Monday, May 31, 2010
thanks to tm-tm for the photo care of flickr
Sunday, May 30, 2010
I have not doubt that the future of online travel is recommendations. Finding a way to give people a targeted recommendation based not only on their demographic or individual wants but on their wants at a particular moment in time. I call this my EveryYou principle (EveryYou definition here, more articles here). Developing a way to do micro targeting at scale.
Marchal's LikeCube is a B2B software as a services solution that purports to provide travel review and retail sites with targeted recommendations and search. His opening sales pitch for LikeCube is similar to that of any search site - give me your data and I will give you the best results for a search string. The LikeCube twist on traditional search is that answers are based not on links and page ranks but on the commonality between the likes and preferences of the content contributors. Marchal pitched this to me as targeting results based on the users "Tastegraph" rather "Sociograph". Instead of linking recommendations and results to the thoughts and feedback of those in the same social network as a user (sociograph), LikeCube targets recommendations and search results from those with the same likes and preferences of the user (tastegraph).
He gave two great examples of how standard approaches to reviews on a content or retail sites do not result in a useful recommendation. The first example was the reviews around TripAdvisor's Dirtiest Hotel of 2010 - the Heritage Marina Hotel in San Francisco. It won the "dirtiest" award in part because 174 of the 330 reviews ranked the hotel as "Terrible". Clearly - according to this rating - no one would ever want to stay there. But 48 of the reviews rated the hotel as "Very Good" or "Excellent". That means 15% of the reviewers of the dirtiest hotel of 2010 think the Heritage Marina is a fantastic place to stay and are keen to stay there again. People with different tastes and needs can see the same hotel in a very different light. Review sites are trying to manage these contradictions by helping users to refine a recommendation by reviewer demographics. The plan being to allow a consumer to see reviews only from people of the same demographics to maximise the chance of getting a recommendation form people with the same interests. This leads to Marchal's second example. He showed me two reviews for the same hotel on Booking.com. Both reviews were by people self classified as "young couples". One rated the hotel a four out of ten the other a nine point five. Additional classification and demographic criteria is not the answer to making reviews more relevant. As Marchal says (and I agree), these two examples highlight the need for a next generation of recommendation search.
That's the theory of LikeCube. I like the theory and enjoyed the conversion with Marchal. The challenge is seeing LikeCube in action. The first implementation of LikeCube is Qype ( a European Yelp clone).
Unfortunately as a B2B solution that requires access to a client's data source, it is impossible to review LikeCube in action outside an implementation. With only one implementation to view it is very hard to make an accurate assessment of LikeCube in action. In LikeCube's defence they only launched last November (at World Travel Mart).
LikeCube's challenge is not winning over people to the idea of targeted tastegraph based search results, it is building scale and proving that their technology can do what is promised. Winning more implementations and proving the case behind the technology (and as a result winning more implementations). Is the standard challenge for a B2B software start-up - made harder by the consumer facing nature of a LikeCube implementation. If they can do it then I predict this to be a very valuable space to be in.
Wednesday, May 26, 2010
Three reasons why I think CX herringbone is better than VS
- The entertainment system starts as soon as you sit down whereas VS make you wait until after take off and after a welcome on-board video has finished;
- The CX seat converts to bed without having to get out of seat whereas the VS seat is a flip to bed version. Means you have to get out of the seat, convert to a bed and get back in; and
- The VS seat narrows to the feet a little more making it slightly tighter in fit that the CX version.
- The on-board bar is a smash hit (hold on that is not related to the seat!);
- The Upper Class Lounge at Heathrow is nearly unmatchable in quality (QF first class Sydney is its only competitor). With a haircut, spa bath, sauna and video games. (hold on that is not related to the seat either!); and
- You get pyjamas on VS (hmmm...also not related to the seat)
- The table is large and can be moved to allow you to get out without having to put the table away;
- The doona is much more bed like that CX's making for a more bed like feel; and
- Big pillow - also better for a bed like feel.
Full CX business class seat review here. Full VS business class (upper class) seat review here.
thanks to Lora_313 for the photo via flickr
Tuesday, May 25, 2010
Every year Skytrax publishes the results of their Annual World Airline Awards survey, Most years since the launch of the BOOT I follow up by ranking my top airline choices against the Skytrax winners. [here are my 2006 rankings and 2008 rankings].
This year I have the added content weight of 10 airline seat reviews to draw on (all here). On to the list
Skytrax top ten Airlines of the Year 2010
- Asiana Airlines
- Singapore Airlines
- Qatar Airways
- Cathay Pacific
- Air New Zealand
- Etihad Airways
- Qantas Airways
- Thai Airways
- Malaysia Airlines
[notes SQ down a place, CX down two places and Qantas down 4 place]
The BOOT's top five airlines
- Cathay Pacific (up 3 places due to new herringbone seats)
- Virgin Atlantic (steady)
- British Airways (steady - despite crew troubles their flat bed seat is still a winner)
- Qantas (up a spot)
- Singapore Airlines (down 4 spots - I don't like the new seat. Too wide, not long enough).
Update (check out the Professor's rankings here)
Update 2 - why Cathay just beats Virgin Atlantic in my rankings in a post "Cathay Pacific vs Virgin Atlantic business class - the battle of the herringbone seats"
Sunday, May 23, 2010
[UPDATE - since publishing this post I have been told that Cleartrip is bigger than Yatra and the clear number two to MakeMyTrip. I don't have numbers to confirm but it clear that the battle has only just started]
Air is still a critical part of the business but like much of the online world he and Cleartrip are targeting hotels for growth. Again like much of the online travel world he is using some creative hiring practices to help Cleartrip get there. Cleartrip have hired the founder of the Travelguru to lead their hotel contracting efforts. Travelguru was bought by Travelocity in August 2009. Current hotel count is 1,400, when it gets to around 1,800 to 2,000 Hrush says that Cleartrip will begin a marketing push.
I was interested to hear that one of the main marketing efforts for Cleartrip was display advertising. After each of Yatra, MakMyTrip and Cleartrip reached a “gentlemen’s agreement” to not bid on each other’s brand terms in search advertising it freed up a lot of marketing spend to invest in display.
This is not the only way that the Indian market has a different twist to emerging online travel markets. While India maybe smaller than the more mature Asian online travel markets Japan and Australia the target population have been online since 1996. That means by the time online travel started to take off in India in 2006, the population had already been online for ten years, allowing for speedy growth and rapid adoption. PhoCusWright reported this week that the 2009 Indian online travel market was US$3.4 billion (Indian Online Travel Intermediary Review).
On functionality, Cleartrip have taken a Kayak look and feel approach to travel (as opposed to the more traditional OTA look of MakeMyTrip). This is deliberate according to Hursh. They are looking to new approaches to travel search, targeting the image lite Google like approach of text boxes.
Hrush is also looking to expansion beyond India. Cleartrip.ae is now live and targeting consumers in Dubai. Not a traditional place of expansion for an Asian online travel company but in Hrush's view Cleartrip already have some awareness and it is a small enough market for Cleartrip to test expansion
Want to read more on Cleartrip? I was not the only one to catch up with Hrush in Singapore. Check out Siew Hoon's piece called "Cleartrip out to make the world smaller".
Monday, May 17, 2010
Sunday, May 16, 2010
Two things I am keeping an ear/eye out for in Agoda/Priceline announcements/transcripts (thanks to Morning Star for the Q1 2010 transcript). Firstly general information on performance and secondly anything on integration of inventory between the three models (opaque of Priceline, negotiated retail of Booking.com and merchant of Agoda). Here is what the transcript has on those questions.
On general performance CEO Jeffrey Boyd made a number of positive comments on Agoda’s performance. Saying that Agoda and year on year improvements in ADR were strong contributors to the 73% increase in international gross bookings growth (on a local currency basis). Agoda’s growth now seems to be having enough of an impact to shift the overall retail/merchant model mix. In this area Boyd said.
"Merchant gross bookings increased 25% as merchant hotel gross bookings both at priceline and Agoda offset year-over-year decreases in opaque airline ticket and rental car sales, where reduced industry capacity squeezed inventory available for opaque discounting."But the future is not without challenge or risk – as we should expect for a business based in Thailand. As Boyd observed
"...civil unrest has reemerged in Thailand, severely disrupting certain sections of Bangkok and forcing Agoda’s team to relocate to temporary offices. As a result, business for Bangkok and other Thai destinations is under pressure for both Agoda and Booking.com. Nevertheless, both businesses continue to grow their overall Asian pacific businesses at impressive rates."During the Q&A Mark Mahaney of Citigroup (author of the Agoda turnover report). Asked Boyd to give some more details on the Asian business. Here is the exchange edited to focus only on the Asia elements:
“Mahaney: ...could you comment a little bit more on the Asia business, particularly the Agoda asset? In the past, you’ve said that’s been growing close to triple digits year-over-year. Were the disruptions in the March quarter significant enough to take that growth rate materially below that level?On Inventory integration
Boyd: With respect to Asia and Agoda... the disruptions had a very significant impact on business for Bangkok and Thai destinations. And while I don’t want to give a specific growth rate for Agoda, their business notwithstanding those disruptions are still growing at a faster rate than our overall business ...I’ll also add that the Booking.com business is growing, again..at impressive rates in Asia. So, Thailand is certainly having an impact, but the business is diverse within the region and the region is having very strong growth for us just in general”
He was then asked about the integration of inventory between the different brands. Boyd is still not giving away much here. It is clear that we have seen and can expect to see Booking and Agoda inventory appear on both sites but is not clear from his comments whether we can expect to see merchant and negotiated retail seamlessly integrated in the way that Expedia has started to do with its merchant and Venere backed Expedia “EasyManage” hotels. Here is that exchange (edited for focus on integration).
"James Cakmak - Sidoti & Company: Can you talk about the progress made on sharing supply inventory across your multiple brands and sites?
Boyd: With respect to sharing supply, we now have on priceline.com, Booking.com inventory available not only in Europe, but also in North America and Agoda has been selling for several quarters inventory of Booking.com to its customers in Asia. I think that we’ve made very good progress in getting that integration up and running, and we believe it’s been additive to the business. The next phase of that is really one of optimization to make sure that we’re able to display the inventory in a way that is additive to the Group as a whole and understand the relationships between how various inventory performs in different marketing channels. It’s not a trivial exercise, but in our view we’ve got plenty of time to get it just right, because as we optimize over time it will be beneficial to our results. So we’re encouraged by our progress on that front, but there is plenty of work left to do in that regard.”
Friday, May 14, 2010
In my keynote, I spoke about the rise of transactional questions on Facebook and Twitter. I highlighted a number of examples of consumers using twitter and Facebook to ask questions that are begging for advertisers to provide answers. Opening up social search as a real competitor for Google. Sharat Dhall of Tripadvisor spoke of the never ending flood of user reviews/photos and hotelier responses. Particularly of interest in his presentation was the launch of TripWow and how Tripadvisor is expanding their insatiable lust for content from text to photos. Joe Nguyen of comScore showed the numbers with a left to right sharp incline for Facebook travel stats. Starwood spoke of having 1 million mentions in social media in 2 weeks (though many of us weren’t sure the numbers were right). Brett Henry of Abacus called Foursquare and Gowalla as the future must watch emerging businesses. Morris Sim of Circos Brand Karma told a story of a 4000% ROI on a social media marketing campaign (though admitted that scaling it was extraordinarily hard). Aloke Bajpai of ixiGo spoke of the future of apps and mobile as social devices – as soon as someone launches a more advanced mechanism for app search and discover. Even speakers that started by expressing concern that the conference had become dominated by social media talk ended up talking non stop about the user forums on their site.
It turned me to thinking about whether or not it was fair to hijack the conference and talk so much on this one area of consumer interaction and marketing. On one level it is understandable given that social networking sites are generating the most traffic, buzz, funding and consumer attention. But (as I said in my keynote) we cannot allow ourselves to get caught up in excitement and forget that the number one online battle ground for transactions is still on Google/Yahoo/Baidu/Naver etc. We must get engaged in social networking and content but cannot take our eye, money and talent off the traditional search battleground. My tip for social media was to focus on data, content and customer monitoring first them look to transactions in social media in a year or two (or three). For more on my thoughts see my post ad:tech thoughts here.
Some of the hoteliers in attendance may have felt disappointed that they did not hear more about how to rank on Google, spend on banners effectively, sign up with OTAs, manage content and improve SEO performance. This is was not a conference for talking about what to do now in the places that generate traffic and business. This was a conference for thinking about what was next – where we talked about how to engage with an audience that wants to talk to you and be with you online.
Attendance was solid in terms of numbers with a majority hoteliers, then online agents then technology and service providers. I have been noticing more and more that airlines have all but stopped turning up to online specific conference, limiting themselves to airline specific ones. On the format, eyefortravel are pulling good quality speakers but it is time to do away with the 3x15+QA format. That is the format where each session has three speakers giving a 15 minute presentation each followed by panel Q&A. Conferences like this need less power point and more QA and interview formats. Moving the format away from collective presentations to interview and panels will reduce the sales pitching that continues to creep (and sometimes storm) in and increase the speed at which the conversation gets to the interesting analysis.
Finally snaps to Don Birch who was a great chair. Insightful questions and summaries.
Thursday, May 13, 2010
Jump On It raises $1.3 million, joins group coupon war and is targeting $15-20mm in revenue per year
A press release hit my inbox announcing the raising by Jump On It and caught my interest because I have been thinking a lot recently about the group coupon model boom and how it might impact online travel. Not just because the barely 16 month old Groupon raised money at a valuation of $1.2/1.3b, not just because Jump On In is joining Spreets and Scoopon in the Australian group coupon push and not just because between Groupon, Living Social and BuyWithMe have raised a combined $225mm and counting. Though those are reason enough. The reason is that I am interested is that between the buzz around group coupon systems and zing around the private sale companies like Jetsetter and VoyagePrive I am wondering if there is something new happening in travel and activity distribution. Wondering if we are starting to see another piece in the move toward the deal targeting and recommendation systems we have been talking about here at the BOOT.
On the business model
Jump On It is running a typical group coupon/Groupon model. In case you don’t know the group coupon business model, it involves a retailer/advertiser offering a discounted product or service via a voucher. Consumers sign up to buy the discounted product or service. But there is a minimum sell order/threshold that as to be met before a voucher can be issued. For example a restaurant offers $100 worth of food and drink for $50 so long as 50 people take up the offer. The deal is normally time limited (maybe also the voucher). The marketing company (Groupon/Jump On It/etc) takes the credit card number up front but only charge the card when the participation threshold is met. Usually one deal per city/area is offered per day. Jump On It makes money by charging the retailer a booking fee (built into the voucher price). Fabig admitted that the booking fee may be the whole amount of the voucher meaning that the retailer sometimes makes no money on the voucher – seeing the whole process as a customer acquisition tool.
On raising funds
It is impressive that Fabig and partners Adam Rigby and James Gilbert managed to raise a sizeable angle sum by Australian standards off the back of a business plan and CVs - with no product live. Money came via investment house/deal shop Nextec and from serial Australian investors Roger Allen and TotalTravel founder Malcolm Baker (NB Yahoo bought TotalTravel in 2009)
Fabig is not worried about the competition from US companies that might enter or the AU players that have already started. He is convinced that the successful coupon players will be those that only offer one deal a day per city not a mass of deals. Means that he sees room for 3 or 4 players to be successful. The Americans don’t worry him. He believes they are a while away from caring about the Australian market by which time Jump On It will have established a foothold.
One of the companies vying to be one of "2-3 players" is Spreets.com.au. Spreets CEO Dean McEvoy is looking forward to battle with Jump On It. “Game On!” McEvoy said in our chat. Spreets has closed a round of it's own (amount undisclosed) and is glad to hear that Jump On It is also in the market as it “keeps you sharp and validates the opportunity”.
On marketing and using Facebook to kick off the business
Fabig sees the challenge in growing the business as a marketing and execution one, not a technology one. He says that the technology is not complicated. Success it is about executing well, building the viral audience. They have been very active in using Facebook as a customer recruitment tool, starting well before the launch. In an impressive display of social media marketing they set up a series of city fan pages (ie I [heart] Sydney]) and claim to have attracted 100,000 fans to use as the initial marketing database.
The biggest challenge I see is scale. Targeting 1 deal a day per city and focusing on Australia (and maybe NZ) means a target deal market of 10 maybe 12 deals per day (assume six cities in AU, four in NZ, maybe two regionals in Australia or splitting Melbourne or Sydney into two). Groupon is in a market where 72 million people live in the top 200 largest cities (2004 data). Fabig is not worried about this, believing that even with a market of just 10 cities he can build scale and a business generating $15-20 million in revenue per year.
Want to read more
If you want to read more on this model I suggest the following posts
2. TechCrunch: A TC Teardown: What Makes Groupon Tick
3. TechCrunch: Interview with Groupon CEO Andrew Masonthanks to bixentro's for the photo via flickr