Speedometer moment: BOOT 250k Page Views, 150k visitors

Please excuse the vanity post. The photo is a shot of my sitemeter report with 250,000 page views and 150,000 visits since launch.

Yes - I know I should move to Google analytics. I am working on a new template, move to wordpress, new URL and more. With that will move analytics also

Future of design, games, loyalty and chips in your head

Not directly travel related but great presentation/video in the below embedded player. Carnegie Mellon University Professor, Jesse Schell, dives into a world of game development which will emerge from the popular "Facebook Games" era. Thanks to G4TV. 20 mins long but well worth it for the content and how to give a presentation using powerpoint (pictures not words)

PC Games - E3 2010 - Guitar Hero 5

Agoda in Priceline Q1 2010 earnings call

I have to let the stalker in me control the blog every now and then. Hence my continued series of posts where I look through the Priceline earnings announcements to find mentions and information on their Agoda subsidiary. The Agoda turnover information void was substantially filled by a recent Citigroup report but I am still interested in the (tiny) pieces of information I can gather on Agoda's performance.

Two things I am keeping an ear/eye out for in Agoda/Priceline announcements/transcripts (thanks to Morning Star for the Q1 2010 transcript). Firstly general information on performance and secondly anything on integration of inventory between the three models (opaque of Priceline, negotiated retail of Booking.com and merchant of Agoda). Here is what the transcript has on those questions.

On performance

On general performance CEO Jeffrey Boyd made a number of positive comments on Agoda’s performance. Saying that Agoda and year on year improvements in ADR were strong contributors to the 73% increase in international gross bookings growth (on a local currency basis). Agoda’s growth now seems to be having enough of an impact to shift the overall retail/merchant model mix. In this area Boyd said.

"Merchant gross bookings increased 25% as merchant hotel gross bookings both at priceline and Agoda offset year-over-year decreases in opaque airline ticket and rental car sales, where reduced industry capacity squeezed inventory available for opaque discounting."

But the future is not without challenge or risk – as we should expect for a business based in Thailand. As Boyd observed

"...civil unrest has reemerged in Thailand, severely disrupting certain sections of Bangkok and forcing Agoda’s team to relocate to temporary offices. As a result, business for Bangkok and other Thai destinations is under pressure for both Agoda and Booking.com. Nevertheless, both businesses continue to grow their overall Asian pacific businesses at impressive rates."

During the Q&A Mark Mahaney of Citigroup (author of the Agoda turnover report). Asked Boyd to give some more details on the Asian business. Here is the exchange edited to focus only on the Asia elements:

“Mahaney: ...could you comment a little bit more on the Asia business, particularly the Agoda asset? In the past, you’ve said that’s been growing close to triple digits year-over-year. Were the disruptions in the March quarter significant enough to take that growth rate materially below that level?

Boyd: With respect to Asia and Agoda... the disruptions had a very significant impact on business for Bangkok and Thai destinations. And while I don’t want to give a specific growth rate for Agoda, their business notwithstanding those disruptions are still growing at a faster rate than our overall business ...I’ll also add that the Booking.com business is growing, again..at impressive rates in Asia. So, Thailand is certainly having an impact, but the business is diverse within the region and the region is having very strong growth for us just in general”

On Inventory integration

He was then asked about the integration of inventory between the different brands. Boyd is still not giving away much here. It is clear that we have seen and can expect to see Booking and Agoda inventory appear on both sites but is not clear from his comments whether we can expect to see merchant and negotiated retail seamlessly integrated in the way that Expedia has started to do with its merchant and Venere backed Expedia “EasyManage” hotels. Here is that exchange (edited for focus on integration).

"James Cakmak - Sidoti & Company: Can you talk about the progress made on sharing supply inventory across your multiple brands and sites?

Boyd: With respect to sharing supply, we now have on priceline.com, Booking.com inventory available not only in Europe, but also in North America and Agoda has been selling for several quarters inventory of Booking.com to its customers in Asia. I think that we’ve made very good progress in getting that integration up and running, and we believe it’s been additive to the business. The next phase of that is really one of optimization to make sure that we’re able to display the inventory in a way that is additive to the Group as a whole and understand the relationships between how various inventory performs in different marketing channels. It’s not a trivial exercise, but in our view we’ve got plenty of time to get it just right, because as we optimize over time it will be beneficial to our results. So we’re encouraged by our progress on that front, but there is plenty of work left to do in that regard.”

Five star weekend and at $5 cappuccino

I enjoyed an amazing night this weekend at the Observatory Hotel in Sydney. One of my favourite five star hotels in Sydney. There is a lot to remember about a stay at this great hotel - see my previous review for highlights. Sometimes it is the little things that are the best. The photo attached with this post is the over-the-top but smile generating efforts that the Observatory barista goes to in making their $5 cap a memorable experience. Well worth it. And the winner is....

Overhead at Eyefortravel TDS – social media stole my conference

The word social media appeared nowhere in the title for Eyefortravel’s Trave Distribution Summit Asia (they have other conferences that do) but it was the number one topic from presenters on April 29 in Singapore.

In my keynote, I spoke about the rise of transactional questions on Facebook and Twitter. I highlighted a number of examples of consumers using twitter and Facebook to ask questions that are begging for advertisers to provide answers. Opening up social search as a real competitor for Google. Sharat Dhall of Tripadvisor spoke of the never ending flood of user reviews/photos and hotelier responses. Particularly of interest in his presentation was the launch of TripWow and how Tripadvisor is expanding their insatiable lust for content from text to photos. Joe Nguyen of comScore showed the numbers with a left to right sharp incline for Facebook travel stats. Starwood spoke of having 1 million mentions in social media in 2 weeks (though many of us weren’t sure the numbers were right). Brett Henry of Abacus called Foursquare and Gowalla as the future must watch emerging businesses. Morris Sim of Circos Brand Karma told a story of a 4000% ROI on a social media marketing campaign (though admitted that scaling it was extraordinarily hard). Aloke Bajpai of ixiGo spoke of the future of apps and mobile as social devices – as soon as someone launches a more advanced mechanism for app search and discover. Even speakers that started by expressing concern that the conference had become dominated by social media talk ended up talking non stop about the user forums on their site.

It turned me to thinking about whether or not it was fair to hijack the conference and talk so much on this one area of consumer interaction and marketing. On one level it is understandable given that social networking sites are generating the most traffic, buzz, funding and consumer attention. But (as I said in my keynote) we cannot allow ourselves to get caught up in excitement and forget that the number one online battle ground for transactions is still on Google/Yahoo/Baidu/Naver etc. We must get engaged in social networking and content but cannot take our eye, money and talent off the traditional search battleground. My tip for social media was to focus on data, content and customer monitoring first them look to transactions in social media in a year or two (or three). For more on my thoughts see my post ad:tech thoughts here.

Some of the hoteliers in attendance may have felt disappointed that they did not hear more about how to rank on Google, spend on banners effectively, sign up with OTAs, manage content and improve SEO performance. This is was not a conference for talking about what to do now in the places that generate traffic and business. This was a conference for thinking about what was next – where we talked about how to engage with an audience that wants to talk to you and be with you online.

Attendance was solid in terms of numbers with a majority hoteliers, then online agents then technology and service providers. I have been noticing more and more that airlines have all but stopped turning up to online specific conference, limiting themselves to airline specific ones. On the format, eyefortravel are pulling good quality speakers but it is time to do away with the 3x15+QA format. That is the format where each session has three speakers giving a 15 minute presentation each followed by panel Q&A. Conferences like this need less power point and more QA and interview formats. Moving the format away from collective presentations to interview and panels will reduce the sales pitching that continues to creep (and sometimes storm) in and increase the speed at which the conversation gets to the interesting analysis.

Finally snaps to Don Birch who was a great chair. Insightful questions and summaries.

Jump On It raises $1.3 million, joins group coupon war and is targeting $15-20mm in revenue per year

An idea poached from a US mega star star-tup, a business plan and a history of building and selling companies are the pieces that Colin Fabig put together to raise $1.3mm to launch Australian based Groupon clone “Jump On It”.

A press release hit my inbox announcing the raising by Jump On It and caught my interest because I have been thinking a lot recently about the group coupon model boom and how it might impact online travel. Not just because the barely 16 month old Groupon raised money at a valuation of $1.2/1.3b, not just because Jump On In is joining Spreets and Scoopon in the Australian group coupon push and not just because between Groupon, Living Social and BuyWithMe have raised a combined $225mm and counting. Though those are reason enough. The reason is that I am interested is that between the buzz around group coupon systems and zing around the private sale companies like Jetsetter and VoyagePrive I am wondering if there is something new happening in travel and activity distribution. Wondering if we are starting to see another piece in the move toward the deal targeting and recommendation systems we have been talking about here at the BOOT.

On the business model

Jump On It is running a typical group coupon/Groupon model. In case you don’t know the group coupon business model, it involves a retailer/advertiser offering a discounted product or service via a voucher. Consumers sign up to buy the discounted product or service. But there is a minimum sell order/threshold that as to be met before a voucher can be issued. For example a restaurant offers $100 worth of food and drink for $50 so long as 50 people take up the offer. The deal is normally time limited (maybe also the voucher). The marketing company (Groupon/Jump On It/etc) takes the credit card number up front but only charge the card when the participation threshold is met. Usually one deal per city/area is offered per day. Jump On It makes money by charging the retailer a booking fee (built into the voucher price). Fabig admitted that the booking fee may be the whole amount of the voucher meaning that the retailer sometimes makes no money on the voucher – seeing the whole process as a customer acquisition tool.

On raising funds

It is impressive that Fabig and partners Adam Rigby and James Gilbert managed to raise a sizeable angle sum by Australian standards off the back of a business plan and CVs - with no product live. Money came via investment house/deal shop Nextec and from serial Australian investors Roger Allen and TotalTravel founder Malcolm Baker (NB Yahoo bought TotalTravel in 2009)

On competition

Fabig is not worried about the competition from US companies that might enter or the AU players that have already started. He is convinced that the successful coupon players will be those that only offer one deal a day per city not a mass of deals. Means that he sees room for 3 or 4 players to be successful. The Americans don’t worry him. He believes they are a while away from caring about the Australian market by which time Jump On It will have established a foothold.

One of the companies vying to be one of "2-3 players" is Spreets.com.au. Spreets CEO Dean McEvoy is looking forward to battle with Jump On It. “Game On!” McEvoy said in our chat. Spreets has closed a round of it's own (amount undisclosed) and is glad to hear that Jump On It is also in the market as it “keeps you sharp and validates the opportunity”.

On marketing and using Facebook to kick off the business

Fabig sees the challenge in growing the business as a marketing and execution one, not a technology one. He says that the technology is not complicated. Success it is about executing well, building the viral audience. They have been very active in using Facebook as a customer recruitment tool, starting well before the launch. In an impressive display of social media marketing they set up a series of city fan pages (ie I [heart] Sydney]) and claim to have attracted 100,000 fans to use as the initial marketing database.

On scale

The biggest challenge I see is scale. Targeting 1 deal a day per city and focusing on Australia (and maybe NZ) means a target deal market of 10 maybe 12 deals per day (assume six cities in AU, four in NZ, maybe two regionals in Australia or splitting Melbourne or Sydney into two). Groupon is in a market where 72 million people live in the top 200 largest cities (2004 data). Fabig is not worried about this, believing that even with a market of just 10 cities he can build scale and a business generating $15-20 million in revenue per year.

My take

If the US can do it, then no reason Australia can’t. Viral and marketing will be a challenge but nothing that good execution can't fix. The challenge will be scale. Making a one deal a day per city business big enough in a market with so few cities.

Want to read more

If you want to read more on this model I suggest the following posts

1. SmartCompany: Venture capital veteran Roger Allen invests in Australian coupon site

2. TechCrunch: A TC Teardown: What Makes Groupon Tick

3. TechCrunch: Interview with Groupon CEO Andrew Mason

thanks to bixentro's for the photo via flickr

Tnooz: Four types of non-destination based search and what it means for online travel

Just live over at Tnooz.com is a post by me titled "Four types of non-destination based search and what it means for online travel". In it I look into the new approaches to online travel search and boo king coming from a variety of start ups including Gliider, Joobili, Triporati, TripIt, Traxo, Jetsetter, BonVoyou and many more. From the post and interesting discussion has started in the comments on the future of search. Check it out here