Wednesday, March 31, 2010

The BOOT at adtech: three trends for any social content strategy

I was at adtech Sydney the week before last speaking at a session called “what is the impact of social content on e-commerce”. During this session I shared my thoughts on the three main trends that an online company has to be aware of in a social media strategy. Here is a post with my speaking notes cover the three critical trends to follow and understand when crafting a social media/content strategy:

Trend 1 - Trust, interest and relevance as (if not more) important than technology

Social media is word of mouth at the speed of light. Successful word of mouth marketing comes not from technology but from trust, interest and relevance. As I mentioned in my lead up interview to eyefortravel TDS next month, getting someone to talk about your brand is not driven by technology it comes from earning a customer's trust, telling them something interesting and making it available in a relevant way. Technology is the speed and connectivity tool but is not the message. The recommendation from this trend is to spend as much if not more time on the message as the mechanism. Just like TV shows in the fifties were great ways to generate word of mouth about soap because of the relevance to the audience, so too they only worked if the soap opera carried a message targeted to and of interest to the audience. The soap operas in themselves were not transactionally driven. Similarly, this is why the initial phases of social media marketing have been content related rather than transactional or deal based. In the travel arena, content and travel stories are more likely to be relevant, interesting and build trust (at this stage) than sending out poorly targeted deals.

Trend 2 - the open ended question comes online

In the nineties and early noughties the job of the online travel industry (suppliers, agents, content and search businesses) was to help customers answer closed questions. Specific questions with specific answers. The last 2 years has seen the shift online from asking closed questions to open question. From a closed question like 'how much for a 4 star hotel in sydney?" or "how much for a flight to new york?" to an open question like "where should I go next?" or "what should I do this weekend?". The first has a limited set of answers regardless of who asked. The second has an unlimited number of answers that change depending on who asks.

For online travel businesses this means using the data we collect from our members, community and purchasers to drive recommendations and trustworthy community interaction to shift form answering limited questions to limitless questions.

Trend 3 - the platforms for social media are still in beta

I am convinced we are at an intermediary step with social media. By that I mean that the platforms are not close to being finalised in form, function or usage. Status updates in Twitter, Linkedin or the new Google buzz are still non-stop streams of information. As I mentioned in my story about tracking the Mumbai attacks via twitter this constant feed of information and innuendo can be overwhelming in volume and unmanageable in determining truth from fiction. Twitter is not a final product, same for Facebook and Linkedin. In fact the social media platform space is still in beta. People were tweeting at adtech that blogs are now dead, long live Twitter. But still only a fraction of the online world uses twitter and there are more cumulative page views being attracted to long form content than micro-blogging update. There is a next stage coming, a next product or iteration of an existing product that adds a management layer, a relevancy later and an attribution/authority layer - in other words trust, relevance and interest.

Tuesday, March 30, 2010

Blog Roll Update: Robert Cole's Views from the Corner Suite

I have added a new site to my blog roll. Robert Cole's "Views from the Corner Suite" blog. Robert and I worked together in 2004 and 2005 at Cendant. He is now running his own hospitality e-commerce consultancy called Rock Cheetah. He is blogging regularly on the online travel industry. I suggest you check his site out.

Thursday, March 25, 2010

Over-heard at NoVacancy: tweets and chatter from No Vacancy hospitality conference 18 March 2010

Innovation, Distribution, Inspiration @ No Vacancy 2010
Normally it is the end of the year that signals the conference season with TRAVELtech, WebInTravel and PhoCusWright following each other month by month starting in September (note - TRAVELtech is Aug 31 this year rather than usual Sept). But for the BOOT this year the season has started early with adtech, No Vacancy having just wrapped up and Eyefortravel TDS Asia coming up in Singapore on April 28 and 29.

Last week was my first year at No Vacancy. It is part of the same conference stable as Martin Kelly's SearchEngineRoom and TRAVELtech and is targeted at the hospitality industry - all channels - rather than being a purely online or technology conference. I (and others) tweeted our way through No Vacancy under the hashtag #novacancy. Not all of you are on twitter so here in this post are some of the top tweets and quotes I took away from No Vacancy. Here are the the most interesting tweets:

On the market general (Australian bias)
  • 2009 hospitality market in Australia according to Dransfield."held up better than expected" "rates down 3%" "revpar down 8.2%". 2010 "good start, expect rate increases" but " lost 40% of capital globally" "another shock could come" They went on "Credit availability + bank conservatism means still shortage of capital" "has hit valuation "av hotel down 20% value"
  • Travelclick" gds htl vol in 2009 46mm trans, to 2003 levels". Wonder how much corp bookg decline, how much OTA neg rate growth?
On Online Agents and Intermediaries
  • Robbie Cook (Wotif CEO) said "60% of business is direct to site, then organic search, paid is a single digit % of the business". He went on to say that "Wotif saved $2.2mm in costs post business post acquisition."
  • Yury Shar Hotelscombined said that "less than 10% of traffic comes from typing in URL direct" "59% of traffic affiliate. Paid 24%, rest organic search" Sam_Linder added in his tweet "@hotelscombined 2 mil visitors pm to 6 mil in last year. Affiliates is primary channel, 15,000 such as skyscanner in uk"
  • Latest stats from "22,400 properties, 270k newsletter subs, 160k bkings/ 650k nts in 2009 (+ 30%yoy)" also advertising revenue
On Hoteliers
  • Starwood AsiaPac "2009 -2% in occupancy, -7% ADR for -9% RevPAR in Pacific" "online only channel to grow- branded faster than OTA"
  • Starwood "2-3 years to get back to 2007 rate levels" to which robertkcole said "Sorry, Starwood's dreaming if they think it will only take 2-3 years for rates to return to 2007"
  • Accor AsiaPac "Occ finished 2009 at 74%. Good but down from all time high in 2007" "price down 6%" revpar down 9%"
  • Accor "Online up from 10% of sales in 2005 to 35% planned for 2010" "65% of online sales will be direct up from 50% in 2005"
  • Accor "happy with 65% of online business being direct. Won't artificially cap 3rd party distribution or hold back inventory"
Other accom types
  • 25-46% of bookings online at "freespirit" (a holiday park/caravan park company). If true for whole sector then parks online larger percentage than hotels

Wednesday, March 24, 2010

Rumour True! Google trialling meta-search in maps for hotels

Who knew that a BOOT rumour (admittedly one from a trusted source) could prove to be true. I wrote last week that I had a good but unsubstantiated story that Google was planning a launch of travel meta-search. Now we have confirmation that they are putting prices into the display of hotel results with priced links to booking engines. Not all users are seeing this functionality (in classic Google multi-variant testing) preventing me from giving you a screenshot of my own, but over at "eWeek Google Watch" you can see some screenshots of a "hotels in new york" search with prices and meta-search style functionality.

Kayak, Wego, Hotelscombined, Sprice and more - hold on to your algorithms this is going to be a bumpy ride!

More analysis over at Tnooz

PS - WOW I scored a TechCrunch link out of this

Wednesday, March 17, 2010

No Vacancy tomorrow (March 18) see you there

Innovation, Distribution, Inspiration @ No Vacancy 2010
No time to recover from the digital scrummage of ad:tech. The conference train continues to roll on with the hospitality conference No Vacancy tomorrow March 18. If you are there come and say hello. I will be blogging, schmoozing and tweeting (follow #novacancy).

Tuesday, March 16, 2010

Google to launch travel meta-search in April according to unsubstantiated rumour

I heard an unsubstantiated rumour today. Someone told me something they heard from someone else that may know something. The rumour is that Google will be launching a travel meta-search product in the US next month (April). Now, let me say up front that this is nothing but rumour and I have not vetted it to anywhere near the levels of confirmation that a journalist would (may Kevin forgive me). Thought this would be a good chance to test out the power of the blog audience. Have any of you out there in blog land heard anything about Google going into travel meta-search in the coming weeks? Bing's doing it, maybe everybody should.

thanks to "This is a wake up call" for the great photo via flickr

BOOT to present at ad:tech March 17 in Sydney

UPDATE and reminder: The BOOT will be presenting today (March 17) at ad:tech Sydney (Convention centre in Darling Harbour). Details of the session are below. Will be tweeting via #ATSYD. It is the last session of the day but promises to be a good one. See you there.

ad:tech Sydney is on this year March 16 & 17. The BOOT will be presenting on March 17 at a session titled.

What Is The Impact Of Social Content On e-Commerce?

Bullets are:
  • What role do social objects and search play in the online purchasing decision?
  • How can you harness social content to benefit e-commerce outcomes?
  • What impact does social media have in powering conversion rates and increasing sales?
Other panellists include
  • Tim O'Neill, Joint Managing Director, Reactive
  • Mike Hickinbotham, Social Media Senior Advisor, Telstra
  • Michael Gorman, Vice President for Strategy, Acxiom Global Multichannel Marketing Services
  • Dan Ferguson, Online Channel Manager, General Pants
Here is the rest of the schedule.

Let me know if you are attending and

Monday, March 15, 2010

Agoda's 2009 Turnover / Bookings was US$244 million (according to Citigroup)

I am always on the watch for Agoda results here are the BOOT as they have been hard to find. You will have seen the stellar results for Pricline in this announcement and elsewhere, showing >50% growth in Q4 09 over 08. In the transcript from the earnings announcement I could not find any details about Agoda's contribution to the performance. Finally, via CitigroupGEO we have an estimate on Agoda's turnover and gross bookings. Here is a table with the last 6 quarters of results for Agoda estimated by Mark S. Mahaney of Citigroup (link to PDF here)

Means Citi estimated Agoda generated $244MM in bookings/turnover in 2009 (3% of Pricline's total). Up 100% on 2008. Q4 2009 was estimated at US$78mm up 111% on Q4 2008. Other information from the note:
  • Confirmed purchase terms. Acquisition in 2007 for $16MM in cash
    and an earn-out of up to $142MM, payable in 2011 upon Agoda reaching
    undisclosed Bookings and Earnings targets in 2010.
  • Strongest search engine ranking markets - China, Hong Kong, Japan, South Korea, Singapore, and Thailand. Weakest - Australia, India, and New Zealand.
  • Projects Agodas gross bookings at $433mm in 2010, $606mm in 2011 and $758mm in 2012; and
  • Models and aggressive scenario where $1bb in gross bookings for Agoda is possible in 2011 if online hotel penetration in APAC increases from 25% to 37.5% and Agoda;s share of the market increases from 3.5% to 6%.
This Citi report is the most detailed analysis of Agoda I have seen to date. Definitely worth a read.

Thursday, March 11, 2010

More on China from McKinsey Quarterly

I think I might as well call it China month here are the BOOT. I have another interesting piece for you to read about the Online market in China. This one is from McKinsey and covers online China in general (not just travel). Called "China's Internet Obsession" this article comes from the McKinsey Quarterly (registration required for full article but no cost to register). Couple of highlights from the article:
  • China is world's largest internet market in terms of people - 384mm online. 50% increase since 2008;
  • One in five consumers between the ages of 18 and 44 won’t purchase a product or service without first researching it on the Internet; and
  • Online advertising has been growing at between 20 and 30 percent a year—twice the print media’s growth rate—and the market was around $3 billion (20 billion renminbi) in size last year.
thanks to Chi King via flickr for the photo

Tuesday, March 09, 2010

Motley Fool on eLong, Ctrip, Home Inn and more in China

It is definitely China week here are the BOOT. Two posts on Ctrip last week one on an interview with their CFO Jane Jie Sun and one on their acquisition war chest plans.

This week I came across another interesting post for China watches to read. Rick Munarriz over at the Motley Fool site published a post titled "Panoramic View of Chinese Travel Plays" In the story Muarriz discusses the performance of online travel company eLong (Nasdaq: LONG) , budget hotel chain Home Inn (Nasdaq: HMIN) (interesting side bar - Home Inn was founded by CTRIP founder) as well as Ctrip (Nasdaq: CTRP) itself and even Priceline (Nasdaq: PCLN) and AirMedia (Nasdaq: AMCN).

Good comparison on performance of eLong and Ctrip. Worth a read. Interesting note on eLong. Though it is profitable, more than half its market cap is explained by the $139mm in cash in the bank.

thanks to steve webel for the great photo care of flickr

Monday, March 08, 2010

Drew Patterson Interview - Jetsetter CEO talks to the BOOT

I have re-read the Tnooz predictions for 2010 to confirm but as best I can tell none of the online travel punderati mentioned online private sale companies in their predictions for 'what's hot 2010'. But if the buzz around Jetsetter, Voyage Prive, Kayak Private Sale and more is anything to go by then clearly we should have. After I wrote a post on Tnooz called "Non-transactional travel sites are chasing the online agents on unique product hunting" I decided to do some more investigating into this area. From that I had a chance to talk last week with Jetsetter CEO and ex-Kayaker Drew Patterson.

As a reminder, Jetsetter offers a selected list of limited time deals at high end travel product to a member only list. To get on the member list you have to be referred by another member.

My view on the business model is that it is interesting, exciting but niche. Has the potential to carve a luxury/targeted space in the online world (like Abercrombie & Kent have done offline). But it is not right to view this move as an "OTA killer". Much like boutique clothing stores have a place in the market but will never beat malls in terms of turnover and scale.

Priceline's Jeff Boyd seems to agree with me. He is quoted in a Dennis Schaal Tnooz post as saying that it believes it is "hard to see how they [private sale companies] will scale".

The clothing analogy is particularly apt case of Jetsetter as they are an offshoot of high end fashion private sale company Gilt. Jetsetter appears to be more than a division of Gilt but an independent but related company. Patterson put it this way "Gilt has capitalised Jetsetter". As well as money, Gilt has set up an "intercompany agreement regarding access to customers".

A number of benefits come from the Gilt relationship for Jetsetter. Firstly they get an insta-database of high end customers (Patterson says more than 1 million). Next they have insta-funding in that they (presumably) are getting their funding from Gilt via the $43mm raised from General Atlantic and Matrix Partners. Finally there would be some technology synergies in Gilt providing Jetsetter with insta-merchandising through a common content management architecture.

These point towards solving a lot of the distribution and establishment challenges that face a travel start-up. Leaving Patterson and team to focus on getting product/supply on the shelves.

Patterson has a clear cut vision for his supply strategy. He is not out to replicate the OTAs with the need to manage "10,000 partner, many with low volumes. We much prefer to focus on 8-9 live sales 0n the site." Hotel selection has to be very tight and controlled according to Patterson. They use a combination of "editorial judgement" from a "group of people from within the industry" and post- stay survey responses from members. Patterson says that the survey response result in partners being discarded and new ones selected.

He stuck to the consistent line that I saw in the TravelTrends post on Jetsetter of not disclosing the margins that are being charged to hotels. He confirms that it is not the standard 20-25% of the OTAs but is "more than healthy enough to run a business". It matches his Gilt customer base to target a limited number of high end products. With a focus as much on descriptions and content as rate.

The spot that Patterson and Jetsetter are targeting has parallels with some of my EveryYou posts and discussions on how to help consumers answer open ended questions in online travel search.

He sees editorial content as the key to helping consumers to discover and book high end product. Wants to be compared to publication and information sources Daily Candy and Urban Daddy rather than shopping sites. To be a "lifestyle publication as much as a travel company". He believes that "Consumers want an editor to help point them in the right direction." To be provided with "a sense of what is interesting in the world of travel. What places to go to . What is distinctive." Jetsetter what their role to be to tell "a very different story to 'here are deals in vegas'" that is market of the OTAs. He did not give much away on performance but did say that traffic in Feb 2010 was 40% up on Jan which was 40% up on Dec. With "revenue per member holding constant".

Patterson and Jetsetter have spent time and energy thinking through the business. They have money, a targeted niche and a customer base. All point towards potential success. To get to success I see two challenges for them to address.

Challenge 1 - turning retail customers into travel customers

The bad experiences of Amazon, eBay and Pricegrabber in travel have shown that that a retail database does not translate easily to travel sales. Patterson's view on this is that there is "enough congruence in the basic business model and customers" between Gilt and Jetsetter to provide Jetsetter with an advantage. That the high end product seeking customers of Gilt will transition from buying expensive clothes to expensive holidays.

Challenge 2 - generating scale (in sales and data)

The first of these (scale in sales) is not that big a deal. While targeted sales will never be as big as mass market, there is plenty of money to be made trying to be the Abercrombie and Kent of online travel. High per booking values make revenue per transaction healthy and customers can be very loyal. Keeping supply numbers tight means that per hotel volume should be high enough to keep suppliers interested. However scale in data could be more challenging. As I discuss in a number of my EveryYou posts the future of online travel is not just making targeted recommendations, it is adjusting those recommendations based on the different 'version' of the traveller that is making a request at a particular time. One person can be many different travellers depending on the trip (ie business travel vs leisure v VFR). To do that you need lots of data on a customer. More than I suspect you get in the tight supply context of Jetsetter. To move to a more powerful recommendation architecture will require Jetsetter to tap into other sources of data from Gilt and other places.

The biggest asset that Jetsetter has to overcome these challenges is the 1 million member Gilt database to start things off.

Thursday, March 04, 2010

Ctrip makes very strong hints that looking for acquisitions

Day for a Ctrip double post. A few movements ago a link to a Tom Botts post from a presentation by Ctrip CFO Jane Jie Sun. Now I have just spotted a Reuters/Yahoo! Finance news story that Ctrip are planning to place 5.7mm American Depositary Shares (currently priced at around $36). In non-finance English this means they are looking to raise somewhere around $200mm in capital. What do they plan to do with it? The Reuters story says they plan to use the money to buy or invest in "complementary businesses and assets" and for general corporate purposes. In non-finance English "complementary businesses and assets"means buying some one. Ctrip plus $200mm equals consolidation. Speculation time....who do you think they are most likely to buy?

Ctrip CFO Jane Jie Sun presentation notes

BOOT recommended read of the week - Tom Botts of Hudson Crossing's summary of Ctrip CFO Jane Jie Sun presentation at the Goldman Sachs Technology and Internet Conference in San Francisco. Post is called "Ctrip and Home Inn: How Different China Really is". Includes notes like "Only 2% of travel in China is booked online today - and Ctrip has 50% of that market". Worth a read. Always worth remembering that online travel in China has a different meaning that elsewhere.

Wednesday, March 03, 2010

See you at No Vacancy March 18 in Sydney

Final speaker list is live for the No Vacancy conference in Sydney March 18. I will be there as an attendee and blogger. Will be tweeting under the hashtage #novacancy. Let me know if you'll be there and would like to meet up. Rego details here.

Some of the speakers I am looking forward to are:

The BOOT is perfect for Qantas Affiliate Program....really??????

I received an email this morning from Affiliate Future. A company providing marketing services to help companies generate affiliate sales. They are pitching an affiliate relationship between the BOOT and Qantas. The offer is for $15 a sale. The email invite contained this sentence as the big hook to draw me in

"I’m reaching out [to you] as I think Qantas is highly relevant for your site and traffic"
Why is that people write to me (to anyone) to pitch a business without have spent a moment to read the source material. Here are some quote from the BOOT about Qantas.

re relationship with Amadeus
"Unlike the PR love-ins of the previous announcements, Qantas was very happy to very publicly blame the whole thing on Amadeus. Newly appointed Qantas spokesman David Epstein used all of the tact that his former Labour party bosses are famous for by being very polite in his finger pointing but stating clearly and cleanly" [full post]

re service on the A380
"More and more this [service] becomes Qantas' weak point. It is provided to their schedule not the passengers'." [full post]

re the outrageous prices on the AU-US route
Right now Qantas is gouging me and every other customer on the Pacific Route (East Coast Australia to West coast USA). " [full post]

re changes to frequent flyer program
"I have been fuming about the recent changes to the Qantas Frequent Flyer program." [full post]

re a VOD system that did not work for two years
"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" [full post]

re Price fixing in air cargo
"Aaah Qantas - the "spirit of Australia". So long as you mean old fashioned pre-colonial convict spirit of Australia to steal as much as you can from anyone you can." [full post]

And this is just a sample. It is not all negative for Qantas here on the BOOT. There are some high praise/positive posts including these three:
But this is not a site that (if I was Qantas) I would want to be sending to cheques to or having my booking engine on. Clearly Affiliate Future have just printed out a list of top ranked or trafficked sites in travel - especially those generating links for seat reviews - and not bothered to actually look at the site to see if the content would suit the partner.

Let this be my version of the warning post to PR companies and marketing people. Take a moment - just 5 mins will be enough- to look at my site before you write to me. How embarrassing.