New Expedia.com Logo: its a 21st century thing - I think

It is a day for Expedia webite posts. Thanks to Ciprian Morar for alerting me to the new Expedia.com logo. Gone is the softly swooshing yellow aeroplane on a bright blue background evoking happy thoughts of travel and living in the noughties. Hello to the sharp pointed rocket ship that blasts forward into the second decade of the 21st century- a world of darker hues and serious companies. No more Mr Nice Guy and next stop the moon. What would Freud say about this change? What do you think? Here is the old one.

More Expedia display trials - defaulting to hotel search in Australia

Late last year I shared with you a screenshot showing that Expedia.com.au were trialling a Wotif list like display for hotel results. With the new year I can see that they are trialling a new home page with larger widget and hotels as the default for search. First sale of the year is a 50% off hotels. Is Expedia giving up on Air in Australia? Screenshot below.

Expedia trialling Wotif display format in Australia

Care of a tweet from Kristi Barrow I came across a hotel sort order and search display experiment by Expedia in Australia (expedia.com.au). Below is a screenshot of the new display trial.

As you can see it is a grid approach rather than the typical list and details approach. I am convinced this is only a test as I was only able to get these results in one of four searches I tried. Likely they are doing multi-variant (or A/B) testing here.

You may be wondering why Expedia would trial a new (and arguably less user friendly) display on their Australian site. The reason is because of the market power of Wotif - the largest seller of online hotels in Australia.

In case you have not looked at the Wotif site, they have a very different look and feel to a typical online hotel retailer. Instead of a list of hotels with a lead in room rate, they have a grid that shows all the hotels on the left side, dates at the top and then availability and price in the middle. In other words a dramatic increase in the amount of information shown to a consumer. The sacrifice being depth of hotel information, sort order management and date accuracy (ie a specific date range for a search). It is now standard in Australia but very different to other markets.

By standard I mean it has influenced other players. Local competitors such as needitnow (AOT group) checkin and quickbeds (Fight Centre) have followed suit with this layout. Clearly Expedia has also caught the Wotif bug and is interested in trialling this layout in Australia.

Thanks to Kristi for sending the story around.

Kuxun acquisition takes TripAdvisor further into China

Expedia's TripAdvisor is to buy Chinese meta-search company Kuxun (at least I think it is a meta-search company) (according to Dow Jones via Hotelmarketing.com). TripAdvior CEO Steve Kaufer would not give away how much was paid but is quoted in the article as saying he has US$50mm to invest in China in 2010 and 2011 but this includes setting up the local version of TripAdvisor Daodao.com. Also said he plans to double the number of staff in China from 80 to 160. My guess (no basis just a hunch) is Kuxun will be used as the tech behind Daodao with Kuxun's brand to disappear soon after the deal.

In case you are wondering about meanings. I am reliably informed that Kuxun means Cool Information or Smart Information and Daodao means To Reach, To Arrive.

Her is my updated list of TripAdvisor Acquisitions in the last few years:

• Kuxun;
  
• Flipkey
  
• Airfarewatchdog.com
• OneTime.com
• Virtual Tourist
• HolidayWatchdog
  
• smartertravel.com
• bookingbuddy.com;
• TravelPod.com;
• Travel-Library.com;
• SeatGuru.com; and
• Cruisecritic.com.

I always close these stories with the reminder that Expedia owns TripAdvisor as you'd be surprised how much search traffic I get asking the question "who owns TripAdvisor"

801 not out

Another 100 posts are live on the InterTubes. Time again for my regular "not out series" recap where I go through the last 100 posts and remind you of the themes that have been dominating the blog. I started almost three years ago with 101 not out and continued with 201, 301, 401, 501. 601, and 701 not out. This comes at a time that the BOOT passed the 100k visitor mark.

Two new segments for the Blog

• Seat Reviews including Qantas Economy, Qantas Premium Economy, JAL Business, BA Business, Singapore Raffles and United Business ; and
  
• Business traveller tips - what to pack, what to wear and getting through security.

Meta search action a-plenty which I tried to summarise in my post "Meta-search vs Online Travel Agents: the three main differences and why they matter"

• TripAdvisor launching air meta-search and received criticism (including from me) for allowing too many reviews from non-travellers
  
• Travelzoo launching Fly.com
• Kayak branching into content and review meta-search through expanded Travelpost
• Yahoo! went the other way and euthenased FareChase
• Cheapflights launched in Australia with a sub-par product
• Car meta-search company Oodles topped the car traffic numbers in Australia
• Sidestep founders came back with the oddly named Voyij
  

While also having time for Travel Discovery and Inspiration sites such as:

• event based search site Joobili
• the high profile Triporati
• data loving Tripbase

...and we found out how much Expedia paid for VirtualTourist and OneTime

BOOT interview mania with start ups and industry shakers

• Alfonso Castellano of TripSay (part 1 and 2)
• AsiaRoom came out of the closet, launched direct contracting and the BOOT found out more about them and their TUI ODS stable-mates including revenue numbers
  
• Jim Hornthal of Triporati
• Yen Lee of Uptake
• Reuven Levitt of Tripbase (part 1 and 2)
• Steve Hafner of Kayak
  

oh...and...a plane actually landed on water

Webjet to relaunch hotels with a GDS backed retail model. Three reasons why I don' think this is the best plan available

Webjet are having a great time selling domestic air in Australia. As we have discussed before their tech leadership in developing the Travel Services Aggregator back in 2004 enabled them to sell multi-carrier domestic air including low cost carriers before anyone else. Even though other sites now have similar functionality, Webjet continues to enjoy customer loyalty and growth (despite charging dramatically higher fees per booking).

The company has made a number of attempts at diversifying their
revenue with land product. In mid 2003 they launched Bookabed as a standalone hotel brand. In 2006 they revamped the product under the new name Lotsofhotels. Then in June 2008 they announced plans to take Lotsofhotels onto the eBay platform. Unfortunately none of these efforts have developed traction in a very competitive market.

In their recent results they announced the launch of new hotel product called "Stay and Pay" (Travel Weekly story here). This new product moves them away from merchant sales to the retail model (consumer pay at the hotel, Webjet collects commission from hotel). They are launching two twists on the retail models you see from big players like Booking.com and Venere. Firstly there is no negotiated inventory. The inventory is drawn from the publicly available rates distributed through a GDS feed from Travelport. Secondly there is a service fee of $10 per booking charged up front by Webjet.

I like the fact that Webjet are trying hotels again. Fees on air make up 97% of their operating revenue (just down from 98% last year). They need to have other revenue streams to compete with packaging experts Expedia and Zuji (Travelocity) and the Wotif group owned air intermediaries Travel.com.au and Lastminute.com.au (not to forget the Orbitz owned hotel only players HotelClub and RatesToGo) [disclosure]. That said there are three reasons why I don' think this is the best way to go about hotels for Webjet:

1. Webjet will struggle for Rate Parity: The GDS companies (Travelport included) have done an admirable job working with the Chains and some independent properties to secure rate parity through GDS distribution. By that I mean working with hotels to have the rates that are loaded in the GDS be on par with the negotiated rates provided to the OTAs. However the rates in the GDS are never cheaper and by charging a $10 booking fee, Webjet will end up with pricing that is almost always more expensive than any other channel. There will be a convenience factor for consumers but this will be at the margins compared to the consumers who will be turned away by the higher price on Webjet;
   
2. Webjet will not have access to important Inventory Types: Again the GDS companies have worked hard to expand the range of hotels and properties available. However there is still a bias towards chains and a bias towards geographies with a history of GDS distribution. This means Webjet will be missing important independent properties and have less coverage in the Asia Pacific, Latin American and Middle East regions than the negotiated hotel agencies and OTA competitors; and
   
3. Webjet will miss out of the the best Specials and Promos: In this "year of the deal", hoteliers are providing deals and promos the likes of which have not been seen since 9/11. Most of these come with conditions, specifically a range of cancellation options ranging up to non-refundable. The GDS is not able to support this functionality as well as the negotiated inventory providers. Means that many of the great deals (especially last minute ones) will not be in the feed accessed by Webjet.

I can understand why Webjet went down this route. It would be very expensive for them to build a hotel contracting team from scratch. Impossible in fact if they wanted to gain coverage outside of Australia. Therefore they need to work with partners to access inventory. However my recommendation would be to work with an inventory provider with negotiated rates rather than the GDS. [disclosure - I work for a company that provides negotiated hotel rates]. It will provide them with a fix to each of the issues above.

The new Stay and Pay product is due for beta-launch today (18 Aug 2009). Will put in a functionality review post later.

Update - make sure you check out the comments where Richard Noon (Webjet CEO) puts his side of the story

Update 2 - I thought of one more reason why this product won't give consumers as good an experience as a negotiated provider will. The room type description and hotel content on the GDS is not as clear or attractive as those from a negotiated provider. Here is an example of a room type for a Sydney hotel in a GDS " PREMIER ROOM CITY VIEW 1 QUEEN OR 2 SGLSNON SMOKING LCD TV HI SPEED INTERNET FOR A FEE".

PS - last year at TRAVELtech Webjet CEO Richard Noon gave his estimates of the turnover of the various Austrlaia online air intemediaries.

Still trying to convince offline travel media that Expedia own's TripAdvisor

Below is an extract of the TravelToday daily PDF published by the Australian version of TravelWeekly (owned by Reed Business).

Expedia coup
Expedia has partnered with SeatGuru to integrate user reviews of airplane seats [sic] into the seat maps for flights sold on Expedia.com.

In case you (like TravelWeekly) have missed the last 5 years of the online travel industry, Expedia owns TripAdvisor and in May 2007 TripAdvisor bought SeatGuru.

What next TravelWeekly? Amazing news that Qantas has extended its preferred supplier relationship with Qantas Holidays. Industry shaking news that W and Sheraton hotels have agreed to exchange loyalty club points. Hold the front page news that Avis and Budget are using the same fuel supplier.

Rather than using the headline "Expedia coup", it would be more appropriate to usethe phrase "People at Expedia are returning each other's calls". But that would hardly make for an interesting headline.

PS - can only find the article in PDF form, let me know if you see it online.

TripAdvisor needs to move to a "no stay, no say" approach to reviews to protect brand and online reviews generally

Expedia's TripAdvisor is claiming more than 20 million reviews on their site. In addition they have been on a steady and apparently unstoppable campaign to buy niche review sites in areas such as Cruise, holidays, airline seats and vacation rental. You'll find the latest list of everything they have bought here. As a result (and as predicted here) they have morphed from a destination site to an online advertising network and meta-search company called (unsurprisingly) the TripAdvisor Media Network.

While that has been going on in the background, the front end of TripAdvisor looks like an Onlnie Travel Agency site with tabbed header, a search widget middle left, deals and promos in the the C column and content and search help below the fold. Clearly a move to compete directly with the OTAs in drawing in consumer loyalty and repeat business.

Despite all the changes, the heart of TripAdvisor is the reviews. The dedication of the user base to write detailed, descriptive, useful and Google friendly content to attract lookers and bookers. This all ties to the baseline of the TripAdvisor band and their tag line - "get advice from real travellers". Unfortunately stories are coming out about possible flaws in TripAdvisor's mechanism for ensuring that reviews are only written by "real travellers".

Just recently the Times in the UK ran a piece called "Who's really writing the reviews on TripAdvisor". The story quoted one hotelier as saying "the system is laughably easy to manipulate....I was even approached by PR first offering to write my reviews for me." Newsweek also covered the story in their article "TripAdvsor tries to respond to fake hotel reviews". In that story journalist Sean O'Neil noted that he did not understand why "TripAdvsor didn't duplicate Amazons "Real Name" feature, which offers third-party verification that a reviewer is the person he or she claims to be".

The question is not whether or not their are fake reviews on TripAdvisor - clearly there are. The question is how many are there and what influence do they have in hotel rankings, especially in smaller destinations. Consumer Travel uber Blogger Chris Elliott put the question best in his story "Does TripAdvisor hotel manipulation scandal render the site completely useless".

The official word from TripAdvisor (care of Elliott's post) is that they have a zero tolerance for fake reviews (they call it fraud) and a three methods for policing this policy. Quote -

"1. Every review is screened prior to posting and a team of quality assurance specialists investigate suspicious reviews

2. Proprietary automated tools help identify attempts to subvert the system

3. Our large and passionate community of more than 25 million monthly visitors help screen our content and report suspicious activity"

An example of this approach can be seen on the entertaining TripAdvisor We're Not Making This Up Blog (in the post called "Exactly") where an irate hotel DOS is complaining that all of the reviews he is writing for his own hotel are being pulled down.

What is missing is independent confirmation that the customer actually stayed in the hotel. My view is that these three steps are not enough. Technology and human review will simply not be enough to screen out the "gamers". The only way to be truly clear of fraud is for TripAdvisor to move to a "no stay, no say" rule. A means of verifying that the person writing the review has stayed at the hotel. This could be achieved though a combination of approaches such as a feature like the Amazon Real Name service, using the enormous amounts of transaction and searching data that the Expedia Inc empire collects, drawing on information from advertising partners and other verification mechanisms.

The counter view is that this would be too hard for TripAdvisor as they do not do any of the bookings, that is left to the advertiser. While there is some truth to that argument, between the data collected by TripAdvisor on click behaviour, information provided by advertisers and information from what must be a massive Expedia Inc privacy killing data warehouse, there is (I am sure) more than enough data available to TripAdvisor to verify. I would not be cheap or easy to do, but in my opinion necessary

What do you think - should TripAdvisor move to a "no stay, no say" rule or is the fraud so small that it doesn't need to?

If you are looking for more commentary on this story also check out

• Yeoh Siew Hoon's post "the ugly face of social media"
• Darren Cronian's post "Ten summer travel tips from bloggers" which includes the tips "You’ll find good reviews and bad reviews for nearly every destination" and "Treat all online travel reviews like mildly entertaining fiction."
• Dennis Schaal "The truth About TripAdvisor and Professional Hotel Reviews"
• Martin Kelly at TravelTrends with a personal experience called "TripAdvisor Cleans out Reviews for Fiji Resort"
  

As always I close with confirmation that Expedia owns TripAdvisor. Other than searches for my name, Google searches for "who owns TripAdvisor" is my number one source of search traffic.

Kayak CEO Steve Hafner Interview: keep it simple, focus on search, stay out of Asia..oh...and get back into offline marketing

Enjoyed a chance to catch up with Kayak CEO Steve Hafner last week. I had planned the call to be about the challenges of a traffic arbitrage business model. I had hoped to draw out of Hafner that there was pressure in the Kayak model fuelled by rising paid search costs, being late to the review game with the Travelpost revamp and tremendous marketing and product pressure from the drop/elimination of booking fees by the big online travel agents (OTAs). Instead Hafner was relaxed, confident and ready to push ahead with millions of dollars in offline (yes offline) advertising planned.

We touched on two main areas. His focus and plans for the next twelve months (including plans for Travelpost and why the OTA fee cuts don't phase him) and his thoughts on expansion outside America (not in Asia and measured in Europe). On the former there is a lot to be worked on for Travelpost to catch TripAdvisor but there are plenty of flaws with the TripAdvisor product and an accompanying disquiet amongst users. On the latter, the potential risk I can see is that they may be under estimating the challenges of growing in Europe where they have more competitors and less compliant suppliers.

Here is our exchange in detail.

On plans for the next twelve months

Hafner says that Kayak is exclusively focused on three things:

1. More focus on core search: The measures here are speed, accuracy and simplicity. Hafner is measuring his world in terms of milliseconds in response time. I asked if we was worried about price accuracy, database loads, hotel and switch look to book issues but none of these concerned him. For Kayak the true cost per query is falling to near zero through caching and the costs of bandwidth. This allows him to focus on the speed of search and the comprehensiveness of the results. His goals are big but simple - that the submit button results in a search in 15 milliseconds, that the results contain every bookable option and that the filtering and customer profiling gives the client the results they want. While this sounds obvious it was the simplicity and aggression in his focus that impressed me;
2. Driving awareness: Hafner believes it is the perfect time to get back into offline marketing to take brand awareness to the next level and compete with the OTAs. He believes that Kayak is "fully penetrated online" and that the costs of offline has "come down by about a third". Critically he does not want to leave the offline channel as the exclusive domain of the big spending OTAs, especially because (as he puts it) "the fee cut [by the big OTAs] takes margin away from their P&L and out of their marketing budgets". New CMO Robert Birge has a $100mm to spend on marketing and a CEO keen to see the brand in lights on TV (example below of their "trip idea" commercials from back in 2006). Right now Hafner is claiming that 8% of online shoppers have heard of Kayak (cf he claims Orbtiz number is 60%). In two years he wants the number to be 20%. ; and
3. Making Travelpost a viable competitor to TripAdvisor and Travelzoo: Kayak has followed the much smaller Uptake into the review meta-search model through a revamp of Travelpost. Prior to the revamp Travelpost (acquired by Sidestep) was a user generated hotel review site much like TripAdvisor. Now post revamp it aggregates reviews from around the web as well as allowing direct posting and commentating. He plans to go after both TripAdvisor and Travelzoo with this new product. He hopes within two years for Travelpost to be generating about half the revenue that Travelzoo is making from deals and to be 15% of the size of TripAdvisor's media revenue (up from 1% now).
   

On Expansion plans

An interview with Hafner is famously free from PR generated answer obfuscation. I asked a detailed question about the Asian market that started with a lead in on the challenges in the market, the earlier successes of Qunar in China and Wego in Singapore and Australia. Even made a reference to Sprice and Cheapflights. "So Steve," I concluded, "do you have your eyes on Asia too?". Two word answer - "absolutely not". In short he thinks the market is too small (in terms of search volume) and not mature enough (in terms of online advertising).

Europe is another matter. He admits that the change in MD "reflects a disconnect in aggressiveness" which I read to mean that the outgoing MD had a more aggressive plan than Hafner did (see the Travolution post on this for more details). This does not mean they are pulling out of Europe and he rejected any suggestion that Kayak had made a "false start" there. Instead they will keep on with the general three strategies above run by the two people in the London office. He conceded that there are product gaps in Europe (no Rayanair and some other low cost carriers) as well as higher costs from online marketing as Google is so much stronger but he is there for the long term even with no plans to replace the Managing Director role.

The competitors are coming fast at Kayak with big marketing budgets and constant model changes. Kayak's response is keep doing what we are doing only better and now on TV. What do you think. Good plan?

---------------------
Example of earlier offline advertising efforts by Kayak.

VirtualTourist and OneTime cost Expedia $85mm according to Venture Beat

Eric Eldon over at the Venture Beat is reporting from an interview with VirtualTourist and OneTime founder J.R.Johnson in his post "No free lunch: The story behind VirtualTourist’s big exit, and Lunch.com".

For those keeping a track of the large number companies bought by TripAdvisor recently, VirtualTourist and OneTime were acquisitions nine and ten in year of frenetic activity by the Expedia owned Tripadvisor (yes...Expedia owns TripAdvisor:)).

Not sure how he did it (and he does not credit Johnson with leaking it) but Eldon has discovered that Expedia/TripAdvisor paid $85mm for the two companies. More back story to the transaction over at the full VentureBeat post.

Hat tip to HotelMarketing where I first saw the story.

Cheapflights.com.au launches in Australia - but this is not meta-search as it should be

It is supposed to be interesting when an international online travel company launches in the land of the barbecuing shrimp. So here I am on staycation leave quietly reading my newsfeed and blog email address when I spot care of m-travel and an email from Steve Sherlock of Oodles that "Cheapflights have launched an Australian and New Zealand version of their site". I should be excited by an international launch in Australia but Cheapflights is not exciting for two reasons.

Firstly, as I said back in July 07 when the rumours first started of Cheapflights coming to town (where 2008 was the planned launch date), this market (online air in Australia) is already too crowded for a domestic market with 2/3 carriers. OTAs like Webjet, Travel.com.au (owned by Wotif), Flight Centre, Expedia, Zuji (Travelocity) and Bestflights and regional meta-search player Wego (part owned by News Corp) are fighting for scraps left over by the online air dominance of the major airline websites (Virgin-Blue, Qantas and the Qantas owned Jetsar). Granted those scraps are getting bigger and bigger but still this is not an easy market to enter. Secondly, the Cheapflights product is simply not good enough to be of value to the consumer.

For those that don't know, Cheapflights is a quasi meta-search company started in the UK way back in 1996. Even describing them as "quasi" is generous because to me the hallmark of a meta-search business is an integrated display of up to date results in one place. The UK version of Cheapflights has the integrated display but the results are not up to date. Have a look at this extract from a London to Paris search

Notice where it says "updated 9 minutes ago" next to the BA quote and "updated 2 days ago" for ebookers. Also have a look at the URL for the page

It is a static landing page - http://www.cheapflights.co.uk/flights/Paris/London/ - rather than a dynamically generated page based on the timings of my specific search. The results are not timely or up-to-date. I clicked on a few of the links and they ended up on either dead search pages or some other destination page where the results did not match the search terms. In short the UK version Cheapflights - the oldest and most established version - does not work on a stand alone basis nor meet the minimum criteria for a meta-search player.

The Australia version of Cheapflights is even worse. It may be just early days for the product but the AU version is many steps behind the UK product which itself is steps behind competitors Kayak and TripAdvisor.

To give them some due, meta-search in Australia is not easy. As I discussed here in a Webjet vs Wego post (another Steve Sherlock tip) it is has proven very difficult to facilitae multi-carrier domestic meta-search in Australia. Wego has tried a work around (again go back to this post for more) but Cheapflights are not even trying. Have a look at this shot below of Cheapflights.com.au

This is the results of a search of Sydney to Melbourne. Rather than being presented with a set of even un-integrated (or disintegrated if you prefer) results I am given four options, four different websites that I can click on. Each click generates a new pop up with search results from the named party. If I want to do what meta-search is supposed to be for - comparing multiple sites - I have to open all four sites and looked at the results one by one. In other words do exactly what we used to do before meta-search came along. In some other words, it adds no value to the standard surfing practices of a regular internet consumer. In some more blunt words, next to useless.

In truth I don't think even Cheapflights think of themselves internally as a meta-search company. They target more of their effort and energies in their Travelzoo style Hot Travel Deals newsletter. Am undecided if there is value here,

Either way I am not predicting success for this product. The product in its current form adds little to the market and the competitors have more money to spend on marketing.

Told you I would get tough again? Am I being too tough?

Expedia, Sefiani Commnications and Fairfax press combine to bring to an end the BOOT's reading of newspapers

I rarely read offline newspapers now. Simply don't have the time and like a good Interweb user I collect and read most of my news via by feedreader and twitter. I have also found that as newspapers have cut more and more staff they have descended into being too dependent on PR companies feeding them whole stories. With this in mind I was reading in Singapore Airport the weekend Life and Leisure supplement from the Australian Financial Review (owned by Fairfax Media). Up until yesterday I have enjoyed the "Traveller" section of that supplement which each week asks a road-warrior to answer a few question about their experiences as a business traveller. This week it was Robyn Sefiani of Sefiani Communications Group. There was one question and answer part of her profile that caught my eye and I thought I would share with you...

"Travel Tips

I do all of my travel bookings online through Expedia.com.au and Hotels.com. The savings can be significant and the traveller reviews are a great guide to finding the best hotels."

This clearly reads like PR messaging regurgitation, not insight shared by one traveller to another. Intrigued I looked up Robyn Sefiani's company and found that she does a lot of work in communications and PR for consumer companies. In fact she lists as one of her client's

"The world’s largest online travel company" (and this news story confirms that she does PR for Expedia)

et tu Australian Financial Review? Have you run out of people to profile in the "Traveller" section - one of the last pieces of offline news media that I consume - and are now selling it off to the highest bidder? Best case view, the AFR did not realise that Sefiani was using the Traveller section to promote one her client Expedia without disclosing the link. In which case it is sloppy work by the AFR/Fairfax for not checking and unpleasant work by Sefiani for tricking the newspaper. Worst case view, the AFR is using this spot as another revenue generating part of the paper regardless of the impact on readers' trust.

I am all for creative PR. For finding ways to get your company's brand read by consumers in a fashion that exploits the consumer's desire for information and entertainment rather than through pure advertising. In a way where the consumer does not mind having the brand promoted. But having a paid representative simply recommend a brand name without disclosing that they are paid to do so is not creative PR - it is advertising deceitfully dressed up as information. This piece should have been labelled as an advertisement. Shame on you Fairfax for this lapse and shame on you Sefiani Communications and Expedia for not having more creative ways of getting your message out. That's it, no more newspaper reading for the BOOT (and we used to be such friends). Back to the Internet for me where you can trust everything your read as being independent and without spin...cough...hmm

Update - Robyn Sefiani has sent me an email on this. Here it is unedited

Dear Tim,

I see I feature on your blog today, following my recommendation of Expedia and Hotels. Com in the Australian Financial Review ‘Traveller’ column last week, which is a regular reader Q&A in the Life & Leisure section of the AFR.

The facts are these: I was an avid fan and regular user of Expedia two years before our firm was invited to pitch for Expedia’s PR account in Australia, and I continue to do most of my travel and accommodation bookings online through Expedia and Hotels.com.

My favourite hotels mentioned in the ‘Traveller’ column, the W Court in New York and Le Agavi in Positano, were discovered on Expedia, well before Sefiani was appointed by Expedia Australia.

I do accept that public relations firms have a responsibility to declare commercial interests, but as my comments in ‘Traveller’ were my own personal views, I stand by them.


Best regards

Robyn Sefiani

"The AsiaRooms of 2009 is not the AsiaRooms of 2005": Interview with John Fearon, AsiaRooms Head of Marketing

AsiaRooms is one of the region's largest online hotel retailers. With 81, 908 hotels and counting (according to the site today) and a parent company that is the largest travel company in Europe (TUI), AsiaRooms is clearly a player that the BOOT should be paying attention to. Historically the company has made this hard as it has been very secretive with its numbers and plans and (to be frank) was not a company we wanted to pay attention to. Prior to TUI buying the company, AsiaRooms built up an unwanted reputation on online customer care forums for complaints and among the trade for scoffing at rate parity and associated price guarantees. Rumours of wholesale group rates being market up $5 and sold online became the standard trade fair post-session beer story when AsiaRooms came up in the conversation. The brand buzz was all bad. In fact the customer and industry complaint forums became the only source for profile information on the secretive company.

John Fearon the (relatively) new Head of Marketing for the Pattaya based AsiaRooms is determined to change all that. Determined to build on the TUI brand and infrastructure support to change the market perception of AsiaRooms and to bring the company out from behind the secrecy curtain. As John told me “we are not the AsiaRooms of 2005”. I had a chance this week to (virtually) sit down with Fearon and hear his plans for changing the reputation of AsiaRooms, overhauling their marketing plans, ditching meta-search and taking on all comers in a press to be number one in Asia.

In marketing, John's first target is to change the approach to paid search marketing. SEM and SEO is the frontier that John believes will sort out the winners from the losers in Asia (I agree). Is also the place he was happy to share numbers and metrics with me. After only three months of work Fearon is claiming to have doubled the amount of business coming form the search engines on the same level of spend. Not much of a metric to share but an indication of his marketing plans. He had a lot less praise for and desire to continue to invest in meta-search. Has pulled AsiaRooms out of Kayak and has no plans to go with hotelscombined. For the moment is sticking with Wego but as general rule does not believe that meta-search builds a brand or helps the business. Claims it forces you into “killing yourself” on pricing at the expense of the consumer experience. This is an interesting point. I am working on a separate post on my thoughts on the meta-search model but from what I am seeing the arbitrage gap (difference between price meta-search players buy traffic from Google and sell it to suppliers) is narrowing.

In supply the plan is to continue to gain access to cheap inventory - but with less (he did not say none) of the rate rule breaking.

Asia is a tough place to play but Fearon is not worried. AsiaRooms claims that profitability and support from the rest of the TUI nline Destination Services (ODS) group will prove another important factor. [FYI the TUI ODA group includes the UK based LateRooms and Spanish Hotelopia].

They will need more than good paid search plans and mothership support to make it in this market. Fearon says he is aware of this, especially with the Global F’n Crisis hitting Asia hard. He predicts the GFC will bring down a number of smaller brands (we off the record speculated which ones). But for Fearon this is the opportunity to bring AsiaRooms out and take competitors head-on. He has not been impressed by any of the marketing activities of competitors from the big four (Expedia, Orbitz, Travelocity and Priceline). "There is nothing they have done that made me say Wow".

Was interesting to finally hear a (confident) voice from AsiaRooms and one not afraid to admit to the reputation. He acknowledged that AsiaRooms broke a lot of the pricing rules in the past (and maybe that they still do) but is now looking to invest in brand and customer satisfaction (heck they even have a facebook fan page now!).

So what do you think? The consumer forums still don’t paint a pretty picture for AsiaRooms but the company is claiming a lot of changes since 2005. Either way the Asian online travel market war has moved to a different level.

Travelocity to remove air ticket fees on 31 March: the razor blade model and online travel

Back in December 2002 Travelocity announced that it had joined the industry trend for fees on airline tickets by introducing a modest $5 fee (original CNET story). Six or so years later, the WSJ has the story that fees will be removed on airline tickets by Travelocity starting 31 March. As I mentioned in the post on Expedia's decision to do the same, the industry is changed forever by this move. The media model will get a boost from this decision and become more important. So do the produce efforts around cross sell.

I recall in the early days of airline commission reductions and online hotel sales (around 2000, 2001). The industry was a-buzz with analogies for describing the new models taking hold. Milk at the back of the store" and the "would you like fries & a coke with that" were being used by online travel strategists as we planned moves to following offline retailers into the world of cross sell and margin managementl. The message being that the low margin product (air/milk/burger) was the lure to sell the high margin product (hotel/candy/post mix soda).

Now I believe that the airline ticket business in online travel is more like the Razor Blade/Razor model. This is where component one of a product (razor/polaroid camera/game console/air ticket) is sold at a loss to drive sales of the second component of a product (razor blade/film/game/hotel). With this model change comes substantive industry change.

thanks to B Tal over at flickr for the gnome shot

Q4 for Priceline, Expedia and Orbitz care of Seeking Alpha

Once again - if you are struggling to keep up with who made how much in online travel in Q4 Sramana Mitra at Seeking Alpha has done all the hard work for you. Her post "Online Travel: Priceline, Expedia, Orbitz" summarises the announcements and resulting share movements for each of EXPE, PCLN and OWW. Is this week's BOOT recommended read.

Photo from @jasoncalacanis

No Vacancy Conference Sydney March 19

MartinKelly of TravelTrends has been kind enough to offer me a media pass to attend the No Vacancy accommodation industry conference in Sydney on March 19. If you are going, look out for me in the back blogging away.

Speakers include Wotif CEO Robbie Cooke, HotelClub's head of central marketing Jon Wild, Adrian Currie of Booking.com and Agoda, Cyril Ranque of Expedia and Grant Colquhoun of Travelocity/Zuji (full list here).

Expedia to launch meta-search. But... don't they already own OneTime

A Kevin May @travolution tweet pointed me to a Travolution story "Expedia mulls launch of meta search engine". Contains a quote from Expedia CEO Dara Khosrowshahi considering a move into the meta-search model. I found this a little odd as back in July last year Expedia subsidiary TripAdvisor (yes...Expedia owns TripAdvisor:)) bought meta-search company OneTime (my post on the story here). Couple of possibilities here. Maybe the OneTime engine is not good enough and Expedia needs to start again. Or maybe Khosrowshahi has signed off on so many acquisitions for TripAdvisor that he forgot about one. Most likely it is just a sign that of the long list of TripAdvisor subsidiaries one of them (OneTime) is going to be getting a lot more attention than the others.

Update - getting lots of feedback in comments, twitter and email saying the OneTime should not be considered a meta-search company. More a deal finder. Looks like Option 1 above is the right one (OneTime engine is not good enough).

Alfonso Castellano Interview - current TripSay Board member, ex Travelocity and Lastminute (part 1)

Last week travel social network and planning site TripSay put out a press release announcing that former Travelocity Senior Vice President Alfonso Castellano (pictured) was joining the TripSay Board. Castellano spent nine years with lastminute/Travelocity and before than ten years with TUI. An impressive online travel resume.

I had a great chance to speak Alfonso last week about this new venture. This is the first in two posts from that discussion. In this post I will share with you the discussion we had around the online travel industry in general. In a later post will go through our discussions on TripSay and the travel content model.

Firstly to the OTAs

We started our conversation around the challenges facing the major online travel companies (OTAs). As Castellano said “Most [of the OTAs] are losing money in air” Castellano identified three themes/scenarios confronting OTAs today:

1. Complexity

The world is complex, the law, technology, fragmentation, environment, globalisation etc all ad complexity and with it costs to the big four OTAs (Expedia, Orbitz, Travelocity and Priceline).

According to Castellano, this globalisation investment bu the OTAs is not showing the benefits and gains in scale and volume and efficiency that were hoped. Instead this globalisation effort is bringing so much complexity that it is becoming a drag for the big four, placing increasing pressure on margins. Leading to theme 2…

2. Pressure on margin

Even in this economic demolition derby the OTAs are still under pressure from suppliers on margin. Castellano concedes that this pressure “might move a little now but underlying dynamic will remain. Car, air and even tour operators are becoming more and more discriminating in the on online channel.” This margin pressure is made worse due to the third theme…

3. Increasing cost of marketing

The global demand pressure will put pressure on margins but marketing costs will sill be there.

And….in a frightening prediction. Castellano is not surprised by the CEO changes recently “and am expecting more and more traumatic announcements out of the big four.”

Then to the Meta-search companies

He does not spare the bad news for other, newer players. Castellano also expressed views on the meta-search model. If we had talked months ago he would have said that the meta-search future was secured because meta-search supported the direct push by the suppliers.

Prior to this eco-madness (my words), the suppliers were able to be “discriminating about distribution”. Meta-search could play to this as “a marketing tool for supplier direct distribution rather than a complementary distribution” (ie unlike an agent). This meant suppliers could hold back from intermediaries. Today however, the “suppliers are running back to any player with distribution”. Castellano is expecting a shift “like the post 9/11 world”. Suppliers will be “desperate to pay for an extra bed to get back to profitability.” I found the discussion around the impacts on the industry of 9/11 versus this downturn very interesting. It was after the tragedy of 9/11 and resulting decimation in demand that the online merchant hotel business was born.

Finally to suppliers

I asked Castellano what advice he would give suppliers during this crisis to not repeat some of the mistakes of 2001 and 2002 where too much power was given to the intermediaries. He had even more grim news. This time for the suppliers (hoteliers). He sees a “fantastic future for hotel distribution for OTAs.” He goes on “If a hotel does not control big chunk of distribution today and is still dependent on high yield and hight cost distribution models [like agents]. It is too late, they have no room to maneuver. If they have not been building up distribution for the last 3 or 4 years, then the only option they [hoteliers] have is to keep ­ feeding the beast [online agents] then to come back and fight the bigger beast subsequently…Only a handful of hotel companies can get out of this.” Grim words indeed.

More from our discussion soon.

The BOOT is back for 2009 with 5 predictions for the online travel industry

The BOOT is back for 2009. Tanned (a little burnt), rested (though could do with another big sleep in) and ready for action (kind of). Inspired by the Travolution article "Predictions for 2009" I am going to open up the 2009 edition of the BOOT with my predictions for the travel industry. Here are my five predictions for 2009:

1. There are more airlines to go bust. In fact before the end of 2009 a big carrier will go bust or be taken over as a saving measure. Alitalia is a gimme so I wont count the impending Alitalia failure/restructure as a successful prediction. Another big carrier (or two) will fail or be bought in 2009. Update - if you want a list of all of the 21 airlines that died in 2008 check out this post over at cranky flyer;
2. Domestic travel growth will surprise us all. I am a noted optimist when it comes to the travel industry surviving shocks and set backs. People will still travel in 2009 - they will just go short. Consumers will look for domestic deals and shorter trips to enable them to enjoy the travel and breaks they want without the long-haul price tag;
3. Consolidation is not yet finished: In 2008 TripAdvisor bought everything in sight, Venere first bought Worldby then joined the extended TripAdvisor family by being acquired by Expedia, Microsoft bought Farecast, Priceline bought Agoda, Wotif bought AsiaWebDirect and Travel.com.au and more. The consolidation in the online travel industry will continue through 2009. There are too many bargains out there;
4. 2009 will not be the year of mobile for the travel industry: Every year since 2000 we have been talking about the mobile revolution in online travel. This year I rejoined that chorus of mobile revolution fan boys while at PhoCusWright in LA. With the Global Financial Crisis (I am told there is even an acronym for this - GFC) in full swing I think the larger players will pull back from their mobile plans and focus on core products, costs control and customer loyalty. Mobile will have to wait until 2010; and
   
5. The dinosaurs will screw up and come out of the GFC even weaker: The big offline players have been screwing up online for a long time now. The good ones have managed to avoid destruction due to the booming economy and the sale of complementary products (land, car, package and especially cruise). The boom is over and the pain is hitting. Just recently Flight Centre announced a likely 33% drop in profits for 2009. In the past I have given advice on how you would know that offline players like Flight Centre "get it" and are ready to execute online. The GFC actually provides a fantastic opportunity to "get it" and join the online travel revolution. Expectations for performance are low during a bust giving offline players time to shift focus and make investments in areas they have previously ignored online. But I think the offline players will miss this chance. Instead of emerging from the GFC with a stronger online focus they will dig even deeper into the offline hole and emerge even further behind the online industry leaders. As evidence of this see the recent interview from new Stella Travel (Australia's number 2 offline player) CEO Peter Lacaze where he confessed to being an online sceptic. [Disclosure - in the past I have consulted to Stella on their online strategy].

UPDATE - Prediction number 6 - the last minute model will come back. I called the last minute model as being on hiatus in May 2008. It will come back as hotels start to hurt during the GFC.

Stay tuned to see what I get wrong and right here. The BOOT is back for 2009.

thanks to Tokyo Boy on flickr for the photo

Expedia and Travelocity team up (in Asia at least): Zuji is carrying Tripadvisor reviews

Am sure you know by now that Travelocity is operating in Asia under a number of brands including Zuji in Australia, Hong Kong, Singapore, New Zealand and Taiwan. You definitely know that Expedia owns Tripadvisor (though I keep getting search engine travel from people that don't). But did you know that Zuji is now including Tripadvisor branded reviews in their hotel search results. In other words a content sharing deal between a Expedia company and a Travelocity company.