Competition is all around you
March 6, 2008
I’ve written before on the landscape of OTA and media companies which is getting more competitive everyday. But also the field of touroperators, airlines and hotelchains is getting more competive. At the PhocusWright conference at ITB John Kohlsaat, 
General Manager for Germany, Central Europe, Baltic and Denmark, of easyJet Airline Company made some comments on that matter. Easyjet, which is the 4th largest airline, is moving ahead fast. From flight only, they have added hotels, transfers and travel services to their offering. This will cause great problems for touroperators. They don’t own the capacity and will have to add value to it, to be profitable. The website that Easyjet uses for this is Easyjetholidays.com. It sees it as a revolution to the package holiday market. As customers are booking more and more direct at airlines and hotelchain websites and are being able to add other travel offerings to it, touroperators should be aware. Future will tell how fierce and bloody this battle will be.
In a few hours I will be heading back to the Netherland. The conference has been very interesting. The bloggers summit as well, great meeting all the bloggers 
from around the world. ITB was big, colourfull
and with great hotdogs!
Perfect storm predicted for travel
March 6, 2008
Maybe it was the unexpected snow. Or perhaps the transport strike. But when Philip Wolf, CEO of travel industry analyst firm PhoCusWright, addressed the bloggers summit at ITB Berlin yesterday, he was putting his neck on the line and predicting big storms on the travel industry horizon.
A perfect storm in fact.
Not the kind featuring a wet George Clooney in a fishingboat, but a convergence of three separate stands of online behaviour and technology that look set to impact travel purchase both dramatically and profoundly.
Philip is predicting a perfect storm of search, shop and buy.
But what does he mean?
“A perfect storm is born when several events occur simultaneously which if occurring separately would be far less powerful. What we’ve identified is that the advance of search technology, online shopping and buying will lead to a whole technological revolution.
What are these converging fronts? Well people can now find needle in haystack online. Additionally, in a longtail environment of unlimited travel choice online, it can also be economically viable to be the niche seller of a needle in haystack.
Social media have also shifted power to consumer. There is now a closer blurring of search, shop and buy. The process of conversing about travel, watching travel images and video, reading user reviews and sharing knowledge drives the sale process. It inspires travel decisions and influences the purchase specifics. In his presentation this morning, Tom Klein, Group President of Sabre Travel Network used the unattributed statistic that 75% of shoppers spend more on online travel after consulting reviews.
What does this perfect storm mean for travel and tourism businesses? Philip explains that:
“Unlike the metrological kind, this digital kind of perfect storm provides perfect opportunity. That will be provided to travel companies that exploit new technology and the momentum and they stop worrying about business model preservation. When you concentrate on trying to preserve business models instead of preserving customers, sometimes really scary things can happen.”
He predicts that as with earlier industry transformations, there will be new agents of change, new winners and losers. That maybe the new generation of online travel firms that ousted the establishment a decade ago, will themselves then be ousted by if they fail to respond to converging customer needs.
Philip adds that in these times of upheaval, it is more important than ever before to trust your instruments and consult your intelligence, but that the stage remains set to exploit opportunity everywhere.
Good news for researchers and industry analysts then 
?
Getting to the PARTY!
March 6, 2008
Here is a map to get to the Movenpick hotel where the after party is. We will see you there at 8:30!
The Anhalter Bar is across the street from the Anhalter Bahnhof. The street address is:
Schöneberger Straße 3
10963 Berlin
I hope to see you all there,
Philip Caines
Managing Editor, Tips From The T-List
Feedback on the Blogger’s Summit
March 6, 2008
Both sessions for the workshop went very well. We had over 150 participants in the audience who were, from what I could tell, very engaged with the subject matter.
One issue that came up during the feedback session was whether or not the topics was relevant. One blogger argued that the subject matter of the workshop was not really relevant to the consumer blogger or to the consumer in general. My counter to that argument however is that the subject was originally developed for the travel industry and so it does not necessarily apply to the consumer audience. That said, I think there is a huge opportunity to open up the discussion and conversation to the consumer blogging community, this however would probably be a different conference and a different subject.
An underlying theme that arose from the discussion is that the web is chaos, it cannot be controlled or contained. In order to survive and ultimately succeed, you must be able to sail the ocean of the web. In other words, blogging and user generated is not going to disappear and certain aspects of the blogosphere will become more important while some will disappear into obscurity. The question is how travel blogging and more specific travel industry blogging will affect the industry as a whole. Most agreed that we are at the beginning of the journey and it is better to be guiding the boat then to be left in the wake.
Overall, the feedback was very positive, although there seemed to be some argument about the real value of the morning interview sessions. This was a new addition to the summit (which by the way is also new) and the feedback was appreciate. Thanks to all the bloggers who participated and we are very excited about continuing the conversation into future conferences.
Second Day @ PhoCusWright ITB - OTAs Speak Out
March 6, 2008
An interesting session with the leaders of some of Europe’s leading OTAs including: Alan Josephs, MD ebookers.com, Ignacio Martos, CEO Opodo, Ian McCaig, CEO Lastminute.com, Jens-Uwe Parkitny, VP & MD Expedia.com Gmbh, Javier Perez-Tenessa, Founder eDreams Inc. During the session Philip Wolf conducted an informal survey to determine whether the audience felt that the OTAs were doing a good job of differentiating themselves from each other. The resounding response from the audience was that they were, infact, NOT doing a very good job of differentiating themselves. So what can the OTAs do to make themselves different from each other? Not surprisingly, none of the OTAs had an answer to this question. Why is this? In my opinion, the question of differentiation implies that the underlying business models are different, and since all the OTAs share the same underlying business model then there is very little they can do to truly differentiate themselves.
So the question was asked whether or not the tabs that are viewable across all the OTA sites will change over the next few years. Again, the answer to this question was “NO” because the model supports the products that currently exist. When presented with the change in interface that Starwood had created for their Fourpoints Hotel brand, Mr. Martos stated that if Opodo only sold one specific product then they might be able to remove the tabs, but the types of products sold through OTAs is too complex for a simple interface, like the one used on Fourpoints.
When presented with the growing trend of experience based searching and integrating the dreaming and planning process into the OTA booking process, Mr. McCaig and Mr. Parkitny both talked about how their brands are trying to do more to build out experiential search into their brands. Mr. Josephs however questioned whether there was true value to the customer of providing non-monetized destination content along with the bookable content that ebookers provides.
The question of monetization was a particularly contentious one and all the OTA leaders seemed to have varying opinions regarding the issue of monetizing the traffic that visit their sites. While some, like Expedia, are already starting to move towards a mixed monetization model of providing pay per click as well as commission based bookings, other OTAs like ebookers had no plans to move into the mixed model and seemed to be reluctant to drive traffic away from their sites to their suppliers.
So what new technologies can we see from OTAs moving forward. Given the undeniable move to more social media, the impact of blogging, and the demand for customer reviews, we can start to see that OTAs will have to start integrating more of these social components into their sites. Expedia’s purchase of TripAdvisor is one example of how OTAs are purchasing and using social components to increase their penetration. Can we expect to see more travel social networks to sell to the big OTAs? Quite likely, given the amount of money that OTAs have. Will consumers support social networks that are purchased by OTAs and will they maintain their bias free status once purchased by an OTA? That remains to be seen. I would hope that they would try to keep the social components as separate as possible to maintain their perceived independence, but only time will tell.
Long tail or ghettos? First Day Thoughts from PhoCusWright@ITB Berlin
March 6, 2008
Post Summary
Does increased choice, perversly, decrease choice? Does the Long Tail indulge our preconceived desires to the exclusion of chance, serendipity and, more importantly, having a really great travel experience?
Can the long tail narrow choice instead of enhancing it?
When I’m not following trends in tourism, I’m a keen follower of UK politics and, even more geekishly, American politics . In this capacity, I regulalry listen to the interviews on the www.bloggingheads.tv as this is an excellent environment in which ideas can be nurtured, discussed, grown or discarded between two knowledgable people in a time frame that allows the debate to mature.
Usually, my politics and tourism interests don’t collide but this excerpt in a recent post made my ears prick up.
The speaker is Cass Sunstein of the University of Chicago Law School who, in terms of the public political dialogue, wonders whether the internet communities are all their cracked up to be. His argument can be paraphrased that, in terms of politic discourse, people tend to congregate with like-minded people who then reinforce their views (and indeed often make them more extreme). This effect is known as the ‘echo chamber’ and it has the effect of making the participants hear what they only want to hear or, in other cases, to work them up into a righteous frenzy that previously didn’t exist.
But Cass sees value in experiences that go beyond the categories imposed by such closed groups as these experiences give an individual both competing views of the world as well as delivering insight into things that they might not previously considered. One example he uses is that of a traditional newspaper where, although you might only be interested in sport, the chances are that you will also read about politics, regional affairs etc - things beyond your narrow interest. He also uses the (borrowed) metaphor of walking through a city, seeing something you have never encountered before and thinking, “Hey, that looks cool, I would like to do that!”
Essentially, Cass is saying that serendipity is a good thing and your life is less without it.
So…what the heck has this to do with tourism?
Well, it made me wonder whether blindly serving the tourism ‘long tail’ niches could be the equivalent of the narrow interest groups where you get exactly what you want…and then miss out something you really would have enjoyed because it has simply been filtered from your view. In other words, we become so niche and exact in our demands for experiences that we miss out on the fuzzy elements that can make a trip really enjoyable.
I don’t have a definitive answer to whether this is the case but I thought I would look for clues at ITB in Berlin and the PhocusWright summit. From what I’ve seen so far, my fear that tourism could be getting too fixated on answering every known traveller’s desire (and in doing so are leaving no room for the enjoyable other serendipitous experiences) is something that some industry leaders are keen to avoid. At the bloggers press meeting this morning, we were given the chance to interview Hugo Burge of hereorthere.com. One of the key aspects of the hereorthere.com seems to be a desire to ‘inspire’ travellers at a stage when they have not yet selected the destination or the form that their travel might take - an area of the travel purchasing process Hugo believes has so far been underserved online. Which to my mind leaves open the possibility that even in a niche environment, potential travel bookers can be exposed to ideas that they might not originally have sought.
I suppose what I am moving toward here is the need for ’slightly imperfect’ information flows for customers that can give them clues about what there is on offer beyond their intended search parameters but which are not so wild as to be meaningless. Amazon.com of course do it in their recommendations lists (”Readers who bought this also bought this…”) and their ability to serve up interesting but not-quite-right recommendations can sometimes lead to more profitable avenues of exploration and enagagement.
Like Mr Rumsfeld said, their are ‘unknown knowns’ and tapping into the potential of a persons full spectrum of travel desires (however seemingly unknown they may be to that individual) is, I believe, key in a really excellent holiday experience.
Lets see what the other participants at the conference tomorrow have to say about this…!
Travel minds in the snow
March 5, 2008
Some of the most sparkling travel minds are getting together at the Bloggers summit in Berlin. Bruces Rosard, VP Sales and Marketing of PhoCusWright welcomes us to the summit. A number of 25 bloggers are present, which is good number considering the snowy conditions. 
Philip Wolf, President and CEO of PhocusWright kicks off with a interesting story on travel. One of his themes is the long tail of travel, selling less of more. New shopping and comparison technology will dramatically change the travel industry, which already has been affected very much by radical changes in the past years. PPA/PPC is the new commission model. Not pay per acquisition that is, but pay per action. With acquisition being the highest form of action. But it is important not to focus on your own business model but on the customers (it is the customer stupid!).
Hugo Burge, founder of hereorthere.com adds to the discussion on PPA/PPC, that it doesn’t make a difference for him. All participants in this game judge eachother on conversion. True, but I questioned this a bit by stating that if you’re a small media startup ppc will be much more difficult to negotiate with travel companies than if you’re a large player (e.g. Google). Pretty impressive bio Hugo has, vice-president of Cheapflights and investor in a lot of startups. Hereorthere is made about inspiration, which is partly professional, partly user generated and all this combined with deals and local services. Reviews and ratings are very important to their story. It is about personalised and relevant travel experiences.
More speakers 
were present during the welcome but I’ll mention just two others. Gerry Samuels, of Mobile Travel Technologies spoke on mobile travel technology. His company licenses technologies to airlines, hotelgroups, intermediairies. The possibities they provide to customers are for example sending a boarding pass to your phone, and facilitating a later or earlier checkin. The company will connect the website of their clients to all mobile devices. Most of the request of their clients are on mobile internet, but also a lot on sms/text. And thirdly “on handset applications”. End of year 500 million mobile internet phones will be used around the globe. Transactions on the phone are possible and some examples were given. Lastminute bookings are perfect for the phone! In China and India mobile internet is thé internet. In the US/UK 20/30% are using mobile internet regularly. 10% of travellers use travel internet services. For example to find out where the hotel is. GPS is also an important driver. Broadband is important, wap is too slow. Google android will have an impact. In India travel is the killer app for mobile! India is also more advanced on mobile payments. US/UK is still on creditcard payment. Walled gardens are being taken down. Tariffs abroad are still very high, people are scared to get really high bills when they get back.
Last speaker was Ranjan Singh, Co-Founder & CEO of Isango!. Very interesting company on travel experiences. Packaging by yourself or DIY (do it yourself) travel is getting bigger and bigger. Most people know how to book hotels and airlines, but local activities is still dificult. Isango! is the solution for that. Isango is consolidator for travel experiences. Worlds largest. Just being funded for 8 million! Chapeau!
Isango
March 5, 2008
Ranjan Singh, CEO and Co-Founder of Isango!
Mr. Singh joined online travel with Expedia and then become Managing Director for EBookers. What he found is that companies like Expedia and other OTAs are focused on the logistics of travel versus the destination products or the reasons why people go on trips. A recent survey stated that 66% of search is for things to do and attractions. For end consumers, there are many choices for booking the logistical pieces of travel but there are very few choices for the attraction and thing to do products. Therefore, a consolidation model works very well for this space and it is for this reason that Isango was created.
The reason for Isango’s growing success is based on the increase in broadband proliferation, a desire to consolidate product, and the rise in experiential travel. Isango provided a distribution model that allows partners to monetize their existing traffic.
A big question for me is how is Isango! different than Viator, which already has very strong penetration in the things to do market? Unfortunately I didn’t get to ask this question but if anyone else can provide their comments on this question, that would be great.
CEO Briefing at PhoCusWright Blogging Summit at ITB Berlin
March 5, 2008
PhoCusWright CEO- Philip’s Wolf
Philip traced the evolution of the 13 year journey from 0 billion to $ 100 billion!. Where the paradigm of travel 1.0 saw Expedia’s blow out conventional travel purchase and then emerge as the establishment in 2005. Then the travel 2.0 and long tail kicked to spur innovation and fresh startups to focus on not the cheapest trip but the perfect trip
The key point that Philip shared is that company that focuses on maintaining the business model and not on the customers will always be challenged and the relevance questioned. The PhoCusWright theme for 2008 is around the Perfect Storm where there is now a blurring or search, shop and buy. Its all seamless.
Other briefings..to come
Distinction Between Bloggers, Journalists Blurring More Than Ever
March 5, 2008
MediaShift Digging Deeper::PBS deals with the topic the panel I’m on this afternoon at the PhoCusWright Blogger Summit at the ITB in Berlin will address.
The title is journalists vs. bloggers, by itself a misnomer, as the lines have blurred between what used to be until quite recently very different categories as the article makes very clear. Like so much else, the role of journalists has been affected by how the web develops and this will very likely continue to be the case. The conversation continues……
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