Lonely Planet CEO Interview on paidContent: iTunes is now our number distributor of city guides

An interesting interview of Lonely Planet CEO Matt Goldberg by Rafat Ali over at paidContent. Is about 5 mins long and worth a listen. Highlights include:

• Confirmation that Lonely Planet is profitable and growing. Digital business is growing at 40-50% year on year.
• Digital sales now $20mm per year covering paid content, services, transaction fees, advertising and digial apps
• One in five of LP's city guides are sold through iTunes. Easily largest single distributor
• On Acquisitions "not the first thing we are thinking about"...but..."always open in areas of technology, audience or talent"

Here is an embedded version from paidContent.

Tnooz: BOOT on Lonely Planet on Tnooz

By second post for Tnooz is live titled "Tips for what Lonely Planet should do next". Contains some background on Lonely Planet's online plans over the last few years, the online and brand vision from new CEO Matt Goldberg and my recommendations on what else they could do. Check out the post here for more. He is an extract with my recommendations for Lonely Planet:

1. Content Expansion: Make more and more of the content currently only available in books available online with the aim of being the number one organic search results for every major destination search item. It might hurt some book sales but winning in organic search will be more valuable long term;
2. Open Syndication: Increase syndication capabilities by allowing bloggers, writers, transaction sites, Facebook pages and more to access content material is an open way. Similar to point #1 above, it might cost a few book sales but being the social network content source of choice will be more valuable long term.
3. Facilitate and Make EveryYou Recommendations: Invest in recommendation technology to allow the community forums and information to be combined with the editorial content, booking behaviour and other data available to put Lonely Planet at the forefront of the development of specific and targeted recommendations of one based on the unique combination of desires, needs and interests of each individual at any moment in time. See My EveryYou concept. It will cost money and development time but the future of inspiration and content sites are targeted recommendations.

Tnooz editor Kevin May has followed up with a post "We love Lonely Planet and want to see it get better says the BBC", where an interesting debate has started.

Preparing some questions for Lonely Planet

I wrote a post a couple of weeks ago on an announcement by Lonely Planet of plans for an offline store at Sydney Airport. I was critical of the focus, time and energy being spent on something other than online. Since that post I have had a number of emails sent to me with some recent Lonely Planet online activity. I have also been doing some reading of my in preparation for next week's eyefortravel Asia Pacific. One of the speakers for the event is Andy Conroy, Global Online Director, Lonely Planet. Here are the series of announcements that I have discovered:

• Launching a channel on Youtube;
• Launching a mobile site in Australia;
• Joining up with Expedia and Hostelworld for joint accommodation sales; and
  
• Launching an API to provide direct connectivity to reviews and content.
  

Am looking forward to talking to Andy Conroy on how these things all come together.

UPDATE - unfortunately looks like Andy is no longer able to attend eyefortravel. Will have to save my questions for another occasion.

Winner of ticket to Eyefortravel Asia Pacific

I have been running a competition for one free two day (bronze) delegate pass (normally A$1,395) for a lucky BOOT reader to the eyefortravel Sales & Marketing in Travel Asia Pacific conference at the Shangri La Sydney on 29 and 30 July.

The competition was for the best question in the comments for a conference speaker.

Prize Winner

Jonathan's question for Martin Symes of Wego (see below)

First Reserve

Gath's question for Andy Conroy of Lonely Planet (see below)

Second Reserve

Adam Vance's question for Richard Noon of Webjet (see below)

What Next??

Can Jonathan and Gath please send me their contact details to timsboot [at] gmail [dot] com? If I hear from Jonathan by noon Sydney time Wednesday then he wins the prize. If not it goes to Gath. If I have not heard from Gath, then it goes to Adam (Adam I have your details).

I need your Name, Job Title, Company, Email and Phone numbers.

Here are the questions.

For Martin Symes of Wego With price parity increasing in popularity, do they perceive the decreased volatility in accommodation pricing as a threat to their business model, and if so then how do they plan to react/adapt

For Andy Conroy of Lonely Planet As free downloadable city guides take off (eg for iPods, iPhone, Amazon kindle etc) how is LP planning to keep up production on their guides as revenue from book sales diminish.

For Richard Noon of Webjet Due to the current economic climate in the US, we are seeing a number of major online travel agents rolling back the plethora of fees they charge in a bid to attract travellers away from the main airline websites. Given that comments in the past have indicated that up to 60% of your revenue comes from these types of fees/charges - what impact would this have on your business model and how could you mitigate this potential risk moving forward as the economic climate cools in Australia and consumers become more aware of how to "beat the system"? Would you agree that it's not a matter of "if" but "when"?

BBC confirms paid GBP £89.9m for 75% of Lonely Planet at a trailing P/E that looks to be higher than Expedia

At the time of the announcement of the acquisition by BBC Worldwide of 75% Lonely Planet there was no mention of the price paid by the BBC. This week the BBC Worldwide have published their 2007/2008 annual review containing the some more information.

The BBC acquired 75% of Lonely Planet for GBP £89.9m valuing Lonely Planet at GBP £119.9m. The sale included a put option for two years (expire 31 Oct 2009) for the remaining 25% to BBC.

Travolution is also reporting (more) plans for a website relaunch and reports that Lonely Planet's sales to March 2008 were £23.1 million for a trading profit of £4.3 million. Ultimately there were losses of £2.1 million due to site development costs and the web business losing £3.2 million from sales of £2.3 million.

That puts the multiple for Lonely Planet's valuation at somewhere around 5.2x trailing revenue. To put this in perspective Expedia is trading at 1.85 times trailing revenue (according to Yahoo! finance). To be fair, this not a very good comparison as I am sure the margins on publishing (Lonely Planet) are significantly higher that than the margins on a business still heavily dependent on air (Expedia). However if we assume that Lonely Planet's profit is a good proxy for earnings then their trailing P/E is 27.9x compared to Expedia's 17.83 (according to Yahoo! finance). That seems odd to me (unless I am getting my numbers wrong).

Here is the full Lonely Planet section of the review

"On 1 October 2007, BBC Worldwide acquired a 75% shareholding in the Lonely Planet group of companies for a total cash consideration (including acquisition costs) of £89.9m. Goodwill of £73.2m was recognised and is being written off over its estimated useful economic life of 20 years.

Under the terms of the purchase agreement the other Lonely Planet shareholders may exercise an option to sell all or part of their 25% stake to BBC Worldwide at any time up to 31 October 2009. As the minority shareholders are deemed to have retained the risks and rewards of ownership for their 25% shareholding, the put option liability has been recognised in reserves rather than as an increase in the cost of investment."

My analysis back in October last year of the sale announcement is here.

Lonely Planet to open an offline store at Sydney Airport with help from Lagardère

Last week TripAdvisor announced another step in its plan for world online travel content domination with the acquisition of a meta search engine (OneTime.com) and a large travel social network (Virtual Tourist). Lonely Planet - arguably the number one offline travel content company - has gone completely the other way by announcing plans to open a Lonely Planet concept store at Sydney Airport. This store (I am quoting from the DFN Digital article)

"...will sell the full range of Lonely Planet books and a range of travel accessories and gift items. It will also feature online interactive portals showcasing Lonely Planet’s digital content, and staff will be trained to offer specific travel advice to travellers."

In other words, books, magazines and young people who should know what they are doing. The store will be operated by Lagardère Services Asia Pacific who are famous for running Airport book stores and news agents.

I had hoped that after the sale to the BBC, appointment of new online staff and attempts at launching new onlien products that Lonely Planet would finally take the steps necessary to turn themselves into an online content company and join the now 15 year old online revolution. But instead the quote from Lonely Planet sales and marketing director Howard Ralley about putting the Lonely Planet brand on a store front is that it is

"an exciting evolution for our brand. It's something we've discussed for some time."

I think that this was time that should have been spent opening up the brand, site and content to online distribution. Am I being too harsh? Do you think that the next frontier for Lonely Planet should be offline?

Technorati founder launches online travel guide business - Offbeat Guides

David Sifry is well known in the blogging world. His regular updates on the State of the Blogosphere/Stage of the Live Web were seen as definitive statements on the rise and rise of blogging. As founder and (now former) CEO of Technorati he built the blogging engine and the means for bloggers to tell who was linking to whom. Unfortunately about a year ago Sifry left day to day involvement in Technorati and Google's blog search has become the new standard for searching blogs. I have switched to using Google blog search as the results have far less spam than Technorati.

Sifry has now entered the world of online travel through an announcement yesterday (here on TechnCrunch and here on his own blog) of the launch of Offbeat Guides. Online guide books that can be bought (that's right paid for not free) in printed versions ($25) or downloaded PDF ($10). There is a video on TechCrunch where Sifry explains further.

This on demand purchasing of guide books is not new. Lonely Planet have been doing Pick & Mix a while now - allowing consumers to build a book from various chapters and down load it. Tom Hall of Lonely Planet told me recently that they have as many as 100 guides available by chapter and up to February more than 150,000 downloads.

Sifry has launched more business that I ever will but I am not convinced that this will succeed. In the new media world of TripAdvisor, blogging networks like Travelpod (owned by TripAdvisor and therefore Expedia), social networks like WAYN and now the review meta-search of UpTake consumers can find all the free information they need (maybe even too much information). In the old world, companies like Lonely Planet and Insight Guides continue to dominate the shelves of book stores and airport news agencies. There is is already enough/too much free and paid information out there for consumers to allow room for a new company to build a business asking people to pay for travel content.

Consumerist: Lonely Planet Writer Admits to Fabricating Guide Book Based On Info From Girlfriend

I love the Consumerist blog. Not sure what to think of Lonely Plant after this story about the shenanigans of guide writer Thomas Kohnstamm - "Lonely Planet Writer Admists to Fabricating Guide Book Based On Info From Girlfriend"

Lonely Planet: New Owners and New Approach online - Diarmuid Russell to lead new digital charge

Moments after the news of Lonely Planet's sale to BBC Enterprises comes immediate steps to re-invigorate the Lonely Planet online strategy through the appointment of former Expedia VP Strategy Diarmuid Russell to the role of Commercial Director, Digital. Diarmuid is relocating as we type - due in Australia this month. Lots of work for Diarmuid to do - but his appointment is a sign that the new owners are looking to invest immediately in turning around Lonely Planet's poor online efforts to date.

Which planet is Lonely Planet travelling on?

Poor old Lonely Planet - first they missed the Internet revolution and then they had to throw in the towel and sell out to the BBC. But we always assumed that their strengths would hold true. That their editorial standards and world knowledge would give them a permanent place in the travel industry no matter how powerful the wisdom of the crowds became. Now they seem to have misplaced a global city in this article from the Saturday Sydney Morning Herald - look at the title calling Rio de Janeiro the capital of Argentina.

There are of course two punchlines to this story. As those of you who submitted to the torture of watching the sequel to I Know What You Did Last Summer will remember (or used other less convention means for studying geography) even if Lonely Planet had put Rio in the right country it is not a capital.

Of course we can assume that since Lonely Planet has remained in non-US hands that they will at least get it right that Europe is a continent not country and Budapest is the capital of Hungary.

Lonely Planet Sale to BBC - an admission of defeat or a perfectly timed sale

Lonely Planet are good at what they do - publish guide books. But have failed at almost every effort to use the Internet as a tool or morph their publishing model beyond static guidebooks. The sale of 75% of the company to BBC enterprises can be seen as a clear admission of this. Founder Tony Wheeler did an interview with Lisa Allen in this week's weekend AFR (subscription only so not available online) where he admitted as much. "We did feel we weren't getting as much out of the digital side of the business as we could" he is quoted as saying. He goes on to claim that they believe they were doing a good job online but admits that "given the size of our brand that our website should be a lot more than it is." I agree completely.

The problem with Lonely Planet online is not the product range it is that they waited too long before getting serious about online. In the last year alone they launched a booking engine (Haystack), a TV/video sharing site (Lonely Planet TV), a classifieds site and cut a number of content distribution deals. Even more recently they announced the launch of Pick & Mix where you can buy individual chapters or build your own guidebook. Other than Pick & Mix each of these was a "me too" product and launched years after other players had established deeper product lines and captured audience attention.

In the case of Pick & Mix I had a chance to speak to Tom Hall the product manager in charge at Lonely Planet. The ultimate vision of Pick & Mix is to give consumer the information they want how they want it - all good Internet stuff. However the product starts out as just the ability to mix and match existing chapters in pdf with limited custom features like names and photos. There is no-auto updating, no online search, no user generated content and it is not available on mobile devices. Tom hopes to build up to those features once they had since the results of the initial launch. Further the system is not yet set up to allow Lonely Planet to see the types of combinations that people have bought to enable them to gain insight into unpredictable destination combinations. Thus as good as the Pick & Mix idea and initial launch is, it highlights the undercurrent of hesitancy and conservatism in Lonely Planet's approach to the Internet.

Tony and the Planet team may have slipped up online but he has been able to spend the last thirty plus years being paid to travel the world and has presumably made enough from the sale to never need work again. Somehow it paid off to miss the Internet revolution.

401 not out

Time for my "not out series" - a regular summary of the last 100 posts that I first started with 101 not out and continued with 201 and 301.

Without a doubt this recent period of posts on the BOOT have been dominated by consolidation and deals:

• Lonely Planet admitted that it could not meet the challenges of the Internet on its own and sold out a majority stake to the enterprise division of the BBC;
• Opodo shed Karavel with the story being broken by an blogger from the inside;
• TUI made a bad decision in buying asiarooms and once again search traffic predicted a deal;
• the battle for Travel.com.au (who now own the lastminute.com brand outright in AU/NZ) is not yet over with Webjet and Wotif at each others throats and AOT sitting not so quietly on the sidelines;
  
• Rakuten made some healthy profits and set itself for further expansion by selling out of Ctrip;
• the Flight Centre privatisation fell in a heap in an embarrassing way for the Flighties board;
  
• rumours flew that Priceline want Travelzoo and the comments section filled up with a debate on the merits of this idea; and
  
• we have the as yet to be confirmed rumour that TravelCLICK are about to be bought.
  

In other general news

• every media outlet there is ran a story about how bad the US air industry is prompting me to run my own series of the Airline Industry brought to you by BusinessWeek, the Legal Fraternity, Wharton, NPR, the Economist and Pizza Hut. Conclusions were that the US air traveller is stuffed and no-one is taking responsibility. In fact Marion Blakely quit as head of the Federal Aviation Authority to join the peak airline lobby group the Aerospace Industries Association;
• the T-List is soon to be a book. The BOOT submitted three stories:
• UGC vs Editorial. What's better? What's the balance? What's more 2.0?;
• Helping Airlines Stay on top; and
• the fourth phase of online travel - "too much information"; and
• it looks like Dead Herring for Red Herring.
  

and in quirky news

• one muppet shouted at two others;
  
• a lion, a crocodile and a buffalo tried to sort out their differences the old fashioned way; and
• the BOOT saved the world by defusing a jar of olives.

I hope you're enjoying reading because I am enjoying writing.

BBC buys Lonely Planet

Am having a tough time on the road keeping up with all the deals that are flying every which way across the industry. Thankfully I have my spies everywhere helping me to stay in touch. Latest piece is that the venerable UK broadcaster the BBC (trough their BBC Worldwide division) has bought the Melbourne based guidebook and information group Lonely Planet. Is not a full buyout - the founders Tony and Maureen Wheeler will retain 25% (according to the SMH). Is proof that travel content is highly prized. Let's hope the BBC can help Lonely Planet work on its online execution where they have to date had a mixed record.

Thanks to Stuart McDonald of Travelfish who was first to send through the story to me.

More from Lonely Planet - maybe I should stop being so tough on them

I gave Lonely Planet a hard time when they announced a new travel classifieds section, arguing that it might be too late for them to try to join the online revolution and the content was eclectic and (frankly) a little over weight pachyderm content. I ranted a little more when they finally announced a booking engine (Haystack) because again it was a little late and as one of the comments pointed out the information was not as up to date as competitors.

The latest effort is a video sharing site - Lonely Planet TV. Follows a similar model to Travelistic (here are my comments on them) and like them enables you to search by map as well as channel, tag, views etc.

So that is review content (their old media content), classifieds, a booking engine and a UGC/Video site.

If I was consistent I would criticise them for being late, having a challenge to reach scale and other quibbles. However there reaches a point where you have to give snaps to a company that was late to a market pulling out all of the stops to catch up and dedicating the time and money to launch new products with planning and co-ordination. This is clearly that time for me and my comments on Lonely Planet. There is much work to do and there are areas of each product that need fixing but snaps to them for launching three in a row.

UPDATE - m-travel is reporting that Reality Digital Opus is the technology partner behind this product.

UPDATE - have just read the interesting post on the Compete blog analysing the (limited) traffic flows from the Lonely Planet main site to the Haystack booking engine. Makes for interesting reading

Another Lonely Planet Play

I have been previously critical of the poor online execution by travel publishing power-house Lonely Planet. They are still well short of building scale in their travel classifieds product. The front page link that I can see here has only 200 or so listings.

I am late to report their newest efforts - the launch of an invitation only online accommodation site, the HayStack. There theory behind the site (according to eyefortravel) is to limit the available properties to those reviewed by Lonely Planet reviewers. From the press release this means

"Haystack launches with over 390 properties from 20 countries and will develop rapidly from launch."

This sounds like a good idea - a way for customers to book reviewed hotels online. But I think it is too little too late. Lonely planet was founded in 1984. Online travel took off in 1995. Online travel became a serious business in 2000 (with Travelocity's acquisition of Preview Travel). Launching a booking product in Dec 2006 is at least 6 years too late for Lonely Planet.

I want Lonely Planet to "win" online as I have so many fantastic travel memories from by backpacking youth that involved a Lonely Planet book by my side. I should also give them some credit for launching new products on a regular basis. But the next generation of backpackers all own mobile phone and will all have accounts with the large scale community and review sites (the Tripadvisors and WAYNs of the world) connected to their phones and local internet cafe, reducing the relevance and need for a Lonely Planet book tucked in the back pocket.

UPDATE - have just read the interesting post on the Compete blog analysing the (limited) traffic flows from the Lonely Planet main site to the Haystack booking engine. Makes for interesting reading

I owe my traffic to elephants

I have recently installed a site meter. The part I love the most about it is I can see where my modest amount of traffic comes from, including the search terms in Google that result in a link to the blog. Today I received the greatest complement ever. If you go to Google.de (German version) and type in "price for an elephant" I am the top result. Clearly there is no better place on the planet other than the BOOT to advise Germans on how much to pay for an elephant. Brilliant!

Thank you Lonely Planet.

Fairfax adds Lonely Planet to hinted plans

A day of updates today with another titbit of information about Fairfax's plans. We already know that Zuji is the white-label engine (and that the engine needs work). Now the story is that Lonely Planet is providing the content. I presume that they will aim for the content to be more around good travel editorial and less on the size, cost and delivery processes for purchasing elephants.

Lonely times for Lonely Planet

Have always had in the back of mind how much Lonely Planet missed the chance to be the dominant online social network/content/destination site. They owned the backpacker market in the early days of the Internet and therefore arguably had the number one travel brand in the Internet demographic - I am assuming here that the young people backpacking and travelling in the early to mid nineties were also those discovering the early Mosaic/Netscape browser and opening their eyes to the world wide web. Even through the first boom period - 1997-2000 - everyone behind, in and around the bubble were travelling with a Lonely Planet book in their back pocket. Now in 2006 I don't know if book sales are up or down but I do know that the online hubs for information, reviews and comparative shopping are places like tripadvisor, kayak, sidestep, bezurk and blogs such as gridskipper not LonelyPlanet.com.

Lonely Planet made an announcement on one way to fight back - classifieds. An open network (craigslist style) for people to trade in travel services. Nice idea but this does not match the Lonely Planet brand story that I have in my head from my backpacker days - that no-one knows a place like LP does. It also opens itself for ridiculous posts and programs. I ran a simple search for what was on offer in my area (NSW, Australia) and came up with this. Love the humour but does not bode well for LP's online strategy.

In case the post is removed here is the text

WTB: Elephant (Asian or African) - NA

New South Wales

Wanted: price for an elephant. Later i'll want an elephant, but first i would like to know what an elephant costs. If anyone knows the price of an elephant, please contact me.

Don't worry about transportation costs, I'll work that out later.