd on the combined Agoda and Booking number and Boyd on Agoda's growth rates then it looks like Agoda is on track for closer to a $500mm 2010 turnover level rather than the Citi estimated $433.

In a separate note we also read that Agoda CEO Michael Kenny was leaving the business to be replaced by Robert Rosenstein (the current COO). I presume (though don't know for sure) that his departure is connected to the fact that November marks the third anniversary of the purchase of Agoda by Priceline and therefore the end of the earn out period.

With the earn out over we can likely expect to see much greater levels of integration between Booking and Agoda (first pieces seen here in January).

Like to know more? Check out the full earnings transcript on seeking:alpaha or Dennis Schaal's recent post at Tnooz

Dell Hell 2 - the BOOT writes 5,500 words on (barely) surviving 43 days of Dell Hell

Over at the Customer Underground I have posted my longest story ever on a 43 day mistake I made in buying a Dell Computer. If you would like a break from reading up on the online travel industry and would like to engage in a little bit of Techno-Schadenfreude then check out Dell Hell 2.

Full post here.

Thanks to Tonie for the photo from Flickr

Dave Cunningham of OurExplorer on sale to Viator

Recently we read through Tnooz and TechCrunch that destination activity specialist Viator had bought human tour guide search and booking engine OurExplorer (press release here). Once the deal has closed, Viator will own the main assests of OurExplorer. An emerging start up brand and a rating system, search engine and booking functionality for 2,400 individual guides.

I had a chance last week to talk with OurExplorer founder and CEO Dave Cunningham about the sale process and what he learned as the boss of an online travel start-up. [for more background on the company see my 2008 interview with Dave]

BOOT: How was the sales process?

Cunningham: It took about fourteen weeks to complete. Six weeks of work in the background then eight weeks of due diligence to confirm the value and the legals.

BOOT: 14 weeks to do a deal – that’s quite quick?

Cunningham: It felt very long. For a small team due diligence is a lot of work. It is a massive risk as a start-up to engage in a sale process. The company we lost 10-15 weeks of growth in the process.

BOOT: What did you learn from the sale process that would benefit other start-ups?

Cunningham: Three steps to us building out OurExplorer

1. Build the platform an website
2. Establish the supplier base (guides); and
3. Build demand

Of these - do not underestimate how hard the work is to build out a supplier base. Need dedicated sales people – start-ups constantly underestimate how hard to get a quality supplier database. Only once you have a decent supplier base can you drive traffic – which is difficult enough.

I wish I’d had more paper evidence of supplier’s commitment. Both in terms of contracts and exclusivity. OurExplorer would have been worth a lot more with paperwork on supplier.

BOOT : Did you user a broker or advisor? If so, do you have any advice in using an advisor?

Dave: Yes. If getting biz broker to help – insist that they take less up front and more on the back end. This made it easier for us to see who had the contacts in the industry. We negotiated to double exit fees and reduce upfront. Any company that said yes to the deal provided us with confidence of the value of their network.

Too many start ups have the same number of companies on their power point deck as the exit. In Australia everyone has Fairfax [large AU media company] or News [News Ltd, the AU arm of News Corp] on their slides as a buyer. Need to have a profitability strategy in your plan. Cannot be reliant on a sale exit – especially in Australia where there are limited buyers.

BOOT: What are the integration plans with Viator?

Dave: Viator have confirmed that they will keep the brand. Viator had two options

1. integrate product – select the top 1000 or so guides (out of 2,400) and add them into the Viator product set; or
2. keep the OurExplorer brand and dedicate effort to grow the business and brand

Viator are doing both. Integrating and keeping brand alive. Viator have around 5,000 products. By adding 2,400 guides to the product list this is a big add.

BOOT: What’s next for you?

Cunningham: One job left. I am going to the World Tour Guide Association conference in January for a good quality hand over. Then done. Then looking to buy into another start up. To help them drive sales and marketing.

My Take

OurExplorer are the definition of the long tail in travel (I mean that in a good way). They are the first (that I know of) to provide searching, rating and booking of individual guides. I think it makes a good addition to Viator.

For my 2008 interview with Dave see this post

Thanks to Håkan Dahlström via Flickr for the photo

BOOT offered free flight. Should I take it?

Dear Readers. Your BOOT correspondent has been invited to an Asian capital to attend a marketing launch/PR event for an airline. The invite comes with an airline ticket and a hotel room. While on the trip I can also do a bit of business - easily justifying the time out of the office. So - should I take it? Should the BOOT be taking free trips from Airlines? There was a big discussion on this point over at Tnooz in May when BA was offering trips to Bloggers.

Seat Review - Qantas Premium Economy (round 2)

After my recent Tokyo to Sydney flight on Qantas Premium Economy I am now able to provide my judgement / kiss of death for the best premium economy seat flying Australia to Europe via Asia. Qantas is the clearly better product and leads similar offerings from Virgin Atlantic and British Airways. The question is not - does Qantas have the best Premium Economy is the sky (it does). The question - is it worth twice the cost of Economy. Answer - depends on who's paying. The BOOT rating for Qantas International Premium Economy is 4.5 stars out of 6 or "Great Seat". Here is the detailed review

Getting on Board	Score 1.0
Qantas has an advantage over other carriers in all instances of boarding as my top tier Platinum status grants me access to their first class lounges regardless of the class I am flying. Something that I miss on VS (though gain on BA). This advantage was particularly acute in Tokyo as I knew to head for the JAL first class Sokura lounge rather than take the monorail to the less impressive and more crowded Qantas Tokyo Business Class lounge. A general tip for you when flying Qantas in Tokyo is take advantage of the JAL lounge and avoid the Qantas one (ditto for CX lounge in HK). Getting on Board itself was a mixed experience. The dual queue set up (one for premium passengers and one for economy) fell apart resulting a huge crowd of pushers and shovers. Once on board the Premium Economy seats are very nicely located just to the left of the middle door. This speeds the boarding process (and the exit process- see BOOT Factor)
The Seat	Score 1.0
Qantas clearly have the largest of the Premium Economy seats. Equally it is clear that have spent a lot of time looking at and avoiding the mistakes make by British Airways and Virgin Atlantic. The entertainment control handset is placed on the lower left of the seat next to the foot rest and a long way away from your legs. Means that there is no chance of accidently bumping and pausing or exiting a movie (a curse that BA suffers from). The area under the seat in front is free from obstruction providing more room to stretch out (both BA and VS had blockages). The pitch is deeper meaning that the seat pocket in front does not jam into your knees (a VS problem). The pillow is a decent size providing for more comfort when trying to doze/sleep (the BA pillow is too small). In addition there are other touches that were appreciated. The blankets used are the Qantas Business Class blankets - with a recent improvement. The early version of this blanket could be quite scratchy or itchy. Like an un-softened woollen jumper. The new version has a sheet lining on one side to increase comfort. The only downside is the footrest. For a guy of my height (185cm) it is useless. In only comes out a little way. Fully extended it does not even touch my calves. Might as well not be there.
The Service	Score 0.5
Qantas service is unfortunately hit or miss depending on the mood of the crew. On this flight service was fine and attentive. Nothing to complain about, nothing to sing about.
The Food	Score 0.5
An unfortunate gap in my review. In accordance with my tips for flying economy - which you can extend to flying Premium Economy - I ate my meals on the ground. A very enjoyable meal in the JAL lounge. I did not eat in the air. That said, I will give them a score of 0.5 because there is no way the QF food could be as bland as BA.
The Entertainment	Score 1.0
I am long term critic of the QF entertainment system. Thankfully from the peak of those criticisms in 2008, they have made improvements. As against their competition in this class (BA and VS) are providing noise cancellation headsets (whereas BA and VS don't). This makes a big difference in the enjoyment of the movie and in the general noise in the cabin. As per the seat comments above, the location of the controls is another plus. A further step up against VS is that QF has placed the headphone jack in an out of the way location. The VS jack jammed into my left thigh causing discomfort. The selection is good - and finally you are able to start movies before take off. Only downside is (like VS) the screen is too reflecting - especially during the well lit meal times. Makes watching a movie with lots of dark or night time scenes (such as Predators) very difficult.
The BOOT factor	Score 0.5
I like the proximity of the seat to the exit. I am a sprinter when it comes to getting of a long-haul flight. Especially at an airport like Sydney where dozens of large long haul aircraft land the second curfew is lifted (6am) there are huge advantages in getting off the plane, through immigration and into a taxi as soon as possible. The first step in that sprint is getting of the plane. The Premium Economy is in a great spot for getting off the plane fast. I also like the size of the cabin. On the plane I flew the Premium Economy seating area was just two rows of 2 x4x2. Means each seat is only one step from the aisle and there are only 16 people in the cabin. Very quiet, very relaxed, even with children.
Final Score	4.5 – Great Seat

Details and scoring system for airline seat reviews

Note this is the second review of Qantas Premium Economy on the BOOT – but my first. My wife did the first one.