Wednesday, January 31, 2007

Flight Centre - doing in right in corporate travel

e-travel blackboard are reporting that Flight Centre's corporate travel management arm - FCm - have made a play for the east coast market in the US with the acquisition of a 25% stake in Garber Travel Services. I have been (rightly) critical of Flight Centre's mistakes in the online market, however as both a consumer and observer of business travel I believe they have made a number of smart strategic and tactical moves in the corporate market - so while I do not know Garber Travel Services, I congratulate FCm on continuing their expansion. As a consumer of travel I have a previously commented (here) on FCm's great service and the need for an air-warrior/warrioress to have a strong travel management company - even in this age of online. As an observer, Flight Centre have managed to acquire and integrate a number of smaller travel management company with little or no observable integration headaches, maintaining standards and bringing scale and savings.

Have to end this quote with a "curse you Google" moment. Is it just me or is publishing using Blogger becoming a risky business. This is the second time I had to write this post due to Blogger eating the last attempt.

Blogger fighting airline delays

Blogger and real estate broker Kate Hanni is angry - and with every right. She and 100 other passengers were on diverted flight AA 1358 from San Francisco to Dallas. The flight ended up in Austin Texas due to bad weather. The plane, passengers and crew were stranded on the tarmac with no way out or off for more than 8 hours. Bottled water and substantive food quickly ran out and it was down to pretzels and that crappy water in the toilet taps. Kate is leading a charge in the US for legislation to protect consumers here. Here is her blog and here is an article in the NY Times on the story. The airline says
“There is some dispute over exactly how dire the circumstance were on that flight. I do have flight attendants reports saying no toilets overflowed. We ran out of bottled water but we still had plenty of drinking water.”
Another piece of brilliance in airline customer service. You are a customer stranded on an American Airlines plane - no real food, no bottled water, no way off, surrounded by screaming kids, receiving irregular updates on what may or may not be happening, dreading the stench from the toilets and the passengers etc etc etc - but according to the airline there is uncertainty as to how bad things were.

I have almost been there. On a trip last July from Sydney to New York I had the "pleasure" of AA from San Fran to NY. We landed in NY ahead of a storm but were stranded on the tarmac for three and half hours waiting for the lightening to clear to allow the ground crew to return to work. That was a tough period - especially as we were 50 meters from our destination - I can only imagine how bad it would have been for more than twice that time. On a good day you cannot find a seat on an AA flight that anyone would describe as good.

Tuesday, January 30, 2007

Qantas Entertainment - a Very Obvious Defect (VOD)

I have already bored/amused you with my stories on how bad the roll out and performance of the new Qantas VOD/entertainment system has been (they are calling it simply "Q"). As a quick reminder, Qantas launched a new VOD system about a year ago claiming that it was a revolution in airline entertainment. Never mind that the system as described was at best on par with that offered by Cathay Pacific and Singapore but realistically still behind the great offerings from those airlines, the real issue was that the system never worked. It crashed on every flight I was on within an hour of launch. My experience was by no means isolated as similar stories were retold by other flyers in Qantas Clubs around the globe.

I am used to Qantas management being immune to the complaints and comments of its customers. Now however there is news from the Qantas cabin crew that they are suffering significant abuse from customers due the constant failures of the system. The Sydney Morning Herald is reporting that this is resulting in stress related issues and physical illness. As a result on Jan 19 the cabin crew association wrote to management to alert them of the constant abuse and failures. Here is the response in the article from the manager in charge David Cox (E-GM of Engineering)

"As with any complex system there have been some technical issues,...The problems usually involve a small number of seats and the passenger can be moved to a different seat in these cases. We are dedicating considerable resources to address these reliability issues, including through the supplier Rockwell Collins."

In other words - this is not a big problem, if you don't like it move seats and it is the suppliers mistake not ours. Shame on you Mr Cox and shame on you Qantas. Your customers are telling you the system is busted, your staff are telling you the system is busted and the best solution you can come up with is moving seats. This is completely useless advice for two reasons. Firstly the flights I have been on the VOD system has been broken in whole sections, if not the whole plane. Secondly, I mainly fly Qantas to the US and UK. These are very busy (or monopoly routes) and I cannot remember the last time I was on a plane with spare seat. In fact I spend half my time on wait-lists in effect begging to get on a flight. My suggestion to Qantas is to can the useless, head in the sand advice and over-haul the system.

My second piece of advice is that if Qantas does not believe me that this is an issue for their customers then here is a quick test that David Cox and his team can try - dress in business casual, grab an on cabin bag and head for the nearest Qantas lounge. In the lounge blend in by grabbing a drink, sit next to the nearest bunch of flyers and start a conversation about in-air entertainment. My bet is that this will be the first time Qantas has solicited the feedback of its top flyers and I am confident the results will be along these lines "the system is crap, it never works, the Cathay and Singapore systems are better but I have to fly Qantas anyway because they dominate the routes I need to fly".

Saturday, January 27, 2007

Subscribing to the BOOT - now with email updates

Have just added the ability for readers to subscribe to email update from the BOOT. If you want to subscribe please enter your email address into the subscribe box on the right side of the page (or this one here). Naturally I will never pass on your email address to anyone - will only be used for updates of content from the blog.

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Wednesday, January 24, 2007

2007 - the year of the Travelport break up

As I have been anticipating for some time, 2007 is gearing up to be the year that the three Traveport divisions - GTA, Galileo and Orbitz - are spun off. First rumour (care of e-tid) is that UBS has been appointed to float Orbitz in London at a valuation of US$2.5-$3bil. Why London? Best reason I can think of is to avoid Sarbanes-Oxley regulation. London is liquid enough a market to provide the same capital value as New York or Nasdaq while removing the onerous/costly burden of SOX compliance.

UPDATE - in related Travelport news here is an interview with Graham Nichols (Worldspan vice president and general manager EMEA) on the merger between Worldspan and Galileo. The questions I most want to ask is "What is the future of the Worldspan brand?". Here is Graham's answer (or non-answer as the case may be)
Should the merger proceed as expected, Worldspan will become a Travelport company and will operate under its own brand, similar to how Galileo currently operates. Until we are merged we will operate as two separate companies.

Monday, January 22, 2007

Expedia "Strikes a Deal with Tripadvisor"

Did not mean for the last few days to be so Expedia focused but the deals and stories are coming thick and fast. The latest announcement care of Australian TravelWeekly is that
Expedia Australia has struck a deal with travel community website Trip Advisor [sic] in a move to step up its user generated content and to improve conversion rates.
The natural inclination as an online travel blogger is to poke fun at TravelWeekly for not knowing, realising or checking to find out that Expedia owns TripAdvisor. Following this train I would make particular fun of this sentence in the report
No commercial terms for the deal have yet been finalised.
However there is actually a very serious side to the internal negotiations between the TripAdvisor site owners and each of the Expedia point of sale operators within the EXPE mothership. Kevin May at Travolution broke the European part of this story in October. There is probably a lot of internal ego and P&L ownership behind this. My guess is that this is driven by that fact TripAdvisor staff are measured with a stand alone P&L and want compensation/target reduction for any activity that potentially helps an Expedia Point of Sale (POS) owner obtain traffic that would normally go to TripAdvisor.

There is a bigger picture also for Expedia. Part of the power of user generated content is the natural search/SEO benefits that the unique content provides. TripAdvisor's strength in this area ensures that it is the top ten natural results for now very expensive key words like "Hotels in New York" or "...London" or "...Sydney". This ranking is maintained by the unique and "independent" nature of the content on TripAdvisor (white hat SEO marketing) and contrasts to the activities of other travel content/affiliate providers that build a seemingly unrelated series of websites based on the same content that link to each other to book rankings (black hat SEO marketing). Black hat SEO marketing can be very lucrative as it short cuts the need to build a huge library of content, links and relevance. However it is also very dangerous. When Google finds sites involved in black hat techniques it typically responds quickly and mercilessly by cutting off the sites involved. Therefore if an Expedia POS was simply to cut and paste TripAdvisor content it runs the risk of (in the best case) hurting the rankings of TripAdvisor or (in the worst case) causing both TripAdvisor and the POS from being banned from Google's natural results. I am sure Expedia is aware of this and that is why they are treading very softly (with just Australia and Canada announcing full deals) are promoting the illusion that it is an arms length commercial deal. Expedia needs to do this as the integration of UGC and booking functionality is the number one characteristic of Travel2.0. Expect Expedia Inc to continue to push this strategy but to do so very carefully.

UPDATE - Sydney Morning Herald has also picked up the story in a good PR piece for Arthur and team. However they too have not mentioned the common ownership of Expedia AU and TripAdvisor.

And finally to TravelWeekly, here is a link to all of the brands owned by Expedia Inc so that you can avoid a mistake like this one.

UPDATE 2 - This is a word for word quote from the print addition of Australian business publication BRW in their "Australia Online" addition dated Feb22 - April 4 (cant find an online version so you'll have to trust me).
"In January, Expedia signed a deal with Tripadvisor...The Expedia tie-in with Tripadvisor is another parthership in a sector that seems ripe for consolidation" (my emphasis)
This is the number 1 or number 2 business publication in Australia (depending on how you measure it against the Bulletin) and yet they fell hook, line and sinker for the notion that Expedia and Tripadvisor are separate companies. You'd be surprised how often I see in my search logs "who owns tripadvisor". I should be ranting about how badly this reflects on BRW, but instead, I am impressed by the great sell job Expedia is doing keeping these brands separate in the minds of the general public and "educated" media.

Keep up with Cameron Jones

Nice interview here from eyefortravel with Expedia's Cameron Jones. Not surprisingly he is saying on message selling to hoteliers on the benefits of dynamic packaging and the relatively recent launch of Expedia in Australia and brand spanking new launch in Japan.

Friday, January 19, 2007

HRS enters the UK

Will avoid any war like analogies in commenting on HRS's announcement that they are entering the UK market. HRS are the dominant player in the German (and I think also Austrian) markets. In the Travelmole article they claim 54% of the online German market.

This is a smart strategy for them - maybe a year or two earlier than would have been perfect but a good move. The market is crowded and they will have to work hard take on the cocky and growing Pricleine (through Activehotels and - hey speaking of which I have not yet seen the implementation of the proposed name change) the entrenched and all powerful Expedia and and the perpetual successful sleeper site combo of HotelClub and RatesToGo. They have the right content mix to fight with these player but will need to work on traffic and marketing from the UK (obviously) but may also have to abandon their long held belief in keeping the display unbiased. In a cut throat market like the UK you need to use revenue management tools to make the most of out each piece of traffic you get your hands on including sort order biasing and display management.

EXPE vs AA - No wonder AA are cocky

I was wondering after having written my post earlier in the week over the commission battle between Expedia and American Airlines - why is American suddenly being so cocky and determined? Don't they need all the help they can get? Now we have the $231mm answer - AA is profitable again. For the first time since 2006 according to e-tid. Everything was up - revenue, passenger numbers and costs. No wonder they feel like a fight. Game on.

Thursday, January 18, 2007

Blog Name Change - BOMST - the Business of Meta-Search Travel

Latest news in the non-stop world of meta-search is that Cheapflights have made an investment (dont know how much) in flight options meta-search company Dohop's claims to fame are that (1) they are based in Iceland and (2) come at the search results from all of the routing options first then price. Most meta-search players (and online agents for that matter) look to searching availability (and that means fares). The prices it finds on complicated routings are very high but that is ok and to be expected. It is great to have a service that can help me get over missing GDS access as I can explore and examine route options and will. Good move for Cheapflights as it should help them deliver more and better options on each search.

I have been talking almost non-stop about meta-search since returning from my break - come to think of it leading up to the break as well. The activity in this sector is running at break neck speed. The BOMST acronym is nowhere near as catchy as "the BOOT" so will resist the urge to change but that will require either the meta-search boom to slow down or me to find other deals to write about.

I owe few responses in comments, particularly to Hotelsbycity on their engine and AsiaTravelMarket. Am working on those for next week.

Tuesday, January 16, 2007

AsiaTravelMarket - Even in comparative shopping brand is important

Announcement today in Travelmole of the site AsiaTravelMarket coming out of stealth mode. They provide inbound to Asia comparative shopping services ex-UK. I don't like the front page as it provides too many options. Travel sites work best with a booking engine/widget on the home page as this provides an obvious first action for a customer, minimizing confusion and lost traffic. However I had a play with a search for Heathrow to Bangkok - the engine was fast and the results looked good.

They will need two things to compete with with more established comparative shopping players (Sidestep, Kayak and to a lesser extent Bezurk in Asia).

First they need some more content deals. The search I conducted did not have results from either Travelocity (or lastminute) or Expedia. Online shoppers that are experienced enough to use a comparative shopping engine will know to check one of both of those players. If you do not have them in an ex-UK devoted comparative shopping play then customers are less likely to trust the results.

Secondly they need a new name. AsiaTravelMarket sounds like a good idea as it is a clean description of what they do. But there already exists an and an Each has their problems and issues but each has been around since the beginning (ie the first boom). Additionally AsiaTravelTips have been around for a long time providing industry information (well press release delivery at least) and hotel booking capability. Even though comparative shopping engines feed off the content and to an extent brand of other players they need to build their own brand as well. AsiaTravelMarket will struggle to secure brand recognition when a Google search for "asiatravel" is guaranteed to favour these older players. I know it is a tough recommendation to receive when you have just come out of stealth but maybe this is also the best time. Reminds me - I must secure the domain names, and before anyone else does....

Monday, January 15, 2007

Headaches at Opodo but is a sale really in the offering

Was preparing a post to discuss the huge list of departures at Opodo with rumours of more redundancies on the way when I say the Travolution blog post. Kevin has all that you need to know about this part of the Opodo story here.

The next part of the story is whether or not Opodo is up for sale. Independent is reporting that Opodo have
"the first steps towards a sale that could value it at well over £100m"
The over a hundred million part I get. Even though Opodo is losing a fortune, it has a turnover of Euro140mm plus and is growing despite the big marketing spends of Expedia and Travelocity / Lastminute in Europe. Heck if eBookers was worth £200mm plus then Opodo is easily in the hundred million range. (OK - we all know that eBookers was never worth £200mm but it has to be part of the story somehow).

The tone of "we have said goodbye to all of the top management, now are ready to sell" I dont get. Not sure how you can sell as either an ongoing concern or as a strategic investment a company that has lost its CFO, Country Manager for largest market, Head of Product and Commercial, Head of Tours and is just breaking in a new CEO (no matter how talented/experienced Ignacio Martos may be). Amadeus is clearly rethinking its online strategy globally (as evidenced by its exit from mid last year) but they are unlikely to obtain the best price for Opodo until after they have rebuilt the management team.

Friday, January 12, 2007

EXPE vs AA - who will be the strongest warrior

Expedia and American Airlines are having a bit of a fight according to Reuters. The news wire article says that AA international an non-coach domestic fares will no longer be available through I presume the battle is over attempts by American to follow the trend limit /eliminate commission payments to Expedia but do not have positive information to confirm. If that it the reason then Expedia must be adopting different tactics in the US to the other locations. In the UK, Expedia continues to sell BA flights and their Australian operation is selling Qantas and Virgin Blue domestic. Traditionally in battles between suppliers and large intermediaries you have a period where on switches off the other while the battle continues in the background until one party "blinks" or a compromise is reached. However in the airline commission battle, so far none of the first mover airlines (BA, Singapore Airlines and Qantas) have blinked. Could be that the US is different as there are more airlines for Expedia to shift share to but there will be some routes where this will hurt. Looking forward to watching round 2 of this fight.

UPDATE - are quoting an AA source as saying that AA and Expedia could not
“come to economic terms”
should be clear confirmation that AA wanted to lower commission and Expedia refused to accept. For their part Expedia says that the reason was
“...the result of Expedia’s choice to cease processing AA bookings using the Worldspan GDS at this time...[and]...independent of any negotiation issues with AA”

Thursday, January 11, 2007

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

The BOOT on Hotel-Blogs

Many thanks to

Tuesday, January 09, 2007

Jumping good, Booking bad

You don't need me to tell you about the Flickr phenomenon, just to point to the travel players trying to take advantage of the traffic and community that comes from photo sharing. A not-so-new player that I came across while reading the New York times online is

On the fun side - I love the bed jumping competition photos section - huge collection of photos of people doing jump after jump after jump including wackos in their birthday suits, dressed in costume and risking life and limb.

On the features side - they have an outline map of a hotel showing the rooms/locations of photos submitted by users (here is an example from the Grand Hyatt in San Fran. Note - not all hotels have this feature.

On the business model front - there is strong consumer benefit in having access to photos not fluffed by the hotel. Further (assuming they have the scale they claim) this is great at driving repeat visitors and customer retention. Their business model seams simple - use photo driven content and community to drive traffic to the booking engine. That said, I made three searches in three cities and could not get a rate or booking option. Hotel results were posted with photos, maps and reviews but attempts to get to a confirmed rate and booking page failed every time. The main error message was that my check-out date did not come after check-in but (a) that was not true (I triple checked each time) and (b) there is no chance to confirm or correct on the error page, you have to use the back button. So - great content, great PR generator in the bed jumping but can end up a waste of time if people can't book anything.

Monday, January 08, 2007

Airlines spotting and nostalgia

Couple of sites came to my attention over the break that I want to share with you - one useful, one nostalgic:
  1. Flight Aware - An airline will never be honest with you in first instance about how delayed their flights are. I remember one time I was running late for a Virgin-Express flight from Heathrow. I called the customer care line and asked if the flight was on time or running late. Was assured it was on time. I pressed - "are you sure, because if it is on time I will miss it". "OK" admits the agent "it is probably running about 15 minutes late". "That's not enough" I say "I will probably get there about 30 mins after scheduled departure.". "Well", the agent confesses, "that should be fine, as the flight looks to be delayed by about a hour and fifteen minutes". It took three attempts to have the airline tell me the correct information on the delay in the flight. On another occasion I was at the gate checking into a flight from Frankfurt to Barcelona when the staff apologised for the delay and announced that boarding would commence in fifteen minutes. I went up to the counter and double checked with the counter staff. "Excuse me - did you say that boarding would start in fifteen minutes." "Yes" she replied "apologies for the delay". "How can boarding start in fifteen minutes, when there is no airplane connected to the air bridge" I say pointing out the window to the obviously lack of anything on which we could board. She eventually admitted that the plane was fifteen minutes away, that it would take fifteen minutes to get the passengers off and at least another ten minutes to prep the plane for our boarding - so boarding would be forty minutes away. Flight Aware claim to provide flight tracking data and info free of the airline spin.
  2. Departed it is a crude and not very attractive site but here you will find old route maps for most major US airlines - including many of the defunct airlines such as Pan Am. Unfortunately is not interactive or searchable but provides a nice trip down memory lane. Other parts of the site have eclectic collections of old airline advertising campaigns including this oldie on how fantastic the 727 is/was.

Back on the blog

Hope you are as rested and ready for 2007 as I am.