TRAVEL TRENDS - INCORPORATING TRAVELTECH AND NOVACANCY
14 May, 2008, 0:34:01 PM
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Events
BOOKINGS open for TRAVELtech, Australia's leading online travel marketing, distribution and tech event, in the first week of June. The theme for 2008 is - The Year of Living Dangerously? Curious? More will be revealed soon. As always, TRAVELtech will focus on the latest online travel marketing and web-based innovations. There'll be presentations, panels, case studies, disagreements, large statements, small statements, debate and perhaps a little controversy. More than anything, it will be a day when Australia's online travel industry can get together, compare notes, challenge new ideas and forge fresh alliances. TRAVELtech was founded in 1999 and is Australia's benchmark online travel marketing and distribution conference - more than 300 delegates attended last year. It has a well-established reputation for delivering relevant, high-quality content and excellent networking. If you have any questions, suggestions or would like to sponsor, please call Martin Kelly on (612) 9882-1575. Please visit the TRAVELtech photo gallery to see some photographs from the 2007 event. And don't forget to mark 26 August, 2008, in your diary.
INFORMATIVE, educational, provocative and sometimes controversial, Search Engine Room is the leading event for Australasia's rapidly-growing search industry. Founded in 2004, Search Engine Room is locally owned and operated. It's held annually in Australia and New Zealand, attracting widespread industry support, and has a reputation for quality content, excellent event management and staging. The program focus is on respected, well-connected speakers delivering topical, relevant information. Search engine optimisation and marketing is well-covered, while broader industry issues are also addressed through interviews with leading search industry figures. There are case studies and debates, plus panels led by informed journos. Audience interaction is encouraged and Search Engine Room always makes an effort to be forward-looking, tracking the latest search and digital trends. Consumers are also given the once-over, enabling delegates to gain a better understanding of their customers. This format has great appeal and delegates come from around the country. Apart from search marketers, marketing managers, e-commerce managers, online business owners, senior management, digital media executives and agency types predominate. Companies large and small from diverse industries are represented, including travel. Some have been in the game for years, others are just starting out. If all this sounds interesting, and may like to attend a Search Engine Room conference, please mark the following dates in your diary.
A good way of keeping in touch is to subscribe to Search Engine Room News, which is packed with original content and comes out every five or so weeks. If you have any questions, please call Martin Kelly on 612-9882-1575.
A RECORD crowd attended the second No Vacancy acommodation industry conference in Sydney recently. It was a great day featuring industry leaders, panels, case studies, presentations and debate. There was a touch of controversy with hard questions asked - and answered. Program topics included online distribution, consumer trends, channel and yield management, carbon offsetting, star ratings, modern marketing tactics, pricing, social media strategies and plenty more. No Vacancy will return in 2009 - please sign up for the TravelTrends.biz newsletter if you'd like further details. |
Online Travel Lessons From Uncle Sam
By Martin Kelly, Editor Travel Trends YOU’VE all heard about the US recession, the one that’s looming and will arrive some day this century. Meanwhile, they’ll just have to make do with a housing crisis that has sent prices crashing across the country. Hmm, sound familiar, well it certainly did to me so thought I’d see what impact all this brouhaha is having on the US online travel industry and whether there are lessons for their Australian counterparts. Conveniently, three of the major online players – Expedia, Priceline and Orbitz - have just announced their results (which you can read below). And the news is generally pretty good, better than many had forecast, though it must be said these companies are evolving into international conglomerates and that overseas earnings are in some cases balancing flat local results. But – and here’s the thing – well-run and aggressively marketed online businesses such as Priceline and Expedia are continuing to do well at home while enjoying the benefits of international diversification. Americans are also continuing to travel despite perceived economic hardship. The key learnings for Australian online travel businesses appear to be: have a simple, keenly priced offer aligned with easy-to-use technology and market, market, market. Travel Trends: May 14, 2008 Expedia To Crack US$1 billion Marketing Barrier
By Martin Kelly, Editor, Travel Trends EXPEDIA will spend more than US$1 billion on sales and marketing in 2008 as the global online travel giant moves to capitalise on the strong sales momentum it has generated over the past 18 months. The company is now spending more than 40% of its revenue on sales and marketing - US$283.4m in the first quarter alone … 29% more than the previous year. This makes sales and marketing by far the major cost for Expedia – general and administrative costs come in at 11% of revenue while technology and content consumes 7%. CEO Dara Khosrowshahi said Expedia – which has just reported a first quarter net profit of US$51.3m (up 48% year on year) - will continue turning up the marketing volume. Most of the sales and marketing budget is spent on “traffic generation costs from search engines, brand advertising (primarily television) our private label and affiliate programs". HotelClub Bright Light In Dark Days at Orbitz
By Martin Kelly, Editor, Travel Trends Australian-based accommodation booker HotelClub has emerged as a rare bright light for the struggling Orbitz online business, which is losing money at an increasing rate - US$15m in the first quarter 2008 compared with US$10m for the same period in 2007. However, HotelClub, which also operates the RatesToGo website, increased gross bookings by 31% over the previous year to US$102m, and did particularly well in in Australia with 55% growth. Japan was also strong. Orbitz is a stock market play 48% owned by Travelport, the travel conglomerate created by venture capitalists The Blackstone Group. Since listing, Orbitz, which was saddled with an awful lot of debt, has been a failure on just about every level, though it does own a decent business or two, and has even managed to under-perform the initial low expectations. Investors who bought the stock have been hammered – it’s now trading slightly above US$7 after listing for more than US$14 last year. Apart from HotelClub it also owns ebookers, Orbitz.com and cheaptickets.com. Travel Trends: May 12, 2008 Priceline Charges Less To Make More
LOW cost positioning in times of financial stress has helped Priceline.com – which features both set pricing and an auction system - record spectacular year-on-year growth for the March quarter. Gross bookings for the US-based company increased 76% while net profit was up 76% to US$37.3m. Its international businesses played a major role in the result with both Booking.com (Europe) and Agoda.com (Asia) performing strongly. “With economic pressures mounting as we entered 2008, we believe that our money-saving ‘Name Your Own Price’ services and our value brand positioning made priceline.com attractive to budget-conscious travellers,” said Priceline.com President and Chief Executive Officer Jeffery H. Boyd. New Name and Website for Travel Search Engine
THE travel search engine formerly known as Bezurk - which News Digital Media recently invested in - has changed its name to Wego.com. It’s also launched a website with improved functionality and search capability. New features include inclusive pricing on airfares and hotels, specific business and first class airline search and a travel research section. CEO Martin Symes said the Bezurk brand had weaknesses. “It was quirky, fun and had a certain irreverence … but it was also hard to remember and spell, particularly if English was not your native language,” he said. “We wanted a new brand and domain name that was easy to recall, type and readily associated with travel.” Symes said Wego.com will launch localised, multi-lingual country sites over the next few month to ensure greater relevance for Asian travellers. Travel Trends: May 12, 2008 Americans Flee Looming Recession
By Martin Kelly, Editor, Travel Trends IN a surprising twist – one that may foreshadow local trends – major United States travel companies are reporting increased demand for international travel despite the ever-looming recession (one day, it will come). But travel patterns are changing as dollar-poor American abandon traditional high-cost Euro haunts and seek value-for-money destinations. They are also taking shorter holidays and buying more all-inclusive package holidays. "I have heard a lot of grumbling about the U.S. dollar, but it is not stopping them - travel has become a lifestyle," Pam Edwartoski from Carlson Wagonlit told USA Today. Amy Ziff of Travelocity added: "More people are travelling, but where they're going is different." NEWS DROPPINGS...HEARD IT ON THE RADIO: Online bookings for Choice Hotels have increased by 58% over the past 12 months, the company says. Meanwhile, a $700,000 radio campaign over the past three weeks has boosted site visitor numbers by 20%. Marketing Manager Mardi Brown says the campaign, where people enter an online competition, has also resulted in more than 1000 new website subscriptions. Travel Trends: May 14, 2008 WATCH ME PULL A RABBIT OUT OF MY HAT: Web travel planning system Cadabra.com is looking for international partners. The NZ based company has developed what it claims is world-first itinerary-building software. Founder Graeme Frost says Cadabra provides a powerful platform on which partners can quickly deploy an online destination site. Cadabra is focussed on multi-destination touring style holidays. Frost says the model hs been proven in the NZ market with NZ$2m in bookings taken over the first two months and can now be scaled internationally. Travel Trends, May 14, 2008 Expedia Slashes Australian Commission Rate
By Martin Kelly, Editor, Travel Trends EXPEDIA is slashing its commission rate from 25% to 10% for local suppliers on bookings made within 28 days on its Australian website. The Expedia rate will stay at 25% for all other bookings. It’s a major strategic shift for Expedia, which has faced resistance from Australian accommodation owners, who are paying market leader Wotif.com 10% commission for much higher volumes. The issue was brought to a head last year when the region’s largest hotelier, Accor Asia Pacific, pulled most of its brands except for high-rate Sofitel from Expedia, citing high commission as the issue. At this stage Expedia’s commission cuts only apply to its activities in the Australian market. The move was flagged by several industry players on both the supply and distribution side at the No Vacancy conference last week. Distribution costs are a major issue in the bullish Australian accommodation market. Rachel Argaman, Chief Operating Officer of Toga Hospitality, told delegates that the group refuses to pay more than 10% commission. “If a contract comes across my desk and it has a different figure I cross it out, write in 10%, sign it and send it back,” she said. Her stance was reiterated throughout the day by a wide range of suppliers. Travel Trends: April 23, 2008 Small On Space, Big On Attitude - So What?
By Martin Kelly, Editor, Travel Trends IF passion was petrol, Nick McCaw would be on the moon right now. Instead, he remains on planet earth as the driving force behind Hotel SO, a budget hotel brand that has just launched with a single property in occasionally hip Christchurch, New Zealand. But that won’t be the case for long, the Blackberry addicted McCaw, who has embraced multi-tasking as a religion, told the No Vacancy conference in Sydney last week. The plan is to take Hotel SO to the world, and Australia is first in line. The concept is small high-quality rooms (11sqm in some cases) costing from just $NZ69 packed with comfy beds and the latest technology such as 26 inch LCD televisions. There’s also free wireless internet throughout the 283 room (134 of which don’t have a window) property plus a café, gym etc. Great facilities, low price – get it! Sleepy or not, Hotel SO has shaken up the Christchurch hotel market. During March its occupancy was 92.8% compared with the city average of 75.5%, the average rate was NZ$82 (NZ$153.76 city average), 52% of bookings through the Internet, and 21% of all bookings from own website. He is also claiming room operating costs are 38% less than the average in an industry he described as “big, old, slow and lazy” with the total cost of having a room occupied just NZ$20. Spectacular Growth of Online Accommodation Bookings ContinuesThe spectacular growth of Australian online accommodation bookings showed no signs of slowing over the past year with the Internet moving into the mainstream as the sector’s major distribution channel. Major suppliers and owners say the Internet provides more than 20% of overall business – an increasing proportion of it direct - while big online distributors such as Australian Online Travel also report excellent growth over the past 12 months. But there are variations - Shannon Knapp from Mirvac said some properties can sell 40% of rooms through the web while others do less than 10%. James Merchant, Director of Revenue, Pacific Region, Accor AP, said the company is doing 25% of its local business online, compared with around 14% a year ago. More consumers are now booking direct with the property they are staying in and Merchant said direct internet bookings are its highest yielding channel. Travel Trends: April 22, 2008 Jury Out On Star Rating System
THE travel industry cares deeply about star ratings as an indicator of quality but has no faith in the present system. The 200+ audience at No Vacancy last week was asked two questions. First, did they believe star ratings are important? The response was a big yes with an overwhelming show of hands. Second, did they think the present star rating system, as administered by AAA Tourism, was working effectively? The answer was a resounding no. AAA Tourism boss Jeff Floyd handled the feedback well, defending the scheme while recognising certain weaknesses, promising its continued evolution with a focus on increased enforcement of ratings and continuous review of standards. But he said there are no plans to incorporate service into the evaluations (a big issue with the Australian Hotels Association) due to cost. Floyd welcomed consumer rating sites and said user reviews would be displayed alongside official reviews on the AAA Tourism website, perhaps a blue print for the future. Roamfree Sacks 50 Staff But Wants To Buy More
ROAMFREE says it is still considering further acquisitions despite sacking 50 staff. The job losses, concentrated in sales and IT, reduce staff numbers from 230 to around 180 following the merger of Roamfree.com and Roamfree advanced. CEO Gary Knowles said there had been a “resizing to take (Roamfree) forward in a more effective manner” but indicated a couple of deals may be in the pipeline. Knowles said Roamfree still has plenty of cash following a $40m capital note raising last August but acknowledged in a recent interview that the company had a significant cash burn rate. The news, yet to be posted on the Roamfree website, follows weeks of industry speculation sparked by founder Tony Smith's apparent financial woes. Smith has been burnt by the collapse of MFS and also cancelled work on his Gold Coast mega-masion. In less than two years Roamfree has spent more than $30m acquiring 300+ websites and several travel IT businesses. The company approached dozens of others, offering half in cash and the rest in shares that could cashed in when the company listed. No talk of that now, while Smith has gone to ground. Travel Trends: April 22, 2008 Contentious New Search Feature From GoogleGoogle has launched a contentious new 'search within a search' feature in the UK and US that allows consumers to search some popular brand sites without actually leaving Google. How does it work? Well, the results for a brand-specific search on a big online brand such as Hilton UK will return the usual info and links plus a new, secondary search box and button that reads “Search Hilton UK” and an invitation to search the Hilton UK website via Google rather than going there direct.
But – and here is the controversial bit – use the new, secondary search box to search for say “London accommodation” and there’ll be lots of paid ads – though none for Hilton, which however dominates the organic results. So there’s a chance that the consumer – who originally just wanted to visit the Hilton site – may not end up there at all. In fact, they may buy their goods from a rival that is actually paying Google to advertise. Power To The People - TRAVELtech Consumer InterviewsTRAVELtech is just around the corner - August 26 in Sydney to be precise. The program is now being worked on and here's a little taste of a Vox Pop prepared for the event a couple of years ago. The more things change the more they stay the same - check it out! NSW Lets The Team Down - Cane Toads on Top
By Martin Kelly, Editor, Travel Trends Living in Sydney, NSW, is like supporting Collingwood. Everyone likes to see you lose, and that’s exactly what’s happening now. The state is in a state. It’s getting picked on, laughed at, locals are questioning their commitment. Unfortunately, the government is no help - it’s even more hopeless at tourism marketing than everything else. For years, Tourism NSW has had no real budget, leadership, direction or market presence. Kind of like your old Aunty Maude, there but not really there. NSW took more than a year to produce an events strategy – released last week - that could have been written in an afternoon brainstorm. Maybe it was. This rant's also been brought on by some research from Andrew Maurer, a speaker at No Vacancy, that shows NSW is letting the Australian tourism team down at a time when the domestic industry isn't kicking too many goals. No Place For Ancient History In Online Future
By Martin Kelly THE Australian cruise industry might be all at sea when it comes to offering last cabin availability through the internet, but that hasn’t stopped a small but vibrant online market emerging in the sector. There’s a handful of players, among them Cleancruising.com.au, which this month celebrates its first anniversary. Clerancruising.com Director Dan Russell says the past year has been hectic. “We only went live with 36 ships and since then have overhauled the IT systems to handle mapping and pricing integration. We now have 120 ships, plus 800 ports and more than 7000 cruises. But for all the site’s bells and whistles, thanks to some musty GSAs it is still unable to offer live inventory, as online agents can in America through the GDS. “As far as we are concerned this system must be overhauled – the cruise lines need to make it available. It will make a big difference.” Yet it isn’t crucial. Now Is The Time To Charge Serious Money
Analyst Ron de Wit had a simple message for the big end of town at a recent Property Council breakfast. “Now is the time to really start making some money. Now is the time to start charging in a serious way.” The reason is demand. According to Karen Wales of Jones Lang La Salle Hotels, 10 out of the 11 major markets experienced RevPar growth of more than 8% in 2007, while Perth, Sydney and Brisbane are running 80% + occupancies. Wales believes RevPar in Brisbane, Canberra and Adelaide will have the strongest 2008 growth. But Wales says returns still have a long to go before they can justify the construction of new properties, which means the good times will be “stretched” this cycle with demand outstripping supply for the foreseeable future. Travel Trends: March 17, 2008 SPUDs Matter And They Are Growing
SINGLE and older people may well be the dominant consumer forces in travel over the next few decades, according to latest Mosaic survey of Australian society, which also introduces the concept of SPUDs and “freemales”. Among the findings: Unmarried women (“freemales”) now outnumber married women for the first time since World War II – a phenomenon dubbed by researchers as “Bridget Jones meets Sex and the City” – while 25% of women will never have kids; Single Person Urban Dwelling (SPUDs) comprise more than 25% of all Australian households, a ratio certain to increase; the proportion of baby boomers aged 65+ is expected to double to 25 per cent of the total Australian population by 2038. Mosaic 2008 was compiled from data in the last Australian census and other sources by Pacific Micromarketing. “Companies should be planning products and services that their customers will want over the next decade, not what they wanted five years ago," spokesman Graham Plant said. Travel Trends: March 14, 2008 Gay Male Online Travel Community Launched
A PAIR of Brisbane entrepreneurs have launched what they hope will become the world’s first “truly comprehensive” gay male travel guide. QGuide.com initially focuses on Australia and will later incorporate the US and Europe. Jack Gonzalez and Scollay Perry believe there is enormous potential to create an online community of gay travellers, something they say no-one has done to this point. While it’s hard to ignore that logic, there is a long way to go for QGuide, which right now is very much in the “soft launch” phase with many key features such as message boards, traveller profiles and photo sharing facilities yet to be incorporated. But when that happens, co-founder Jack Gonzalez claims it will as if “Lonely Planet joined forces with Spartacus Guide, MySpace, Facebook, Blogger and Orbitz.” Gonzalez and Petry have self-funded the venture. Travel Trends.biz: March 14, 2008 Just Briefly - Travel Online Odds and EndsONLINE BOOKING TRENDS: We may be living in a last minute world but HotelClub, one of Australia’s largest online accommodation website, has revealed a significant majority of its customers prefer to book more than 30 days out from their trip. The second biggest group booked within 10 days of travelling. A HotelClub online poll revealed: 31.54% book 0-10 days out; 16.81% 11-20 days out; 7% 1-30 days out; 44.65% more than 30 days out. HOTELSEEKER OFFICIALLY LAUNCHES: Anthony Chahoud, the founder of Roomseeker.com.au, has launched a new sister site called Hotelseeker.com.au. The difference between the two is that Hotelseeker offers 28 day availability while Roomseeker is proudly last minute at 14 days. Each site charges a consumer booking fee of $1.50 while suppliers are charged an industry low commission of 5%. Chahoud has signed up more than 300 suppliers and will be attending the No Vacancy conference in Sydney. Travel Trends: March 14, 2008 DON'T GET SCAMMED: Tourism Australia reports that scammers have been selling bogus space on Australiatourism.com. The company sends its targets bills offering free space on the site. However the fine print outlines that this free space converts to a charge after a period of time. Correspondence has been to industry in Australia and overseas. Tourism Australia “would like to state that we are not responsible for this site and have no affiliations with it at all”. Any issues need to be referred to the relevant Department of Fair Trading in the appropriate State or Territory. Travel Trends: March 14, 2008 QUEENSTOWN REVAMPS WEBSITE: Destination Queenstown latest website redesign better reflects its ‘pure inspiration’ branding. New features include a video stream and webcam, while there is an updated Trade section. There is a greater emphasis on quality images throughout the site. Unique visitations to the site have increased by 21% year on year. Travel Trends: March 14, 2008 POST PIX ON VIATOR: Viator, an online site which sells destination product, continues its evolution into a traveller’s resource centre and has just opened its site to traveller submitted images, which are posted as content under the relevant product or destination. Only people who have booked travel through the company can do this, and are prompted to post with a ‘welcome back’ email a week or so after their trip. Viator also has its own Flickr photo page and travel blog as the company steps up customer interaction. Travel Trends: March 14, 2008 GOING OFFLINE TO DRIVE ONLINE BUSINESS: Wotif.com has taken its marketing spend offline for the first time with a new ad campaign that includes tv and outdoor in addition to online. It features the tagline “Why not when you can Wotif” which CEO Robbie Cooke says is a “fresh, fun and motivating” message, adding the company now processes more than 200,000 bookings each month. Until this point, Wotif.com has relied on public relations, online marketing and word of mouth. Travel Trends: March 14, 2008 Maturing Wotif Gets Punished For Slower Growth
By Martin Kelly, Editor, TravelTrends MATURITY is over-rated. Just look at the fate of former PM John Howard. Now turn your attention to the Wotif share price which is going nowhere despite the company recently announcing a record net profit of $17.1 million for the six months to December 31, 2007, 43% more than the same period a year ago. So what’s the problem? Maturity, of course, combined with a jittery stock market that probably pushed prices too high in the first place. The online travel space has moved beyond adolescence in less time than it takes a teenager to shed acne, and Wotif’s growth is now slowing across all headline indicators. For instance, room nights sold increased 22% compared with a blistering 47% 12 months earlier; net profit was also growing substantially quicker at that time. Flighty investors don’t want slower growth from an internet stock, they want the excitement of youth. And, frankly, so do I. Now that the sector has “matured”, it’s become rather boring with consolidation partly the cause. Fewer companies mean fewer voices. It’s also run by a remarkably conservative group of people, many of whom sport a majority of grey hair and are definitely not part of the Internet generation. Wotif is a great example. The company continues moving forward and doing what appears to be smart corporate things, primarily through the acquisition of other companies such as Asia Web Direct and Travel.com.au (though time will tell on these deals). But it's happened in such a methodical, deliberate fashion - with the appropriate sanitised rhetoric - that I'm finding it hard to get excited. Phrases like "earnings accretive" really don't do much for my circulation. What about some online innovation? Ah, for the "good old days" when founder Graeme Wood started building the company from scratch. He travelled relentlessly in what appeared to be the same jacket and was always good for a quote. Wood was direct, down to earth and the company flourished. As did its accommodation partners. Growth The Story at Vroom Vroom Vroom
CAR rental site Vroom Vroom Vroom (VVV) is moving into the fast lane. It’s about to open a US office headed by current Aussie boss Richard Eastes, who declares: “Everything we do is for growth”. He sees opportunities for a niche car hire player in the US, a market where many specialist companies have been bought by the big name travel portals. VVV already has international experience through a London office led by CEO Peter Thornton and VVV revenue has doubled every year since 2004. Turnover this financial year will be around $40m with income before costs of about $3m. Can it last? Read on to find out more... Online Charity Footprints Builds on The Bottom Line for World Nomads
By Martin Kelly, Editor, Travel Trends A FUNNY thing happened to the World Nomads bottom line when the company started accepting charitable donations through its network of websites – the sales conversion rate increased. Now World Nomads, a major online travel insurer, is inviting other online businesses to join the not-for-profit organisation it set up to administer the donations – The Footprints Network. World Nomads CEO Simon Monk, the founder and Executive Director of Footprints, says it has raised more than $500,000 since 2005 with potential to raise "tens of millions more". He says the administration costs of Footprints are borne by World Nomads – an approach that will continue even as membership increases – as part of the company’s commitment to corporate responsibility. “We believe that not only is it the right thing to do, but there are also business benefits,” he says, citing increased transactions, conversions and customer loyalty. No Vacancy: Program, Speakers Announced
CHANGE is the only constant for Australia's accommodation industry - What's Next? To get this question answered you have two options - get yourself a crystal ball or attend the upcoming No Vacancy conference in Sydney on April 15. Even if you're lucky enough to find that crystal ball, No Vacancy is still a great option to have your thoughts confirmed or challenged. It features industry leaders, panels, case studies, presentations and debate. Topics include online distribution, cunsumer trends, channel and yield management, carbon offsetting, star ratings, modern marketing tactics, pricing, social media strategies and plenty more. No Vacancy also features great networking while there'll be some key-vaue adds. Cumming Sets Sail On New Adventure With $34m Sale to Wotif
Asia Web Direct President Neil Cumming, who sailed to Phuket after making his first fortune in Britain, has hit the jackpot for a second time by selling his online accommodation company to Wotif.com for A$34m in cash and shares. Cumming also gets a seat on the Wotif.com board and - along with the present management team including CEO Jiarap (Sii) Easakul - will continue running Asia Web DIrect, which operates more than 100 websites. Key online properties include LateStays.com, Phuket.com, Bangkok.com and SmartStays.com. The company, which employs 150 people, sold 450,000 room nights during 2007. LateStays.com, which has a 28-day booking window, was the standout performer, increasing room nights by 89% from 53,585 to 92,920 year on year. Never Play cards With A Man named Doc...
“Never play cards with a man named Doc. Never eat at a place called Mom’s. Never sleep with a woman whose troubles are worse than your own.” Famous advice from US novelist Nelson Algren - advice we chose to ignore, eating in a “place called Mom’s” on a freezing January day in Salinas, a cow town in the back blocks of Utah in the western United States. It was bitterly cold, the temperature minus 12 degrees Celsius. But the waitress at Mom’s – who had clearly seen plenty of winters - wasn’t impressed. “Oh, we’ve had colder Januarys,” she said. Her uniform included bobby socks and she served up a variety of mostly fried food, some of which was actually OK. Whatever, it was the experience that mattered, and we got that in spades. So while Nelson Algren was probably right, there are exceptions to every rule. That said, I’m not about to test him on the cards or the sex. Martin Kelly, Editor, Travel Trends - February 19, 2008 Notes From The Las Vegas Strip - January, 2008
Las Vegas Boulevarde – a jumbled visage of cranes, traffic, people and neon; posters, screens, screams, fountains, gawkers, touts, tourists; a pyramid, a roller coaster, an imitation Statue of Liberty, a fake Eiffel Tower and all the rest. Mexicans with t-shirts that claim: “Girls to your room in 20 minutes”, tourists chugging tequila on the street… Las Vegas is returning to its roots. Gone is any pretence of a family destination. And don’t the punters love it. Vegas is pumping, packed with adults of all shapes, colours and sizes looking for action, mostly men but a few women too, while a building boom of epic proportions is ripping up The Strip. Vegas, a place where you can lose your identity, and everything else too. Martin Kelly, Editor, Travel Trends - February 19, 2008 Crystal Balling 2008 - Good Times Continue To Roll
By Martin Kelly CAN it get any better for the Australian travel industry? The answer is yes. Sure, 2007 was an excellent year for most operators – except for those reliant on the Japanese market – but it looks like 2008 could be even better, though not by a huge margin. This of course assumes there will be no terrorist attacks, airborne disease, pestilence, US, Chinese or Indian economic calamity etc. Consider the evidence...
Tourism Exchange Australia Attacked as 'Socialisation of Tourism'
By Martin Kelly, Travel Trends Andrew Burnes, Chairman of AOT Group and Deputy Chairman of Tourism Australia, has attacked as “socialisation of tourism” the new direction taken by the government-funded Australian Tourism Data Warehouse (ATDW). ATDW, which until now has provided only content to partners, recently signed a controversial agreement with tech provider V3 to set up Tourism Exchange Australia to distribute and sell its partner product. “I don’t very much agree with the socialisation of tourism which began with the ATDW, and I say that with my AOT hat on," said Burnes, who plays an influential role on the Tourism Australia board. “Government should just get out the way.” Social Media Works For Melbourne and Tourism Vic
By Martin Kelly, Travel Trends IF there is one thing marketers hate – apart from the fact they get no love from financial types – it’s letting go and losing control of their brand. But for Don Richter, who invited outsiders to post their thoughts, photos and videos on visitmelbourne.com as part of Tourism Victoria’s ‘Red Thread’ campaign, the process was a revelation. “It was astoundingly successful,” he says. “We were concerned that people wouldn’t stay on the brand message but that wasn’t the case at all. In fact, the thing that amazed me was that (the posts) were so close to our brand values I could have written them. It was almost like I had copy writers come and write the stuff.” Get Used To It: Shocks Shouldn't Be So Shocking
By Martin Kelly, Travel Trends TOURISM forecasting is among the toughest gigs around with the industry exceptionally vulnerable just about every type of external shock – since 1989 think pilot’s strike, Asian financial crisis, 9/11 and SARS. So it's no surprise the Tourism Forecasting Council says in its latest forecasts that there’s a strong possibility of at least one major external shock over the next 10 years. It says two external shocks in that period is also feasible. What impact would they have? Long-term annual growth rates would fall from a base case of 4.8% over the next 10 years to 4.2% (one shock) or 3.1% (two shock). One Shock Scenario: “If an external shock occurred in 2010 that reduced arrivals by 1.5% (a similar outcome to the fall in 2001 that was mainly driven by the 9/11 terrorist attacks) … there would be 6% fewer arrivals in 2016 compared with the base case.” Two Shock Scenario: “”There would be over one million (or 12%) fewer arrivals in 2016 compared with the base case.” Travel Trends: December 17, 2007 Japanese Women Now Get Their Thrills At Home
By Martin Kelly, Travel Trends THE Japanese tourism market to Australia may be in terminal decline – that’s the inescapable conclusion of a study by Tourism Research Australia. One of the major reasons appears to be a lack of adventurousness among young Japanese, especially women, who used to travel here in packs during the mid-1990s. But there have been fundamental changes to the Japanese psyche since then. “Unfortunately for Australia ... certain population groups, most notably young women, are exhibiting different life aspirations and attitudes to travel compared with earlier cohorts." Siren Call of China, India Moves Moves Accor
By Martin Kelly, Travel Trends AUSTRALIA’S most powerful hotelier, Accor Asia Pacific boss Michael Issenberg, is packing up and moving the company’s regional headquarters from Sydney to Singapore. The siren call of China and India – where Accor is now developing 100 hotels with plans for many more - has proved impossible to resist. “It was inevitable and could not be put off any longer,” says Issenberg. “The weight of development is now in Asia." Issenberg sees the biggest opportunities in China thanks to a bigger economy and better infrastructure. “China is unbelievable – what a future it has,” says Issenberg.“I know my own industry is booming but that is only one small part of a very large picture – I can’t even imagine what is happening elsewhere.” Carbon Offset Schemes Now On Front Burner
By Martin Kelly. Travel Trends THE media focus and green group pressue surrounding global warming could hurt Australian travel businesses, the Tourism Forecasting Committee warns. “Current media attention could have negative repercussions for the Australian tourism industry,” the TFC says in its latest report. “European tourists in particular are under increasing pressure from activist groups to consider the impact of long haul travel on the environment.” The report says many carbon offset schemes “lack transparency” and are “largely voluntary and unregulated” resulting in wild price variations for the same product. There also appears to be consumer concern over what happens with the money: ie will the dollars I spend now have a meaningful impact in the future? Aussies Go Snow Crazy As World Warms Up
GLOBAL warming be damned - it now seems certain Australians are taking more snow breaks than at any time in our holidaying history. Fresh figures show visitor numbers to the Australian Alps were the third highest on record, while Aussies spent 348,520 guest nights in NZ ski hub Queenstown this year, 30% up on 2006. Meanwhile, forward bookings are strong for Japan and North America over Christmas and into 2008. Europe may even see a few Australians with a couple of good November storms prompting an outburst of optimism and headlines such as “Something Strange is happening at Europe’s Ski Resorts – It’s snowing”. WE'RE IN THE MONEY! TRAVEL PROFITS TO SOAR...
TWELVE billion dollars - that’s the stunning sum the Stella Group, Australia’s biggest diversified travel company, will turn over this year through its agencies, hotels, wholesalers and operators. The massive figure was revealed when Stella Group owner MFS backed away from a private equity deal and upgraded its pre-tax profit forecast 5% to A$220m. After lying largely dormant during the private equity negotiations, Stella has also returned to its acquisitive ways, buying a British agency group, Global Leisure. Meanwhile, online airfare booker Webjet upgraded its forecast pre-tax profit forecast to somewhere between A$7.9m and A$8.3m on turnover of $331m. Webjet’s share price has also improved of late – moving most strongly after its bid for travel.com.au was rejected - with the stock now selling at A$1.78. In other news, Webjet recently entered the NZ domestic airfare market, which has just been shaken up by the arrival of Pacific Blue. Travel Trends: December 17, 2007 Travelzoo Embarks on Ambitious Regional Expansion
By Martin Kelly, Travel Trends TRAVELZOO has embarked on an ambitious Asia-Pacific expansion program with the US travel newsletter and meta-search business intent on launching up to eight country-specific websites across the region by the end of March. “We have a mandate to open seven or eight offices in Asia Pacific by the first quarter of 2008,” Jason Yap, Managing Director, Japan, Australia and India, told Travel Trends in Sydney this week. The company has just launched in Hong Kong while Japan will follow later this month. “China, South Korea and Taiwan are in the works, while India will also happen next year,” said Yap. Brad Gurrie is leaving his role as General Manager of Lastminute.com.au to lead Travelzoo Australia and will take up his role on November 14. While optimism abounds, Travelzoo’s aggressive expansion strategy has hit the company’s profits, which are significantly down year on year. However the margins, by travel industry standards, remain solid. Universal Search Changes Travel SEO Forever
Google has started rolling out Universal Search across its Australian and NZ sites, a move that is already having major SEO ramifications for travel websites, and is also encouraging consumers to post accommodation reviews on its site. Universal Search means that people who use the main Google search engine will potentially not just get text links but also maps, images, news and video results in response to their query. This is having a big impact on the natural and paid search results. A classic example is for search term ‘Sydney hotels’ (see above) where the top three natural results are for hotels marked on an adjacent map, which immediately draws the eye away from everything else, including the paid ads. Bean Counter's Dream Drives Blume Insane
ONLINE travel agent Zuji is spending 35% of its total marketing budget on search marketing and optimisation. Why? “Because it works and is measurable down to the very last cent,” explained Zuji CEO Scott Blume. Blume said search marketing – widely acknowledged as the key to online success - has rapidly evolved into a highly sophisticated science that favoured larger operators. "To be able to perform in that (search) business is not an easy thing to do for some of the smaller players. But Blume has something of a love/hate relationship with online marketing, where instinct ranks second behind accounting logic. “It’s a bean counter’s dream and it drives me insane because we see so much data … we are drowning in data.” Carbon Neutral Takes Off With Consumers
Carbon Neutral schemes are winning widespread public support. Simon Westaway, GM of Corporate Affairs at Jetstar, told delegates at the Tourism Directions conference in Sydney that 10% of the low cost carrier’s customers are opting to pay its Carbon Offset fee, which varies according to the distance but is generally a couple of bucks or less. For example, Jetstar’s Carbon Offset fee for a return flight between Sydney and the Gold Coast is A$1.64. Meanwhile Scott Blume from Zuji said its Travelocity stable mate, Lastminute.com in Europe, was getting 20% take-up on Carbon Neutral initiatives. Travel Trends: November 1, 2007 Laughter Will Turn To Tears For Friendless Bailey
WORD on the street is that Australia’s Federal Tourism Minister, Fran Bailey, is very much on the way out - even if the Liberal National coalition is returned to power in the November 24 election, a scenario which appears increasingly unlikely. Quite simply, her time is up. Many in the industry will be glad to see the back of Bailey, who has won few friends during her time in office. She often ignores industry advice, has a strong personality-driven management style and is not afraid to throw her weight around … the ‘departure’ of Tourism Australia MD Scott Morrison a case in point. Ironically, Morrison, the Liberal candidate for the rock-solid conservative Sydney seat of Cook, may well end up being the next coalition Tourism Minister. But according to the polls that won’t be any time soon. Labour is so far ahead if could take the coalition two full terms to reclaim power, which would put Morrison in the hot-seat around 2013. Travel Trends: November 1, 2007 Rock Star Hotel To Break All Records - A$180m Tipped
THE impending sale of Sydney’s rock star hotel, the Park Hyatt Sydney, is set to smash all Australian sale records. Bids exceeding A$180 million will buy the five-star, harbour-front property (on a gross yield rumoured to be around 6%) pricing it at more than $1.13 million per room. It’s not the first time the Park Hyatt will have broken a sales record. In fact that happens every time it changes hands. But it’s fair to say the latest bullish figure reflects a domestic hotels sales market that is hotter than Hades with demand far outstripping supply. Meanwhile Sydney’s room rates are heading north at a rate of knots – the Park Hyatt boast an average room rate of just over A$500 a room - and there are no new properties on the horizon. Then there’s the location – underneath the Harbour Bridge, smack bang on the water with gun-barrel views of the Opera House. Selling agent Mike Batchelor from JLL Hotels said there’s been plenty of interest from Australia, Asia, the Middle East and North America. Give him a call if you’ve got a few million to spare. Travel Trends: November 1, 2007 EDITOR'S UPDATE: The Park Hyatt sold for A$201.6m, or A$1.267m a room ,which is an Australian record. Room Auction Site Hits the Online Market
WEB upstart www.Ubid4rooms.com, which officially launches next week, aims to have 10% of Australia’s online hotel booking market within five years. Founder Gary Berman told Travel Trends he believes there is enormous potential for the auction site, the first of its kind Down Under, which allows consumers to bid on hotel rooms up to 14 days in advance. He said there’s no reserve rate - “it’s up to the hotel in question to either accept or reject the bid.” Berman said the model has big advantages for hoteliers, who can use it as discretionary pricing channel because the system does not commit them to a posted rate. Ubid4rooms is charging 10% commission on bookings and has signed up 40 properties so far. “The reaction has been very positive and we’re about to start advertising through the consumer press,” Berman said. He has extensive hotel management experience and began developing the business more than 12 months ago. Travel Trends: November 1, 2007 Is Travel.com.au worth 55 million big ones?
By Martin Kelly, Editor, Travel Trends SO, assuming the Wotif bid gets over the line, what will it get for the A$55m or so it has agreed to pay shareholders for Travel.com.au? The answer is a company that has accumulated losses of more than A$33m over the past eight years and never made a profit, though different sets of management over the years have continually hinted that it would. But something always comes along to drag it into the red… At one point it looked like 06/07 could be the year, however once again it was not to be. In a recent interview with Travel Trends, outgoing CEO Adam Johnson said TVL, which owns the lastminute.com.au and travel.com.au brands, has been performing strongly through 2007. Latest Wotif Bid for Travel.com.au Backed By BoardWOTIF looks the likely “winner” of the protracted battle for travel.com.au. The TVL board has backed the latest offer from Wotif, which values the company at around A$55m. There is still, however, uncertainty, surrounding the intentions of the AOT Group, which has built a stake in excess of 19% over the past few weeks but made no comment regarding its intentions. Travel Trends: October 16, 2007 Game Over? Not by A Long Shot As AOT Group and Wotif Spark Bidding War for Travel.com.au
By Martin Kelly, Editor, Travel Trends THE AOT Group has emerged as a dark horse in what may now be a three-way fight to buy travel.com.au. AOT yesterday (October 2) revealed it has accumulated a 7.74% stake in TVL, buying into the company at up to 63 cents a share – an extremely bullish price and way more than either of the two “official” contenders – Wotif.com and Webjet - have offered shareholders for control of the company. AOT, one of Australia’s largest privately-owned travel companies with online brands that include needitnow.com.au, has made no comment on its intentions, but one thing is for sure – it will have a huge say in determining the future of what has become Australia’s most sought-after travel company. The value of TVL, which owns the travel.com.au and lastminute.com.au sites, has increased from A$33m to A$55m in less than a month. And to think that just three weeksago Webjet looked home and hosed at 42 cents or so a share. A day or two after making that offer, ever-modest Webjet boss David Clarke considered the deal a fait accompli, outlining a future where online retail rivals wouldn’t stand a chance, telling Travel Today that “the combined entity will open up a large lead over Flight Centre and a ‘huge gap’ over the rest”. “It will be game over”, said Clarke. Big Challenges Ahead But FNQ Industry Upbeat
By Martin Kelly THE Far North Queensland tourism market faces major challenges in sustaining its international business base due to falling Japanese visitor numbers and increased competition from other destinations. But the FNQ industry leaders - veterans of a famously cyclical market – have seen it all before and remain optimistic about the future, pointing to steady domestic growth and increased visitation from new markets like Korea. The number of Japanese visiting FNQ dropped 10% in the year to June, according to the latest Tourism Research Australia figures, while overall international visitations fell 3.2%. Meanwhile, international arrivals through Cairns Airport have slumped 15% since 2005 – a trend set to continue with the Qantas Group cutting capacity by 5% on the key western Japan routes through Osaka and Nagoya. Online Focus For Lonely Planet after BBC Sale
By Martin Kelly, Editor, Travel Trends REALISING the online potential of Lonely Planet is the first priority of new owners BBC Worldwide, which bought a 75% controlling share in the iconic brand for anywhere between A$100m and A$200, depending on which newspaper you read. Maureen Wheeler, who started the company with her husband Tony, told the Australian: “"We were looking for someone who would help us not just with funds but with skills, someone who'd shown they could make their way in the online digital world because we felt that's what we were lacking." Watson also promised readers of smh.com.au that there was “absolutely no intention” of introducing advertising in to Lonely Planet, which he described as "the most important brand to travellers around the world". So how will BBC Worldwide monetize the content-based Lonely Planet site at a time when the world’s foremost media player, Rupert Murdoch, says he can no longer justify charging subscriptions for the Wall Street Journal online because the site would make more money from advertising if it was free and attracted more visitors? Clearly, now is not the moment time to ask such questions, though in the fullness of time perhaps the new partners will follow the lead of actor Sean Connery, who swore off the James Bond franchise after a few wildly successful films. He made a comeback, however. It was called: “Never Say Never Again”. Travel Trends: October 3, 2007 Forever Young - NZ Keeps Message and Media Fresh
Tourism New Zealand will increasingly shift its international marketing from television and print to new media. Chief executive George Hickton said Tourism New Zealand will increasingly pump its message through social sites, blogs and podcasts. "One of the main changes will be to embrace new technology and to provide content to people when they want it, where they want it, how they want it," says Mr Hickton said. As a first step in this direction it has launched its new “Forever Young” advert on a dedicated YouTube channel. So far it’s received more than 650,000 views and a three star rating. See it here: http://www.youtube.com/profile?user=PureNewZealand... PS: After a mild public uproar, Hickton was forced to defend the use of ‘Forever Young’ a song by Australian band Youth Group because, well, they are an Australian band. Travel Trends: October 3, 2007 Viator Changes, APN Buys Into Roamfree, New Qantas CIO, Qantas and Amadeus Seal New Deal
Travel Trends: October 3, 2007 TRAVELtech 2007 - A different perspective
BLOGGER and industry exec, Tim Hughes, who writes The Boot, not only did a great presentation at TRAVELtech but also stayed up late and blogged about the day. Here are some of his thoughts: TRAVELtech continues. Rod Cuthbert the CEO of Viator gave a great presentation earlier this morning. He have very few slides, instead relying on pictures of destinations and activities to tell his story. A number of these photographs showed the tough side of consumer travel from the extremes of pictures of terrorism and panic to images of the drudgery of never ending lines at airports filled with despondent people wishing they were on holiday rather than going on holiday. From this he talked about how hard it is becoming for a consumer to travel. The uncertainty of arrival times, the challenges of travel in economy class, the need to varying degree to limit what you can carry on board etc. Bean Counter's Dream Drives Blume Insane
Roamfree.com has bought 90% of Tourism Technology, the developer and owner of the market-leading Calypso Wholesale Travel Management System, for $16.8m. It’s by far the most significant acquisition for Roamfree.com, which has been stitching up deals faster than a three-armed seamstress. Tourism Technology has a heavyweight client list including Qantas Holidays, British Airways Holidays, Singapore Airlines Holidays, United Vacations, Creative Holidays, Gullivers NZ and Tasmania’s Temptations Holidays. It is also implementing the technology for Flight Centre’s wholesale division, Infinity Holidays. Founder and Managing Director, Graeme Hunter, retains 10% of Tourism Technology and will continue to lead the business along with General Manager Michael Dundon and the existing senior management team. Meanwhile, TT has developed its own Dynamic Packaging product which is now being used on Travel Corporation’s ineedaholiday.com.au website. Qantas Holidays Launches Dynamic Packaging
By Martin Kelly QANTAS has quietly launched Dynamic Packaging on its main website, giving the booking option a high-profile flash advertisement on its home page. It’s a significant strategic move for the aviation giant which has had enormous success in selling airline tickets online but struggled to replicate the performance with package holiday sales through its hugely popular website. In fact, Qantas Holidays revenue – which to a large extent depends on accommodation – is now signifciantly less than it was two years ago due to changing consumer travel spending patterns. But the new Manager of IT Strategy at Qantas Holidays, Grant Swinbourne, who has moved across from Jetstar, says the launch of Dynamic Packaging marks a change in approach. Online Overhaul At Stella Travel Services
By Martin Kelly Stella Travel Services boss Keith Stanley has promised a dramatic overhaul of the travel giant’s retail web strategy. It will start with the relaunch of the Harvey World Travel website over the next few days, followed by a new Travelscene site soon after. “You will see dramatic changes over the next six months,” says Stanley, who will elaborate on the Stella strategy at the TRAVELtech conference in Sydney on August 28. Stanley says that in addition to the new Harvey World and Travelscene brand portals, each Stella agency franchisee will have individual websites. He says they’ll be able to customise these sites within brand guidelines and, in an ideal world, create their own niche or speciality markets, whether location or skills based. Aussie Hotel Room Rates To Hit Record Highs
By Martin Kelly HOTEL room rates may increase by up to 45 per cent in key Australian markets over the next three years as the industry enters a golden period of prosperity characterised by high demand and low supply. Yet analysts say the imminent revenue bonanza – sparked by occupancy rates regularly topping 80 per cent - may not be enough to trigger the next hotel development cycle. That’s because construction costs are rising just as quickly, thanks to high land prices and increasingly expensive materials, setting the scene for a remarkable era of stability in a historically volatile industry. Defining Year Ahead For WebjetOpinion By Martin Kelly WILL the Webjet share price finally take off after a couple of years in limbo? That's the question shareholders are asking after a couple of brokers put a 'buy' recommendation on the stock, which has been static for the past couple of years while the likes of Wotif have gone through the roof. The recommendations come on the back of Webjet's recent profit announcement and forecasts, which include a steadily rising dividend stream. It's a welcome boost for a company which has failed to deliver on its early promise to investors despite dominating Australia's online retail sector, in terms of both visitor numbers and profits. The reality is, after an initial surge through to mid-2005, investors have never warmed to the Webjet story the same way they have taken to other internet stocks such as Wotif, Seek and Realestate.com, which are trading on aggressive Price to Earnings multiples of around 44, indicating strong optimism about future prospects and market position. Roamfree.com Gets On Bike For Tour de France
ROAMFREE.COM boss Tony Smith has once again put his money where his mouth is by pledging $20m in sponsorship towards the first Australia’s first Tour de France cycling team. Smith made the decision after meeting champion cyclist Robbie McEwen at a BBQ. “He told me there wasn’t an Australian team,” Smith told the Daily Telegraph. “If someone wants it to happen, like me, you have to put up the money.” The sponsorship is over four years. Starting a team in the 2009 Tour de France the initial goal and, while $20m is anything but small change, more sponsorship money is still needed to make this dream a reality as it costs $15m a year to run a top-class team. Travel Trends: August 15, 2007 |
