Friday, September 29, 2006

Wotif white label live on Ninemsn

First affiliate white label deal for Wotif has just gone live on the ninemsn travel channel (Australian joint venture version of Microsoft's msn and the largest portal). They announced it a few months ago and how it is up and running. Ninemsn has traditionally avoided all attempts to do revenue share deals, traditionally asking for large up-front financial commitments. If this is the case here then this is likely to be the largest single marketing spend by Wotif. If there is a revenue share component it will be the first time that I know of that Wotif has had to build a commission tracking and sharing component to their engine. With a margin of only 10% there is not a lot of money to go around to affiliates compared to the larger margin programs run by Expedia and Octopustravel however RatesToGo has shown that you can still build a strong affiliate program off low margins if the content is good. Either way it is a new marketing approach and channel for Wotif.

I like the integration on the ninemsn travel page, however if I was Wotif I would be unhappy with the widget/engine being below the fold as it lessens the brand impact and if I was ninemsn I would want Wotif to work on a next generation co-branded landing page on the Wotif site to strengthen the ties back to the ninemsn travel channel.

Thursday, September 28, 2006

RIP Cendant - Tim, it is time to get over it.

Comment on today's post on the lastest Travelport announcement deserves a post of it's own.

" Mr hughes, time to let sleep dogs from your past lie"

I try not to blog about Travelport - honest I do. But how can I run a commentary on online travel and ignore a company that in the last nine months has be bought out, written off more than a billion dollars, had a turn over of half of its senior executives, shut down under-performing business units, is leading the charge for re-invention the GDS business, had two significant restructures and is setting itself up for a break-up. The eventual sales of the separated GTA, Galileo and Orbitz will be among the biggest if not the biggest travel industry stories of 2007 (barring an airline collapse or terrorist attack). Compared to that Expedia and Travelocity have had a very quiet 2006. That said, "Mr Anonymous", I will try harder.

Three companies - a world of opportunity

Cendant TDS' motto on banner ads used to be "One Relationship: A world of opportunities". With the announcement of a split into three "decentralised" business units - GTA, Orbitz and Galileo - I am announcing a competition for a new motto. Early entries for new banner campaigns are:
  • "Three Companies: Click here to make an offer"
  • "Travelport: Bought 15 to make 1 to sell 3"
  • "Travelport: There used to be only one"
First prize is my Cendant branded first anniversary collectors edition pen. I have given up efforts to blog less about Travelport as I can't ignore the unstoppable path to the break-up. When we wrap up this competition we can start working on rumours for who the buyers will be.

On the serious side - many congratulations to Gordon Wilson on being named CEO of the Galileo business.

Wednesday, September 27, 2006

China heating up

Couple of news stories converging to show that the online travel market in China is heating up

1. Despite three months of declining stock prices, Ctrip is back in the news with a new overseas hotel platform and some good commentary from analysts;

2. Expedia has closed a WWTE distribution deal with Air China and promoted AsiaPac President Barney Harford from board member to Chairman of majority owned and market number two eLong;

3. Travelport and CYTS joint venture Aoyou brought on a local manager - Xiaodong Guo - with the promotion of Dan Wacksman to more senior regional roles within Travelport's GTA division. Aoyou is a long way behind the other two but the market should be big enough; and

4. New entrant (who I only heard of recently) growing with a travel meta search model including doing a deal with Hilton.

Who said China was going off the boil....

Tuesday, September 26, 2006

Come on Tim - stop complaining and use a Travel Agent

Yesterday I spoke of the difficulties in booking a combined London and Tel Aviv trip and longed for the old direct access to Galileo.

Good comment was posted in response -

"Here's a wild concept, Try a Travel Agent Amazing when you delegate this sort of task how much more time one has to spend with family..."

It is a good point - but - I am. I use a great corporate travel agency - Fcm. Worked with them in my old job and very happy to bring them across to my new company. I find that as a heavy user business traveller I cannot get the service I need as an online only self booker. That might sound hypocritical given my rants about trying to book leisure travel offline but hear me out.

There a couple of things that a great corporate agent gives me that I can't do on my own online:
  • pricing - despite all the advances in loading of net fares and search and matching technology I have not found a site that gives me access to the cream of the negotiated business class fares, especially those that are more complicated that London or San Fran return and even more so now that I am in a very small company (6 people). This is certainly the case ex-Australia but I think is also true if I was based in Europe or the US;
  • panic in the middle of the night service - I have had half a dozen occasions in which I have had to find someone to speak to out of business hours to fix a big problem: stranded in Paris trying to get home on a Friday with Heathrow shut-down due to a fuel spill; re-routed to Brisbane due to fog; called on a Saturday morning by boss needing me to be in London by Monday morning etc....; and
  • billing, expensing and reporting - I know that the various corporate arms of Expedia, Travelocity, Orbitz and more have great compliance and expensing mechanisms but none of those are available in Australia.
They are the good points. On the bad side, I find that the individual agents (while very responsive) are not as upto date in their knowledge of non-conventional routings. With each complicated booking combination I find that I have to send suggestions as to which routing to take and airline to use. So while the "panic in the middle of the night" service is fantastic from a good corporate agent, the "find the creative/crazy options" service is not. This is why I want Galileo/GDS access to search and explore. Leads to a product recommendation for corporate travel providers - self booking tools and nice but for complicated users like me I would love:
  • web access to itineraries that can be stored on multiple devices and feed into outlook;
  • search tool that looks at native GDS for scheduling options (no need to prove availability and pricing); and
  • hotel review information
Of course - if you want this level of service you have to be prepared to pay more for it in service fees...I am.

UPDATE - Anonymous commentator recommended that I save time and follow the advice in this link - oh that I could. (link fell off the comment page so am reposting here)

Monday, September 25, 2006

Strangely, I am missing GDS access

I try to cram all of my business travel into the shortest amount of time to minimise days away from the family. Has resulted in some interesting itineraries in the past including a 4 hour layover in Istanbul airport, a 10 hour backtrack from Greece to Australia via Frankfurt and manufacturing an red eye flight from Sydney to Singapore (much harder than it sounds).

I have a new trip I am working on that I did not think would be hard but is proving frustratingly hard to figure out. Across a five day week I want to spend two days in London and two days in Tel Aviv (with a day in between to travel between the two). This should be easy - Tel Aviv is only 5.5 hours from London and almost in a straight line from Sydney. However the benefits of this geography are not reflected in airline schedules or the politics of the Middle East. Therefore I am struggling to find a way that does not involve going through London both ways - which means leaving on a Saturday not a Sunday, increases the security delays and therefore costs a lot of time. I have tried a few of the new generation websites and information destinations for tips - but have found nothing.

Have found myself missing the access to native Galileo that I had in my old job where I was able to look deep into airline schedules without the biasing and deal dependencies that exist in the online travel agent world. Wow...I just said that I missed GDS access...who'd have thought it.

Sunday, September 24, 2006

Disclosure and Comments Policy - Updated

This is my personal blog. If you want to know who I am look at my linkedin profile.

The views in this blog are mine and not the views of Getaway Lounge or Nine Entertainment. In the context of this blog I am not a spokesperson for Getaway Lounge or Nine Entertainment and neither  endorse any material, content and/or links or assume any liability for any of my actions.

If you would like to comment on any story on this blog please do. The settings are such that anonymous comments are accepted and will be automatically published un-moderated. However I will delete anything that is defamatory, spam, nonsensical or full of vitriol/personal insults.

Friday, September 22, 2006

Another angle on Travel 3.0

Lisa Gannes and GigaOM has an interesting post on cFares. Love the idea but the worry with this site (and other niche like Groople) is whether or not a great niche product is enough to build a business on. To use a soft-drink analogy (which I am known to do) - how often can you base a whole business on a single product that caters to a particualr market - Red Bull - vs. when does your great energy drink better sit with a full service player who can pump "free" (in incremental terms) distribution, marketing and development - such as Coke launching "Recharge by Sprite". Don't know the answer but will see soon enough.

UPDATE - July 07 cFares have just closed a series A round of $4.5mm from Claremont Creek Ventures and Garage Technology Ventures (who were also an angel)

Thursday, September 21, 2006

Travelport Results - the billion dollar black hole that has finally disappeared (maybe)

I am going to have to renounce all attempts to blog less about Cendant/Travelport. Every time I try - a new story emerges. There is no way I can ignore the recent Q2 06 results announcement, especially as it (how's this for a mixed metaphor) brings back to life the billion plus dollar elephant in the room that has been haunting the halls of Travelport since it's emergence from the ashes of Cendant.

The Good news is gross bookings up a healthy 32% versus prior year and cash flow from operations is $221mm up $35mm.

The Bad news is that revenues are up only 5% to $693mm. A 5% increase in a business heavy in great online brands such as Orbitz, HotelClub and RatesToGo is hard to swallow. With ebooker's profitability and turn around years away by their own admission there is a lot more pressure on these three brands to compensate. This also places even more pressure on the Galileo GDS business which has to face declining yields every year as airlines push, bite, shove and kick to reduce segment fees. It also strengthens the incentive for Blackstone to cut free the faster growing business from the poor performers to unlock the value (as they say in the private equity world).

The awful news is the $1.2billion dollar write-off. A carry over of the turning of $7bil into $4.3bil when Travelport was sold to Blackstone. I am running out of ways to express my sadness that there are so many great people from ebookers, Orbitz, HotelClub and RatesToGo that paid for that overspend with disruption, dissatisfaction and sometimes their jobs. At least the monkey is now off their back and the elephant can be put to bed (today is a day for mixed metaphors).

We also received word on another to add to our "where are they now" list with CFO Darly Raiford to depart.

Tuesday, September 19, 2006

Hotel branding, social networking and strawberries

Last night's post on Sheraton generated a comment around whether hotel branding is better generated by social networking or "the front line troops". This is a fantastic point and reminded me about the timeless sales speech famously given by James Lavenson’s to the American Marketing Association in 1973 called "Think Strawberries". Lavenson was CEO of the Plaza Hotel in New York and talks about how he generated a sales and customer retention culture (not just policy) throughout the hotel including training and creating incentives for more than just the reception and reservation staff. His program targeted everyone - the laundry staff, janitors..everyone. The strawberry mantra came from his desire to sell more in the restaurants. If someone declines desert, offer them strawberries. Up-sell at every opportunity but do it with something that everyone wants. Fantastic insight in how to build sales while maintaining strengthening a brand.

Could not agree more with anonymous that frontline staff are critical in branding for a hotel.

Monday, September 18, 2006

Why social networking was a good move for Sheraton

Received a comment to my post earlier today and decided to reply in a new post.

Here is the comment -" does one expect to make a $$$$ using the sheraton approach ?"

I think there is a huge question mark over the big chain fight back strategy of the same price for every channel and robotic responses to negotiations for rates and availability with trustworthy partners - by that I mean partners that sell through the channels that they tell hotels they will sell through. The hotels have done this to reclaim customers lost to intermediaries thinking that price was the main reason.

I have long argued that the marketing money that the chains are spending to drive people to their websites for just a price based experience is a bad one as it is telling customers to think with their wallets and not with their hearts. Hotel room purchases are unambiguously a part rational part irrational purchase decision. A lot of emmotion goes into deciding where to sleep, who to trust with breakfast and your clothes and which bar of soap smells the sweetest. This is where brand comes in.

I believe that the chains fight back was too much weighted to price and not enough on brand and experience. The movement by Sheraton to a UGC influenced page is a positive step because it is encouraging people to interact with the brand, to share their emmotional experiences and trust in the Sheraton.

You can't look at this as a pure money play by Sheraton but a way for it to encourage its customers to share the brand experience with others and help with the emmotional battle for their money. In the hotel biz if you win the emmotional money battle it is very hard to lose the financial one, especially in the 4-5 star market.

There are a lot of things Sheraton will have to do right in implementing this. They will have to publish the good and the bad and reward both. They will need to give customers a reason to keep returning by keeping the content fresh and relevant. Basically - if you open up your brand to public scruitinity you have to listen to what you hear.

PS - am just looking at the theory, have not tested the Sheraton site that much to see if they have actually executed well. Let me know if you have.

UPDATE - interview here with Philip Charles-Pierre, Director, Interactive Marketing Starwood Preferred Guest, Starwood Hotels (good title) where he discusses the changes to the More PR spin that deep inside story but worth a glance.

Planit - now this is doing something...but...

I was disappointed with the press release in TravelToday from needitnow that was initially empty of details then later expanded to add that doing something meant spending money on marketing. As you may recall I made a plea for press releases to contain strategies with innovative approaches to marketing such as...

"do a revolutionary deal with a social networking site to combine distribution with reviews"

The announcement from Webjet today seems to have heard my plea. Webjet have announced that in December they will launch a social networking and user generated content site - Planit. Planit will change Webjet into "the MySpace of travel with an environment to buy, plan, share and talk" according to CEO David Clarke. A very ambitious claim indeed but I am in favour of the approach. In fact I applaud the idea.

Creating a community around travel is a proven success through Tripadvisor, who announced this week also their launch of a dedicated wiki site - Tripadvisor Inside. As we know Sheraton relaunched their site with a user generated focus. Travel and social networking are a prefect compliment. If successful will be a great way to build sticky and loyal traffic.

However this is no small task. Successful social networking sites need scale - lots of it. You need lots of people posting lots of information and lots of readers to drive lots of traffic. That is a lot of lots. Execution will be critical. The first step will be the challenge of obtaining the Planit URLs - the URL points to a design and manufacturing software provider and the URL starts at a referrer page eventually ending up at (who while also Melbourne based do not look like they have anything to do with Webjet). Webjet have told us in the past how important the URL is - if you recall they abandoned the brand Bookabed over the issue - so I hope they are able to fix up that issue. Then turn to the challenge of functionality and achieving scale.

Great idea - execution will be everything, starting (as always) with the brand and URL.

Friday, September 15, 2006

Always hurts when the wrong rate is loaded

Expedia has a great deal in Phuket. Totally unbeatable. Beautiful hotel with lovely rooms, views of the water, sparkling swimming pool...the works. Only problem is that the rate is only AUD$16 per room. In other words its the wrong rate at the right place at the wrong time. Looks like this inventory is coming from their GDS feed rather than a direct contract so the problem is almost certainly with the hotel or their GDS connection partner not Expedia.

With help from an anonymous tip I passed this onto friends at Expedia so sure it will be corrected soon. Thankfully a not well known hotel and it is the rainy season in Phuket so should be fixed before any damage done.

The screwy rate problem has hit most of the major online travel sites, often resulting in a protracted battle between the site and supplier over who's fault it was. As you could expect there are message boards devoted to findings mistakes and publishing them.

Here is the Expedia shot (and link though might be fixed now)

And here is the hotel's own site with a rate 10x more.

Thursday, September 14, 2006

Now is the time to PANIC

Have always loved reading the Economist while flying. I am one of those predatory business class travellers that hits the magazine rack as soon as we are on board looking for a copy of the Economist to get me through the trip. I love their small "l" liberalism mixed with economic rationalism mixed with calling it like they see it.

Here is a great airline safety announcement from them for the fictitious Veritas Airways. My favourite part

"Please consume alcohol in moderate quantities so that you become mildly sedated but not rowdy. That said, we can always turn the cabin air-quality down a notch or two to help ensure that you are sufficiently drowsy."

Thanks to inFlightHQ blog for drawing my attention to the online version of this article.

Wednesday, September 13, 2006

Aaaah...doing something means spending money

I ranted a few days ago about a press article where needitnow said they were going to do something. Now they have received more press for the details. The answer - spend money - AU$2mm in marketing. That's it. Simple, straight forward but not that exciting. All of the teams chasing Wotif in Australia (RatesToGo, Lastminute, Needitnow, ReadyRooms, GoStay etc) need to do more than simply spend marketing money - that is 1999 thinking. You need to be innovative in product/functionality (see my suggested list for ideas) and build a compelling loyalty solution with your customers - a reason for them to subscribe to your email specials and come back again and again to purchase without looking at Wotif.

As underwhelming as the answer was, it is nice to hear what the "something" was. However to TravelToday I say - restrict your publication of press releases to real stories and cut out the preannouncement junk.

Tuesday, September 12, 2006

Vienna via the morgue

Great travel blog post in the Sydney Morning Herald this week. Starts out as a very entertaining read until to get to the end and hate yourself for enjoying the begining. Makes my stories of delay so inconsequential.

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, 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......

Monday, September 11, 2006

Needitnow is going to do....something

Travelweekly is reporting that AOT "plans to pour more resources into its online brand, Need it Now". There is nothing specific in the article at all to give us an idea as to what this means just generic/bland comments like "allocating additional resources" and "bolster its product
range". What possible commentary can you make to that except - "that's nice but WHO CARES". I am so over PR and market commentary from companies that effectively says

"We really plan to do something to make our business bigger and take advantage of changing market conditions"

Blah blah blah. Tell me something interesting. Tell me you are going to:
  • do a revoluationary deal with a social networking site to combine distribution with reviews
  • improve amenity and activity search on your site to allow for activity as well as destination searching
  • hire a particularly smart person (with their name)
  • add unique indepdent property inventory (homestead, B&B, beach rental) with instant confirmation
  • etc
Something that will make youre competitors blink twice infront of their computer and think - damn why didn't we do that first. You can picture now the panic that must be occuring in Brisbane right now as Wotif managment run around screaming "Holly HELL - Needitnow have threatened to do something....quick...we need to do something straight back at them...."

This is not just an AOT problem but these comments were the straw that unleashed my rant (if you can excuse the mixed metaphor).

Friday, September 08, 2006

RIP Cendant - where are they now

With the end of a an era and death of the Cendant name thought I should point a few links to where ex-Cendant people have ended up in online travel and media. Lots of examples of start-up activity
  • ex-Orbitz, and Cheaptickets hotel supply boss Fred Bean has set up his own hospitality technology business - Rebel Travel
  • ex-Ebookers hotel boss Ranjan Singh founded a destination/activities site - Isango
  • ex-Octopustravel boss Daniela Wagner has turned up at Tralliance Company, the .travel Registry company
  • Former Flairview founders and bosses have launched an online menu and restaurant service Menulog
  • Former asia-hotels owner probably has the best job as he and his family are sailing around the world
  • Former head of European product for Galileo is back in Australia working for Amex
  • Others have ended up Australian ticketing company Ticketek, Advertising revolutionary company Spotrunner, destination player Viator and the Red Rat Qantas
  • and of course me at netus
  • UPDATE - Here's a good one - sports drinks. Former Iberian marketing manager for HoteClub and RatesToGo Alex Baneres is the new MD for the Australian operation of Verofit.
(not sure what the blog etiquette is about naming names so have kept private some of them).

If you know of more, please add to the comments. I'll update more as they come to mind.

Thursday, September 07, 2006

RIP Cendant - long live the CAR

As mentioned in the begining of the week - let us have a moment of Internet silence for the death of the brand Cendant

[how do you emote silence in text?]

...and celebrate the re-birth of the fourth and final child - Avis Budget Group, Inc - ticker CAR. The Cendant website is now little more than a holding page.

Wednesday, September 06, 2006

Are Hutch and Pricline still friends?

News out that Hong Kong gazillionaire Li Ka-shing's companies Hutch Whampoa and Cheung Kong have sold 70% of their stake in Priceline. Priceline's stock has bucked the Expedia and Travelocity trend of declining share prices with its stock up 60% from a year ago. Analysts have been talking up Priceline particularly over its continued gains in hotel sales. It might be that Li is just cashing in on this increase in stock price. Reports are he will retain rights to board spot and therefore the control and influence element remains.

BUT - what does this mean for the Hutch and Priceline Asian joint venture? Priceline Asia (Hong Kong, Singapore and Taiwan) is a joint venture which (was in the past at least) dominated in ownership by Hutch. It has been active since 2001 but have struggled to attracted Asian buyers to the Name Your Own Price model even with enormous offline cross promotion in the early days from Hutch Whampoa such as in its Watsons stores across Hong Kong. Aparantly the savings were never quite enough to convince locals to make opaque purchases. Is this sale by Li/Hutch a first step toward an end to this relationship and venture in Asia? One more thing for us to keep an eye on.

UPDATE - not surpisingly the market did not like the sale very much and punished the stock with a 9% drop.

Tuesday, September 05, 2006

The view from a travel 2

Interesting post here from Mike Fridgen of Farecast on the changing dynamics and power balance in travel, especially the consequences of yield/pricing pressure at the GDSs. Not surprisingly comes out in favour of greater opportunities for travel search sites as opposed to online agents. I agree with this but do not think this will catch Travelocity, Expedia, Orbitz etc unawares. Each has been shifting as much business as possible to cross sell, packaging, hotels etc to diversify revenues away from air commissions and air GDS segment rebates.

Have added Mike's blog to my blog roll on the bottom right.

Monday, September 04, 2006

CAR is the new CD

We are mere moments away from the funeral for the name "Cendant". With only the Avis Car group remaining in the Vehicle Formerly Known as Cendant we can expect a full name change at any moment. First step of this change starts week when it will change it's ticker from CD to CAR. Will have to hold on to my broken 1 year anniversary pen. Could be worth something one day...

musical Chairs at Travelport

The sounds of the music had barely faded away and Gordon Bethune had to give up his seat at the head of the Travelport board of directors to new owners Blackstone principal Ben Jackson. Bethune is returning to his airline roots taking over the Chair at Aloha Airlines. New owners, new brand, more new owners and leadership changes will make for challenging times.

Friday, September 01, 2006

Unbelievable round for founders (now

You know by now that the niche online travel sector is either heating up or boiling over. Groople has being raising money, Kayak closed a round at EURO9mm and is a toast of Europe (according to Red Herring) (UPDATE - RedHerring link seems to be dead along with the news paper. New link here to alarm:clock who cite the round at Euro 8million not 9) and Red Herring itself seems to be carrying a travel industry story every other week. Questions of bubbles and busts have naturally been raised.

Now - in what appears to be out of the blue - the founders of Singaporean based have raised more than US$10mm to launch a new travel meta search business in Europe and Asia. Rumours are that the post money valuation of this new venture is as much as $50mm. Leading the business will be former Zuji CEO and Travelprice COO Pascal Bordat (though strangely the Red Herring article does not mention his Zuji background). This venture is backed by smart VC money - Sofinnova Partners in Paris and Walden from the Valley - but they will have to move quickly. Kayak and Sidestep have the global lead and are making moves in Europe, and Bezurk has been operating in the Asian market for a few years now with smart people behind it.

Bezurk has a much better product than and has been getting distribution and supply traction (including recent a deal with Lonely Planet).

Another front for us to watch in the Asia online travel war.

Update - company now called Sprice