Monday, March 31, 2008

Bad news day for airlines - at least for Alitalia, BA and Aloha

Reading the travel pages looks like a bad day to be in the airline business:

1. Milan Malpensa - the "greatest airport in Italy" is having its flight numbers butchered. The newly Air-France/KLM owned Alitalia is going to eliminate two-thirds of its flights from this airport. Effectively ending Malpensa's days as an international hub (SMH article here). By sheer Italian co-incidence the must heralded new link between Malpensa to the Milan-Turin Highway was finally opened yesterday (day before this announcement) after years of delay;

2. BA is still up to their necks in baggage at Terminal 5 (SMH article here). Some 15,000 items nowhere near their owners and without enough staff to help. Kevin has more coverage of US$8.6billion in problem here; and

3. Goodbye to Aloha Airlines that shuts (not unexpectedly) tomorrow (SMH again). Home page of Aloha says it all.

thanks to sluggerwv on flickr for the photo

Thursday, March 27, 2008

Kango becomse UpTake, Vailoma becomes TripSay - seems it is easier to buid a product that get a good URL these days

A new start up pattern is emerging overnight in the content space. First you form a team, then you get a little funding, put out a beta site and generate some buzz. Then, naturally, you change your name. Within days of each other we had news that community and guide content player Vailoma is now called TripSay (announcement) and content/review aggregaor Kango is now called UpTake (announcement). Could be a strong sign that finding a good URL and a name that means anything is now near impossible. That it is faster to get the product out than it is to secure the rights to or think up a decent URL. In Kango's case it is also because of the confusion they were experiencing with auction ad meta-tool Kaango.

A did a little piece here that involved these two players if you want some more background.

Tuesday, March 25, 2008

Priceline and Ctrip are (separately) looking for buddies

March 18 in the evening a rumour hits the wire that Priceline (Europe's biggest online hotel company) is looking for local help to launch a Chinese hotel booking site.

March 19 in the morning a news story hits the wire that Ctrip (China's biggest online hotel company) is looking for an overseas partner to develop services for travellers to China.

Maybe each should set up a facebook profile and put the status to "random play"

photo are of centralasiatraveler

Wednesday, March 19, 2008

I don't agree that BAR is a brand building activity for Chains

I have been keeping a watch on the stories coming out of EyeforTravel Travel Distribution Summit this week. In one story (via eTravel Blackboard) Revenue Bosses from top hotels are talking about the important role that Best Available Rate (BAR) or Best Rate Guarantees (BRG) (why have one acronym when you can have two) have in the building and maintaining of a hotel brand.

Maunik Thacker of the Venetian Macau is quoted outright as saying "Rate parity builds loyalty and trust in the brand".

I don't agree. Building and owning a brand is about so much more than just beating everyone up in the distribution chain to ensure a single price. Have a look at the Interbrand list of top global brand. Almost every single one of them charges different prices to consumers based on the channel. Here are some examples of channel based price differentiation from the top ten list:
  • Coca-Cola, the number one brand in the world, charges more for a cold 600ml bottle at my local super market than it does for a warm 2 litre bottle. This is charging more in the same store for less. It does this because it uses a non-price based differentiator (cold versus warm);
  • Nokia is the number one consumer electronics magazine. I can buy a top of the range Nokia N95 out of the box with a price range of $512-700. That is a variance of almost 50%. If I sign up for a contract I can get it for a little as US$20 per month (ie around $140 for the handset); and
  • Disney, the biggest entertainment brand in the world, let's retailers set the price on almost anything they sell.
The most successful brands on the planet use price discrimination and market segmentation to enhance their brand and the proof is in the brand valuations. Consumers love the Coke brand even though it is five times more expensive to buy it at the movie theatre than the supermarket. Yet in the hotel business the Chains argue the opposite. Maybe there is a reason there are no hotel brands in the global top 100 brands. Instead of beating up over BAR Chains should be using price and product as flexible tool for distribution management - just like the top global brands do.

PS - have look at the bottom of the article where (the now TUI owned) asiarooms is singled out for breaking the rules. This gives the answer to the commenter on an earlier post who asked why I called asiarooms infamous.

Photo ukdenners

Airline Industry - Singapore Airlines cancels deal to buy a slice of China Eastern - parable for online travel in China

A little bit off the online track but I enjoyed reading a recent Wharton Article called "Turbulence in the Skies: The Ongoing Saga of China Eastern Airline, Air China and Singapore Airlines". Very quickly - SIA was going to buy 24% of China Eastern for HK$7.16 billion (US$918 million). Everything was announced and ready to go. But at the last minute the deal is off (see update below). Air China and a related company (China National Aviation Corporation or CNAC) swooped in and took the deal away from SIA.

What I particularly found interesting about the story was that it is a parable for a lot of online travel and investment activities in China.

The "once great" Cendant Corporation entered China online though a joint venture with government owned CYTS to form AoYou (English site China Travel Depot). Descendants of Cendant had to pull out.

Expedia jumped into China and jumped up and down about its investment in the permanently Ctrip chasing eLong. Fours CEOs (include one interim), untold number of secondees from Seattle and a lot of red ink later and this business is still losing ground to Ctrip. I am sure descendants of that deal wish they could pull out also.

China is tough. Culture and developing market issues aside. Online in China is more offline than online with more than 70% of the so called online volume going through enormous call centres. Regulatory environments mean it almost requires a different ticketing licence from each regional governments. Not to mention the security issues around famil trips.

If you want to keep more of a track of the online travel market in China I suggest you subscribe to Roy Gaff's China travel industry blog.

UPDATE - an informed reader tells me that an investment by SIA into China Eastern is not deal it is just very complicated and will take a lot of time.

Thursday, March 13, 2008

TripUp - "our site is dead, go to Facebook instead"

Sidestep bought TripUp in 2007 as part of the plan to add content and community and with meta-search. Then Kayak bought Sidestep and made it clear that they believed in affiliates and search as traffic generators not content and community sites. When asked by me what this meant for sites like TripUp, Kellie Pelletier of Kayak gave the not so coded code words of “evaluating all those relationships now” and “reviewing contracts and performance". That usually means you will see things being shut down in the next three months. Well here we are three months later and TripUp is dead. I wonder how the staff at Travelpost (another Sidestep Content acquisition) are feeling?

The page that used to be TripUp is now thirteen simple words
"Tripup is gone, sorry.
Maybe you can use Facebook instead, it's very popular."
I doubt even that page will last very long.

Thanks to to the Triptouch blog where I spotted the story.

Have attached a screenshot below

VibeAgent Sessions: Interview with VibeAgent CEO Adam Healey - the Web is my container

In my continuing series of interviews with start-ups I had a chance to chat with VibeAgent founder and CEO Adam Healey.

VibeAgent is a combination of review site and meta-search - which I think in today's world is where every hotel focused meta-search player is pitching themselves. As I have discussed recently, content is now the number one tool that people are grabbing at to drive natural traffic to feed search. As PPC becomes more expensive it has become harder and harder for meta-search to make money the old fashioned way - traffic arbitrage. Now meta-search providers need content to generate traffic from natural search. Sidestep tried this through acquisition (though it seems that Kayak does not care for it very much as the new owners).

VibeAgent do things slightly differently from other met-search providers we have seen. They have matched content, maps, user reviews and activity tagging all in the same search. On its own none of this is revolutionary. It is "just" content, plus functionality plus supplier/inventory connections. It is not these choices and combinations that makes VibeAgent different it is the execution. The user interface and layout look good. Really good. This is a website designed with customers in the mind. It is easy to search - but more importantly it is easy to refine search by price, location, activity, requirement, category of activity and more. It is even fun to play with. Searching Paris and then refining by Historic, Nightlife and Gourmets and seeing what the hotel results makes hotel searching a game again.

It is not all roses - the load time is slow (though the interstitial manages it well). Also the mapping functionality appears to favour some supplier/inventory provider address formats. These thing can be fixed.

I don't think the VibeAgent idea is revolutionary (the revolution was meta-search itself) but the site is a winner. This led to my discussions with Adam about whether or not a fantastic site and product is enough. In my rules for content companies I said you need content and lots of it to get the traffic from Google. Healey says he will look to more than natural search fed by user generated content for traffic generation. The aim is to take the product and...well...productise it. In Healey's words the web and particularly networks life Facebook and MySpace are containers and VibeAgent is an application that sits in the container. This means that marketing efforts will be built around widgets & applications that can be imported into all of the "containers" sitting around on the Internet. First announcement - a Facebook application.

My Take

I see the rationale for this strategy. PPC is too expensive for a start up with just angle funding (from Trip Davis of TRX). Content acquisition takes a long time. But it is also risky as it takes a lot of developer time to build and there is a lot of noise in the containers (ie application spam).

In a lot of my start up interviews I reach a common conclusion around the enormous challenge of attracting traffic once the product is right. I see that same theme here with VibeAgent. In this case Healey and team (including founder Charles Seilheimer and marketing VP Dennis Ortiz) have a top class product, a clear strategy and (a little bit) of money. The container strategy is the new piece and an untested one. To make it work Healey and team have to keep the costs low and the product sharp.

Wednesday, March 12, 2008

ad:tech Sydney - day one - yawn

Spent the morning at ad:tech Sydney attending the keynotes and exhibition space. If you don't know ad:tech is the number one online advertising conference series. Moves every month or so to a new city around world.

There was a top list of speakers set for the Keynotes including: Mike Murphy (VP Media Sales Facebook); Damian Smith (GM digital media at Network 10 - large AU TV station); Warrent Lee (CEO APN Online - large AU media company); Jack Matthews (CEO Fairfax Digital - online arm of large media company); and Chris Smith (GM Sensis Interactive - online arm of large AU telco Telstra).

About 1,000 people in the audience turned up to hear the latest and greatest about online media and advertising globally and in Australia. Here is my summary of the first two hours of this two day event.
  1. Facebook is big, very big; and
  2. Online media is new and different.
How about that for two hours of insight. Don't ever tell me that Australia is not right up there at the top of the online world.

Monday, March 10, 2008 in-flight TV commercial

Last week I put up the Australian Television commercial appearing on local free to air TV. Here is the ad that has just started to air on in flight TV for a number of Asian Pacific carriers.

In the comments let us know which you think is better...

Disclosure - my linkedin profile is available for all to see - including role at HotelClub

Friday, March 07, 2008

Expedia launches hotels and attractions in india.

Announcement that Expedia has launched in India with Much like their launches in Europe (except FR and DE) and Asia, the open functionality is just hotel and attraction. Business being operated by Sharat Dhall - Managing Director India. According to to his Linkedin profile Sharat joined Expedia in May last year. Prior to that he was a VP of eCommerce at the Expedia is entering a market that is young but moving. Euromonitor predict a $2billion online market in India by 2010 but more than doubling every year. In the Expedia press release they say the Indian market has already reached that size.

Currently leaders in full service in India are Yatra, Makemytrip, Cleartrip and travelguru. launched in India with flights and hotels in April last year headed up by Himanshu Singh MD - reporting through to the Zuji executive team (Travelocity's Asia Pac brand - except in India).

UPDATE - Ram Badrinathan of PhoCusWright made contact telling me that in his latest report on India PCW are estimating that the Indian online market will be $6 billion in 2010

Thursday, March 06, 2008

Horror Familiarisation trip as 10 travel agents held hostage in China

Frightening story coming out of Shaanxi province in China (location of the entombed warriors). Ten Australian travellers - all of them travel agents on a famil - were taken hostage. A hijacker (now dead at the hands of Chinese authorities) stormed the tour bus and took the travel agent hostage for about 2 hours before being tricked into leaving the tour bus and being shot by the authorities. According to reports none of the Australian travel agents were hurt. SMH story here.

I am never going to complain about a business trip ever again.

thanks to barjack for photo (via flickr)

Wednesday, March 05, 2008

PhoCusWright ITB Bloggers Summit -wish I could be there

Wish I could be at the PhoCusWright@ITB blogger summit. Looks like a great collection of people will be there. Check into Travolution if you want to keep up with ITB coverage. - first time using traditional marketing

First for (lastminute accom provider in AU & NZ) - a TV ad.

Acquisitions now traditional advertising - is organic growth slowing?

Another version of the ad here

Help Wanted: Finding staff in a Travel 2.0 world

In the early days of doing this blog the majority of the email I received was from start-ups and entrepreneurs asking me for advice. These fell into two camps -"what do you think of my idea" and "where is the best place to look for money". Toward the end of last year the email became much more PR related - "Dear Tim - company X is doing thing Y. Isn't that cool! Don't you want to write about it?"

In recent months this has changed. Email has been coming in from start-ups and younger companies desperate for talent and advice on where to find new hires/recruits. I think this says an interesting thing about the state of the online travel industry. In 2006 there were companies to build and ideas to finance. Now there are small sites moving from beta to full launch, gaining traffic and scale, and big sites fighting for growth and pressing for market expansion. Both need people, good people, lots of good people to fire up the furnaces and keep the engines roaring.

Let me give you an example. I was talking by email with Marcus Cent from ibooking , a small (but he tells me) profitable online reservation technology provider. I don't know much about ibooking but Marcus wrote asking me the following
"[Dear Tim, I am] trying to find a resource where I may be able to find an experienced director level person who may have the right experience to help us with future growth. I was wondering if there was something online that would allow a company like us to find someone that may have had previous experience of high level travel/tourism and have good industry contacts that may be looking for a new challenge."
This is typical of the "help wanted" email that I am receiving. Here is an edited (and updated) version of what I said in return
"Everyone is short of people and looking for them. I don't know specifics about the your market but imagine it is similar to this trend. If you are looking for targeted recruitment sites you can and should try some of the recruitment networks like Linkedin and the hospitality specific WIWIH (though WIWIH has not yet achieved sufficient scale to be a big difference maker). If you want to go people hunting I suggest trawling for names in Linkedin and cold calling or attending every conference you can find with a stack of business cards and plenty of beer money.

If you are looking for board level or advisor help (not full time operational staff) then this level of support is best provided for my an investment company (ie alongside cash!). Firstly because they have a significant interest in the success of the company and secondly because their network is wider in hunting for talent for you. If you are not looking to tie this board level person to a capital injection (or need this person to help with the capital raising) then things become complicated (but not impossible). In this case the perfect candidate for you is someone who has already made their killing in online travel but is too young or invigorated to stop working. You should build a list of all of the ex-Expedia, Travelocity, Orbitz, Priceline, Lastminute, Bookings/Activehotels, Yahoo Travel, Opodo etc execs you can think of (or track down on Linkedin) and start "stalking" them - finding out what they are up to and interested in. Then pitch at them."
Unfortunately this is not silver bullet advice. It is does not provide an easy to follow guide to finding staff. I predict that talent hunting is going to become the number on growth constraint for online travel in 2008 despite what idiot government ministers in Australia might say.

thanks to "Darth Dragon" for the photo care of Flickr

UPDATE: if I needed any further proof about this story, it arrived moments ago. Exactly 2 minutes after pressing the "Publish Post" button on this story I received an email from a high profile online company I wont name asking for help in the search for a European MD. Maybe I need to set up a BOOT Job Board...?

Tuesday, March 04, 2008

Content, content everywhere but who is getting the traffic

Content, content, content. Everywhere we look there is content. Back in August I posted that the next phase of online travel will involve consumers being bombarded with "too much information". Having mastered the art of booking travel online, consumers now found themselves overwhelmed with choice and information - looking for help. Recently I co-blog-erated with Alex Bainbridge on some rules for success for start-up content companies. With this background I was looking through my inbox at all of the different types of content companies that were writing to me. I found a spectrum of approaches to capturing long tail traffic with review and content sites.

Kango is targeting the tail through meta-search for review content. As per my Interview with founder Yen Lee here Kango have built a review meta-search business. Modifying business models of the meta-search booking sites like the combined Kayak/Sidestep, Kango has built an aggregation engine for reviews from a multitude of sites. It takes time to put together (hence the beta is only on two destinations - California and Hawaii) but Yen has been able to raise a lot of money and is working on balance between building search architecture and attracting content. UPDATE - Kango now called UpTake.

While Kango is looking to index content on a grand scale, I am constantly coming across or being approached by deeply targeted local content players. 71 miles covers weekend trips in a small part of Northern California. covers - as the name implies - tours and travels around Sicily's famous Volcano Etna. While covering completely different parts of the world and travel experiences, Adam Rugel's 71 miles and Enrico Forte's Volcanoetna are at the longest point of the long tail - focused on detailed and informed content in a very specific location. The pluses for them is that the long tail loves targeted and specific. Nothing brings long tail traffic better than detailed, focused and informed content. The problem is scale - a highly targeted site can become the number one place for a specific piece of long tail traffic but you still need a minimum of traffic to generate advertiser interest. Rugel of 71miles admitted to me that traffic was not a problem but monetisation was proving difficult. Local advertisers who should have been interested didn't get it (online that is) and are spending their money in the local newspaper instead (my theory). Better to be part of a network - Rugel said.

So targeted brings the traffic but not the money. Want proof? Four years and GBP7.4 million pounds later and VisitScotland has shut its doors. has the story - but the short version is not enough traffic to justify and not able to monetise.

This is where Gawker Media's Gridskipper has an advantage of the hyper long tail sites. It has been around long enough and writes on enough material that it generates the long tail traffic. At the same time it has the network effect of the Gawker family (including Gizmodo, Lifehacker, Consumerist and the NSFW Fleshbot). UPDATE - Gridskipper no longer owned by Gawker.

Video is also playing a role in this race for content. Geobeats are trying to build a business around user gen travel videos. Players are racing into this space as well - driven by the phenomenon of youtube. Pixsy is in this space too (including a relationship with Lastminute). Both are following Travelistic (who I first covered here) who (as far as I know, tried to do it first). The advantage of video in this race is that video generates a greater engagement than a text site. They may generate less page views than text but good video sites keep people on the site longer and interested longer - all elements that advertisers love. As GigOM said "Page Views are dead, Engagement named as Heir".

The final style of player is the now ubiquitous social media, social networking and user generated player. There are a lot to chose from here in this post:

New players are rushing into this space:
  • Vailoma - still in beta- trying to build a community around content and guides UPDATE - Vailoma now called TripSay;
  • SimpatiGo - leading with the "classic" map mashup around activity. Trying to drive search and "engagement" through map and neighbourhood based information and search.
As I said in one of my early posts - the difference between a online content company vs a retailer is that it is significantly easier to launch a content company (no need to build extensive supplier relationships) but it is harder to achieve and maintain scale. This means that content companies have to innovate sooner, faster and more often to keep the traffic flowing. So after an analysis of a dozen companies I feel even more certain that my four rules of success apply.

1. Content - lots of it
2. Index - a fantastic Google friendly index and expertise in search optimisation
3. Access methods - varying ways and means for consumers to access the content
4. Patience - time (and money) to wait for the traffic to build.

What do you think? Who have I missed?