Travolution have asked the question - How do you know when you’ve read a fake hotel review on a travel website? (see their full post)

In response, one comment says “When you read it on an online travel agency website”.

Yikes - have user generated reviews got that bad a reputation? Have companies been so manipulative of it in the past that it no longer holds any weight?

It was only last January (7 months ago) that Nielsen//Netratings published research that said that sites posting user reviews are considered the most trustworthy (see reference)

When asked which online source do you trust to give you ‘the most reliable information of all’ user generated content sites like TripAdvisor were cited by 21% of respondents ahead of 15% each for review sites like TimeOut.com and official local information sites such as Visit Scotland.com. Travel agents’ own sites such as ThomasCook.com were considered the most reliable by 12% of Britons online compared with just 11% who selected search engines.

Personally I have always been a little wary of trusting user generated reviews as I don’t know whether it is really a customer or a hotelier / tour operator / airline in disguise. However, I write as someone who once booked a hotel in London and then checked TripAdvisor. All the reviews said to stay well clear of the hotel….. but I had booked by then…. when I got to the hotel - there was no cold water (let alone hot water!). Lesson learnt.

Do I have any ideas to help with reducing “gaming” by travel companies?

Firstly there is a difference between two categories of user data - and therefore two styles of gaming:

• Attention or use data - what the user does - such as user navigation paths on a website, items put on a shopping basket, time spent on a page etc
• Action data - such as posting a review or “buying” something

Both can be gamed - by which I mean changed or used to a individual or companies advantage. However, mostly attention or use data will only impact the experience of that individual user so the incentive to do so is minimal.

An example of gaming an ecommerce website in this way would be:

1. Go to a website selling mobile phones
2. Go straight to a page with an expensive phone on
3. Add the expensive mobile phone to your shopping basket
4. Remove the expensive mobile phone from your shopping basket
5. Navigate to a web page with a less expensive phone
6. Add the less expensive phone to your shopping basket

The chances are that, on the website, a special offer for the expensive phone you first added to your shopping card could be shown to you - perhaps with some money off or similar. This is because the website will have identified that you are interested in buying - but has evaluated that you are buying on price - so could be upsold to with a product you have previously expressed an interest in….. You also need to find a website powered by an expensive ecommerce platform such as Broadvision - as very few sites actually do this at the moment!

That is gaming for personal benefit - but the problem with user generated review sites is that the gaming is mainly for commercial benefit - i.e. getting good reviews of your product infront of potential customers

The real problem is one of identity. How do you know the user is who they say they are? 

An answer to this is to ensure that the incentive to provide a correct identity is driven by something other than having access to the system - perhaps by an ongoing relationship where you have to provide correct information for other purposes.

Here is an example of what I mean - do you recognise the question format?

This question came up in Linkedin.com’s business social network - not the first place I would go to ask a travel question.

However, what interests me about this question is:

• I can see who asked it - it is not a travel company from Limerick “trolling” a question - in order to answer it later with a good response pushing their product - but a supply chain manager from Dell in the USA.
• I can see who has answered it - a law professor from Houston, a bank employee and assorted others

I know exactly who these people are - I don’t know them personally - but I trust that they are who they say they are - because LinkedIn has solid profiles of all users. I know they are not travel companies.

This is something that Facebook, MySpace, Bebo and all the other travel social networks DONT have.

So to summarise - user generated review sites are only as good as the identity mechanism they have. The identity mechanism doesn’t just have to convince the website that the user is who they say they are - but also must be able to convince the websites’s users….. this, without making all sorts of personal information very public, is not something that many user generated review sites will find very easy to achieve.

Now if I were Linkedin - I would be looking to utilise this solid profile information to create something bigger and better than what they already have……….. they are one of the few sites that people actually give their real information to (although it only really attracts those of working age)

Ummmm…….. something to ponder

If you want to be notified next time something is published sign up for email alerts or subscribe to the RSS feed. Thank you for reading!

I have tried to write this post a few times over the previous months - as each time I think I am going to write it - something comes up (like a travel disaster such as an aeroplane crash) and I consider it to be in bad taste to use that kind of thing as the prompt of a post.

This time, everyone survived:

Lets face it - in the travel business - events happen. It could be fires in Greece, a hurricane in the Caribbean or a airline falling out of the sky. For more local tour operators it could be a minibus crash or a break out of food poisoning. None of this is very nice. The key difference between this kind of event and other, more personal, tragedies (such as a death in resort - which all tour operators have to handle from time to time) - is that these larger scale events require fast and informative communication to go out to:

• Family of those currently travelling with you
• Those shortly to travel with you
• Mainstream press / media
• Potential customers - showing that you are on top of the situation
• Agencies (such as Government, health, police, fire etc)

There tend to be two levels of event that need to be handled:

1. General situations relating to a destination, resort or hotel - that are useful to communicate - and may be additionally communicated to customers through some other means (such as email, telephone, SMS or postal letter).
2. Serious situations where in essence the company stops trading and moves to “disaster mode”. (Such as an aeroplane crash etc)

An example of type 1 would be how Hotwire place their travel advisories at the top of their website:

The business keeps on trading but all web visitors are made aware that there is information that they may find useful to read.

One large airline I project managed a web project a few years ago suggested that 50% of the time they would be at “level 1″ - requiring a message like this to be linked to from their homepage.

Level 2 events are rare - and can lead to a bit of a mad scramble in travel companies to change their website to be appropriate for the event.

In preparation, some companies have a prepared “level 2″ website that is pre-made - that is in essence a blogging platform with a very neutral, sober, web design - that can be placed “live” in such a way that the entire homepage is replaced with the new website with a single mouse click (and appropriate authority). Ongoing communications can then be published effectively throughout the incident until normal corporate communications can take over again.

Aspects to consider:

1. Who is able technically to put a website into “Level 1 or Level 2″ mode? In larger tour operators it is the resort or operational duty team that can normally do this (without the help of any IT or ecommerce support).
2. What business procedures would be required to authorise moving to this mode of operation? (One tour operator I know requires a phone call to be made to a duty director - even out of hours - before taking this decision)
3. For the smaller companies - if you had to do this without the help of your web designer - could you do it?

As long time readers know I am not a lawyer and nothing I write counts as legal advice (however I do know when I ought to be using a legal disclaimer)

This weeks legal quote comes from New Media Age - a traditional format (physical) magazine that covers the ins and outs of mainly London based web and new media companies.

They have an article, penned by Gary Brooks, who is a senior associate specialising in privacy law at Berwin Leighton Paisner (London).

He wrote about privacy issues on social networks - in particular around photo uploading showing friends in situations such as parties etc:

The Data Protection Act (DPA) places obligations on how organisations can use and disclose personal data, and it gives people a number of privacy rights to control how their data is used. A key question is whether photographs qualify as personal data so as to be covered by the DPA….. there is no doubt that a photograph of an individual identifiable individual qualifies.

Gary suggests that users obtain friends’ permission before posting photos of them. I expect in practice this will be quite hard to achieve so will have to be “buried” into a websites terms & conditions somewhere.

OK - but how does this relate to travel websites?

I worked with one leading tour operator on a web project and as part of this project we had to undertake a legal and security audit of some proposed web based functionality. (As a side point - this audit cost more than most small tour operators would budget for an entire development - and this was just the legal bit!)

Their data protection policies were very strong - for example in accounts - if someone called to check up on a booking - they had to ensure that it was the lead passenger - not the wife or husband for example - because maybe the husband was going on holiday with “someone else” (I will leave you to imagine what I mean).

Likewise, a potential date for a holiday was deemed to be sensitive information - even though it was not yet booked. I have personally experienced a situation where an employee of a ferry operator was selling customer travel dates to burglars - informing them when people were going to be away, their home address, and when they were coming back. Not very good (and the gang was caught later)

What interests me is use of photos on a travel website. For example if you, as a company, upload a photo to your website showing a group of clients (either prearranged or just a general shot) then you must be sure that you have the permission of the people in the photographs to use their image. If you are doing a commercial photograph this is normally handled through a model release form but now, with all sorts of travel companies rushing towards letting customers upload photographs of their trips - how is this going to be policed?

What happens if a customer uploads a photograph showing, perhaps in the background, people who ought not have been on holiday? A bit like those people who take “sick days” and then go and watch a football match - only to have the camera zoom into them and be shown on national TV……

Ok - I will leave this to the lawyers….. but this looks like a looming minefield to me.

I wrote last month about Paypal vs Google Checkout and their policies towards taking online payments on behalf of travel companies. In summary, Paypal (owned by EBay) accepts travel companies while Google doesn’t.

Anyway, roll on 6 weeks - and now Amazon have launched an interesting website payment service. What makes it interesting is that they look like they can handle micropayments (which could be very small transactions - ideal for those selling content or travel information). They also have full web services support - which to developers - makes it easy to work with and integrate with other systems.

However, they have excluded from using the service:

Travel and Time Share Services - includes agencies, tour operators, clubs, packages, airlines, cruise lines, time shares and property management companies

So that is that then - Paypal is the answer for small travel companies taking online payments - however if you are an information company - then maybe Amazon would be worth building on.

Apparently it is not very British to talk about salaries….. but thankfully Travel Weekly have, in their most recent magazine, given us an interesting insight and some data that can therefore be shared.

They suggest that a junior programmer may earn £20,000 to £25,000 per year (40,000 to 50,000 USD) while a travel ecommerce director can command a salary of between £70,000 and £80,000 (140,000 to 160,000 USD). From personal knowledge, I can say they are not far off - although there are very few travel companies who actually have an ecommerce director or manager at that level.

One of the problems is that director level ecommerce people just don’t grow on trees. Most large companies won’t trust an individual unless they have 5+ years experience with a good track record - and there are still very few people who have that as the web is still in its early days. Other professions (like a product or commercial person) will have many people in the “recruitment pool” with 5,10, 15 or even 20 years senior experience…..

Oh - if you can’t find an ecommerce director or advisor (or you don’t have an 80k GBP budget) - you could always ask someone like me to help

Following on from my previous post about using social networks for travel websites, here are some further thoughts , and answers to questions raised in comments to my previous post.

Enrico asked “Consider a local destination - how can you implement a social network in a travel destination that may only be visited once in a lifetime”.

This question comes down to the problem with community building in that you need your users to come and join your community - not only to “read”, but also to interact - by creating a profile, joining forums, asking questions and adding comments, uploading photos, videos etc. Users need to see the benefit to themselves, not just the benefit to you.

If a user only looks to travel with your company once or twice, you may struggle to build a longer term online relationship with them as there is no reason for a user to come back to your network “next time”. You need that long term connection between users to make a successful social network.

I guess this is why the social networks that are not company specific - such as Wayn, Boo etc may work, because their networks are not around any specific product from an individual company, but about a longer term relationship with users who are interested in travel in general. This is the same for the Lonely Planet Thorntree, probably one of the first travel communities to reach any significant size.

Perhaps in these situations a forum would be better - as forums tend to be about questions and answers - and more searchable for reference. Social networks tend to be about the “here and now” - and are more “conversational” like a discussion in the bar. Alternatively, take the Amazon approach. There are (although I have not counted them!) 10 ways for a user to interact with the website (like review a book, add a comment on a review, buy a book etc)…. you wouldn’t call their website a social network - but they have a successful community.

Gooner (not a real name surely!), from 2wentysWorld (a social network part of FirstChoice), has another perspective. He suggests the problem is more about monetising the network.

One case study would be the Florida forums from Travel City Direct. In my opinion they don’t need to monetise their community directly because if they just promote Florida in general, this will drive more flight and attraction ticket sales - either sold by them or others - and as they run the aeroplanes (via XL Airways) - any business going to Florida from the UK is good for them. Travel City Direct’s forums also address Enrico’s question above as it is a good, destination specific, place to discuss travel. It is probably also helped by being heavily focussed on Disney - which retains long term interest with users - rather than about specific trip planning and research.

Going back to the FirstChoice social network experiment - the idea is sound - with the audience being those travelling on their 2wentys brand (who you would expect would be heavy social network users). However how they have implemented their site leaves quite a bit to be desired technically and from a user experience perspective - It is simple things - like them selling your data to third parties - data brokers etc…. This is not the kind of social network I want to join - so perhaps First Choice’s focus should less be on monetisation - and more on making the social network an asset to the customer experience.

Travel Weekly have this week a rather shocking quote stated by Debbie Venn from asb law, a southern UK based legal firm who have a fairly long list of travel company clients.

The article states :

“…and she warned that, when adding links to other websites, permission from the third party must be granted in writing, in order to guarantee you have protection from any future legal action”

I am not a lawyer (of course!) and I have no idea about the law actually says with respect to 3rd party website links - but surely this isn’t right. I should be able to link to whichever site I want to. The web is built on links.

Overall, I think this quote is rather unsatisfactory from Travel Weekly - and leaves us crying out for more detail. For example, who is going to commence legal action? Are we talking about the website visitor who may perceive that through a link that there is some kind of inherent responsibility in what is found on the resulting website. If this were the case, then I would say follow the BBC website’s advice - and put next to all external links - “We are not responsible for the content of external internet sites”. I am sure the BBC have good lawyers who have looked into this and if this disclaimer is good enough for them, it is good enough for you.

Perhaps legal action will come from ABTA, the Travel Association (or whatever name they have this week) - in that maybe links to other travel product websites may give the impression that in some way financial protection on one travel website (provided by ABTA or ATOL) should give coverage to linked travel websites. Maybe that is the problem.

Perhaps legal action will come from the website being linked to - I suggest this is very unlikely. Most websites are trying to get links - not remove them! They may not want a link if what is being written is not positive about the company - but this surely falls under a different legal area - and has nothing to do with the link - more about the text surrounding the link.

Personally, where links are concerned, I am much more interested in the legal moves around deeplinking. See this summary of some news relating to this on the Out-Law.com website

Incidentally, I didn’t ask permission from asb law to link to their website - should I have done?  

Kevin May, on the Travolution Blog, raises an interesting a question about budgeting for pay per click online advertising. Pay Per Click advertising (or PPC) is where for each site visitor that a 3rd party sends you, you incur an advertising fee. Google Adsense is an example of a PPC advertising engine and so is TravelSupermarket and Cheapflights

The story that Kevin recounts is one from an ancillary firm who advertise via TravelSupermarket (see the full story) - who set a fixed advertising budget for the year. TravelSupermarket then upped their own TV advertising - leading to additional traffic to the ancillary company (each click costing money) - and the fixed advertising budget being used up. The ancillary company then had to respond and increase their prices they advertised via TravelSupermarket - to price themselves out of the website (therefore reducing their spend) - while they not fully extracting themselves from the site (presumably waiting for their budget to be refreshed the next year)

Kevin asks - what else can you do?

Frankly - lots. They need to create what is known as an “infinite” advertising budget. Even better if they can create a cash flow positive infinite budget.

Firstly some assumptions - as a website selling ancillary sales direct to consumers there is little customer retention. Yes you may get a subsequent sale to the same customer - but perhaps if they have come via TravelSupermarket originally- they will come back to you next time via TravelSupermarket - therefore costing you again. So on this assumption the entire advertising fee must be recouped by the initial commission / margin generated from the first sale (i.e. excluding any future revenue opportunities). This isn’t exactly correct - but it will do as a conservative working assumption.

Secondly, we need to know the conversion rate (paid click to sale) - helpfully Kevin has supplied information that it is 9-10%. That is within the bounds of a normal website performance.

OK - lets work this out

Lets say that an average click cost is £1.50, the average margin is 20%, the conversion is 10% (click visitor to purchase). So it costs 10 visitors @ £15 total advertising spend to generate one sale. At a margin of 20%, they are going to need to sell their product at £75 at least in order to cover the advertising. (As a side note, this is why principal travel companies can do PPC advertising not travel agents -as the margins that agents earn are not sufficient to play the same game)

If the average click cost was £1 then they need to sell product at least at £50, or if a £2 click, product at least at £100.

Why sell at zero profit?

Three reasons - firstly you can increase the volume of transactions going through your systems - leading to better negotiation (or internal efficiencies) - leading to lower costs in the future. Secondly, you could be aiming to hit a quarterly sales target (particularly for newer online companies that need to show some kind of improvement to investors - even if the investors are not wise enough to see through the figures). Thirdly - you may have an allocation that you need to move (i.e. product you have committed to purchase even if you can’t sell it)

You don’t have to sell at zero profit - this is just the edge of the curve (i.e. you take all the sales you can get that generate positive profit - as well as all of those that take zero profit - but then stop)

Therefore the conversation that the ancillary company should be having with themselves is “What percentage can we afford to spend on advertising”. Say its 15% revenue. That should be the budget - not some static “old school” way of setting budgets with a fixed annual amount.  

OK I hear you say - wonderful having an “infinite” budget - but what about cashflow? If you are taking deposit payments online - and are paying your PPC advertising on credit (say 30 - 45 days), you can get yourself into a positive cash flow situation (as you are paying for your advertising after some income has been received). If you are an ancillary company selling hotels - if you are selling on the merchant model (i.e. full payment at time of reservation rather than to the hotel at time of customer checkout) - then you can really begin to generate positive cash flow from PPC. This should convince your head of finance that budget setting based on revenue percentages works better than fixed annual budgets.

Are there alternatives to the “infinite” budget? Yes - you can do what is known as traffic arbitrage. Say you have a landing page on your website that relates to an individual hotel. You have paid £1.50 to get that visitor to see the page - but they, for some reason, reject that opportunity to purchase. You can “sell” that user to someone else. If 20% of the time you can get £0.50 exit money from users the outcome looks like this

100 users clicking through to the page
10 sales (costing £15)
20 paid exits (earning £10)

All of the sudden, your 10 sales have only cost £5 advertising, which means for the original budget you can already do so much more!