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

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

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)

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)

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

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

1. "by and large waiting times at immigration are not that onerous"; and
2. '"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

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

1. the long tail theory is now 5 years old. That is "decades" in Internet years. It is time for a rethink;
2. we now have access to effectively unlimited computational power (technology change);
3. 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
   
4. 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

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:

1. 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;
2. 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
3. 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:

1. 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;
   
2. 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
   
3. 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