Friday, August 31, 2007
Yahoo! makes another travel play in Japan
Yahoo has been active in the Japanese online travel market for about seven years through its ownership of 40 some percent of the Japanese online travel site Tavigator (alongside Softbank and JTB). Not they have added a small 16.5 percent stake in content portal 4travel (thank you paidContent). Not sure what to read into the number one portal in Japan buying a non-controlling stake in a travel content company. On its face looks strange as they gain neither control nor distribution. Will need to watch what happens next.
The BOOT in the press
The TravelToday newsletter has picked up some of my comments from TRAVELtech. Here is the quote
and here is a summary of my presentation in a post
Tim Hughes, commercial director of Orbitz Worldwide/HotelClub.com, said internet users were now asking much more of travel retailers. From initially just wanting the cheapest flight, they now want more information, and are asking “where do I go next”, he said. “And the thing we have to do as retailers is try to figure out how to answer this open-ended question with technology,” Hughes said.here is the link
and here is a summary of my presentation in a post
Thursday, August 30, 2007
New leadership for Travel.com.au
Adam Johnson said a lot during his interview at TRAVELtech this week but he did not mention that on the 18th of January 2008 he will step down as CEO of Travel.com.au and hand the controls over to current COO Chris Meehan. Here is the news story.
Seems that a changing of the guard flu is running around Australia. Early this week we had the announcement that Graeme Wood will step down from the Wotif CEO role in favour of his COO Robbie Cooke.
Seems that a changing of the guard flu is running around Australia. Early this week we had the announcement that Graeme Wood will step down from the Wotif CEO role in favour of his COO Robbie Cooke.
Wednesday, August 29, 2007
The Airline Industry - Pizza Hut style
The Consumerist blog has been on a roll recently with great airline stories. First this week was the Airline boss with a talent for technology and customer service and then the was the airline that was handy with a paint brush but not so handy as to stop a plane blowing up. Now the Consumerist has a story from the New York Times that fits neatly into my not a series series on the airline industry. As you will recall I have a series of posts recently about the American airline market centred around poor customer service, delays on tarmacs, customers rights and more. This story is actually a good news story.
Appears that a number of Delta flights were diverted to Syracuse last week. Instead of the usual horror story of passengers trapped on the plane living off toilet water and pretzels, the pilot not only let everyone wait off the plane and in the terminal but called ahead and ordered pizza for everyone. Simple but brilliant stuff. Round of applause.
If you have not seen the seven hours on the tarmac in seven minutes video - watch it here.
Full story here.
Appears that a number of Delta flights were diverted to Syracuse last week. Instead of the usual horror story of passengers trapped on the plane living off toilet water and pretzels, the pilot not only let everyone wait off the plane and in the terminal but called ahead and ordered pizza for everyone. Simple but brilliant stuff. Round of applause.
If you have not seen the seven hours on the tarmac in seven minutes video - watch it here.
Full story here.
Tuesday, August 28, 2007
TRAVELtech: the travel industry against the applicance industry
TRAVELtech continues. Rod Cuthbert the CEO of Viator gave a great presentation earlier this morning. He have very few slides, instead relying on pictures of destinations and activities to tell his story.
A number of these photographs showed the tough side of consumer travel from the extremes of pictures of terrorism and panic to images of the drudgery of never ending lines at airports filled with despondent people wishing they were on holiday rather than going on holiday. From this he talked about how hard it is becoming for a consumer to travel. The uncertainty of arrival times, the challenges of travel in economy class, the need to varying degree to limit what you can carry on board etc.
When travel becomes hard, he argues, people start to look at their discretionary spend and think of alternatives outside of travel such as LCD screens, new generation games consoles and home cinema sound systems. Have no data to back this up but I agree with him. Travel used to look only to other forms of travel for competition (international versus domestic, retailer vs retailer, supplier vs supplier). Not sure what the solution is or how we open up our marketing to fight the Harvey Norman, Best Buy or Dixons of the world but it reinforces the need to keep the purchase and consumption process simple for consumers.
A number of these photographs showed the tough side of consumer travel from the extremes of pictures of terrorism and panic to images of the drudgery of never ending lines at airports filled with despondent people wishing they were on holiday rather than going on holiday. From this he talked about how hard it is becoming for a consumer to travel. The uncertainty of arrival times, the challenges of travel in economy class, the need to varying degree to limit what you can carry on board etc.
When travel becomes hard, he argues, people start to look at their discretionary spend and think of alternatives outside of travel such as LCD screens, new generation games consoles and home cinema sound systems. Have no data to back this up but I agree with him. Travel used to look only to other forms of travel for competition (international versus domestic, retailer vs retailer, supplier vs supplier). Not sure what the solution is or how we open up our marketing to fight the Harvey Norman, Best Buy or Dixons of the world but it reinforces the need to keep the purchase and consumption process simple for consumers.
TRAVELtech: Hotelscombined - bringing meta-search and affiliate marketing together
TRAVELtech continued. Yury Shar gave a little more insight into meta-search and his company Hotelscombined. My earlier profile of them is here.
The interesting point from his speech today is not that he is generating good traffic - though he is with 450,000 visits per month. The interesting story is that his number one source of traffic is affiliate program. He shared that 38% of traffic is coming from a network of 1,500 affiliates (here is an example bellhop.com.au). Search is still critical with SEM ranking number two at 34% and SEO third at 20%.
I was working on the assumption that paid search and to a lesser extent SEO would dominate the traffic feed for meta-search. With no data backing it up was assuming that these would be responsible for 80% of traffic for a meta-search provider, not the less than 65% that Hotelscombined generates. Congrats to Yury of building this great affiliate network.
Yury also passed on this four tips for search engine optimisation marketing efforts:
The interesting point from his speech today is not that he is generating good traffic - though he is with 450,000 visits per month. The interesting story is that his number one source of traffic is affiliate program. He shared that 38% of traffic is coming from a network of 1,500 affiliates (here is an example bellhop.com.au). Search is still critical with SEM ranking number two at 34% and SEO third at 20%.
I was working on the assumption that paid search and to a lesser extent SEO would dominate the traffic feed for meta-search. With no data backing it up was assuming that these would be responsible for 80% of traffic for a meta-search provider, not the less than 65% that Hotelscombined generates. Congrats to Yury of building this great affiliate network.
Yury also passed on this four tips for search engine optimisation marketing efforts:
- Give yourself time - it takes 18-24 months for a start up to "prove" itself to Google as a legitimate content provider;
- Design the site - design the site for both consumers and search engines. The site needs to be specifically designed to be shopped and indexed by Google. As he puts it - it is easy to design a site with great content that Google cannot be "seen" by Google;
- Register and open a Google Webmaster account; and
- Design a long term link strategy - Does not mean building fake links or becoming a hard core "black hatter" but working on links and traffic generation through content optimisation has to be part of marketing plans. For example making sharing of and imbedding of links by customers and easy thing to do.
TRAVELtech: Interview with Travel.com.au CEO Adam Johnson
TRAVELtech continued. Interview on stage with Adam Johnson the CEO of Travel.com.au the operator of both Travel.com.au and now the sole owner of Lastminute.com.au.
Couple of interesting metrics and number from the interview:
Travel.com.au are celebrating their 10th year this year. They were one of the first in the world to do international flights online. Not that this is much to brag about. As Adam joked, "In the early days we had 100% of the online international fares market. All two of the bookings made were made with us."
Couple of interesting metrics and number from the interview:
- The are now profitable (measured on monthly numbers). Recent full year financial results showed a loss but now profitable on a monthly basis;
- Expecting 30-35% topline and bottom line growth for FY08 - TTV of $130-140mm;
- Marketing spend will stay around 2.5% of TTV. All of this online, 80% of it likely to be on SEM;
- 15,000 hotel bookings per month; and
- 500k subscribers to newsletters on both brands.
Travel.com.au are celebrating their 10th year this year. They were one of the first in the world to do international flights online. Not that this is much to brag about. As Adam joked, "In the early days we had 100% of the online international fares market. All two of the bookings made were made with us."
TRAVELtech: the fourth phase of online travel - "too much information"
More from TRAVELtech. I talked some months back about my theory about how the short history of online travel can be broken up into three phases. For a quick recap here is what I said
Phase 1 (1995-2003) – I know where I want to go, find me the cheapest price.
Consumers treated online as a price based flight business. They knew exactly where they wanted to go from and to. All they wanted help on from an OTA was price. Not information, not help, not recommendations, just price.
Phase (2000-2006) – I want to find a deal on where to stay, can you help me with rates, availability and advice.
Consumers gain in confidence and cheap hotel deals flood the Internet. Consumers now begin asking OTAs for limited advice on finding and booking of accommodation.
Phase 3 (2005 – now) – what do I do next, where should I go next.
For the first time ever the consumer starts to ask an open ended question of the Internet. Instead of the specific questions of phases one and two where the consumer knew most of what they wanted to know - consumers gained the confidence, tools and networks to ask for advice from OTAs, "the crowd" and the Internet at large. "What do I do next?" Content started to drive traffic and sales like never before. Best available rates and set pricing from suppliers made it harder for the OTA to offer deal advantages.
In my presentation today at TRAVELtech I talked about my thoughts on the future of online travel - phase 4 going by my timeline. Here is what I said.
Phase 4 (2009 and beyond) - Too much information
Consumers begin to feel overwhelmed. They are searching sites with 50k, 100k and maybe 200k hotels (though a comment here says that the sites like HRS claiming 200k hotels are exaggerating a little). There are review sites with 20 million or more reviews. Social networks are producing hundreds of friends with thousands of recommendations. Emails, RSS feeds, SMS suggestions and more are flooding into consumer inboxes. Too much information!!
The challenge as we head into this phase is to take all this information and build a coherent story for consumers. My expectation (and hope) is that this will produce a return to the need for customer loyalty. For online retailers making a connection with customers that they keep through the development of loyalty programs - be they actual rewards, good deals, community building and other marketing and product activities.
The reason to care about this history is that it helps us in planning our products and marketing plans for the future. One of the downsides of a maturing industry is that growth in the traditional markets (US and EU) takes more work and greater innovation. One of the upsides is that we now have a history to look to in preparing of the next trend.
UPDATE - you can find a copy of the presentation here.
Phase 1 (1995-2003) – I know where I want to go, find me the cheapest price.
Consumers treated online as a price based flight business. They knew exactly where they wanted to go from and to. All they wanted help on from an OTA was price. Not information, not help, not recommendations, just price.
Phase (2000-2006) – I want to find a deal on where to stay, can you help me with rates, availability and advice.
Consumers gain in confidence and cheap hotel deals flood the Internet. Consumers now begin asking OTAs for limited advice on finding and booking of accommodation.
Phase 3 (2005 – now) – what do I do next, where should I go next.
For the first time ever the consumer starts to ask an open ended question of the Internet. Instead of the specific questions of phases one and two where the consumer knew most of what they wanted to know - consumers gained the confidence, tools and networks to ask for advice from OTAs, "the crowd" and the Internet at large. "What do I do next?" Content started to drive traffic and sales like never before. Best available rates and set pricing from suppliers made it harder for the OTA to offer deal advantages.
In my presentation today at TRAVELtech I talked about my thoughts on the future of online travel - phase 4 going by my timeline. Here is what I said.
Phase 4 (2009 and beyond) - Too much information
Consumers begin to feel overwhelmed. They are searching sites with 50k, 100k and maybe 200k hotels (though a comment here says that the sites like HRS claiming 200k hotels are exaggerating a little). There are review sites with 20 million or more reviews. Social networks are producing hundreds of friends with thousands of recommendations. Emails, RSS feeds, SMS suggestions and more are flooding into consumer inboxes. Too much information!!
The challenge as we head into this phase is to take all this information and build a coherent story for consumers. My expectation (and hope) is that this will produce a return to the need for customer loyalty. For online retailers making a connection with customers that they keep through the development of loyalty programs - be they actual rewards, good deals, community building and other marketing and product activities.
The reason to care about this history is that it helps us in planning our products and marketing plans for the future. One of the downsides of a maturing industry is that growth in the traditional markets (US and EU) takes more work and greater innovation. One of the upsides is that we now have a history to look to in preparing of the next trend.
UPDATE - you can find a copy of the presentation here.
TRAVELtech: The true cost of booking an airline ticket
First of my posts from the conference TRAVELtech. Have been listening to Tim Russell (MD of Amadeus Australia).
Tim made a very good point when looking at the costs of booking an airline ticket online. He presented research indicating that at a dollar charging level the cheapest place to book a flight is usually the airline’s own website where there is normally only a small credit card fee but no booking fee. Call it $0-$15 per booking. In the middle of the cost spectrum there is the online and offline agent where there are fees and charges ranging from $10-$30 per ticket. Finally At the end of the spectrum there is the full service Travel Management Company (TMC – corporate travel agent). These providers can charge upwards of $50-$60 per ticket.
On the crude measure of dollars per ticket, the airline direct site is the cheapest. However, Tim brings in the great point that when assessing the cost of booking we should really also be considering the time cost is searching and completing the transaction. When this is taken into account the cost spectrum is turned on its head. The TMC booking takes the least amount of time – say 15 minutes, the time it tkes to make a phone call to a dedicated agent. Next comes the online agent who can display multiple carriers in one place making searching faster. Finally the airlines direct site takes the longest – more than an hour because of the need to search more than one supplier before taking a booking.
Including these measures it becomes a neck and neck race between the cost of TMCs and online agents with airlines coming third.
If you are booking a leisure flight for the family and have all the time you need then time does not come into account but certainly in the corporate area there is a huge time difference between the different travel booking channels. Goes part of the way to explain the success of Webjet in Australia despite the huge fees they are charging.
Tim made a very good point when looking at the costs of booking an airline ticket online. He presented research indicating that at a dollar charging level the cheapest place to book a flight is usually the airline’s own website where there is normally only a small credit card fee but no booking fee. Call it $0-$15 per booking. In the middle of the cost spectrum there is the online and offline agent where there are fees and charges ranging from $10-$30 per ticket. Finally At the end of the spectrum there is the full service Travel Management Company (TMC – corporate travel agent). These providers can charge upwards of $50-$60 per ticket.
On the crude measure of dollars per ticket, the airline direct site is the cheapest. However, Tim brings in the great point that when assessing the cost of booking we should really also be considering the time cost is searching and completing the transaction. When this is taken into account the cost spectrum is turned on its head. The TMC booking takes the least amount of time – say 15 minutes, the time it tkes to make a phone call to a dedicated agent. Next comes the online agent who can display multiple carriers in one place making searching faster. Finally the airlines direct site takes the longest – more than an hour because of the need to search more than one supplier before taking a booking.
Including these measures it becomes a neck and neck race between the cost of TMCs and online agents with airlines coming third.
If you are booking a leisure flight for the family and have all the time you need then time does not come into account but certainly in the corporate area there is a huge time difference between the different travel booking channels. Goes part of the way to explain the success of Webjet in Australia despite the huge fees they are charging.
Monday, August 27, 2007
So you own an airline and a plane crashes - what is the first thing you should do?
If you are China Airlines the answer is paint over the company logo on the side of your plane to hide your identity and hope no-one notices.
Here is the before shot
Here is the after shot
Thanks to the Consumerist and MSN News/Mainichi Interactive
Here is the before shot
Here is the after shot
Thanks to the Consumerist and MSN News/Mainichi Interactive
The BOOT at TRAVELtech in Sydney
Quick reminder that I will be speaking at TRAVELtech tomorrow. I think you can still get a ticket. UPDATE- now sold out. I am on in the morning speaking with:
- Peter Smith, General Manager, Zuji;
- Tim Russell, Managing Director, Amadeus Australia; and
- Rod Cuthbert, Chief Executive Officer, Viator.
- my view on the history of online travel (teaser here);
- the likely outcome of the battles between meta-search/content providers and retailers for customer loyalty (teaser here); and
- my thoughts on Australia finally embracing the air intermediary model (teaser here)
Friday, August 24, 2007
SMS from out of the blue. What should I do?
A friend of the BOOT and industry insider (not called Tim) received a text message yesterday from a phone number that neither or us recognise that said "Tim have made an offer to buy out ????.com" where ???.com is a city specific destination site owned by a private equity firm. I am keeping the actually URL a bit quiet as there is some sort genuine secret mistake that occurred and this SMS was meant for me. The carefree blogger in me wants to shout about this and add it to my mini deal list but the corporate professional in me is hesitant to tell the world (or my 200 or so readers) in case there is something more here that I should know about. So - dear reader- what should I do? Tell you all about this mini-deal or wait to see if this is an important miss-sent work SMS?
Thursday, August 23, 2007
Spirit Airlines CEO crowned technology and customer service superstar
The CEO of Spirit Airlines - Ben Baldanza - is the lead candidate for our tech loser of the year award. If the Consumerist and other blogs are right Mr Baldanza pressed reply all to a email instead of regular reply. The person on the other end of the email who was not supposed to receive the reply was a customer with a complaint. Mr Baldanza's reply to the customer service agent who was supposed to receive the email was
Full text of email is here
Please respond, Pasquale, but we owe him nothing as far as I'm concerned. Let him tell the world how bad we are. He's never flown us before anyway and will be back when we save him a pennyNot sure what displays more genius - bashing the wrong key on outlook or being so dismissive of annoyed customers.
Full text of email is here
Tuesday, August 21, 2007
Groople was first to Group but is now having to innovate to keep up
One of the first companies I blogged about was group booking specialist Groople. In posts on them and other targeted booking providers I have mused about how it will be challenging to obtain and maintain scale focused on a very niche section of the market. Themarket has also become very competitive for group travel with the likes of TripHub also entering the market (here is my interview with John Pope of TripHub).
You will recall that TipHub enables groups of people to share information about about a trip. In a recent announcement Groople are planning similar planning abilities such as clone itineraries, themes for groups and event scheduling. TripHub may have followed Groople into the group market but Groople is now following TripHub into social networking.
You will recall that TipHub enables groups of people to share information about about a trip. In a recent announcement Groople are planning similar planning abilities such as clone itineraries, themes for groups and event scheduling. TripHub may have followed Groople into the group market but Groople is now following TripHub into social networking.
More little deals - 10Best buys Content Works
In another sign that I should be looking more and more at the little deals and that the market for big acquisitions in the online travel space is limited, reports from PaidContent that destination and activity information site 10Best has bought The Content Works. Dollars kept quiet. No quotes from any of the executives such as CEO Brice Bay. Looks like a distribution play by 10Best. Designed to give them more business to business distribution and increase the customisation options for their content.
Monday, August 20, 2007
Little deal updates and staff movements
Have been caught on the blog talking about the big deals more and more such as Rakuten's big profit from Ctrip, Sabre & Amadeus in a tie for non-air sales and the collapse of Flight Centre's multi-billion dollar buy-out. Time for a couple of smaller deals.
First an announcement this week that Travel Publishing group Questex Media Group has snapped up "Five Star Alliance". Five Star Alliance (foundered by Cal Simmons and Eric Koefoot) is a listing service devoted to luxury properties. Not convinced that a simple listing service targeted at a particular price/quality can survive without a twist - something different to just listing. Maybe this is the hope in tying up with a media company. If you want an example of a price/quality site with a twist see Tablet Hotels which has a range of search options that match the thought process that a luxury hotel hunter goes through.
Second announcement from alarm:clock was further recruitment efforts at stealth mode start up Travelmuse. There has been little out of this start-up to date other than general claims around improving the booking process and sharing experiences. But they are now up to a team of 5 having added ex-Peerflix CTO and ex-Hotwire staff member Cyril Bouteille.
First an announcement this week that Travel Publishing group Questex Media Group has snapped up "Five Star Alliance". Five Star Alliance (foundered by Cal Simmons and Eric Koefoot) is a listing service devoted to luxury properties. Not convinced that a simple listing service targeted at a particular price/quality can survive without a twist - something different to just listing. Maybe this is the hope in tying up with a media company. If you want an example of a price/quality site with a twist see Tablet Hotels which has a range of search options that match the thought process that a luxury hotel hunter goes through.
Second announcement from alarm:clock was further recruitment efforts at stealth mode start up Travelmuse. There has been little out of this start-up to date other than general claims around improving the booking process and sharing experiences. But they are now up to a team of 5 having added ex-Peerflix CTO and ex-Hotwire staff member Cyril Bouteille.
Saturday, August 18, 2007
What do Yododo, mipang, tuniu and cn0km.com have in common?
Yododo, mipang, tuniu and cn0km.com are some of the leaders in Travel 2.0 services in China according to the China Web2.0 Review blog. Yododo is a travel planner and info site. Mipang is a social network. Tuniu is a travel portal with Digg style voting features. Cn0km is a destination wiki/info site.
This is one of those nice web moments where I have not been able to look into sites like these because of my language inadequacies so can simply point you all to someone who has done all the hard work.
Originally found the link on the China Industry Travel Blog.
UPDATE - Claude at Les Explorers blog has an interview with Yododo CEO Marriane Miao here
This is one of those nice web moments where I have not been able to look into sites like these because of my language inadequacies so can simply point you all to someone who has done all the hard work.
Originally found the link on the China Industry Travel Blog.
UPDATE - Claude at Les Explorers blog has an interview with Yododo CEO Marriane Miao here
Friday, August 17, 2007
TripAdvisor finds $3million dollars to buy Facebook App - Where I've Been (maybe?)
A few months ago developer Craig Ulliott was panicking because he had 400,000 users bombarding his little Facebook application - Where I've been. Not only are there now 2.3 million people with the Application but Craig and the rest of the group (if there is a group) now find themselves rich and members of the Barry Diller travel empire due to a sale to TripAdvisor for $3million (according to TechCrunch). UPDATE - TechCrunch is now saying that this deal is not yet done - just under discussion. UPDATE 2 - Here is TripAdvisor on News.com calling the acquisition untrue and Ulliott saying that there is no deal (yet) but that he is "exploring all avenues to maximize the value and usefulness of our product". Sounds like discussions have stated but note finished.
The application lets you share with your Facebook buddies where you have lived, worked, travel and (obviously) been in world. It is simple but effective. It has none of the stickiness and addictiveness of Traveller IQ test from (now stable mate) Travelpod. But its fun to work with.
Provides further evidence of TripAdvisor's plans to expand into different brands and expand their traffic base beyond the core review site.
If you are on Facebook and want the App, you can find it here.
The application lets you share with your Facebook buddies where you have lived, worked, travel and (obviously) been in world. It is simple but effective. It has none of the stickiness and addictiveness of Traveller IQ test from (now stable mate) Travelpod. But its fun to work with.
Provides further evidence of TripAdvisor's plans to expand into different brands and expand their traffic base beyond the core review site.
If you are on Facebook and want the App, you can find it here.
Tuesday, August 14, 2007
Monday, August 13, 2007
The BOOT in Melbourne at HSMA
The BOOT will be live and in living colour in Melbourne on Wednesday 15 August at the Hospitality Sales & Marketing Association event - Managing the Internet Sales Beat. Event details here if you would like to attend. Other speakers at the event include Ryan Rae, Head of Global Markets Wotif.com, Jon Marshall, Ecommerce Consulting and Michael Hausen Tourism Victoria.
Friday, August 10, 2007
Rakuten and Ctrip part company and commence battle
Japanese online powerhouse Rakuten Travel has announced that it is selling its 20.3% stake in Chinese powerhouse Ctrip for $575mm - pocketing more than $470mm in profits in three years (Reuters). Good deal. Rakuten was the largest single shareholder. Profit is not the only motive. Rakuten has been pushing its own brand in China for a at least three years. The natural expansion plans for Rakuten given its inventory and regional location has been into Korea and China. It was only a matter of time before that Chinese expansion saw Rakuten (the brand) battling head to head with Ctrip. The challenge of course in China is the one I discuss often - the fact that "online travel" really means "call centre travel" meaning that it is not a clean and easy expansion of the current Rakuten model. Not a simple matter of more hotels in China and more translated pages. But with $470mm in profits in the bank you can buy a lot of seats in a Chinese call centre.
Thursday, August 09, 2007
Couchette airline style
I never believe an airline mock-up of a possible plane layout. I will only believe my eyes when I board the plane and see the truth. But there is a cute idea coming out of Lufthansa according to News.com.au to have couchette style sleeping in economy class seats for the Airbus A380. You can see the plan for three by three stacked beds from the picture above. I am sure there are a 101 safety reasons why this will never happen.
UPDATE - Air New Zealand is also seeking a PR push through announcing its "contemplation" of sleeping pods. I still do not believe any of this will happen.
Sabre and Amadeus joint venture - then there were two?
Hot on the heals of the imminent approval of the Galileo and Worldspan merger is news of a Sabre and Amadeus joint venture. But don't get too excited this does not mean we are down to two GDS companies as the JV is for non-air product only according to Travelmole. Unclear to me how that will technically work but given the quantity of non-GDS ways for consumers and travel agents to book non-air would be surprised in the competition authorities rejected the deal.
UGC vs Editorial. What's better? What's the balance? What's more 2.0?
A debate is going on about content and Travel 2.0/Web 2.0. What is better at providing recommendations and information - the crowd or the specialist? TripAdvisor has proven that that crowd has power. Millions of people with millions of points of view producing a searchable and understandable review mechanism. But Web 2.0 is also pushing back on the size and difficulty of listening to the crowd. This has produced plenty of sites that believe that editorial is now critical - for exampl human search start up Mahalo is producing dedicated and editorially driven guides.
The crowds eliminate the errors of a editorial statistical sample of one but there is a point at which UGC is too hard to navigate. Ever tried surfing YouTube? Just going to the YouTube homepage with no plan in mind and looking around for something to watch rarely produces entertainment. Compare that experience to going to Break.com or Digg Videos where an editor or technology backed by the community has produced an easy list to tell you what they think you should watch. There are less videos on Digg and Break, and you may not like the ones you see, but you can be certain that you will find easily something to watch that does not involve a cat or an idiot miming Justin Timberlake.
Travel reviews and content are similar. As much as I shift from giving Lonely Planet a good and a bad time for their online activities there is a sense of comfort and certainty you get from reading a Lonely Planet story or recommendation. This comfort comes from their brand, their readership but mainly from their editorial rigour. They send someone to everywhere they review and they send them back again and again. This is the pure editorial model. The positive of it is that trust is already established and time and energy is spent maintaining that trust. The downside is that it is less reactive. The editorial based product sometimes misses updates because its research or publishing cycle is...well.. by definition a cycle and not immediate.
In the wisdom of the crowds model you throw as many human beings as you can at a problem/issue/thing/wall and hope that the accumulation of knowledge produces the right answer and that the right answer can be filtered by those looking for it. This is what TripAdvisor does and there is a point at which for every hotel they have their is a terrible review (room sucks, staff awful, never again), a brilliant review (love it...oh my God I love it) and a whatever review (it was ok, kinda, sorta, you know). I discussed this my "Who you callin' ugly post" about Travelpost.com.
As with all these things it is about balance. You need the crowds to give you the immediacy of updates and the statistical spread but you need the editors or trusted uber user to help you sift and order the information. This has problems of scale (how do you balance controlling quality across a huge range of destinations and information) and openness (to be an editor involves cutting out some of the crowd - a crowd that can get ugly when you cut them out).
My thoughts on how to balance this are the same as for a transactional site/intermediary that has thousands of hotel/supplier options. In the early days of hotel/air intermediaries there was discussion that as some point a limit to the number of choices would arise. How could a consumer possibly look through 10,000 hotels, then 20,000 hotels, then 30,000? Now people like HRS and hotel.de are claiming 200,000+ hotels. The answer is more than better search technologies. It is combing technology, merchandising/rev management smarts and user reviews to generate sort order biasing. This is the approach that content companies need to follow. Match UGC with editorial biasing.
This thinking came to me in an email exchange with a startup pitching itself as the review/information site that has found the balance. The email exchange was with Jim Johnson Vice President of Product Management of LocalGuides.com - itself a spin off from a local search company called LocalMatters. The LocalGuides site is a site that wants to provide...well...local guides. Detailed information on destinations about activities, restaurants, hotels etc. Jim and I had a very interesting mail exchange on the how they would find the balance. Here is what he had to say...
Been a bit of a long post but would be interested to hear your thoughts on getting the balance between the crowd and the editor.
The crowds eliminate the errors of a editorial statistical sample of one but there is a point at which UGC is too hard to navigate. Ever tried surfing YouTube? Just going to the YouTube homepage with no plan in mind and looking around for something to watch rarely produces entertainment. Compare that experience to going to Break.com or Digg Videos where an editor or technology backed by the community has produced an easy list to tell you what they think you should watch. There are less videos on Digg and Break, and you may not like the ones you see, but you can be certain that you will find easily something to watch that does not involve a cat or an idiot miming Justin Timberlake.
Travel reviews and content are similar. As much as I shift from giving Lonely Planet a good and a bad time for their online activities there is a sense of comfort and certainty you get from reading a Lonely Planet story or recommendation. This comfort comes from their brand, their readership but mainly from their editorial rigour. They send someone to everywhere they review and they send them back again and again. This is the pure editorial model. The positive of it is that trust is already established and time and energy is spent maintaining that trust. The downside is that it is less reactive. The editorial based product sometimes misses updates because its research or publishing cycle is...well.. by definition a cycle and not immediate.
In the wisdom of the crowds model you throw as many human beings as you can at a problem/issue/thing/wall and hope that the accumulation of knowledge produces the right answer and that the right answer can be filtered by those looking for it. This is what TripAdvisor does and there is a point at which for every hotel they have their is a terrible review (room sucks, staff awful, never again), a brilliant review (love it...oh my God I love it) and a whatever review (it was ok, kinda, sorta, you know). I discussed this my "Who you callin' ugly post" about Travelpost.com.
As with all these things it is about balance. You need the crowds to give you the immediacy of updates and the statistical spread but you need the editors or trusted uber user to help you sift and order the information. This has problems of scale (how do you balance controlling quality across a huge range of destinations and information) and openness (to be an editor involves cutting out some of the crowd - a crowd that can get ugly when you cut them out).
My thoughts on how to balance this are the same as for a transactional site/intermediary that has thousands of hotel/supplier options. In the early days of hotel/air intermediaries there was discussion that as some point a limit to the number of choices would arise. How could a consumer possibly look through 10,000 hotels, then 20,000 hotels, then 30,000? Now people like HRS and hotel.de are claiming 200,000+ hotels. The answer is more than better search technologies. It is combing technology, merchandising/rev management smarts and user reviews to generate sort order biasing. This is the approach that content companies need to follow. Match UGC with editorial biasing.
This thinking came to me in an email exchange with a startup pitching itself as the review/information site that has found the balance. The email exchange was with Jim Johnson Vice President of Product Management of LocalGuides.com - itself a spin off from a local search company called LocalMatters. The LocalGuides site is a site that wants to provide...well...local guides. Detailed information on destinations about activities, restaurants, hotels etc. Jim and I had a very interesting mail exchange on the how they would find the balance. Here is what he had to say...
"Our approach to Local Guides has been to seed the site with the key editorial content to provide users a starting point to iterate based on their own local expertise. The interesting transformation is the community has used the tools to create a personal publishing platform (think blogging on steroids) in ways beyond what we originally thought. Guides have been created around making sushi at home, best concert venues and how to get out of the doghouse with your wife. We expected more top 10 restaurants’, hotels and bars to be the norm. The distinguishing focus on Local Guides is in its “personal local publishing” orientation; rather than aggregating all user’s content into one summary view of a business or place, it supports each user’s unique views as “guides”, and builds community around exploring, sharing and relating to “individual voices”. While sites like TripAdvisor, while highly useful for opinion aggregation, we aim to retain the opinion and viewpoint of each individual. Somewhat more of a “reporter’s view”, if you will."Their view is that the editors set up the framework, provide the basic facts and guidance and then let the crowd fill in the detail with more freedom than you see on TripAdvisor. It is hard to provide much commentary on their approach and whether it will work as the site is in beta - though I would call it very early beta maybe even alpha as there is a lot more content that they need (editorial or otherwise). I like the idea but not sure if that will provide the balance I have discussed. If you give the crowd too much control you risk looking like the comment list in a popular video on YouTube.
Been a bit of a long post but would be interested to hear your thoughts on getting the balance between the crowd and the editor.
Wednesday, August 08, 2007
You thought online travel was cutthroat...
There is a big three in online travel - Expedia, Orbitz and Travelocity. In Africa there is also a big three - the Buffalo, the Crocodile and the Lion. This video does nothing to bring these two groups of three together in any meaningful way but it is amazing to watch. Kill, be killed or find a bunch of mates to save you.
Tuesday, August 07, 2007
EzRez EzMoney ToughBusiness
White label provider EzRez has announced a fund raising round of $15mm led by Canaan Partners and with pieces thrown in by Azure Capital and "existing investors". Not sure what the "existing investors" part means. Startup Capital Ventures partner John Davison is on the board already and they list EzRez as a portfolio company, however they have not put their name to this round.
EzRez have been very active in the online white labelling space. The initial white label moves in online travel were dominated by B2B versions of online agencies such as Expedia's WWTE or online versions of offline operators such as GTA's Octopustravel.com. However neither of these or other players like them were able to offer a technology style solution that allowed the distribution partner to either add inventory not contracted by the white label company or to request bespoke hosted layouts. This left a gap for EzRez (and competitors like TopDog) to steal clients and build a business despite lacking the scale in both supplier turnover and developer numbers of the OTAs.
There are been early success globally but also in my home market - Australia - with Qantas spin off Jetstar using EzRez for their packaging options. But even with these success and $15mm in the bank this is not an easy sector. EzRez has to constantly find the space between the online agents and the traditional distribution/connectivity companies (GDS and Switch). Simultaneously staying ahead of the OTA white label/affiliate providers on the technology elements that I mentioned above and staying ahead of the GDS' and Pegasus on contracted inventory and web display. It is like being David against two Goliaths but at least having a little bit more than a sling.
UPDATE - stated reason for the fund raising was to "drive product development and interenational growth to meet the increasing blah blah blah yadda yadda". The other sides of the story that I hear from anonymous industry insiders is that they have had to be a bit more radical that this stock phrase sounds by throwing out their old business plans and change the focus. This includes physical changes such as the well known shift in location from Honolulu to San Francisco and funding the not so well known round of redundancies. It also involves a change in the business model. The early days of the model had a lot of focus on mid and back office operations support for clients/distribution model. The new variation is focusing much more on web services/distribution and UI syndication. That is - less of the mechanics behind the scene to bring supply in and manage bookings, and more of the aggregation and distribution of different supply sources with flexible UI for delivery. Complex differentiation but think about it as less an end to end booking engine and more an aggregation engine.
It can not be said definitively whether a change in model is a sign of panic or genius. But it is further proof of the challenge that the EzRez' of the world face in making a business out of the gap between OTA's and traditional distribution companies.
EzRez have been very active in the online white labelling space. The initial white label moves in online travel were dominated by B2B versions of online agencies such as Expedia's WWTE or online versions of offline operators such as GTA's Octopustravel.com. However neither of these or other players like them were able to offer a technology style solution that allowed the distribution partner to either add inventory not contracted by the white label company or to request bespoke hosted layouts. This left a gap for EzRez (and competitors like TopDog) to steal clients and build a business despite lacking the scale in both supplier turnover and developer numbers of the OTAs.
There are been early success globally but also in my home market - Australia - with Qantas spin off Jetstar using EzRez for their packaging options. But even with these success and $15mm in the bank this is not an easy sector. EzRez has to constantly find the space between the online agents and the traditional distribution/connectivity companies (GDS and Switch). Simultaneously staying ahead of the OTA white label/affiliate providers on the technology elements that I mentioned above and staying ahead of the GDS' and Pegasus on contracted inventory and web display. It is like being David against two Goliaths but at least having a little bit more than a sling.
UPDATE - stated reason for the fund raising was to "drive product development and interenational growth to meet the increasing blah blah blah yadda yadda". The other sides of the story that I hear from anonymous industry insiders is that they have had to be a bit more radical that this stock phrase sounds by throwing out their old business plans and change the focus. This includes physical changes such as the well known shift in location from Honolulu to San Francisco and funding the not so well known round of redundancies. It also involves a change in the business model. The early days of the model had a lot of focus on mid and back office operations support for clients/distribution model. The new variation is focusing much more on web services/distribution and UI syndication. That is - less of the mechanics behind the scene to bring supply in and manage bookings, and more of the aggregation and distribution of different supply sources with flexible UI for delivery. Complex differentiation but think about it as less an end to end booking engine and more an aggregation engine.
It can not be said definitively whether a change in model is a sign of panic or genius. But it is further proof of the challenge that the EzRez' of the world face in making a business out of the gap between OTA's and traditional distribution companies.
Thursday, August 02, 2007
The Airline Industry - Lawyer Style
In my series that did not mean to become a series, I am going to add this story my recommended links for those trying to keep abreast of the cruel and unusual punishment that is inflicted on the US air consumer. This update comes from travel lawyer Al Anolik (via mytravelrights.com via inFlightHQ). Anolik draws attention to Rule 240 which are the filings that each US carrier makes to the DOT on what your rights are if your flight in the US is cancelled or delayed. The beauty of course is that very few of the airline staff know their own rules. So Anolik and mytravelrights have provided an easy to access and print out list of the Rule 240s for each of the major US carriers. His advice is simple, when flying a carrier take their Rule 240 with you and politely bang it on the desk of the airline counter if they try to offer you something less during a delay.
UPDATE - have a claim that Rule 240 is dead and its ability to save you is now a myth from the 20th Century.
UPDATE 2 - Christopher Elliot is saying that rumours about the death of rule 240 are exaggerated. Post here on four secrets about Rule 240. Thanks to Consumerist.
UPDATE - have a claim that Rule 240 is dead and its ability to save you is now a myth from the 20th Century.
UPDATE 2 - Christopher Elliot is saying that rumours about the death of rule 240 are exaggerated. Post here on four secrets about Rule 240. Thanks to Consumerist.
Wednesday, August 01, 2007
Be Nice. Really Nice. All the time.
Madame BOOT speaks...
Article in the SMH about Qantas, fresh from its publicly humiliating failed PE bid, is planning to restructure by splitting the business into 4 distinct units. I'm so over the restructuring and the decentralising and the change management programs, really business strategy is a lot faster and simpler than that. Be nice to your customers. That's it. Just be nice.
Article in the SMH about Qantas, fresh from its publicly humiliating failed PE bid, is planning to restructure by splitting the business into 4 distinct units. I'm so over the restructuring and the decentralising and the change management programs, really business strategy is a lot faster and simpler than that. Be nice to your customers. That's it. Just be nice.
Bezurk is sooooo Business 2.0
The future of Business 2.0 may be uncertain but the Time Inc publication has survived just long enough to give a great wrap to Asian meta-search company Bezurk. Bezurk joins high profile and mega-funded players like Joost and Rebtel in the "Business 2.0 It's a Web, Web 2.0 World", their measure of the best of the non-US sites to watch. Well done Martin, Craig, Ross and team.
BusinessWeek on online travel in Asia (with a China bias)
Nice read from BusinessWeek called "Asian Tourists Love to Click and Go". Interesting fact that I took from it was.
In China...Ctrip and eLong enjoy a combined market share of 72%...We all suspected as much. Of course the article does not talk about how most of what is online in China is actually offline but still interesting.
Subscribe to:
Posts (Atom)