Holiday break and a little entertainment. Back in early January

Dear BOOT readers,

I am going on holidays early this year. Barring a collapse, buyout or killer email that draws me back to the keyboard I will see you back on the blog around Jan 5 2009.

Merry Christmas, Happy Hanukkah, Seasons Greetings, Happy New Year and best you and yours.

I'm having a blast writing this. Hope you are enjoying reading. See you again in 2009.

In the meantime I am reposting an old favourite which has no relationship at all with the business of online travel.




Tim

Expedia and Travelocity team up (in Asia at least): Zuji is carrying Tripadvisor reviews

Am sure you know by now that Travelocity is operating in Asia under a number of brands including Zuji in Australia, Hong Kong, Singapore, New Zealand and Taiwan. You definitely know that Expedia owns Tripadvisor (though I keep getting search engine travel from people that don't). But did you know that Zuji is now including Tripadvisor branded reviews in their hotel search results. In other words a content sharing deal between a Expedia company and a Travelocity company.

BOOT Link Exchange Policy

The quantity of link requests I am getting is going up by the day. I feel compelled to do a post setting out my link policy. At the very least it will give me something to point to when I reply to link requests. So here is the BOOT link exchange policy.

"I don't due pure link exchanges. Instead I link to sites that I read regularly whether or not they link back to me. I think that is a "purer" way of building blogging and linking communities. You can see from my blog roll there are sites that have not given me links back. Similarly there are sites that have given me links that I don't link back to. If you want to submit a link to me then I promise to take a look at the site and if it joins my list of regularly visited sites then will add to my blog roll and give you a link back"

Best way to get a link out of me is to:

• Give me a link;
• Send me traffic; and
• Have something interesting to say that I want to read again and again.

PhoCusWright Interview: TripWolf CEO Sebastian Heinzel and his relationship with MairDumont

Another very interesting meeting I had in LA at PhoCusWright with TripWolf CEO Sebastian Heinzel. TripWolf is a German based online destination guide, social network and travel planning website. They call themselves a "social travel guide". They have already been generating a some blog buzz (Travolution examples) since their May 2008 beta launch. They have received some funding from i5invest. The part of this conversation I enjoyed the most was hearing about the unique relationship that the online Tripwolf has with the offline publishing powerhouse MairDumont. More on this below.

I have commented before on content sites, including a specific post summarising a series of travel planner sites that participating in the PhoCusWright Innovation Summit.

Tripwolf do a number of the things you would expect from a travel planning and social media site including displaying destination information, providing blogging and UGC systems and allowing travel guide printing. Functionality-wise they have the expected social networking pieces but are still to develop the itinerary aggregation functionality we have seen from players such as TripIt and fellow TechCrunch 50 allum GoPlanit.

Rather they have focused on two elements as their differentiator compared to other trip planning sites. Firstly they are European based. This provides for a different destination focus, greater breadth in language and different consumer pool to fish in.

The second is content and this is where my interest in Tripwolf was particularly engaged. The challenge that a travel planning company has (as I have discussed before) is the need for content and lots of of it. This usually requires time, patience and good marketing as the trip planning site tries to piece together its own editorial content and collect user generated content. Tripwolf has dramatically sped up the time required through a unique relationship with a large content provider - MairDumont. MairDumont (I am told) is the largest publisher of travel guides in Germany (which likely makes them number one in Europe also). It is trite to call them the "Lonely Planet" of Germany because one of MairDumont's many products is to market and translate the German editions of Lonely Planet. I am reliably told that their books, maps and publications are ubiquitous in Germany.

On their own MairDumont have followed an approach we have seen with by companies such as Lonely Planet and Frommers by launching series of sites (8) based on their various publication brands. These have been successful in their own right generating some 240 million page impressions and 36 millions visitors a year (according to Tripwolf's Heinzel).

The interesting part here is that in exchange for equity in Tripwolf and the right to sell advertising on TripWolf, MairDumont have given TripWolf access to the extensive MairDumont library of content. This means access to quality editorial information/content on more than 200,000 destinations in five European languages (press release here). It grants Tripwolf an enormous content head start but threatens MairDumont's tradditional business. This is a very bold move by MairDumont as Tripwolf is now "giving away" the content that MairDumont has been selling in books for 60 years. They are supporting a distribution mechanism that seeks to undermine the traditional publishing business that generated Euro190mm for MairDumont in 2007. Allowing their content to go online through a vehicle they have an interest in, even though it competes with the traditional business is a bold move that deserves our applause. It will cost them book revenue but it recognises that the future of content distribution for travel is going to be beyond the printed page.

Travel industry copying the appliance industry: American Airlines Fly Now / Pay Later

I have written before about how travel is competing with appliance retail for the consumers dollar. In one post I quoted a report from Tourism Research Australia that said as much. In that post we saw evidence of JetStar (AU low cost carrier owned by Qantas) trying to fight this trend with a promotion tied to prizes from a white goods and appliance retailer.

Thanks to an email from an equity research analyst I have become aware of another airline's efforts in this retail battle. Below is a shot from the American Airlines site with a very common appliance store tactic of buy now pay later. In the case of American Airlines they are offering Fly Now Pay Later with six months interest free.



There are restrictions here. Firstly it applies to air only (ie the areas on directly under American's control). The consumer has to apply for an AA credit card, combining financing with credit card customer acquisition. Most outrageously if the amount is not paid in full within six months interest is accrued and back dated at a Mafia like level of 25.96%.

The execution and interest rate may be bordering of scandalous but I expect this to be the first of many appliance retailer like activities from travel suppliers and online agents. Even in these times of credit crunches there is just too much money in financing, extended warranties (insurance) and flexirent style products for margin pressured suppliers to resist the lure of appliance retailer practices. The BOOT will be tracking and posting on these as I see them. If you spot some let me know.

PhoCusWright interview: Talking with Tina Fitch of EzRez about how airlines can improve their online offering

I am finally finding time to write the follow up posts from PhocCusWright in LA. This post also ties back to a story I wrote in May 2007 called “Helping Airlines Stay On Top”. Also one a few months later when EasyJet announced a complete revamp of its website – becoming the first of the low cost carriers to do integrated (read seamless) land and air cross sell and packaging.

I was reminded of these two stories during my meeting at PhoCusWright with Tina Fitch the President and CEO of EzRez. As you probably know EzRez is a provider of web based reservation and distribution services. This includes a mechanism for allowing travel distribution companies (including suppliers) to build multi-product (air, land etc) engines with cross sell and packaging. Effectively allowing a supplier/airline to look like an OTA.

This took me back to my earlier posts because in them I proposed three things that an online supplier (namely airline) should do to increase their online presence. I have updated this list from the earlier post. Here are my three recommendations to an airline:

1. Cross Sell Complementary Product - Properly: Advising an airline to sell complementary land product is the easy part. The twist in this advice is they should not do it through through a simple white label and link on the home page that says "book hotels". It is another mistake to simply to bring online the offline holiday or vacation division of the airline (like what Qantas have tried with what used to be known as ReadyRooms). Instead they need to invest in being a true online hotel (land) business. One that lives by the principles and processes that have made the hotel only players successful - hotel flexibility in rates and availability, product focus and online product managers living and breathing their channel. Leaving it to the holiday division means that the hotel contracting style and results mirrors the less flexible world of wholesale. This does not produce the inventory and pricing you need to beat the hotel only players. Just as important you need to match the big OTAs in putting cross sell in the purchase path through both dynamic packaging and shopping basket style. Both of these things mean investing seriously in the complementary product. It will likely involve a third party inventory provider but for maximum effectiveness needs more than a link to a white label;
2. Give Customer rewards and enticements beyond price: Web only deals and lots of them drove customers to Airline websites but with the OTAs and meta-search now using API connections and screen-scraping to provide customers with the same inventory, the airlines need to expand their offering to customers. They should use content, loyalty concepts/miles, customer service and bonuses (all the stuff that OTAs do) to open up another front in retaining customers. I talked about this in relation to how BA brought their Highlife magazine online. When using content to retain consumers, Airlines should seek to drive loyalty through building community, building brand and linking all elements to the customer experience not just to drive traffic and generate advertising revenue ; and
3. Apply focused channel management and structure: Stop treating the online channel as...well...just another channel. Make it a separate business in itself. Put the person in charge, truly in charge such that they never have to enter into a debate over cannibalisation of other channels. Turn the site into a business that is independent of the airline's other sales activities.

Tina's EzRez is building a business around helping Airlines with these recommendations. Her company's pitch is that their software as a solution (SaaS) products can provide the functionality and connections needed to drive the architecture and inventory. With clients such as AA Vacations where they are hoping to prove it. She believes a SaaS provider like EzRez can invest more in technology (than an airline), can go behind the scenes at the airline (unlike an OTA) and can build on top to customise for areas such as miles/points.

I see a very interesting battle emerging between companies like EzRez approaching this market from the SaaS angle, the OTAs with customisable white label solution and now XML feeds and black box connectivity style companies such as TopDog. The winner will determined by whether or not players like EzRez can keep up with the technology strength of the OTAs (with their deeper pockets and larger technology teams) and can stay ahead with interoperability capabilities ( I have also mentioned these challenges before).

Gift Disclosure Tina was kind enough to give me a t-shirt during our interview.

What the hell does Recombobulation mean? Maybe the TSA can help?

This sign was spotted at Milwaukee's Mitchell International Airport. It is the place passengers go after the security check to put their belt and shoes on and reassemble computers and toiletry packs. I tried to search around for the definition of Recombolutation. This was a typical response online

That is - it is a made up word. Trying to figure it out I came across "Combobulate" which is (according to definition-of.com)

To put together in a somewhat mysterious manner. To bring something out of a state of confusion or disarray. To manufacture by some unusual or novel means. Antonym: discombobulate.

So drawing on my very poor high school grammatical training it is very nice of the Transport Safety Authority (TSA) to provide people with a place for Recombobulation or the

"putting back together of personal items in a somewhat mysterious manner"

Not sure if helping people do things in a mysterious manner should be hallmark of TSA service but then I am not the professional in this area. I am just thrilled to be able to add the word recombobulation to my list of techorati tags.

UPDATE - Looks like it was the airport not the TSA that put up the sign. Here is what the photographer "lark is already taken" had this to say about the photo in an exchange with me

"FWIW I had the impression that the airport put up the sign, not the TSA. Perhaps the airport is expressing an opinion on the whole screening process.."

Hat tip to Consumerist for the story and lark is already taken for the photo

UPDATE 2 - More fame and recognition for Milwaukee. The American Dialect Society has voted "Recombobulation" as the most creative word of 2008. To complete the story - the winner of the "word of the year" was "Bail Out" with runners up including "lipstick on a pig" and "change". Thanks to Steve Sherlock at Oodles who sent me the link.

Qantas and British Airways merger means bringing the pacific pain to the Kangaroo Route

Story on CNN that BA is in talks with Qantas over a merger (thanks to iKangaroo on twitter where I spotted the story).

I hate this idea.

Right now Qantas is gouging me and every other customer on the Pacific Route (East Coast Australia to West coast USA). Qantas earns 40% more revenue per passenger kilometre on that route than the Kangaroo route because...they can. And they "can" because there is no competition. The only "competitor" (if you can call it that) is United. The US and Australian governments have restricted who can fly this route - ensuring profit good times for Qantas and high prices for me. There are possible long way round options with Canadian and Hawaiian Airlines but the routings and timings are terrible. V-Australia (Virgin Blue's long haul play) is due on the route in Feb 2009 but there is only limited capacity improvements expected and how they will connect out of LA to other US destinations is not clear. Basically Qantas own this route and take advantages of customers because of it.

I ranted about this a lot in a recent post - "Open Skies between the US and Australia: There is no one I don't hate right now".

Currently we (travelling consumers) have been spared this gouging on the Kangaroo Route (Australia to UK/Europe and a Qantas Trade mark) because more than thirty carriers fly this route in addition to BA and Qantas from the well respected - Singapore, Cathay, Emirates, Virgin-Atlantic, Etihad, to the mid ranges - Malaysian and Thai, to the micro and niche - AirAustral, to the "no way in hell would I get on it" - Garuda.

But the UK and AU governments let BA and Qantas enter into a "Joint Services Agreement(JSA)" in 1995 allowing them to

"coordinate scheduling, marketing, sales, freight and customer service activities"

In other words to engage in behaviour that otherwise would be anti-competitive. When accused of this BA and Qantas point to the above facts - that 30+ carriers fly the route as proof that competition continues. However since the JSA was signed the following airlines have pulled out of the route - KLM, Alitalia, Air France, Lufthansa, Lauda Air, Austrian Air. Do you see a common theme? In fact there is now not one Continental European carrier flying the route. Not one. All have been forced to pull out because of the scheduling and marketing collusion of BA and Qantas under the JSA (OK..maybe in the case of Alitalia there have been other causes).

I have a (legitimate) concern that a merged BA and Qantas will have further competition consequences and help Qantas to extend their Pacific gouging to the Kangaroo route. If the government is listening please squash this. Then again it is the AU government(s) that allowed the JSA and Pacific Route dominance to continue.

Update - Delta have announced they will fly the route around July 2009. The Cranky Flier has written a post showing what this means in terms of flight schedules across the Pacific.

Australians at PhoCusWright - ekit and viator

Photograph of an Australian group at the recent PhoCusWright Conference in LA. From left to right John Diamond CEO of international mobile phone card, SIM and geo-location services company eKit, Tim Hughes (me) and Rod Cuthbert Executive Chairman of destination services company Viator. Am grateful to Rod as it was through his introduction of me to Philip Wolf of PhoCusWright that I managed to get a blogger ticket to PhoCusWright.

The war on Mumbai, the rescue of my family and the re-writing of the media rules care of Twitter

I have been quiet for the last week on the blog. You could be forgiven for thinking that this was a come down from the activity of PhoCusWright in LA the week before. But actually it has been because my family has been directly caught up in the Mumbai horror that dominated last week. My wife’s cousin and her family (husband and six month old daughter) were long term residents of the Trident Oberoi hotel in Mumbai. The husband was the head chef at the Italian restaurant that was part of this five star property. He was evacuated immediately after the terrorists stormed the hotel but my cousin (in-law) and her infant daughter were trapped in the hotel for more than thirty-six hours as they hid from the terrorists with little to no food or fresh water. The husband managed to sneak back into the hotel at around the thirty hour mark with food and water but it was not until late Friday afternoon Sydney time (around midday local time) that the whole family was liberated. Not surprisingly photos of a young a family escaping the horror dominated a lot of the online and offline press – particularly in their native Italy (click on links for photo).

I share this with you for a few reasons. Terror attacks of this kind will impact all of us in the travel business – particularly in Asia. As an industry we have lost colleagues and friends. Additionally this was a very personal experience for me as I a was filled with worry for nearly two days culminating in the incredible feeling of joy at their survival – held in check by the sadness of the loss of so many others.

It was also a very powerful experience to live this moment in real time with the changing media tools at our disposal. The second I heard they were trapped (early morning Sydney time), I fell into an old habit, immediately switched on BBC world and sat on the couch alternating between that and CNN. Then new world instincts took over. I started by having multiple tabs focused on different online news sites – BBC.co.uk, CNN, Nytimes. But they did not time stamp their updates very effectively. It was hard to know how old (read out of date) a particular story was.

By the end of the second day I had my eyes glued to Twitter under the search tag #mumbai and more generally searching Twitter for any mention on the word Oberoi. Towards the end of the siege these twitter feeds updated themselves with nearly a tweet a second. People from all around the world were tweeting with the important ("am watching pictures of commandos storming the hotel"), the emotional ("thoughts are with all those in Mumbai"), the practical ("here is the direct line to the Oberoi Mumbai staff"), the wishful ("heard a rumour that it was all over, is that true?") and of course the useless ("here is a link to [an unrelated] video"). Meanwhile my other screen was alternating between live web streaming of NDTV (local news) and CNN-IBN (CNN’s partnership in India). Live professional feeds on one screen and live citizens on the other.

This kept me so up to date that I actually saw the live footage (as it happened) of my cousin and her family stepping out of the hotel and towards the buses. My cheers of glee brought work colleagues rushing into my office as I jabbed at the screen screaming “That’s them!!! That’s them!!!”.

This combination kept me as close as possible to the action. Almost certainly closer than if I had actually been there on the ground as I could see, hear and track the events from multiple angles. There was also an amazing human side to the Twitter feed experience. As I posted more and more questions, thoughts and updates to Twitter in the search for “and Italian national and her infant”, more and more people tweeted back with support, tips, thoughts and just plain human to human contact. Some I knew, very many I did not. It was an amazing experience but not a perfect one. At the height of things the Twitter feed was completely unmanageable. Too much information steaming too fast and none of it verifiable. People would state any rumour as fact, which would then we re-tweeted at the speed of light and build up a momentum of its own. One person Tweeted “Indian government to shut down Twitter feed because of security concerns”. Within moments this had become “Twitter law” and reappeared every 15-20 mins without fail. At no point was it supported by a source or any basis for confirmation. Real time Twitter reporting of an event like this is clearly flawed and over-whelming but it is a view into a dramatic change in how events will be reported.

Without a doubt the Mumbai horrors have shown us a real time information world unlike any before it. We will now see and watch the world unfold from multiple angles and the lines between professional media and the people on the street are not just blurred they are eliminated.

[photo is of the Vetro restaurant at the Oberoi Mumbai where my relative was head chef]