However there do seem to be a few organisations/events out there that are looking to assist travel industry entrepreneurs in the UK.
First there is the Get Funded Show – taking place again at the World Travel Market in London / November 2009.
They have already attracted onto their panel the following:
Travel Gurus
Hugo Burge, Founder, Cheapflights and Howzat Media
Steve Endacott, Owner and CEO, On Holiday Group
John Kent, Founder and CEO of youtravel.com and the founder of Aquis Hotels and Resorts
Roger Allard, Owner, All Leisure Group
Peter Waller, Group Mergers and Acquisitions Director, Thomas Cook
Paul Evans, Founder and Chief Executive, Low Cost Holiday Group
Faisal Galaria, ex-Managing Director, Kayak Europe & Angel Investor
Dinesh Dhamija, Founder, eBookers
Cree Lawson, Founder and CEO, Travel Ad Network
Glenn Fogel, EVP Corporate Development, Priceline
Dhruv Shringi, Founder, Yatra
Investors
Roberto Bonanzinga, Partner, Balterton Capital (tbc)
Jason Katz, Founder, KP Capital
Bill Morrow, co-Founder, Angels Den (tbc)
Daniel Smith, Assistant Director, New Investments, ISIS Equity Partners (tbc)
Now I know a few of these people…. and would be happy to pitch in front of them. Tom, who chairs this event, says that he has interest from 150 potential startups, one of them is us [although whether we are a startup is another discussion]
I know these guys attract a crowd. I remember at the last Travel Technology Show [London] where I was on a panel preceding Hugo Burge talking. I could see the audience filling up as the time for Hugo’s to talk neared….. umm….. perhaps my “rent a crowd” didn’t quite work that day or perhaps Hugo is more interesting than me!
TTG Big Idea
The TTG Big Idea is a competition to pitch for 100,000 GBP (say 150,000 USD) for your travel startup. They have 4 investors who are putting in 25,000 GBP each:
Paul Stanyer, Holiday Taxis
Oliver Brendon, Attraction Tickets Direct
Jane Dyson, The Network
Christopher Photi, White Hart Associates LLP
They are also associated closely with the UK based TTG travel industry mag.
UK Fast competition
Not just for travel websites but may be worth a quick look. They are offering 15,000 worth of prizes but seems to be mainly services in kind. Via Internet Retailing blog [worth a read to keep you in touch with general, non-travel, ecommerce]
What do I think about these competitions?
Generally I am in favour.
However what I am concerned about is over disclosure of information. In a normal VC scenario you pitch your idea, say how much you need and disclose significant information about yourself, your vision and future projections. You expect this information to remain private.
That is fine. However these competitions are not normal VC scenarios. They are all backed by entities that want to make PR out of the VC process. I am not sure that is entirely a clever thing (from the entrepreneur’s perspective). Yes PR is good – but do I really need to give significant background information to one of the leading travel industry magazines in order to achieve funding? What happens in 2 years time when you are successful and then the trade press rake up a story based on what you said you were going to do?
VC funding should take place behind closed doors.
Having said that, I may put ourselves forward to pitch at the GetFunded show. I see that as safer than the TTG proposal and more about a bit of fun and pitching ideas than about finding an actual funding source. If they want a business plan I will withdraw…. happy to send business plans to VCs – just not trade press nor PR entities.
If you want to be notified next time something is published sign up for email alerts, subscribe to the RSS feed or say hello via Twitter @alexbainbridge. Thank you for reading!
Many new online travel websites created by entrepreneurs coming in from outside the travel sector are in the product review category. One reason for this is because getting hold of travel product data just isn’t easy and by starting with reviews you build your own data set.
To acquire original data there are complex commercial relationships that need to be formed and technical barriers too. Much of the existing commercial contracts and data formats are setup to support the status quo. If a new online travel website has a good idea – or just wants to play with the data – it isn’t possible. This stifles innovation.
No surprise then when entrepreneurs create product review sites or other social systems. And then no surprise when us transactional type “traditional” companies snigger at all these travel social startups. Instead of sniggering we should be assisting. We should harness this enthusiasm and desire to innovate.
Waste of talent
What a waste of talent. These entrepreneurs are risking several years of their lives in order to best serve travel consumers. Consumers who will eventually buy products from existing travel companies. So why then don’t the rest of the travel industry help them?
What they need is your data
Free your data. Remove your commercial and technical barriers.
Netflix released their data and created a competition – now a team is close to winning the 1 million USD first prize. As I wrote about previously, companies such as Google / Bing don’t compete by who has the best search algorithm. What the Netflix prize showed is that the company with the best data (and understanding how to use that data) wins.
Sources of interesting travel related data for your own projects
Interesting quote in the TTG this morning [See article]
The article is about a new form of travel company consumer protection that is being planned / discussed later this year to provide additional / clarified protection to UK travel consumers:
The government’s plan could see all non-air packages brought under the current Atol regime, or under some parallel protection arrangement, the CAA said.
It could also look at bringing in low-cost airlines that sell other holiday components on a “click-through” basis into the protection regime.
The second paragraph is what attracted my attention.
What about non-transactional travel sites – e.g. review sites, a price comparison / meta search etc. Can you really imagine that all these sites are going to required to give consumer protection too?
If the CAA is only talking about airlines requiring protection when they have external links to independent 3rd party travel websites…. that could be tricky for airline owned travel websites….. like Metrotwin, Vtravelled etc….
And what about non-transactional sites that link to both airlines and accommodation sites (but don’t handle any transactions)…. I guess they would end up in this wide net too.
I don’t see this particular clause making the final proposal myself, but the fact that it is even being discussed should wake up a few people. Stranger things have happened when it comes to UK government made legislation!
I have been holding back from writing about Virgin Atlantic’s new travel community Vtravelled. It is plainy not quite yet ready for a full review so thought I would give it the benefit of the doubt and see what consumers make of it before I jump in. That is only fair as reviewing social functionality on day #1 of a site is always a little pointless! Social systems are about the community you attract not just about the functionality.
I have though previously written about Vtravelled – First in January (6 months ago) when rumours first surfaced (see post) and later when doing a small piece on Vtravelled vs Metrotwin (and the 90-9-1 rule of social media).
Uniqueness
What made me write about Vtravelled now though was some comments that Steve Ridgway, Chief Executive of Virgin Atlantic is quoted as saying in the TTG [See article]
Steve Ridgway, chief executive of Virgin Atlantic, said: “vtravelled is a unique proposition for travellers who want to celebrate and share their travel experiences with like minded people.
“We knew we could fill a large gap in the market by creating a community which shared and discussed travel positively and creatively.
“vtravelled is a unique proposition for travellers who want to celebrate and share their travel experiences with like minded people.
We knew we could fill a large gap in the market by creating a community which shared and discussed travel positively and creatively”
I don’t believe that itinerary sharing websites are unique.
Not only that but I believe that this is one of the most crowded sectors in online travel at the moment (even more crowded than meta-search / price comparison). Barriers to entry are low for new startups.
Therefore either
Virgin Atlantic believe the statements they have made (and no reason to doubt them) – in which case how thorough has their research been?
Virgin Atlantic don’t believe the statements – but needed something bold & positive to say for PR purposes. That would be odd!
Uniqueness isn’t what Virgin Atlantic need to be worrying about. Nor about there being a large gap in the market.
What they need to worry about is whether there is sufficient market size for itinerary sharing (there probably is, if it is reflected by the number of VCs backing sites in this category) – and whether they can use their brand to capture a sufficiently large sector of the market to give them ROI.
They are an underdog not a category leader when it comes to travel social media. It isn’t going to be an easy ride.
Final thought – this is from the Vtravelled terms & conditions on their website “nor may You create a link to any part of Our site other than the home page“. That is pretty much the most hilarious line I have ever read on a site that is aimed to be a social media hub. If they stick to this rule then this site won’t even get out of the starting blocks.
As per normal for Travolution events you have to submit your questions in advance. The panellists then get to think about it a little before giving their answers in public.
I have been pondering my question and trying to make it a good one. Generally though I am better at asking followup questions as it is easier to pick holes in an answer than to come up with original questions in the first place!
Here is my question:
“Will consumer facing social networking within the travel industry be more or less likely to create an amazon.com books scenario in travel? i.e. will it magnify the influence of the head leading to a few global winners – or ensure and retain an even playing field for all?”
Phew.
Lets take that question apart. What I am asking is whether, as a result of social media, we are going to end up with a few winners…. or whether it will assist in sustaining a diverse travel industry.
What do you think?
If you were on the panel how would you answer the question?
I am not sure blog readers quite understand how tricky it can be to write a blog in an industry that you also work in.
You have to consider factors such as:
Am I right? After all you don’t want to write something with an opinion that is plainly wrong – otherwise you lose your credibility. However writing a blog post without expressing an opinion is the quickest way to lose subscribers and just be boring.
Is who I am writing about a potential partner? I have recently written about companies that actually now would turn out to be quite nice partners. Perhaps previously opinionated blog posts don’t quite look so clever now.
What do my existing NDAs cover? Yes – I have a few but now they are quite old. However I still have to be careful that I don’t break any.
Information sources – Was the information I am basing the story on given to me because of the blog (i.e. for publishing) or because of my position in the industry?
It is not straightforward.
I have spoken to people who say that they find it hard to write a comment on a blog post. Well multiply that feeling by 100 and you see what it is like writing a blog post.
My rule for writing a blog post is that each time you publish you have to risk something. Normally it is just ridicule. The reward/return is that if you call it right – and no one else has the balls to write about it – then there are rewards (increased credibility, more subscribers etc).
So far I reckon I have come out ahead….. but you make your own opinion.
But now a few things have changed (or become clearer at least, legally nothing has changed)
According to Travel Rants a libel suit was launched in the UK high court claiming for considerable damages as a result of a comment that someone had written on a blog post.
Travel Rants has given in and removed all blog posts and comments about that travel company. [Source: Search Travel Rants and see that previous blog posts are now missing]. Travel Rants has also apologised.
As a result of this Travel Rants has for the moment ceased to write any new blog posts [Source: Travel Rants blog post]
That isn’t surprising. Blogs like Travel Rants and this one thrive on opinion and as conversation enablers. As soon as it becomes a burden to write and manage a blog the interest goes. (But yes we must also comply with the law)
Today
Today I have received more comments on my Expedia article interviewing the founder of the Victims of Expedia website. I have no way to judge whether the comments are valid or not and really I haven’t the time / inclination to contact Expedia to ask them for a response. Do I therefore just let the comment be published (previously I wouldn’t have thought twice about it) – or do I moderate them?
I have a business to run and can’t afford the legal hassle that blogging can bring. But then again blogging has given me a good ROI upto this point….
Tricky eh!
What would you do? Shall we leave news and insight to the trade press? Or do you think independent travel industry bloggers like us add value somewhere? What do you think about Travel Rants getting sued?
Nixon has struck several commercial deals with travel distributors through which holidays can be bought by clicking through from the guide.
But he insisted the project was not a threat to agents.
“The is an opportunity for travel partners, whether that’s journalists, enthusiasts or people in the travel industry, to promote themselves online by monetising quality editorial,” he said.
Nixon has struck several commercial deals with travel distributors through which holidays can be bought by clicking through from the guide.
But he insisted the project was not a threat to agents.
SimonSeeks is about new revenue models for travel guide writing.
With the Penguingate story travel guide writers are up in arms, it appears.
Where is the agents angle?
Both of these stories should be of strong interest to travel agents. But doesn’t seem that they are and even when the TTG cover the SimonSeeks story it hasn’t been given the correct perspective.
Travel agents have three core activities:
Generate desire to travel
Inform travel (through expert human knowledge)
Book the product (and earn revenue from the transactions)
Travel guide writers have two core activities:
Generate desire to travel
Inform travel (through expert human knowledge, delivered via words and photos)
Travel content websites have two core activities:
Generate desire to travel
Inform travel (through expert human knowledge, delivered digitally)
Do you see what I am getting at? I am a believer that you don’t define someone as a competitor if they have the same solution but if they solve the same problem.
i.e. a sheep is a competitor to a lawn mower when it comes to cutting grass
A travel agent is clearly not a travel guide writer – but they both look to solve the same problem. Only difference is that agents are rewarded for their knowledge and desire generation based on subsequent transactions whilst travel guide writers are rewarded purely for their knowledge and skill in communicating that knowledge.
SimonSeeks has a model where the travel guide writer is rewarded based on transactions coming from their content. Isn’t that what travel agents do?
Interesting new site gone live tonight – SimonSeeks
The project, initially conceived in August 2008*, aims to create a new revenue model for travel guide writers.
The principle is that contributors can write travel guides and share revenue from advertising and transactions driven from their reviews.
Various people have gone down this (or similar) routes before so I am not in a position to say if they are the first company to have a go with this model. For example Worldreviewer have an amazing array of expert writers providing content to them – but I don’t know how they remunerate their guide writers. To consumers, it probably doesn’t matter as long as the guides are expertly written, helpful and impartial.
What makes SimonSeeks so interesting is that they have raw ambition:
Aim to establish itself as one of the top 10 travel websites in the UK within its first year
Has plans to launch globally, including a .com (perhaps USA), UK, China, Italy, Spain, India and Germany [See list of sites in Terms of use]
Simon Nixon, CEO, founded MoneySupermarket and TravelSupermarket 10 years ago leading to an £850 million stock exchange floatation in 2007. Simon maintains a 53% share in MoneySupermarket / Travel Supermarket. I don’t think he is bootstrapping this particular travel startup.
With revenue share going to guide writers this sounds quite a complex sequence of arbitrage so lets look at the model in detail
50% of the net revenue generated by UGC guides to writers who have posted those guides (revenue from both advertising and bookings)
You will only receive income for specific references contained in your Guide, which shall for the avoidance of doubt include, but shall not be limited to specific references to: hotels: restaurants; bars; activity organisations and sightseeing organisations. For example if your Guide describes your holiday in Paris at a particular hotel you will not be entitled to any net revenue if a member, after visiting your Guide books a holiday in Paris at a different hotel.
Site generates revenue via Google Adsense as well as launch transactional relationships with Lastminute, Opodo, Mr & Mrs Smith and Superbreak.
What restrictions are there to control astroturfing by suppliers?
If you become a Contributor to the Website, you will be required to disclose within Your Content, for the benefit of other Members and Contributors, the details of any commercial arrangements that you have, or have had, with any third parties whatsoever that either have, or may be perceived to have, contributed towards, influenced or affected Your Content. This will include, but is not restricted to, the provision by any third party of any incentive to you, financial or otherwise, which has encouraged, or may be perceived by Members to have encouraged, you to provide Your Content that may not be entirely impartial or may have influenced Your Content in any way. By way of example, should you contribute a travel article describing your journey to a particular location, then any travel, accommodation, restaurant or other cost associated with a trip that has been funded by a third party must be disclosed within your article in a prominent position for the benefit of our Members.
Seems quite good. But this will be tested by suppliers and the interesting question is how SimonSeeks handles this.
On one hand reinforcing that they want product (not destination) specific content – but then asking for disclosures – is going to require a few interesting judgements by humans working at SimonSeeks. Can those judgements be undertaken consistently or thoroughly when done at scale?
Time will tell.
Conclusion
I give these guys a good chance of success because I expect they can link the reviews into TravelSupermarket somehow and tap into that source of traffic.
I also think this is a demonstration that innovation over the coming months is going to be in the content and review space…. not in the transactional one. There is only so much you can do with a metasearch / price comparison / transactional site.
* SimonSeeks domain names first registered in August 2008. Of course they could have registered them with other projects in mind…. I know I have a few domain names that could be put to use for different types of travel projects – if I can see a business case for them!
Some interesting ideas flying around today at the TTI conference on mapping for travel websites [London]
Like what Bing maps for enterprise are upto… (the new name for the various, now single named, Microsoft mapping services) e.g. look at Roads on the Harley-Davidson Ride planner. You can add, save, share and review different motorbike rides.
Multicom chairman Rob Howell presented an idea for the TTI to take forward as a project.
Howabout a group of travel technology providers, suppliers and online travel agents grouping together to correctly geocode all the few hundred thousand hotels that are out there?
Geocoding is the process of converting addresses (like “1600 Amphitheatre Parkway, Mountain View, CA”) into geographic coordinates (like latitude 37.423021 and longitude -122.083739), which you can use to place markers or position the map [Source, Google Geocode info]
Seems an interesting idea that we could collectively address as a travel industry.
My immediate thoughts
Mapping is going to be one of those barriers to entry that larger travel organisations may wish to retain. If everyone has access to the same data, what other barriers will remain? What is the ROI for all participants in the project?
Does the project really need to be centrally managed and judged – or should it be created “wiki style”?
Do you trust suppliers to geocode correctly? When hotels used to code using IATA airport codes they would often chose one many miles away from where they actually were – especially if it was a larger airport – to catch out the unwary traveller who hasn’t looked at a map and was searching by airport code.
In order to map a known hotel name to a set geocode don’t you also need to create a complete repository of all hotel names, addresses etc? Why stop there? [And at this point is this really something that can be done by an industry organisation - or should it be a commercial venture?]
Who would have access to the data?
I know people who have become website affiliates of leading hotel booking websites just so they can have access to their hotel data.
While it would be great to have a single source of this kind of data I can’t think what I personally would do with it right now…. However I am a believer in first setting the data free and then letting someone else figure out how to make some utility out of it.
But if you restrict access to the data to those who participated in the project to centralise the data you immediately exclude those new entrants (startups) who may find the data useful – but were not around when the project kicked off (or didn’t have any spare resources to assist at that point in time)
The mapping provider churn question
TrustedPlaces mentioned that it would only take them 2 days development to move from one map system to another. i.e. Microsoft Bing and Google are fairly interchangable, in their eyes. They currently use Google maps.
Bing mentioned that their Birdseye view (45 degrees) has proven to give a 3.4 % better website conversion than Bing powered sites with just aerial photos. Google don’t have this 45 degree angle on their maps….. so Microsoft were saying that Bing and Google are not interchangeable and that there are differentiators that are worth considering.
Then something else quite interesting cropped up.
Seems that if you geocode your addresses into latitude and longitude using one mapping providers API then that mapping provider still retain the copyright to that data. So you can’t just take all your geocodes and use them with another provider. Probably makes it a larger than 2 days job then for TrustedPlaces to move from one provider to another then!
He added [travel] agents should not be afraid to ask operators for financial assistance for advertising campaigns or promotional evenings if they are confident they can generate sales as a result.
Rowdon said: “A lot of agents are frightened to approach tour operators about advertising [funds].
eh?
Tour operators tend to work with many travel agents. They have no particular attachment to any individual agent – they are just looking for a specific % of bookings / revenue to come from the travel agent channel.
However as soon as a tour operator invests the success of a specific agent they have altered their risk profile. Now that individual agent must give them a return. Its no longer about getting a return from agents vs their direct channel but about a specific agent.
Why should a tour operator give funds as well as commission to an agent?
If no sales happen – the tour operator has made an investment – and the agent has lost nothing
If sales happen – the tour operator gets sales but still pays a commission.
Moves the entire risk profile away from the travel agent and onto the tour operator.
i.e. the agent can’t lose
Caveat
I can see that if an agent has a specific regional strength and the tour operator needs to sell a certain proportion of tours [and flight allocation] from a regional airport near that agent then agent specific promotions could be beneficial.
Can you see where it makes sense for a tour operator to give an agent money to promote their products? Please educate me!
Tour operator reservation systems can be expensive to develop and maintain. The chances are that you use a reservation system provided by a travel technology company rather than building your own.
How do you pay for your software?
The total cost to you is likely to come down to three or four components:
Software license (either fixed or perhaps per seat / person – either concurrent or total)
Professional services (configuration, training, consultancy, web design)
Booking fee (performance based) – either fixed per booking – or % of transaction revenue
Bespoke development costs for custom development (based on time & materials)
Different travel technology companies will adjust and cross subsidise the different components hence the true costs of each component are often obfuscated.
For example some companies will hook you in with a low cost license model – but then charge you significant fees for bespoke development. [It is these companies that have come unstuck during the travel downturn as fixed income has remained fixed (!!!) whist professional service income has fallen as travel company projects are put off for another 12 months]
Other companies have merged their charges into a single, performance based, value. E.g. perhaps they take 1% of the value of the transaction. Some go upto 5% of the transaction. It is this method I am reviewing today. I don’t think it works very well as a pricing model for reservation systems.
Why the % of transaction revenue based system for software pricing doesn’t work for activity company / tour operator software providers
Training bookings – how do you handle bookings that have come as a result of staff training? You wouldn’t want to pay for these
Test bookings – during configuration & setup phase there are often many test bookings. These can happen once live for regression testing as a result of new products. How can you distinguish between a test booking and a real booking?
Spam bookings- unless you have a credit card payment system integrated into your booking engine you will receive spam bookings. (Not all tour operators do incorporate credit cards in their booking engine, as it isn’t necessary, unlike for more commodity based products)
Handling quotes and enquiries – many small and niche tour operators have a “quote request” or enquiry stage prior to booking. Not all these convert to final bookings. If you are on a performance model do you charge for these non-confirmed bookings or not?
Multiple quotes- for tailor-made tours you can end up with multiple quotes for different travel products – of which only one may be confirmed. Do you charge for each quote?
Products without prices – we have customers who sell products that are zero priced (for example some forms of logistics management). If you are charging a % of the transaction revenue then tricky to workout how to charge a company with zero priced products.
Backloading – When new companies take on tour operator software for the first time they tend to do significant booking backloading so the software has a good picture of all transactions. If you are charged for historical booking backloading then the full picture won’t be in the software.
Multiple layer transactions – Take an agent who sells a tour that is sent to a tour operator. Each wants a separate booking in their own account (one represents the contract between the agent and the consumer, the other represents the contract between the agent and the tour operator). If you charge a % of transaction revenue then you will end up charging twice on the same booking. Both layers may not even know they are using the same software.
End up enhancing system around transactions only – if you as a technology provider earn all your money from transactions you tend to only want to enhance functionality that drives transactions. For example because we are not focussed around just transactions we have enhanced our website CMS, the enquiry management system etc. No temptation only to work on transactions.
Unfair pricing for low volume high value bookings - take a tailor-made angling tour operator who sells high value tailor-made tours. Compare that to a high volume bus tour company selling low priced tours. Why should the angling tour operator pay more for light use on the system than a heavier use bus tour company? If you are going to do utility based pricing it should be based around usage not around transaction value. Doesn’t matter where the decimal place is on a bit of data in your data store… its just a number.
Disincentive to online bookings – If as a tour operator you have a customer on the phone what you want to do is tell them to visit your site and put the booking online (once you know they are converted). However if your web booking transaction % charge is too high it introduces an incentive for the tour operator to take the booking manually (via the phone). This is inefficient for the tour operator and not as nice for the customer. Pricing should be created to reward efficient behaviour.
Disincentive to having all bookings in your software – instead you may just have a sub-set of bookings where the tour operator has seen value in paying the % (e.g. perhaps those coming from an online distributor)
Competitor systems pricing #1 – As soon as you start pushing through many bookings on a % transaction basis you will soon hit a ceiling where other tour operator system suppliers who sell based on a license fee basis compete at. Hence % based looks competitive to start with – but not for any company employing more than a few tour leaders.
Competitor systems pricing #2 – You can’t charge for content on the web if someone else is providing the same content for free. This is why newspapers are struggling so much. Hence if just one competitor isn’t charging on a % transaction revenue basis then you can’t either.
As far as I can see all that performance based pricing does is cause plenty of opportunity for negative conversations with travel company customers. Very few upsides at all.
Having said that I do believe that performance based marketing does work very well in the travel industry – but only if it is your performance that is being rewarded. Hollywood screenwriters don’t pay a % of their royalties to Microsoft just because they used Microsoft Word to write their blockbuster. The fact that they used Microsoft Word was immaterial to the success of the film. It was just a tool.
We are running on a low cost license based model based on number of seats (staff users) who need access to the system. See our prices. Only over several thousand bookings per month do we charge a booking fee – and then it is a fixed booking fee (not based on the value of the transaction).
Most of our competitors are running on % of revenue – ranging between 1% and 5%.
I calculated ours at about 0.1% revenue. i.e. we give 10x more ROI / cost effectiveness overall than competitors who charge 1%.
Interesting. Not sure competitors charging on % revenue works. Who is right?
Travel companies were criticised for not supporting tourism academics and students at a conference organised by ABTA, the Institute of Travel and Tourism (ITT) and the Tourism Society on June 1 2009.
West Herts College lecturer Stephen Pearl added: “We need support from the industry but you can see that the industry isn’t here to support us today. How important can it be to them if they can’t take a few hours out of their week?”
Rather than academics ranting at the trade about how little they are supported here are my four action points that they, collectively, should consider:
Write a blog that shows what you are working on and want help with from the industry Don’t overwhelm us with academic topics or just use it to announce forthcoming conferences – but use it to let the trade into your world. The more we know about what you do, the easier it will to get support from us when you need it.
Engage with the industry using social media (blogs / twitter etc) to demonstrate thought leadership When was the last time you saw an academic writing a comment on a travel industry blog? Happens very rarely. If academics want to be seen as the thought leaders within the travel industry they need to be out there showing their faces and exposing their thoughts. It can’t be right that nearly all comments on travel industry blogs (including this one) come from industry journalists or other bloggers. (Yes I know there is a world beyond blogs, but they don’t write too many opinion pieces in the trade press either!)
Conduct research that we can apply to our businesses
Much of the interesting research that I see created within the travel industry is researched by commercial organisations with the intended outcome of either short term PR or long term positioning. Makes for some questionable research.
Move the focus away from commodity products like flights / hotel Every so often we get asked by a college for software that can be used to teach how to make flight bookings. I believe the real skills for future travel professionals are much broader than command line GDS commands of yesteryear. Get the small tour operators involved.
Come on academics, come and expose your opinions – come and spend a few hours a week with us! In return, we will support you when you ask for help. Better than ranting at us anyway.
Daniele Broccoli said: “The role of the ABTA travel agent will remain the same as it is now: providing protection, expert advice to clients, and booking all their travel needs. It makes me smile when I hear people say there will be hardly any travel agents left on the high street, as they really do not know what they are on about.”
Agents also like the fact there’s commission available, even if they end up giving most of it away. Speaking to a leading agent the other day he said any operator that wanted to take just his business would have to employ at least 100 people.
He has a team specifically to answer more than 350 calls a day just from people already booked asking questions ranging from what they need to pack to wear for formal nights to queries about insurance. We’re a long way from replicating that kind of customer service on automated booking and customer service systems.
I wonder how far ahead people are looking.
Is Daniele really saying that in 5 years time agents will continue to be as efficient sourcing customers from a small geographic area (highstreet agents) vs large online (or what will be then digital) players? If he is, then I would say its fair enough to suggest that it is him who doesn’t know what he is on about. Digital will broaden geographic reach for each agent and hence only the efficient will survive. Highstreet it won’t be. Local customer service / sales advice centres maybe, at a stretch, but they won’t be in prime highstreet locations.
Is the cruise agent that Lee mentions really suggesting that digital technology can’t deal with the 350 daily calls more efficiently than his 100 staff? Over time technology will improve and the cruise demographic will become more digitally engaged. Not a long term position of strength for hanging on to 100 staff just to answer phone calls.
Personally when I make sweeping statements about the future I am thinking 5 years out. I am not thinking about this season, next season or even perhaps the year after that. I am thinking about 5 years plus.
Seems other people are happy just planning on a shorter term vision. Not sure that works for me. As technology providers we must be looking over the horizon much further than dealing with current issues otherwise we can find ourselves outmanoeuvred by competitors.
Earlier today there was some bad news to do with Air France. I am not going to bring further attention on it as I do not feel it is right.
I tweeted
Come on people – stop tweeting about the air crash. Just because we are in travel industry doesn’t mean we have to tweet all crash news
In return I had five tweets back
In agreement
hackneye @alexbainbridge Agree. File that with people “liveblogging” events 5000 miles away. Unless you’re there, you’re adding zilch.
rickseaney RT @alexbainbridge: Come on people, stop tweeting crash. Just because we are in travel industry doesn’t mean we have to tweet all crash news
Against my view
jeremyhead Why not? I think it’s very significant. Air France for heaven’s sake… very concerning
TorreTwit Surely were tweeting because were concerned nothing to do with business
alaninantwerp No reason for travel industry people (or anyone else) not to tweet on air crashes: if they’ve something constructive to say
Seems that the view is split.
I am concerned about any air crash. I don’t wish to be insensitive. However having much of the twitter active travel industry tweeting this or that about air crashes – before any real understanding goes on – isn’t really that sensitive either is it?
Working on the assumption that we are all humans here – we are all sensitive folk – we all care deeply about the travel industry and our duty of care towards our customers – how should we tweet really bad news that involves others?
My view is that we shouldn’t. We as travel industry tweeters should leave it up to the airline involved.
Hopefully you can add your views below:
[Oh and yes I see the irony about writing a blog post about this. However I have tried as much as I can not to write about today's sad events. As this happens about once a month there is never a totally right time to have this discussion]
Ian Gilder from Jetline Cruise is a new columnist at the TTG. You can read his thoughts about the cruise market on the TTG website.
His first post is about Google.
Yes we all do tend to write about Google rather a lot. But they are important to the travel industry with many companies taking between 30-80% of their business from Google initiated web searches (and if you think you are reducing risk by sourcing business from agents / affiliates / website partners etc…. ask them where they are getting their traffic from. Total it all up to build your own overall percentage total for Google initiated traffic. It might shock you)
Ian rants that Google is too expensive for cruise holiday marketing:
But can you imagine how I felt when I went back on pay-per-click on Google last week? After running my campaign for 14 days I am still in shock. Just to get on the first page of results for some keywords you are having to bid £3 (5 USD) per click.
I know people will say you have to build your quality score and get your wording right etc, but I think everyone is missing the bigger picture. Consumers research 22 different websites before they make a booking. So in theory, for each customer that books, Google could be earning £66 (80 USD) from all the advertisers trying to secure the booking.
Fair enough, ranting is good!
Then he wrote
Surely this cannot be right. As an industry we should be doing something about this. Imagine what would happen if we all collectively reduced our spend to 50p per click. We would have five times the money to spend on other forms of advertising.
Competition law prohibits almost any attempt to fix prices – for example, you cannot:
* agree with your competitors what purchase price you will offer your suppliers
The law doesn’t just cover formal agreements. It also includes other activities with a price-fixing effect. For example, you shouldn’t discuss your pricing plans with your competitors. If you then all ‘happen’ to raise your prices, you are fixing prices.
The law is enforced by the OFT, which can impose a fine of up to 10 per cent of your turnover. It can also apply for company directors to be disqualified.
I am not a lawyer so I will just leave these two direct quote excerpts for your own, personal, analysis.
Ian asks us to imagine what would happen if we all collectively reduced our spend to 50p per click. I imagine we would all end up in court. But then I have a somewhat creative imagination!
Ian wants to be known as the Bad Boy of Cruising (BBoC). To me this is a title that can only be assigned by action… Ian seems to be heading down the right path with his first article!
Seems to be lots of fuss about Microsoft and their new search service – Bing
I am fascinated by what the future holds as a result of this move. Not because I believe Bing will turn out to be the best search engine ever – but because it may force other competitors to react. That reaction will either include Google launching something in travel or Google will decide not to. But we are getting ahead of ourselves.
What is Microsoft Bing?
I dunno. All to be revealed next week (early June 09) however it appears to be, from a travel perspective, tightly incorporating the original Farecast system (which Microsoft purchased in early 2008 and I wrote up previously on this blog, including an explanation of how it works)
The principle of Farecast (now Bing) is that they analyse airfares (and hotels) and suggest to consumers whether to buy now (as the price may go up) or whether to hold for a while (as prices are coming down). Nice.
The travel research onion
Onions have many layers. So does web based travel research for consumers (commodity travel)
Consumers start at Google (yes they still own the consumer)
Next the consumer could end up on a supplier website (a hotel, an airline etc)
There are three layers.
What happens if there are two?
Consumer starts at Microsoft Bing (requires a seismic shift – but if they can present the site as being a place to inform decisions rather than undertake research – people may buy into that whilst keeping Google as their main research site)
Consumer sees Farecast style functionality and is directed straight to supplier
Now we have two layers.
Microsoft have, finally, merged the first two research layers into one.
When I speak to Google they always mention that they do the best for the consumer. That is their mantra. If the consumer is best served by sending them to a multiple-supplier website that is what Google will do. If Google believe that the consumer would benefit from being directed to a single supplier site then that is where they will send them. The consumer experience is key as that is what Google believes keeps the consumer going back to their site to start their searches.
Therefore the question to Google now is – Is a consumer best served by having a 2 layer research process or a 3 layer one?
How can Google react?
Microsoft is a fly on an elephant’s back. Really Google don’t have to react at all at this point. However Microsoft isn’t an entity to be underestimated – they will keep throwing money at the problem and eventually they will hit on something that is good for them. Google may lose their nerve and decide to react after all. In 10 years time will we still be looking at text keyword based results? No – so Google will react – the question is how and when.
Options
Alter the Google results to ensure that suppliers are ranked higher than intermediaries
I believe Google know who are intermediaries and who are suppliers as they have every travel website categorised [See my blog post about that]
Question is, do they understand the consumer enough to be able to second guess where to send them? I don’t believe they do without additional information provided by the consumer for that specific trip. User supplied keywords are not as useful to a search engine as originating city, destination and dates.
Add more travel product functionality to the Google search results
They could replicate Bing. They could acquire Kayak / Expedia or any host of other companies and over time replicate where Bing is going.
My gut feeling is that they won’t do that (although rumours persist that Google were bidding against Microsoft to buy Farecast when they were up for sale [Source])
Why won’t they do that? Again, from tiny conversations with people from Google travel I believe they have a respect for the long tail of the business. They care about the interesting tour operators and if they were going to launch a travel system it would have to be all inclusive rather than restricted to the flight / hotel folk. None of the potential Google acquisition targets include non flight non hotel product.
Create a date / availability markup format for travel products
The data is in the web page not in some XML file. Although this makes it available to anyone, it is Google who have the engineering capability to retain a copy of every single web page out there…. A single travel website would struggle to go and collect all that data from all travel websites because they are not set up to do that. Google do it anyway as part of their page scanning system.
Could they create a format that would support dates, prices & availability? Perhaps so – and we would end up with a scenario like I pitched 12 months ago in a previous blog post – decentralised B2C metasearch.
To me this is the Google way – it is open to everyone to take part – and incremental to existing services (rather than competing with). We shall see.
Last week had an interesting public conversation while presenting at a side event during the EyeForTravel Distribution Summit in London (ETOA).
Some travel companies are upto 80% reliant on Google for their income. Wow. That is a scary number. Talk about eggs in a single basket. Personally I wouldn’t want to see more than 50% of business coming from a single source.
Could Bing be good for these companies? Could this be an opportunity to find another source of traffic that isn’t Google?
Finally
See also – rather dull blog post from Microsoft announcing Bing Travel
Mentions launching a community and blogs etc… which may turn out to be quite interesting as well [But most large company created communities are dull really - I much prefer those done by passionate people who are experts - like @ Worldreviewer]
JDW take this as an apology for earlier…
Hat tip – “Chris” who wrote a comment on Travolution’s blog (linked above). No idea who you are (do I?) but you got me thinking. Thank you.
For the UK travel industry there is an interesting election currently taking place to elect the next chair of ABTA, the travel association.
Before I go much further I ought to say that we are not ABTA members (being travel technology providers) hence have no vote in the election. I know neither candidate well.
What do ABTA do?
Maintain high standards of trading practice for the benefit of its members, the travel industry at large, and the consumers that they serve, and to create a favourable a business climate as possible for its Members.
Is this going to be interesting, Alex? Yes! (Read on!)
Does ABTA really matter? Although ABTA have 5300 travel agent and 1000 tour operator members I am not convinced that they represent the UK travel industry as much as they used to.
ABTA mainly represent transactional travel companies. Non transactional travel companies have no part to play in ABTA hence there is no lobbying of Government on their behalf. Non transactional companies are though equally part of the travel industry. As the travel industry evolves to move outside of the historical transactional model I suggest that ABTA may become increasingly irrelevant as a lobbying organisation.
Examples of non transactional travel companies that are part of the travel industry but not part of ABTA:
Travel website affiliates
Meta search / price comparison sites
Desire generating sites (like commercially run destination specific websites)
Search engines (Google!)
In many leisure travel transactions it is these types of companies and websites that actually control and direct the overall customer experience. If ABTA want to represent and regulate the consumer’s perception of the travel industry they must be more inclusive of these consumer facing travel companies.
My 5 year vision for the future of transactions
Take an example of a customer travelling to Egypt for a leisure trip. How has their purchasing behavour changed?
Up until the late 1990’s the consumer would visit a travel agent in their near geographic vicinity. This was the era of high street distribution.
2000-2010 – consumers buy from UK based tour operators who feature Egypt. Regulation is still possible by the UK Government and ABTA has a part to play.
2010 onwards – consumers buy from Egypt based tour operators. There is no part to play for any transactional travel company based in the UK.
[In some markets this shift has already occurred - for example if I travel from the UK to New Zealand or USA there is no chance that I would book with any UK based entity.... I would immediately book with a tour operator business in the destination directly]
In my example above the ultimate transaction is between a UK consumer based in the UK and an Egypt based company. However the desire to travel to Egypt may well have been initially created by a UK based travel website or company.
The UK outbound travel industry will be left with destination advocates. These advocates will be remunerated much like travel website affiliates are now – the contractual transaction will be between consumer and destination supplier – the advocates will earn a commission fee – but will not form any part of the travel contract nor handle any of the money transfer.
If ABTA are not inclusive of these non-transactional companies now they may well find that irrelevance (from a lobbying perspective) beckons.
As you can see from this Twitter thread John acknowledges that it is vital that ABTA recognises the broad church of travel as it is the best way to boost membership and be representative.
I had a 15 minute phone conversation with Daniele earlier today where we talked about non-transactional travel company representation via ABTA. He didn’t have an answer and promised to phone me back about it later today. He hasn’t (yet)!
What will the new chairman do?
ABTA could decide that they only want to represent transactional travel companies.
That is a perfectly sensible outcome – but should that occur – we as an overall travel industry would need a new lobbying organisation for Government issues. A lobbying organisation that was inclusive of all whose livelihoods in the UK are based around the outbound travel industry.
Structurally there would need to be a change to the ABTA memorandum of association that legally defines ABTA
a) Establish an organisation fully representative of Travel Agents and Tour Operators…..
I would also like to see a board position dedicated to non-transactional travel companies. Someone who has made it already and holds the respect of the travel industry – like the Cheapflights founders – would be good start.
If my world view is correct, it is only a matter of time before ABTA have to evolve in this direction. Question is, which candidate would take ABTA there first?
Part of the agenda for the opening session was as follows
Travel 3.0?…How will developments in the Semantic Web enable more complex and sophisticated trip planning for online travellers?
What do travel companies need to do now to prepare for the Semantic Web? How will your website need to change to ensure optimised results in semantic search?
Google chap probably wished he was on the other side of London at the Google Zeitgeist event but instead had to present to us hoi polloi. He therefore used the event to remind us all about their existing advertising services (which we know about and weren’t there to hear). A pity and opportunity missed.
What should Google have presented?
Being a nice person I never suggest something is bad unless I have a better idea. What I wanted to hear was how Google are going to apply the semantic web to the travel sector.
Wow – I don’t ask for much – and normally asking them to expose their strategy would be most unlikely to get any sort of answer at all. However last week this all changed. Google quietly rolled out a new data format that has gone mostly unreported within the travel industry press.
Stop and muse for a second. If 20,000 travel websites adopted the microformat standards that Google announced last week then wouldn’t that pretty much create fantastic competition to TripAdvisor overnight? For those of you who think that TripAdvisor has locked themselves in at the top of the tree they haven’t. Google, with this review markup, can quickly gain ground on them. Google are the ones that have the consumer traffic and now it seems they want to do something with it.
The real question will be what will travel websites do that have thousands of reviews? Will they use the Google markup now and hope that Google is nice to them in return?
I can see startups who have reviews using the markup system because they have nothing to lose. Existing (significant) players with hundreds and thousands of reviews may feel a little unsure just giving them all away to Google…. especially as review content is quite a nice differentiator currently.
What I wanted to hear from Google this morning was an explanation about what they are going to do with these reviews – and take questions from the audience about it. It was their opportunity close to the launch time of these microformats to really convince the travel industry they mean no evil with this markup so we should all support it. Instead we were told to buy more PPC from them.
PS
If the Google chap would like to come to my presentation at 9.45 on Wednesday AM happy for him to write a blog post saying whether he liked it or not and what he would have covered
This blog is about travel ecommerce & travel social media with a focus on topics of interest to tour operators & B2C travel companies
Alex has previously started up a small tour operator (5 staff) and also worked for leading "dot coms", airlines, hotel chains and tour operators advising and project managing web, ecommerce, social media and reservation system projects.
We operate TourCMS - a web based reservation system for small tour operators
Recent comments Tom Ellum: @Jared Yeah Jared I agree with you there and don’t worry it will be upfront. You’ve been a tremendous help with a few key pointers and I reckon we’ve got an event that offers the ROI...
John Pyle: Another good source of geodata is Yahoo! GeoPlanet. “In practical terms, Yahoo! GeoPlanet is a resource for managing all geo-permanent named places on Earth. It provides the geographic developer...
Atanas: I’m author of software product and I’m interested about what will happened with the description of this product on my site. The same product description will be sent to download-portals (Download.com,...
Jared Salter: @Tom – Sounds like you have made great strides in putting on an excellent show at WTM. As I said, I am okay with pay-to-pitch events assuming the ROI is there, and it sounds like you are putting...
Tom Ellum: @All – Great conversation going on here guys and I do sympathise with Alex’s disclosure concerns but as Hugo says it is personal preference to pitch at these events. Glad some good things have...
Hugo Burge: @Jared – Fair point about scale/ publicity – hopefully WTM seems to be shaping up as a bigger thing altogether. Glad you were able to give detailed feedback for improvement. Thank you for kind...
Alex Bainbridge: @Hugo Re 6 years – I agree – that is why the funding aspects of these competitions are less attractive to me. Depends whether you look at these competitions as idea competitions with the...
Jared Salter: Let me start by saying I feel like it’s been worth my time to participate in all these sstartup pitch events. With that out of the way, I also think you need to manage your expectations. The...
Hugo Burge: @Alex – IMHO I believe it would be great to have a B2B proposition. A challenge with many entries is that they are not new or distinctive. However, by having an already developed offering –...
Blog home
