The BOOT - The Business of Online Travel

Google bought AdMob, Norm was right, the BOOT was wrong - time to eat humble pie

timsboot@gmail.com (Tim Hughes) — Mon, 09 Nov 2009 23:45:00 +0000

In my predictions for 2009 (back in January) I said the following

"2009 will not be the year of mobile for the travel industry: Every year since 2000 we have been talking about the mobile revolution in online travel. This year I rejoined that chorus of mobile revolution fan boys while at PhoCusWright in LA. With the Global Financial Crisis (I am told there is even an acronym for this - GFC) in full swing I think the larger players will pull back from their mobile plans and focus on core products, costs control and customer loyalty. Mobile will have to wait until 2010; and"

Many disagreed including Norm Rose, arguing that the proliferation of smart phones and mobile apps would prove me wrong. But I would not be talked out of it. In September I reaffirmed by prediction saying

" The argument in favour of my prediction is that bookings of travel via mobile phones apps (outside of Korea and Japan) are still very small and arguably inconsequential to the $150+ billion online travel industry. "

Here we are in November and I was looking forward to debating my position with Norm at PhoCusWright next week. But with barely a week to go before seeing Norm in Orlando, Google won the debate for him by buying AdMob for $750 million. AdMob is/was a Sequoia backed mobile display advertising platform.

This means that Google's third largest acquisition ever (after YouTube and DoubleClick) is of a company with maybe $40mm in revenue focused on putting adverts on iPhones, Android phones, smartphones etc. We now have a revenue model and distribution for advertising on the phone. Add that to the travel app bonanza on iTunes and elsewhere, the levels of smartphone penetration, augmented reality and more.

You got me Norm. I concede. Google has closed out the year with a big M&A deal proving that 2009 is indeed a year for Mobile. See you in Orlando for a piece of humble pie.

More on the deal read these two TechCrunch posts

thanks to smiteme for the pie photo

Interview with Joobili boss Jared Salter - Part 1 - rasing money in Europe

timsboot@gmail.com (Tim Hughes) — Sun, 08 Nov 2009 09:09:00 +0000

While the fees, sales and my promo is bigger than your promo claims that are the battle of the OTAs in the US has ramifications for the state of the industry going into the second decade of the 21^st century, I continue to be most excited by the innovation coming out of travel discovery and inspiration sites. Sites set up to help customers answer the open-ended question “where do I go next”. A question that is only now being asked of the online travel industry on Google, Twitter, Facebook and elsewhere. The sites that are at the forefront of data analysis and projections in line with my EveryYou concept of using the technology and social transformation in front of us to develop a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time.

I have already done a number of profiles in this area including one of the Budapest based Joobili (pronounced Jubilee). Now I have had a chance to spend time over skype with Jared Salter the founder and CEO of Joobili to hear about his experiences in founding a online travel company in Europe, on time based travel inspiration, on the balance between pre search information requesting and post search refinement and the rights and wrongs of attending a Swiss turnip festival.

In short Joobili is a time based travel search, discovery and inspiration engine. At the entry screen you select the date range you are interesting in travelling on and Joobili replies with a list of festivals, activities, events and time based entertainment that are on during that time period. Options for refinement are then presented to help narrow down the list to a short list of trips. Joobili starts with the question “when do you want to go?” rather the standard OTA question “where do you want to go?”.

As with other interviews, this is best suited to a two part blog post. In the first part we will talk about the set up of the company especially raising money in and running a business from Europe. Then in part two I will share our discussions on the functionality of Joobili and the travel and inspiration market/industry.

The interesting summary of part one of this interview is that Jared and his partner Tamas Gabor managed to raise seed money for an Eastern European based company without a prototype. They had a business plan and powerpoint that so impressed or struck the Swiss born Esther Dyson that she gave money without a working site and despite the possible challenges of monitoring a business off the beaten track (VC wise).

BOOT: Where did the idea come from? Do you have a history in tech or travel?

Jared from Joobili: I moved to Budapest from a corporate job in San Francisco to do an MBA. There I met my co-founder of Joobili Tamas Gabor. It was his idea to look at calendar based travels. Other sites start with the destination. We spent the first few months scouring the internet but could not find anyone doing calendar search. We built the initial business case during the MBA. The product took off when we secured funding.

BOOT: At what point did you decided to seek funding? Had you built a proto-type yet or did you manage to get funding off the back of a powerpoint deck and business plan?

Jared from Joobili: It is different for each entrepreneur but as neither of us had a tech background we had to raise money with just a business plan. Which was tough. But we needed money to build a beta site.

BOOT: Europe is not famous for lending money on a ppt only. Traditionally Euro VCs want to see something built, if fact more often than not they are looking for series B work. Did you have to go to America to get angel funding with nothing built.

Jared from Joobili: Yes Had been going after a lot of different Euro investors and VCs. We were lucky that Ester Dyson (investor in Orbitz, Flickr, Delicious, Dopplr and more) was coming to Budapest as part of some Euro boards that she was on. We got a meeting with her to show her our detailed plans and forecasts. It ended up being just a one hour but she committed. “This is something that belongs on the web” was her quote.

BOOT: Budapest is not the first place that springs to mind when I think of online travel and tech innovation. What has it been like trying to run a business from Budapest?

Jared from Joobili: From a standpoint of travel and start up it is a bad thing- as you miss out on the networking opportunities. So we do frequent trips to London. Last September we were involved in Seedcamp – one of only two travel companies. This month I will be at WTM so we get out as much as we can. That said there is a reason we started here and I would do it again. It is very cost efficient to develop technology here. There are some talented developers in Budapest. Given the amount of seed capital we raised, we would never able to build this business in San Francisco or London.

BOOT: Are you looking for more funding?

Jared from Joobili Fair to say that any start-up is always on the hunt for more money to develop new features. The list of features we want to build is longer than we can afford. And this is a tough market, especially for the discovery part of travel as it is the least tapped space of the travel process.

In part two we will talk about the Joobili business model and travel discovery and inspiration business.

Interview with Wego CEO Martin Symes and Product Boss Ross Veitch on Content, Advertising, ADR, Meta-search and (naturally) Twitter

timsboot@gmail.com (Tim Hughes) — Wed, 04 Nov 2009 22:03:00 +0000

It has been a frustrating conference season for me this year. I had to leave TRAVELtech early this year to rush to the side of a sick relative. Then I missed WebInTravel altogether because of a back injury. As well a missing out of a lot of schmoozing and boozing, I missed a chance to catch up with Martin Symes and others from the Singapore based meta-search company Wego (aka Bezurk). Martin is an online travel veteran with stints at Zuji/Travelocity, BA and American Airlines. He is also an entertaining presenter and dinner companion. Through Wego he is at the forefront of meta-search in Asia so an interesting person to hear from. Last week I had a chance to catch up with Martin and Wego Product Boss Ross Veitch by phone to hear the latest on Wego, meta-search and the Asian travel market.

Here is some of our exchange. [nb- I was not smart enough or well trained enough to include in my notes which of Ross or Martin answered my questions so in the below I have blurred them into one respondent]

BOOT: How’s business?

Wego: Great – steady growth in all the metrics we look at. Traffic is up 200% year on year and revenue about the same. The recession has been good for us as it has brought to us looking for distribution and has added to the price sensitivity of consumers. Move from Bezurk to Wego brand and new platform has also helped, especially with SEO traffic. [SEO] Now makes up 50% of our traffic so acquisition costs are low.

BOOT: I noticed you have a new feature of ranking hotels by popularity in the sort order. Does a meta-search company have to choose between being a price based search engine or being a a mechanism for recommending hotels to consumers?

Wego: See them as complementary. We have adopted the same philosophy toward UGC aggregation as we have to price aggregation. Have not tried to do it ourselves. For content it is critical to get a mass of reviews so have crawled hundreds of different review sites and then broken down the content, created indexes and built a snapshot of what people are saying. The volume of hotel reviews for larger properties is overwhelming. We can help customers cut through the reviews and the price.

BOOT: The theory was that the recession/GFC would drive down CPM rates and drive up CPC rates as advertisers shifted their marketing budgets from display advertising to direct response. Is this true? What have you seen?

Wego: Hard to say as our display business is coming off such a low base. June on June we have had a 600% growth in display revenue – again a low base. Also for most of our customers we are selling integrated packages for display and direct response [clicks - BOOT]. An example is Hotel Spotlight [three hotels at top of search– BOOT] which is generating a dramatic increase in click through rates to not only the spotlight itself but organic listing further down the sort. Now trialling the hotel inserting their twitter feed messages into the Hotel Spotlight. Giving hotel a chance to put fresh content into the promo spot [now available in Singapore and coming elsewhere soon – BOOT]

BOOT: What about other plans for Asia? There is some tight competition with Qunar in China and Ixigo in India.

Wego: Some days India is our biggest source market for traffic. Though the click through rates are lower than other markets. Even so we think that it has more potential as a market than Chian. Very hard to monetise traffic from China. Our Chinese language sites are launched we have a few more languages planned

BOOT: ADR declines are hurting everyone. You are able to see prices from so many different angles. Where do you think ADR is going next year?

Wego: Agree, we saw big declines in ADR this year. Can’t see too much continued downside next year without another recessionary event. We hope to see rates stabilise and then we can get into targeting of deals. We are having discussions with suppliers about targeting to different user groups. This is the exciting next step for us and OTAs.

BOOT (to Martin): Final question about conferences and presentations. Twitter and instant blogging are now an unstoppable feature of presentations at conferences. How has it changed the way you present and prepare?

Wego/Martin: With presenting you now have to be aware that things will be taken out of context, re-twitted and sent around in seconds.

PS – Apologies again to Ross and Martin for (other than the last question) losing track of who was answering which question. Chances are that the answers I have above are a merger of comments from both of them

PS 2 – disclosure: Back in 2007 I did some consulting work for Wego

Kuxun acquisition takes TripAdvisor further into China

timsboot@gmail.com (Tim Hughes) — Mon, 02 Nov 2009 02:07:00 +0000

Expedia's TripAdvisor is to buy Chinese meta-search company Kuxun (at least I think it is a meta-search company) (according to Dow Jones via Hotelmarketing.com). TripAdvior CEO Steve Kaufer would not give away how much was paid but is quoted in the article as saying he has US$50mm to invest in China in 2010 and 2011 but this includes setting up the local version of TripAdvisor Daodao.com. Also said he plans to double the number of staff in China from 80 to 160. My guess (no basis just a hunch) is Kuxun will be used as the tech behind Daodao with Kuxun's brand to disappear soon after the deal.

In case you are wondering about meanings. I am reliably informed that Kuxun means Cool Information or Smart Information and Daodao means To Reach, To Arrive.

Her is my updated list of TripAdvisor Acquisitions in the last few years:

I always close these stories with the reminder that Expedia owns TripAdvisor as you'd be surprised how much search traffic I get asking the question "who owns TripAdvisor"

PhoCusWright: Organising appointments and meet ups for Orlando Nov 17-19

timsboot@gmail.com (Tim Hughes) — Fri, 30 Oct 2009 22:12:00 +0000

I am going to Orlando for PhoCusWright November 17-19. Due to the nature of long haul travel I will be there for the whole day the 16th and 20th as well. My diary is starting to fill up with appointments. If you are interested in making a time to meet up please email me or make contact through PhoCusWright's eConnect conference network site.

Tnooz: BOOT on Lonely Planet on Tnooz

timsboot@gmail.com (Tim Hughes) — Fri, 30 Oct 2009 19:34:00 +0000

By second post for Tnooz is live titled "Tips for what Lonely Planet should do next". Contains some background on Lonely Planet's online plans over the last few years, the online and brand vision from new CEO Matt Goldberg and my recommendations on what else they could do. Check out the post here for more. He is an extract with my recommendations for Lonely Planet:

1. Content Expansion: Make more and more of the content currently only available in books available online with the aim of being the number one organic search results for every major destination search item. It might hurt some book sales but winning in organic search will be more valuable long term;
2. Open Syndication: Increase syndication capabilities by allowing bloggers, writers, transaction sites, Facebook pages and more to access content material is an open way. Similar to point #1 above, it might cost a few book sales but being the social network content source of choice will be more valuable long term.
3. Facilitate and Make EveryYou Recommendations: Invest in recommendation technology to allow the community forums and information to be combined with the editorial content, booking behaviour and other data available to put Lonely Planet at the forefront of the development of specific and targeted recommendations of one based on the unique combination of desires, needs and interests of each individual at any moment in time. See My EveryYou concept. It will cost money and development time but the future of inspiration and content sites are targeted recommendations.

Tnooz editor Kevin May has followed up with a post "We love Lonely Planet and want to see it get better says the BBC", where an interesting debate has started.

Bing Maps: Helping you find the middle of nowhere whether you want it or not

timsboot@gmail.com (Tim Hughes) — Wed, 28 Oct 2009 20:39:00 +0000

Bing was supposed to be the new black. Bing + Yahoo! search deal + Farecast integration + new mapping was supposed to = a revolution in search engines for Microsoft (excuse me.. not a search engine.. a discovery engine). For that all to work, the mapping has to work. Especially in travel. When people search for information on locations they need to be given very accurate mapping information on where the location is..well...located.

I have been house hunting recently and "accidentally" used an integrated Bing Maps feature on Internet Explorer. It failed miserably...in an entertaining way.

Here are the screen shots that tell the story. Shot 1 - the house in 138 Underwood St Padding (suburb of Sydney just next to downtown business region) that I was looking at and me highlighting the address and selecting map with Live Search/Bing. Shot 2 - the result. No only is the mapping result nowhere near Paddington, it is some 4,000 kilometres away on an Aboriginal reserve in the North West corner of Australia. In other words...somewhere near the middle of nowhere (with all due respect to the people who live there).

Shot 1 - me doing the search

Shot 2 - the result. We now know where the middle of nowhere actually is.
Described by Bing as "138, Aboriginal Land, Western Australia". Other than the number 138 there is nothing in common with the address I was searching for

Let me put shot 2 into perspective with Shot 3 showing how far away this is from the actual location of Underwood St Paddington

Shot 3 - how far apart the locations are

Think this is a one off? I tried the same for a property in another part of Underwood st Paddington (this time number 14 not number 138) Shot 4 is the result. At least this time in Sydney but still some 30-40kms away and under than the number 14 - nothing in common with what I searched.

Shot 4 - closer but still not close enough
Showing 14 Underwood st Paddington as 14 Bilgola St Newport

If Bing wants any chance at fighting Google, Kayak or the OTAs in travel search they will have to do dramatically better than this in the mapping area.

Mile Run: Frequent flyer miles, obsessions and what to do with my relationship with Qantas

timsboot@gmail.com (Tim Hughes) — Tue, 27 Oct 2009 04:03:00 +0000

I have been mulling over my relationship with Qantas. I have just achieved life time Gold status with them while also qualifying for my ninth year in a row as one of their Platinum fliers. That said, I have not flown Qantas long haul for almost a year. My last trip was economy class Qantas to Singapore almost a year ago. I held my Platinum status through domestic trips on QF and long haul trips on oneworld partners Cathay Pacific, BA and JAL. Choice played a role (I am a big fan of CX Business Class) but more often than not it was price that put me on BA and CX rather than QF - especially as my company has a United preference for Australia to US travel.

So I started a forum thread over at FrequentFlyer.com.au on whether I should chase Qantas Platinum status for another year or move my main frequent flyer account over to BA, CX or American. The discussion is here.

At the same time I cam across this video on the fantastic Elliott.org blog. It is a 18min video documentary of flying enthusiasts/nuts chasing mileage status and bonuses. Including an amazing story of a guy that paid people in northern Thailand to fly a particular routing on Thai four times a day to collect Star Alliance points. Reminded me of the famous Pudding Guy (David Phillips) who earned 1.25mm frequent flyer miles in 1999 just by buying 12,150 yoghurt container sized serves of chocolate pudding.

If you don't have time to watch the video then here are some of the statistical take aways from the video are (in part drawn from a great Economist article from 2005 called "Funny money; Frequent-flyer miles" - pdf version here):

There are 17-20 Trillion unspent frequent flier miles in circulation;
This is enough for redemption for 800 million US domestic trip;
This is enough for 160 million first class trips form the US to Asia; and
(according to the Economist), this is more in circulation that there are dollar bills in the US.

As the Econmist says with that much "currency" in circulation and no one looking to restrict or manage supply then regular devaluations are inevitable. In other words - having lots of miles ig great but if you don't spend them then they will be devalued over time. They have to be. Here is the video.

Frequent Flyer from Gabriel Leigh on Vimeo.

thanks to msmail for the photo at flickr

Long Tail and travel - Chris Anderson shows data

timsboot@gmail.com (Tim Hughes) — Mon, 26 Oct 2009 00:21:00 +0000

I am sure the timing is a complete fluke but two weeks after I published my first challenge to Chris Anderson's Long Tail theory in my post EveryYou: Individuation and going beyond the Long Tail theory he published a post on seekingAlpha called the Long Tail of Travel. In this post he carries some search data analysis that says that over time the top 50 destinations out for the UK have fallen from 36% of the total destinations in travelled by air 1998 to 26% in 2008 driven by low cost carriers, consumer demand and more. He has based this on data from the UK CAA. His post contains a graph and link to the data.

I have no doubt that searches for body and tail destinations are up and growing but we need more that just the Long Tail theory to allow demand for the tail to be unconstrained. We need targeting, recommending and discovery tools that allow consumers to find things they did not know they wanted to know about and trust the answers they get. [Broken record time] we need to use the technology and social changes made available to generated individuated search responses to open ended web queries.

Web Reservations International (WRI) up for sale for GBP 275mm (the Times)

timsboot@gmail.com (Tim Hughes) — Sun, 25 Oct 2009 23:36:00 +0000

The Times is reporting that Web Reservations International (WRI) is up for sale with a price tag of £275m.

WRI is owned by Ray Nolan and U2 Manager Paul McGuinnes. It operates

boo.com - the former fashion/clothing site and poster child for the dotcom bust in Europe is now a meta-search company
Hostelworld.com - online booking for hostels, backpakers and budget accommodation
Hostels.com - more hostels and backpacker bookings with content
Trav.com - more budget accomm including cheap hotels, motels, guesthouses, bed and breakfasts, youth hostels, holiday apartments, campsites, inns and lodges

The Times is saying that WRI has sales last year of €38m (£35m) and made a pre-tax profit of €18.3m.

thanks to joshhostels where I spotted the story first on Twitter and Hostelmanagement where he spotted it.

Seat Review - Cathay Pacific Business Class (Herrinbone style)

timsboot@gmail.com (Tim Hughes) — Sun, 25 Oct 2009 01:48:00 +0000

I have lost track of what trip I am reviewing as I have consumed a lot of Cathay Pacific business class in the last few months. I have taken trips to Rome (via Hong Kong) and Tokyo and Seoul (with a CX leg care of a oneworld circle Pacific fare). I liked Cathay’s old business class. It suffered slightly from the not quite flat incline that a number of carriers launched in the late ‘90s and early this decade (Qantas, Virgin Atlantic, Singapore Airlines) but was still an excellent product. Cathay’s new business class is in the herringbone style like the (now not so) new Virgin Atlantic Upper Class. That is a series of angled seats in individual mini cabins jutting out in a fish bone looking formation. This is a great airline product. I struggle to find any faults with Cathy Pacific long haul business class. There are carriers with higher quality food but these are at the margin. CX is at the top of my list of carriers (if you want to see the list, click here).

The BOOT rating for Cathay International Business Class is a 5 stars out of 6 or "Great Seat". Here is the detailed review (Details and scoring system for airline seat reviews)

Getting on Board	Score 1.0
I am not a big fan of what should be an impressive airport in Hong Kong. I would like the gates to be a little bit better organised to improve the flow of people onto the plane. Most of the queues degenerate into a confusing mass of people. That said, the world class CX business and first class lounges more than make up for the annoyances of getting on the aircraft. Qantas has fought back with their Sydney first class lounge but CX Wing and Pier lounges are nearly unbeatable. QF Sydney wins when it comes to food. The food, wine and service restaurant in the QF first class lounge should probably score a “hat” in the Sydney Morning Herald Good Food guide. But CX wins overall because of their Cabanas (in photo). These min-day rooms come with a full sized bath, recliner chair for sleeping and a water feature. Turns a 2+ hour layover in Hong Kong into a mini spa treatment. On the one hand is outrageous and unjustifiable luxury but on the other hand it is an unbeatable way to “survive” hours in transit.
The Seat	Score 1.0
I like it. I like it a lot. There are two challenges in setting up a herring bone style seat. Firstly privacy. If you get the angles wrong then you spend the flight staring directly at the person across the aisle from you. 9-13 hours is a long time to be staring a stranger. Secondly width. The herring bone design is based on length – trying to give the longest seat in the smallest amount of space. If done badly it can end up too narrow or starting wide at that top and ending up too narrow at the feat. CX have avoided both of these issues in their design. I can see the top of the head of the person opposite but nothing more. As to width it is a little tight on the elbows when typing but if not working (ie resting, watching or sleeping) there is less of a tight coffin like feeling that I have experienced in other herringbone seats. The buttons and gadgets are in the right place. One minor complaint is that the design of the table and TV screen means that it is impossible to have a computer open and watch a movie at that same time. Makes it very hard to be watching a crappy movie while pretending to do work.
The Service	Score 0.5
Smooth, seamless and attentive. I like being recognised for my status - even though it is one world not Cathay specific. On the flight where I flew with a bulging disc in my back (very painful) there were staff everywhere after I landed making sure that I was taken through customs and immigration to a doctor.
The Food	Score 0.5
This is the only weak-spot for CX. The food is not that bad. Certainly not at the level of blandness that I have had on Thai, JAL or Malaysian. However the food is closer to "satisfying" and "OK" than to "enjoyable" and a long way from "memorable". I have two issues with it. The food itself could be improved. There are often too many flavours on the plate and the vegetables overcooked. I also dislike the silver service nature of the distribution of the food. On Qantas they have mastered delivering plates one at a time meaning the food arrives hot and fresh. On CX they place all of the plates on one tray and serve the whole cabin from the one service tray. Unless you are early in the service order your food is cooler than it should be and sauces on the way to being solid. The first issue is hard to fix as requires a reworking of Cathay's catering approach but the second is a serving issues and CX should fix it.
The Entertainment	Score 1.0
In the world where all of the top flight products are during audio and video on demand and noise cancelling headsets it is harder to find differentiation between the leading airlines. The three areas are entertainment selection, control comfort and timings. In each of these CX excel. In the selection area they have a long list of TV shows, movies and audio on demand. Their Studio CX system claims 100 movies, 350 TV shows and (a very luck sounding) 888 songs. The controls are easy to use and most importantly are located in a way that you do not accidentally bump them (something that happens far too often on other carriers). The area I like the most is how quickly they turn on the system. BA, QF, VS and others take a long time to turn on the entertainment. Often forcing you to wait until the seat belt sign is off and then sit through a 20 minute intro video before allowing you to use the system to its fullest. But not Cathay. The system is available from the moment you are in the air (sometimes before) until the last minute before landing (and sometimes after). This is a little thing but a very noticeable benefit.
The BOOT factor	Score 1.0
I love starting a flight with the latest copy of the Economist – freely provided. I also need to put in another plug for the first class lounge cabanas. A Cathay experience does not have the "great to have you here" feel of a Virgin Atlantic flight or (naturally) the "looking forward to bringing you home" feel that (some) Qantas crews deliver. But I do feel like everything I need to have happen will happen to make the flight smooth and productive.
Final Score	5.0 - Great Seat

thanks to Xmansti on flickr for photo

Details and scoring system for airline seat reviews

Guidebook Economist Style: Doing business in Sydney

timsboot@gmail.com (Tim Hughes) — Tue, 20 Oct 2009 23:07:00 +0000

The Economist is a regular podcast listen of mine. This week "Doing Business in Sydney" by the Economist appeared in my iTunes podcast feed. Is a ten minute Sydney guide by the Economist (odeo player with audio below) covering airport practicalities, business culture, restaurant and hotel recommendations and side trips if you have a moment. Interesting that the Economist is getting into the very crowded guidebook space. As to the content itself as a Sydney native I agreed with most of the recommendations except the comments on the airport.

Comments like

"by and large waiting times at immigration are not that onerous"; and
'"usually no wait for taxi's" [at the airport].

....are scandalous untruths. A business or leisure traveller to Sydney can be practically 100% guaranteed of great weather, amazing views, entertaining people and a relaxed but serious business environment. Hopefully all that will be enough to help the traveller recover from the endless queues, scans and form checkers of Sydney Airport Immigration, Customs and Quarantine and the most inefficient taxi rank system this side of the sub-continent.

WebInTravel: WIT presenation 2009 - Recommendations, Long Tail and EveryYou

timsboot@gmail.com (Tim Hughes) — Tue, 20 Oct 2009 10:00:00 +0000

Tim Hughes WIT presenation 2009 - Recommendations, Long T...

tims-boot's Podcast

On doctor's orders I had to cancel my trip to WebInTravel this year. Here with slides and audio is the presentation I would have given today if I had been there.

Key themes are

the long tail theory is now 5 years old. That is "decades" in Internet years. It is time for a rethink;
we now have access to effectively unlimited computational power (technology change);
consumers are voluntarily giving us data and information about themselves - often for no obvious tangible gain (forwarding links, writing reviews, uploading photos, setting up detailed traveller profiles etc) (social change); and
if we work to put together the technology change and social change we can target EveryYou rather than Everyone. Can develop specific and targeted recommendations of one for an individual. Rather than a recommendation based on demographics, a recommendation of one based on the individuals unique combination of desires, needs and interests.

PS - forgive the timing of the slides, they are not quite right but the message comes through.

3 + 3 recommendations on how offline travel can save itself

timsboot@gmail.com (Tim Hughes) — Mon, 19 Oct 2009 10:10:00 +0000

I remain stunned how often I still read announcements from large off-line travel agents (in Australia, Asia and elsewhere) saying that they don't need to worry about competition from online players.

Just recently in separate reports leaders of two of the largest in the Pacific region reaffirmed their online travel disinterest.

Peter Lacaze is the CEO of Stella Travel. One of the Pacific's largest network of offline franchise travel agents, corporate travel and wholesale/consolidators. Lacaze is confronted with a lot of challenges. Today he announced plans to cut franchise fees and other measures to retain stores/members. Despite the challenges to his business, he does not believe online is the answer. In fact he has gone beyond just ignoring online to being positively negative on it. In a recent TravelTrends post he said “not in my lifetime” in response to a question about the internet taking over half the market in Australia. I am not sure what market or stats he is looking at. The online domestic air business is already above 50% and online hotels are in the 30% range. PhoCusWright (in their recent APAC report) say that 26% of leisure and unmanaged business travel spend is online in Australia (2008) set to rise to 41% in 2011. At this sort of pacing more than half of the spend will be online before the end of the next decade (as it already is in the US)

Graham Turner (Lacaze's rival over at Flight Centre) continued the "denier" talk during the presentation of his FY09 annual results (see TravelToday pdf here). Telling the audience and media how little he was worried about online travel companies and that they were not a threat to his business.

How to get serious about online

I regularly write stories on this continued denial by the off-line players. In response I am often asked by email and at conference either "how would you know if the online companies 'got it' and started a real push into online?" or "what would you tell an off-line CEO that he/she needs to do to be serious about online?" The answer to both questions is the same. There are three things that players like Stella and Flight Centre need to do right now to take online seriously:

Hire a new person and restructure: Appoint a senior exec to be the boss of online. Critically they need to report direct to the CEO and be free of any "cannulisation hand-cuffs". That can buy, invest and drive online without fear of the sales taken away from the store-front;
Set a specific Target: Make a company aim and shareholder commitment of a number of transactions (or dollars) that will come in from online bookings by a certain date; and
Embrace Technology: Accept the fact that technology is critical to selling travel well. Hire a team of developers (or do a deal with a technology company) devoted to online only activities, reporting to the new online boss.

How to revitalise off-line

To be fair, I do not expect a 100% off-line company to become a 100% online company. Therefore I am going to add three more recommendations on how off-line players should use technology to protect their existing business and stay relevant to consumers looking to fulfil their more complicated itineraries off-line and therefore protect their revenues from complex itineraries. They are:

Destination Experts/Complex Product Methodology: Brochures and Famil trips are not enough to provide off-line agents with the level of information they need to sell complex itineraries to consumers better than the web. To effectively compete with the scale of information online, off-line agents need to be able to add their skills to a deep content library of destination information and a discovery and recommendation system to help sort through all that is available;
Massive CRM investment: Off-line agents get to see their customers, online don't. This means that off-line agents can make decisions about purchase intention and consumer activity that online can't. Also means they can ask more detailed and targeted questions about consumers than off-line. This improved access to information on consumers is currently wasted by the major off-line agents because they either don't collect it, or if they do, they don't know what to do with it. I recommend a massive investment in a CRM systems tied to the desktop sales tools and to the incentive plans for staff; and
Rewrite store experience (copy the supermarkets): The travel agency store layout has not changed in my lifetime. The rows of brochures in no particular order with deal led window displays look the same today as they did in the 70s, 80s and 90s. Meanwhile other retail organisations (especially supermarkets) have invested heavily in consumer retail pattern research and store layout. The location of items, stores and promotional spaces has become a science. All designed towards bringing the customer to the store, keeping them inside the store and directing their purchasing behaviour. Travel companies have to do the same. They need to rewrite the consumer experience to make more of the merchandising opportunities offered by access to customers walking around with their wallets in the pockets.

The other view is that it is too late to save the offline players. What do you think? Too late? Answers in comments

thanks to salinadarling at flickr for the great photo

Gnome Speaks: Sam Gilliland Interviewed in Dallas News

timsboot@gmail.com (Tim Hughes) — Mon, 19 Oct 2009 03:59:00 +0000

With Travelocity private and execs being very quiet of late, is has proven harder and harder to find out what is going on at the land of the gnome. The Dallas News has a two part interview from Sabre Holdings CEO Sam Gilliland. Highlights from the interview are:

On sales to forecast: "...in terms of our planning we've come out basically even" - meaning leisure travel sales growth has offsett steeper declines in corporate travel;
On marketing: "...I'm imagining we'll spend up" - meaning that he doesn't have to disclose how much he spends on marketing but will tell us that he is spending more than last year;
On 2010 plans: "We're investing a lot in the hotel sector" - meaning that the airline sales business continues to be only borderline profitable
On private vs public future (ie IPO): "It will depend a lot on where the market is and where the economy is, but I do also think that we'll be looking for revenue growth before we do it," - means no timetable or immediate plans

thanks to B Tal over at flickr for the gnome shot

Business Traveller Tip: The best drugs to take with you

timsboot@gmail.com (Tim Hughes) — Sun, 11 Oct 2009 10:01:00 +0000

If you travel a lot, then you have been sick on a trip. If so, you know the challenge of finding fast, quick and (importantly) understandable health care. Getting a good doctor is usually the easy part as either your hotel or insurance company can find you a local language doctor or health care professional. The harder part is finding the right over the counter meds on the road because either: the pharmacist does not speak your language; the drug you are looking for has a different name or brand; or you simply do not have time in your schedule for an unanticipated apothecary adventure. Thus we have have business traveller tip number 4 – which (legal) drugs to pack with you to handle most minor health issues. This list is long enough to provide you with the aliment alleviating you need while being short enough (and free of liquids) so that you can fit all of it in a separate wetpack that does not require removal for security screening.

For throat pain: a tray or four pack of medicated throat lozenges. I prefer Difflam but Strepsils will do. Un-medicated ones like Anticol or Butter Menthol are just candy in (a poor) disguise;
For head pain: A tray of paracetamol or aspirin. I prefer paracetamol for flying;
For really bad head pain: I have suffered back pain on a long haul flight and can tell you that flying plus back pain is as bad as travelling gets. I would not have made it through the flight if it it had not been for the small amount of prescription pain medication that I carry with me just in case. I recommend carrying a few tabs. I am not saying that you should have any hillbilly heroine or hollywood starlet party drug with you but if you can have a couple of tablets of Di-Gesic, Panadeine Forte or another combination of codeine and paracetamol then you have a fool-proof “back-up” plan for acute pain. If you are unable to get a prescription then a top of the range over the counter med like Nurofen Plus will do;
For the flu: A cold and flu med with pseudo-ephedrine will fight sniffles, snuffles and snoozles that come with a cold. There is something about pseudo-ephedrine that can make a jet-lagged, flue ridden, early morning meeting manageable;
For sleeping: Work colleagues and friends swear by Ambien, Stilnox and other sleeping pills. I manage to get by with lower grade (non-prescription) drowsy pills like Unisom or Restavit. I don’t know the chemical terms or inputs but these are the drowsy parts of antihistamine or flu drugs without the anti-sneezing or anti-flu parts. In other words they won't knock you out like Ambien but will make you very very sleepy. I also carry melatonin for fighting jetlag and adding to the all over tired feeling;
For the rest of you: band aids (or insert brand name for strips of fix all gauze and medical padding) are a must; and
For the queasy among you: If you suffer from motion sickness, Madame BOOT swears by Travacalm as the means of eliminating the awful green colour that comes over her at the mere mention of the word plane, train, boat or automobile. The ginger stuff like Travel Calm is a waste of money.

In the old days of liquids, gels and aerosols I also used to pack nasal spray and eye drops. This is still possible to do but if you do, I recommend keeping them separate from the other meds so as to maintain the “no need to screen” status of your meds wetpack. I have learnt to live without them.

Please put more recommendations in the comments.

PS – it goes without saying that I am not a doctor, this is not medical advice and you are smart enough to base decisions on what you stick, jab, ingest, eat, spray and more in to your body on more than a random blogger recommendation. In other words go sue somebody else if the above are no good for you.

thanks to Sherlock77 for the photo on Flickr

EveryYou in Germany

timsboot@gmail.com (Tim Hughes) — Sun, 11 Oct 2009 09:57:00 +0000

A German blogger has picked up the EveryYou concept. Here is the post on the Hermann Hohenberger Blog in German and the badly translated by google version called “The End of Target Groups”.

AsiaRooms and LateRooms complete merger of operations - my guess from reading between the lines

timsboot@gmail.com (Tim Hughes) — Sun, 04 Oct 2009 01:47:00 +0000

Here at BOOT central (even while on holidays) we are always on the look out for information about the TUI owned AsiaRooms. After my (relatively) recent interview with AsiaRooms marketing boss John Fearon I started to compile as much info as I could about AsiaRooms as other companies in the TUI Online Destination Services Group including their new push into direct hotel contracing and the commission model. Recent news seems to say that the next piece in the AsiaRooms puzzel is a complete integration with stablemate LateRooms (of Manchester).

I have picked up is more information on executives and team numbers on AsiaRooms care of an update from Siew Hoon at the WebInTravel website called "“Bad boy” no more, AsiaRooms moves to commissionable model". I recommend you read Siew Hoon's interview with LateRooms boss (and therefore AsiaRooms boss) Chris Morris but let me walk you through a highlight from the interview and how it led me to conclude that LateRooms and AsiaRooms are now one.

First to the highlight - we now know the name of person in charge of leading AsiaRooms into the direct to hotel contracting business. According to the interview Kathy Gwinnett will head up contracting as Hotel Relationships Director – B2C Division. She will be backed up by a team of 25 in Asia. Not clear if all contracting staff or have a mixed contracting, database and content role. Also not clear yet where the commission collection group will be run out of. Gwinnett (according to her linkedin profile) is a long term LateRooms employee (8 years) and is Manchester based. Looks like she is heading up a combined AsiaRooms and LateRooms hotel contracting team.

Second to the conclusions - I think this interview makes it very clear that the LateRooms and AsiaRooms business have been fully merged. I draw this conclusion not only from the shared staff members but also from a recent technical glitch at AsiaRooms which resulted in the AsiaRooms website pointing to a LateRooms error message page (c/o the franz). Finally (and conclusively) the sort order results for both LateRooms and AsiaRooms on a search for Singapore are exactly the same. Both have new layouts that but for colours are exactly the same. Means that while we have different brands and site skins, the hotels, ops, tech and execs behind LateRooms and AsiaRooms are likely the same. Means we can expect a very rapid roll out in the new direct to hotel model and further brand integration.

BOOT is on holiday - back around Oct 12

timsboot@gmail.com (Tim Hughes) — Sat, 03 Oct 2009 14:43:00 +0000

I am taking a week off with Madame BOOT and the Anklets in Port Douglas for some beach time, pool time and to help my 3 year old daughter meet her lifetime goal of "seeing a crocodile". See you in a week

thanks to DeusXFlorida for the flickr photo

Seat Review - British Airways World Traveller Plus (Premium Economy)

timsboot@gmail.com (Tim Hughes) — Wed, 30 Sep 2009 09:00:00 +0000

A family emergency sent me to Berlin. The trip back (which was filled with stress and eventually relief) was on British Airways Premium Economy – branded World Traveller Plus. Due to the circumstances of the trip I was not in a good mood. This almost certainly impacted my attitude toward the flight and the product and therefore this review. That said, it is clear that World Traveller Plus (WTP) is closer to economy than business. It is a product a little above economy but well below business. The problem is that the pricing (absent a deal/special) is mid way between Business and Economy. Therefore without a deal or pricing special then WTP is not worth the money - especially if your frequent flyer status already grants you access to premium check in and lounges.

With that background, the BOOT rating for British Airways World Traveller Plus (International Premium Economy) is a 2 stars out of 6 or "Bad Seat". Here is the detailed review (Details and scoring system for airline seat reviews)

Getting on Board	Score 0
Not sure why and it was not a factor associated with World Traveller Plus, but this was the slowest boarding I have every experienced on a 747. BA was using one door rather than two but even so there was an annoying long delaying in boarding and chaos at the gate. It felt at times like a queue for Space Mountain at Disney land, each time I eventually came around a corner I thought that it would be the last one and I would get a glimpse of the door only to be disappointed and realise there was another stretch of the gate and corner to go around. My mood was also a factor due to the nature of the trip but also because Terminal 4 at Heathrow is an abandoned wasteland with construction, closed shops and poor facilities. The BA lounge is sub-par by any measure (against competitors, against other airports and against BA’s other offering in Terminal 5). On board there is no pre-flight drink or other offering from BA in this class. Combined this contributed to me reaching my seat in an even worse mood.
The Seat	Score 0.5
There is a reason why the product of Premium Economy or World Traveller Plus is tied in its definition to the Economy product. The seat is a step above economy but it is not a leap above. Put another way this is not a product that sits in between the Economy Class and Business Class (Club World) products. Instead it is a noticeable but incremental improvement on economy. The extra seven inches of leg room is nice but not transformative. This means that you are more comfortable but is does not make for an ability to sleep for an entire sector (ie 7-8 hours). There were also some very annoying parts to the seat. Something (I think either the VOD unit or lifejacket) was placed under the seat in front in such a way that it impeded my ability to freely put my feet under the seat in front. For someone of my size (185 cm) the foot rest is useless (too high) and the leg rest is meaningless (does not come out far enough) so the benefit of the extra leg room comes from the ability to put my feet under the seat in front. This is not as possible in this BA product as it should be. Also annoying is the location of the Entertainment (VOD) remote control. I had this issue on Qantas economy also. The controller is at thy height in the arm rest. Means that each time I moved my legs, I hit the controller which paused, fast forwarded or otherwise messed up the movie I was watching. In the end had to store the controller in the magazine flap in back of the seat in front which was annoying for me and the passenger next to me when she tried to go to the bathroom.
The Service	Score 0.5
The service provided is attentive, punctual and functional but it is also procedural. That means I felt I was on the staff’s timetable with limited flexibility. I would have liked to have received a little more proactive service such as bringing me more drinks and walking around looking for passengers needing help. The trick to long haul Europe to Australia is to stay awake for the first sector and sleep for the second. That way your longest period of sleep ends with the early morning landing into Australia. This means staying awake for 12-13 hours. To do that I need a lot of support in drinks and other care. I feel there could have been more. I did like the dedicated cabin aspect. Regardless of food, seat and service, having less people fighting for air, toilets and attention is valuable.
The Food	Score 0.0
As with the seat, the food is a step above economy but two or three below business class. It is a one tray service, all packaged and very carbohydrate heavy. The last meal of the trip (breakfast) after 9 hours of flying from Bangkok was a “deli box” – something that should be more at home on a Sydney to Melbourne flight than a meal designed to break a six hour break without food.
The Entertainment	Score 0.5
The Entertainment is solid enough with a fair selection of movies and TV. But BA VOD is a step behind the leaders in this space (Cathay and Singapore). Issues that detract from enjoyment of the system and place it a step below the leaders are: (1) the delay in starting – 15 minutes after seat belt sign is turned off; (2) the location of the controller (see above); and (3) turned off tow soon – 30 minutes before landing.
The BOOT factor	Score 0.5
It my BA Business Class review (Club World) Review I expressed my annoyance that World Traveller Plus is located between door one and two giving WTP passengers a head start off the plane over business class. When in business class this annoyed me. Now I am in WTP, it is a nice bonus. BA’s other WTP twist is their “raid the larder” snack program where business and premium economy passengers can access a mini bar area with drinks, fruit, candy and sandwiches. This used to be one of my favourite parts of the BA premium product experience. But on this flight it was not as good as I remember. It could have been my grumpy mood but it did not look as enticing as previous flights.
Final Score	2.0 - Bad Seat

Details and scoring system for airline seat reviews

thanks to caribb for the photo

WebInTravel: Pre-conference Podcast with the BOOT

timsboot@gmail.com (Tim Hughes) — Tue, 29 Sep 2009 13:16:00 +0000

Only a few weeks to go until the WebInTravel conference in Singapore (Oct 20-23 during ITB). A fifteen minute pre-conference podcast interview of me is now live. You can listen to it here. Themes covered into the interview include

EveryYou and developing a recommendation of one;
Social networking and the panel I am moderating at WIT called "Taming The Social Media Beast";
Three areas of controversy I am expecting to be discussed at WIT on social networking being (1) whether or not there is loyalty in search and social networking (2) whether or not the form of social networking we have now (twitter, facebook) will be the form social networking takes in 5 years time and (3) whether or not you can build a brand through search/social networking;
Major changes in the last year and my predictions for the next year; and
My love of Singaporean chilli crab.

You can listen to the whole interview here.

Tnooz: first BOOT story on Tnooz live on Augmented Reality, EveryYou and more

timsboot@gmail.com (Tim Hughes) — Tue, 29 Sep 2009 13:13:00 +0000

My first story for the new Tnooz site is live called "Augmented Reality, mobile, search and (maybe) getting it wrong". As well as touching on Augmented reality and mobile apps I give even more background and analysis on my emerging EveryYou concept. Read the full story here.

Why travel companies aren't building top global brands

timsboot@gmail.com (Tim Hughes) — Sun, 27 Sep 2009 15:10:00 +0000

Interbrand and BusinessWeek have been publishing a list of the top 100 Global Brands for 9 years now. In preparing the the list for 2009 they have set up a hoop or two that a brand has to get through to be considered a global brand. These require more than just name recognition and sales. The test is that the brand

“must derive at least a third of its earnings from outside its home country, be recognizable beyond its base of customers, and have publicly available marketing and financial data.”

As they say in the BW article, this means a lot of big private or nationally contained companies missed out on the list. That said, in the list of 100 brands (topped again by Coca-Cola) there is not one travel company. I might be being narrow in my definition as the list contains Disney at number 10 and American Express at 22 but these are not pure play travel brands like a major US or Euro carrier (American, United, Continental, BA) or a mega chain (Hilton, Starwood, Marriot). I am trying to figure out why that is and what that it means. Despite travel being (by many measures) the largest industry on the planet and despite what feels like every other advertisement I see being from a travel company, according to Interbrand niche but high profile products like Ferrari (88th) and Moet & Chandon (82nd) are more valuable brands than the long list of travel companies that we could all debate as the biggest brands in travel.

We know that travel brands are well known – by that I mean recognised by consumers in prompted and (more importantly) unprompted awareness tests. We also know that there is a degree of brand loyalty in travel as evidenced by frequent flyer programs and flag carrier love ins. Though the first kind of loyalty (frequent flyer programs) is a “bought” loyalty and the second (flag carrier) is often tied to misplaced jingoistic behaviour. The reason for travel being missing from Interbrand’s list is therefore clearly not a “recognition” factor.

The main test in the BusinessWeek/Interbrand survey is the significance of the “earnings derived from the power of the brand…the brands effect on earnings relative to other…assets”. For the travel brand builders this means that BusinessWeek thinks that these 100 brands get dramatically better sales bumps just from their brands than the equally as well known travel brands. That the recognition and awareness of travel brands does not translate as much into sales assistance as for equally as recognisable non-travel brands.

If this conclusion is right, then we need to think about why this is and whether or not this means that travel companies are worse at marketing than we thought. Or - is there something about travel that makes it harder to build a brand that in tech, fast moving consumer goods and luxury brands (the majority of the list).

In analysing this I turned to thinking about the brand battle between Coca-Cola (ranked 1st) and Pepsi (ranked 23rd). Each throws hundreds of millions of dollars at marketing products with subtle but not extreme differences (much - dare I say - like a lot of travel products). One theory is that the travel consumer is more fickle than the cola consumer (as a proxy for most fast moving consumer good) because they have more options to choose from and given the high cost more reason to change supplier. Clearly there is some loyalty within the travel consumers but I consider it more like a “basket of loyalty” rather than a dedicated loyalty. That is, consumers have a basket or collection of brands in their minds and are open to buying any product in that basket. For example I will fly to Europe on any of Qantas, Cathay, Singapore, BA and Virgin. Sure I have one that I would like to fly more than the others but for a specific trip the decision point between these brands is price and schedule. Which one is cheaper and at the right time. With Coke and Pepsi schedule and price are not issues. There is usually no shortage of supply (schedule) and price is usually equal between the two products. In the case of the luxury brands like Ferrari price is still not an issue as people are not choosing based on price and schedule/supply is not an issue (if you want one and can pay for it they will get you one). The question is then, can a travel brand break out of a consumers “basket” such that it can develop the same psychological hold on a consumer that a cola, luxury or soap brand can. A hold that can overcome the price and schedule/availability advantage that another brand has in the basket.

I can’t think of one and therefore understand why there are no travel brands in Interbrand's list of top 100 global brands. Can you?

Tnooz: The BOOT joins Tnooz contributor team

timsboot@gmail.com (Tim Hughes) — Thu, 24 Sep 2009 23:05:00 +0000

Travel industry journalist and uber blogger Kevin May left Travolution in August with a promise of a swift return to online travel , technology and digital media news and opinion. We now know that he is busily working towards the launch of a Tnooz as the new means for informing the industry on what is and is not worth knowing about. Gene Quinn (Chair of PhoCusWright) is joining Kevin as the Tnooz CEO. Dennis Schaal (another online travel blogging A-lister) has signed on as Tnooz Nth American Correspondent.

Tnooz has also signed up a selection of bloggers and industry commentators to join their global contributor team. This group will prepare original Tnooz commentary and analsys content The BOOT has signed on and is ready for action. Does not mean and end to the BOOT - this will still be the home of my writing and rantings. But it does mean that I will be doing dedicated/unique content for the soon to be launched Tnooz along with other industry commentators such as
Alex Bainbridge
Stephan Ekbergh
Jeremy Head
Troy Thompson
Stephen Joyce
Siew Hoon Yeow
Claud Bernard
Charlie Li

Put your name and email into the fields at Tnooz.com if you want to know when the launch will be. Also ways to follow on facebook, twitter and linkedin

Anklet to the BOOT: "Dadda the world has changed colour"

timsboot@gmail.com (Tim Hughes) — Thu, 24 Sep 2009 00:29:00 +0000

This is what we woke up to in Sydney yesterday morning at dawn care of 100km per hour winds bringing dust from the south west of the state. My daughter (an Anklet in BOOT-speak) stormed into my room to wake me up and share how the world had simply changed colour. In case you don't know the shot is of an iconic but struggling fun pier on Sydney Harbour (think our version of NY's Coney Island).

hat tip to taebeast for the photo and PaddyPlasterer who sent it to me