23 Musings

Troogle? TravGoogle? GooTravel? Whatever you want to imagine the name may be the thought of Google jumping into the travel arena has operators and agents either salivating with the thought of the traffic and sales it could drive or quaking with fear at the thought of them owning the customer experience. Rumours keep appearing of the intentions of Google, but up till now there hasn't been any obvious functionality leaking out of Googleplex which could support a serious move into travel. That is, until now (at least I've only just found it)...

There's a new(ish) beta on Google for a Merchant search (only appears when you're in the right place searching the right thing). This is basically a price comparison engine, currently only serving the loan market. My question is, could this power a travel price comparison engine and so switch users to this type of interface and functionality if they search for the right travel related keywords? Could Google then become an affiliate to travel companies? I'd imagine TravelSupermarket would hope not!!

Fantastic article from Richard Waters of the Financial Times here talking about the coming semantic web!

Quote: Imagine, for instance, being able to ask a computer, “Where should I go on holiday?” and receiving an answer that is as suitable as anything you could have come up with yourself. That level of computer-generated reasoning is on the horizon, says Nova Spivack, one of the entrepreneurs involved. It may still take 15 years or more to be fully realised, but between now and then lies a series of breakthroughs that will revolutionise the way we draw information from the web, he adds.

Perhaps this is where the efforts of the online travel industry should be placed, the benefits of being first to market with an intelligent holiday finder (a kind of online concierge/travel agent experience) will be huge...

On the subject of semantic web, here's some more great reading from Ian Davis over at Nodalities.

Techcrunch has reviewed a new entrant to the online travel market called InsideTrip.

It seems aimed at the Farecast/Kayak arena of comparison and aggregator sites but with a twist which could set it apart. For once in the travel sector they aren't purely about finding you the cheapest price for a flight, rather they are trying to find you quality.

Flights are rated on price, speed, comfort and ease. The interface flights are returned in is familiar, it has all the AJAX filter tools of Farecast et al but there's filters for quality too.

In this day of massive GDS's which have hundreds of airlines and so many different ways to get from point to point by air this is actually a really nice idea. Many passengers will choose a flight based on factors other than price, especially when the cheapest option could be longer, less comfortable and less convenient.

They have filters for Speed which includes number of stops, travel duration, on-time stats and security wait time. Comfort includes legroom, aircraft type, aircraft age and historical load factor. Ease means connect time, routing quality, lost bags rank and gate location. All extremely valid factors for influencing a choice of flights.

If the data behind these options is accurate and complete then I can see this catching on. If InsideTrip aren't succesful themselves I'd expect to see these kind of search filters and options appearing on other online travel agents and aggregators pretty soon as they are just so useful to the customer.

Is it time for a new approach to the interface for these sites though?

Looks pretty familiar doesn't it...

ComScore has released some figures on traffic growth in January for the UK. As expected travel features prominently.

January is the peak booking month for holidays in the UK and as such the number of web users researching and buying is much bigger than any other month of the year.

January's figures show that the biggest increasing category in travel was hotels/resorts with a 54% increase in traffic from Dec-Jan. Airlines were next with 46% and online travel agents third with 43%. Quite where tour operators come in there is a bit of a mystery to me, it would be really interesting to see them broken out to compare with OTA's.

Within travel two websites saw huge growth, First Choice grew 140% and TUI Group 122%. British Airways, Moneysupermarket Group and Priceline all feature as well with good growth.

Nothing unexpected in any of this but it does highlight the gaps in ComScores data as the market as a whole is not very well represented.

Of course it would also be intriguing to know if their booking numbers increased by similar percentages...

Good insight here into the rise of the meta search travel sites in the U.S.

I looked at some of these a while back, seems they could do with a new review which I'll get round to soon.

Interestingly, Pricegrabber.co.uk looks like it will be up for sale soon and Mike Butcher at Techcrunch has a good piece looking into a possible shake-out that may happen to UK sites.

I've blogged a couple of times recently (here and here) about declining levels of customer satisfaction with online travel websites. Now another survey reports their declining further.

Detail is here at Hotelmarketing.com but in a nutshell this seems to suggest that the old model of 'booking engine only' websites is losing favour as users want a richer, more immersive and customer focused experience rather than simply a one size fits all approach to buying travel online.

The online travel industry has dropped 1.3% as a whole, Expedia lost 3.8% and now scores 75 (the highest).

The next generation of travel websites can't be far away, hopefully the advances in technology will allow customer satisfaction to be dramatically improved through the use of advanced usability techniques, customer profiling and tools which enable rather than just sell, sell, sell.

Hat tip to Joe Buhler (who's excellent blog is here) for the heads up about this excellent article on Travel 2.0 from Booz, Allen & Hamilton.

It gets straight to the point of the matter by identifying that travel providers need to adapt to give their users a personalised buying experience that gives all the reassurance of speaking face to face with a travel agent while at the same time securing the best revenues for inventory. The ability to size up a website visitor and instantly offer them a tailored experience which meets their needs and offers them products they will be attracted to is seen as a kind of holy grail in the e-commerce world. Travel could be the industry to get that right as most companies have a wealth of data and understanding of their consumers which can be used to segment and target their offering more effectively. CRM based e-commerce is the way forwards (in my opinion), have a relationship with your visitors and let them know that so they feel special (and more inclined to buy with you).

A tough task, but the article goes on to rightly hint that the technology is now in place to allow this.

Another salient point from the article is that the large players operate pretty much on price alone with very little to differentiate them otherwise. Consumers are getting pickier now and this kind of approach won't work for much longer unless you have the user experience to match.

In my opinion the only thing holding the industry back from breaking this new customer focused way of selling is a lack of foresight and a nervousness which prevents them going the extra mile to offer the all out personalised, segmented buying experience. It won't be long though until someone breaks the mould and comes up with something truly engaging which also ticks all the commercial boxes.

Throw in semantic technologies and you will have a ground breaking web experience to offer...

Great article! Go give it a read!

Now I've just been proved totally wrong. I wrote a while ago that paid search budgets may actually start decreasing (slightly) or stagnating by the end of 2007 in travel as marketers got their heads around affiliates, other new behavioral ways of marketing online and moved back to seeing the huge value in SEO. Also a backlash against paying per click has been expected for some time as marketers try to get everything measurable on a CPA basis.

Seems that's not the case though. Robin Goad of Hitwise has a post which talks about some paid and organic search trends in travel and shopping sites through 2007. One really interesting chart shows that the Hitwise Shopping & Classifieds categories paid search activity actually decreased in 2007 compared to 2006. Travel on the other hand grew by 15-20% during the final three months of the year.

Also, there a great chart showing the trend for paid search traffic to the two categories from late 2006 to the end of 2007.Interesting dip around July 2007 there. Anyone hazard a guess at what that may be? I know it's not the busiest month of the year but that's a hefty drop in paid search spend.

News here from ZDNet that some of the largest online travel agencies in the U.S. may shift their focus abroad in order to keep growing their business. Chief execs at Priceline, Orbitz and Expedia all said at a summit this week that they would be focusing on emerging markets in an aim to capture as much of those markets as possible.

Asia-Pacific seems to be the particular focus but there is still work to be done in Europe by some of these large players. Orbitz, Priceline and others such as Travelocity do not have the profile in Europe that Expedia have built up. I'd expect to see some more aggressive tactics over here from companies like them.

This could make it an even tougher year from domestic players especially with the economic climate in the U.S If the Americans stop spending I'd expect them to put their efforts into regions which are not so economically challenged.

Good article from Reuters here talking to Expedia CEO Dara Khosrowshahi about the prospects the current economic climate presents to the online travel agent.

It's yet to show whether it will bite in the UK. Apparently more people than ever have booked their holidays in January (here and here from Travel Weekly). They believe 16% of people who plan to travel this year will have already booked in January. The fear among travel companies must be that if the economic conditions really bite we may not see all the rest of the 84% book as their plans may change as they reign in spending.

Time for some innovative marketing and aggressive pricing policies to make as much of the profits as you can before anything worsens perhaps?

Reuters have been holding a Travel & Leisure Summit in Los Angeles and this was one of the topics of conversation. The main answer seemed to be that deals will be key!

While consumers may tighten their belts, hoteliers may give better rates to online travel agencies as they will be more eager to fill their rooms. This should really benefit the large online agents such as Priceline, Expedia, Orbitz etc.

While a recession could erode demand generally it can also have the opposite effect in the activity of bargain and deal hunters as more people hunt for something affordable. This could benefit not just the big players but also the price comparison websites as they have access to so many rates they are the obvious place for any bargain hunter to start their search.

Another factor of economic weakness could be airlines who cannot fill all their seats, this should push them to offload unsold stock to online travel agents and may mean that there are some better deals than usual available.

Of course this is all conjecture, at the moment we have no idea how bad an economic downturn could get (wait for the commercial property market to show it's weakness) or how long it could last.

My tip for this year is price comparison websites. They are positioned well as far as price goes for a year of weaker demand and this has to be the year that they finally improve their user experience to a point where they are so easy to find deals that they start to erode market share of slower moving websites (remember, a lot of price comparison sites are technology companies rather than travel). Looking forward to seeing how Kayak, Mobissimo, Travel Supermarket etc get on in this economic climate!

CNN is reporting that some U.S. online travel stocks have been downgraded and as a result many more have dropped in value. Priceline, Orbitz and Expedia have been downgraded by analysts and Travelzoo have underperformed.

It's interesting, makes me wonder if there is more about this than economic shocks in the U.S. I'd hazard a guess that they are beginning to suffer to price comparison sites and more technologically adept traditional players.

The growth these online agents experienced a few years ago had to slow eventually and it looks like the market is displeased. Expect Expedia to do best as they now have the media angle with Tripadvisor advertising revenues to take into account.

Business travel arrangement has always been best left to someone with experience at making sure all the timings match and everything runs like clockwork. Now Tripit have branched out by announcing a move to provide services aimed at business travellers and those who arrange/manage business travel.

I'm really loving Tripit, the beta works amazingly well and it's definitely got a long life in my opinion. I'd like to see them actively trying to get more travel providers to sign up to allow their email confirmations to be processed as soon as possible. At the moment I'm just testing it and I'd really like to be able to play with it for real using my own travel plans. The new business functionality allows you to add meetings into an itinerary. A Tripit travel plan can now contain all your travel plans along with daily weather, driving directions, client meetings, restaurant reservations, city guides and more (massive room to cross sell off the itinerary here).

What's the future for Tripit? Well, it could do fine on it's own if it applies a sprinkle of advertising in the right places, or maybe it will tie up with online travel agents or become an affiliate to other sites and offer suggestions to fill any gaps in your itinerary (now that's quite a nice idea, gaps for travel products but also pre-travel products maybe, copyright me please Tripit :-)). However, my one fear for Tripit is that they get bought by a major player and just become a way of them helping users organise travel. Tripit adds the most value because it's a standalone site and not linked to anyone, I hope they stay independent as they show so much promise!

PhocusWright has released it's 2008 Travel Trends report which looks at some of the developments in the marketplace that it expects to dominate the year. There's a brief overview here.

In short they expect:

• Mobile to grow (no massive surprise there, it's been coming for years but travel has been very slow on the uptake)
  
  
• Consolidation in the industry to continue (again a safe bet, I don't think we've seen the last of the mergers, however this year I expect to see online only concerns looking at mergers to stimulate growth and increase market share)
  
  
• Social and e-commerce approaches to converge (strange one this, I know there's a lot of social experiments that are totally unconnected to a companies e-commerce facility but this will continue as players find their feet in the social waters. Any decent foray into social should always have an e-commerce edge anyway, even the most brand focused campaign should be aiming to drive bookers at the end of the day)
  
  
• Metasearch to come of age (this could be the biggy! I'm waiting for Kayak or someone like that to launch fully dynamic packaging through metasearch, that could be a clincher that sees off the competition. I also expect tour operators to move towards a more metasearch model online by supplementing their product through GDS')
  
  
• Media-based pricing (interesting move from Expedia earlier this year that has triggered this one, will certainly be interesting to see if others move this way, especially those with their own stock as price flexing to match their media spend will be more difficult)
  

I think they've missed one big thing that we will begin to see on travel websites and that's intelligent or guided search. My number one complaint is the lack of relevance in cross/upsell offerings that are pushed at you during an e-commerce process. The rise of tagging and meta data on products will help push this forwards (as well as the rise in technologies that provide this kind of functionality). Another interesting area to watch will be semantic web, expect to see a travel site of some sort try to get this right this year. Interesting year ahead!

Denmark's Center for Regional and Tourism Research has released it's latest figures on European online travel trends this week.

The report shows a 24% increase in sales of travel products online in 2007 (compared to 2006) and shows they now contribute 19.4% of the market as a whole. They're expecting a further 18% growth in 2008 and up to 15% in 2009.

The UK still contributes the biggest share at 30% of online travel sales.

Packages accounted for 14.6% of sales, looking like there wasn't much change from last year. God knows where dynamic packages fit in the report though, there's no explanation. In fact it must be really hard to classify travel these days with so many sites selling components as a package (of course, as I've said before consumers really don't know what's a traditional package and what's dynamic...).

Here's the breakdown by type of product, full details can be found here.

I blogged about Tripit a while back. Since then it's been gradually gaining momentum and receiving increasing interest from the travel industry and bloggers alike. Most are attracted by the simplicity of their offering and clever way they put together travel itineraries using your confirmation emails. Now they've announced another string to their bow.

Today, Tripit announced the addition of new 'closeness alerts' to their offering. The location based social 'closeness' alerts let you know who will be close to you by automatically alerting you to other travellers who's plans will take them into your proximity. They've also added a feature (similar to WAYN's) which lets you know who is coming to your hometown.

It's all functionality that's been done before (WAYN, Doppler etc etc) but Tripit is still a really nice service so adding these value add features even if they have been done before will entice more users to the service. It's not attempting to be primarily a social network, rather it's a travel tool which is adding social features.

Techcrunch have a screenshot of the new features here.

Maxymiser have published a paper on improving the holiday buying user process online. It's obviously a sales pitch but has some useful hints and tips that are worth a read. The paper talks about all the good stuff such as multivariate (A/B) testing which we should all be doing. Down load it here.

According to the Motley Fool, one third of UK consumers put more than 10 hours into researching their holidays before purchasing. They found that only 21% of UK consumers would put the same effort into researching a mortgage purchase and only 11% would research that much for a bank loan.

Personally I'm not surprised, and I'd probably do the same. It's really an indication of society today and shows that personal pleasure is more important to the populous than financial security.

Good news for anyone in online travel though! Tools to help users perform research are going to be a big deal this year!

Interesting exclusive from Techcrunch UK this morning. They are carrying the story that WAYN may be sold to AOL for the sum of $200m. WAYN themselves haven't acknowledged the deal but Techcrunch's reporter claims three independent sources have verified it.

It's a possibility. Maybe the founders and investors feel it's time to cash out before the larger social networks take over the travel network mantle. Facebook is well on the way to providing the same functionality as part of it's package. Once WAYN's core users realise this they could see a large dip in traffic as users stop feeling the need to visit.

With the above in mind $200m does seem like a lot for something which could tank anytime soon! It would though be a good complement to AOL's portal and if anyone is going to make a success of a niche network like this a portal which still has a semi-walled garden approach (such as AOL) could do it.

Personally I think it would be a better fit for Yahoo...

IMRG the online retail analyst is to release a report stating that it is critical that retailers invest in online as more of the UK population shift to making their purchases through the web. They say that retailers who refuse to move online risk losing half their business over the next ten years as they estimate that 50% of all retail will be online by 2018.

Growth of the online retail channel outstripped all other channels in the run up to Christmas and the volume of shopping online in 2007 was up over 50% on the previous year. This kind of growth is expected to continue (although slowing gradually).

I believe this will apply to travel even more quickly than retail. The shift to online is happening much more quickly and it's possible that half of all travel bookings could be online within the next two years in the UK. The U.S. is already there according to the report here. Investing now will put you in a good position to capitalise on that growth. It's especially important for any travel companies who don't have a web presence yet (there really are some who don't still) as they really need to get their brand known online and get their online marketing processes in place asap.