All posts by Martin Kelly

Sucker Punched By Technology – Blackberry The Culprit

By Yeoh Siew Hoon

I have to confess. I have succumbed. I got a Blackberry.  Despite declaring I wouldn’t, despite my sincerest desire to be free of it, I have caved in.  Let me tell you what did it. Paranoia.

I was about to leave for a 19-day vacation in France and two days before I was due to catch the flight, I got an email from a friend saying there may not be Internet access where we would be going.

I panicked. So many things to do. Deadlines to meet. Loose ends that had to be tied.

Plus, a friend’s voice kept whispering in my ear. “Get a Blackberry. It’s perfect for someone like you,” she said.

Two other friends I spoke to had told me differently. One said he gave it up after a week because he found it too intrusive and another, a hotelier, said he regretted ever insisting his company gave every manager one.

“Now that we have it, we have no excuse not to respond to emails.”

To which my tech geek friend – notice it’s always a woman who has an answer to everything – rebutted, “If it’s a company mandate, then yes, I can see how it would be intrusive. But you? You are a free agent. It will free you even more. You can decide when to switch it on or off.” 
Well, when you put it like that …

The day I was due to catch my flight, I got a call from another friend (male) who said, “Babe, I hope you’re leaving all your gadgets behind.”

“No. And I’m bringing my Blackberry,” I said proudly.

“Babe, you are insane,” he declared.

So, now I am paranoid about whether this latest device will ruin my holiday. Already half my baggage is made up of gadgets and all the paraphernalia that come with them.

Here’s what I am carrying. An iBook G4, which has just been upgraded to the Tiger platform (grrr) and 1GB RAM, a hard disk drive containing stuff from my PowerBook G4 which I leave behind when I travel, my Sony digital camera, iPOD, iPOD Shuffle, Altec Lansing speakers, my mobile phone, radio and, of course, the BB.

Sometimes, I wonder why we even bother to go on holidays. Before we leave, we have so much stuff to clear. While we are away, we worry about stuff left behind. When we return, we have to deal with a backlog of stuff. 

Here’s the other thing. When I told my friends I was going away for 19 days, everyone went, “Wow, so long.” No one said, “How wonderful.”

It seems to me that we live in a guilt-laden world. Few of us take long breaks anymore. Most of us can’t afford to be away for an extended period of time.

Or perhaps it’s because we don’t know how to be idle anymore.

Someone is late for an appointment and what do we do?  We take out our phones and start SMS-ing. We go on holidays and what do we do? We check our emails.

When Tom Hodgkinson, author of “How To Be Idle”, was asked on practical tipson how to be idle, he said, “Part of this individualism is you feel this pressure that you alone have to conquer the world, and if you don’t work all the hours God gives then you start feeling really guilty.

“If you can stop feeling guilty, then I think it’s easier to start doing what you want to do.

“The way to stop feeling guilty is to read stuff - I’m not saying my book, but works by Bertrand Russell or Oscar Wilde, people who weren’t losers but who didn’t believe in the work ethic, and argued this thing about guilt or wrote philosophy about idleness.”

A friend drove me to the airport. “Is this all you have?” he said, referring to my one small suitcase.

“Yes,” I said proudly. I pride myself in travelling light. “Half of it are books and my high-tech toys.”

“For 19 days? Are you sure you will have enough clothes? Or were you just planning to wear your underwear throughout?” he asked.

So, now I am worried that I will be a semi-naked albeit fully wired traveller.

Actually, I am most worried about whether I will even have time to be idle during my break and whether my Blackberry will make a fruitcake out of me.



Competition Heats Up For Asian Search Engines

FLEDGLING Asian travel search engine, Bezurk, has landed its first major client – the InterContintental Hotels Group (IHG) ahead of its launch later this year.

It is the latest in a slew of Asian travel search engine announcements.

Airline search engine, based in Singapore, has already taken off and is offering comparative pricing on airfares across Asia.

Pascal Bordat, CEO and Co-Founder of Fare.Net said: “We see a huge opportunity in Asia for a service such as Fare.Net. 

“In the US, several such comparison shopping portals are already successful and growing rapidly.

“We are equally confident of the success of Fare.Net in Asia Pacific.

“After Singapore, we plan to successively launch in Malaysia, Thailand and Australia in the next six months, with other key markets like Hong Kong, India, South Korea, Taiwan, and China soon thereafter. ”

Beijing-based has launched into the Chinese market with a Mandarin language search site, while Oodles 100% Travel Search is planning to go live within a couple of months.

Qunar, which means “where are you going” in Mandarin, offers price comparison search capabilities across air, hotels, car rental and tour packages.

The company plans to complete beta-testing of its English, Japanese and Korean versions by the end of September.

Things are also moving quickly at Bezurk.

Chairman James Vaile said the company will offer accommodation search ”by September or October” before expanding into other areas.

 ”We think that is a good stepping stone,” he said.

Mr Vaile said he has no doubts the Asian market is ready for specialist search engines, which operate on similar principles to the majors such as Google and Yahoo!

The major difference is that instead of evaluating all travel deals, specialist search engines typically only monitor the sites of its member companies.

These companies then reimburse the search engines on a ‘pay per click’ basis for sending traffic to their sites.

“The reaction has been phenomenal since we launched a couple of weeks ago, particularly from the Internet portals, which recognise what a perfect fit this is for the region,” Mr Vaile said.

Regional Director of E-Commerce at IHG, Craig Hewett, said travel search engines had really worked for the group in the US.

“We want to be apart of the action,” he said.

Mr Hewett said an advantage of travel search engines for suppliers is that they facilitate direct booking.

“By sending customers direct to our branded websites – including InterContinental, Crowne Plaza and Holiday Inn – it enables us to forge direct relationships between travellers and our brands.”

Meanwhile, in Australia is also preparing to start.

But instead of accommodation, it will be launching with car hire and Director Steve Sherlock said agreements had been signed with all major suppliers.

He added that its technology development – outsourced to India – is progressing well.

Mr Sherlock said Oodles had decided to start with car hire because just a handful of companies dominate the global marketplace.

Oodles expects to launch within a couple of months and is currently seeking additional capital.


Get Set For Wired 2005 – Speakers Sponsors Announced

Speakers and sponsors have been announced for Wired 2005: Asia Travel Matrix, which is happening at the Grand Copthorne Waterfront Hotel in Singapore on October 20 & 21.

It’s set to be the best travel technology, marketing and distribution conference staged in the region.

  • Sponsors: Singapore Tourism Board, Amadeus, Abacus International, Millennium and Copthorne International, TravelCLICK, Pegasus and WORLDHOTELS.
  • Industry partners: Hospitality Sales and Marketing Association International, the Hotel Electronic Distribution Network Association, MarketShare and the MacroVision Network.
  • Media: Yahoo! South-East Asia is the online media partner, while e-Hotelier, 4 Hoteliers and Travel Trade Report are also supporting

A dedicated site will be launched in mid-July and tickets for the two-day conference will start at just US$395.

Meanwhile, check out the speakers below who have already confimed, and click here to register for updates – stay tuned for more big names.

If you have any questions, feel free to contact the oraganisers Yeoh Siew Hoon – – or Martin Kelly –

  • Ram Badrinathan, Analyst, Asia-Pacific, PhoCusWright
  • Nicole Bernthaler, Chief Marketing Officer, World Hotels
  • Scott Blume, Chief Executive, Zuji
  • Oliver Bonke, Vice President – Marketing, Starwood Hotels and Resorts
  • Symon Bridle, hief Operating Officer, Shangri-La Hotels and Resorts
  • Maria Cary, GM Pricing and Distribution, Accor Asia-Pacific
  • Rick Clements, Managing Director, Rick Clements and Associates
  • Tony Davis, Chief Executive, Tiger Airways
  • Bernadette Dennis, Vice President Asia-Pacific, Marriott International
  • Olivier Dombey, Vice President Sales and Account Management - Asia Pacific
  • Sue Graham, Regional Manager – Hotel Business Asia Pacific, Travelocity
  • Peter Harbison, Managing Director, Centre for Asia-Pacific Aviation
  • Deep Kalra, Founder,
  • Ken Low, Assistant Chief Executive – Branding and Communications, Singapore Tourism Board
  • Grant McCarthy, Head of Search, Yahoo! South-East Asia
  • Ken Mandel, Chief Executive/Regional Director, XM Asia Pacific
  • Toby March, Vice President – Hotels & Cars, Abacus
  • Gerry Oh, Senior Vice President – Marketing, Millennium and Copthorne Hotels International
  • Timothy O’Neil-Dunne, Managing Partner, T2 Impact
  • Lucas Peng, Founder and Managing Director, MacroVision Network
  • Chananya Phataraprasit, Chairman, East West Siam
  • Mark Renshaw, Managing Director – Singapore, Arc
  • Mark Rizzuto, Managing Director – Asia, Cendant TDS
  • Karthik Siva, Founding Chairman of the Global Brand Forum; Group Strategy Director of Ogilvy & Mather, Singapore
  • Peter  Smith, Vice President – E-Commerce, Amadeus Asia-Pacific
  • Stuart Spiteri, Director Asia-Pacific, Akamai
  • Martin Symes, Executive Director – Commercial, Zuji
  • Aileen Tan, Vice President – Centres for Excellence, Abacus International
  • Jan Tissera, President – International, TravelCLICK
  • James Vaile, Chairman, Bezurk
  • Anthony Venus, Executive Director, MarketShare


Static Pricing Going Nowhere – Accor Moving To Dynamic Model

The region’s largest hotel operator, Accor Asia Pacific, is moving to a Dynamic Pricing model and reducing fixed rate allotments in the current round of 06/07 contract negotiations.

Bullish regional hotel markets – in particular Hong Kong, Sydney, Bangkok and Melbourne – are also colouring agreements and mean that room rates are set to increase by 10% in popular destinations with limited supply.

General Manager Pricing and Distribution, Maria Cary, said traditional static pricing is fast becoming an historic relic.

“This is a real issue for wholesalers, inbound operators and suppliers,” she said.

“It just doesn’t make sense to sell at a flat price across the year.”

Ms Cary said static rates are irrelevant four days out of five when they are either below or above the dynamic market rate, which consumers can see via any number of Internet sites. 

“In benchmark cities like Sydney and Singapore the rates are going to be above the market 40% of the time and below it for another 40%,” she said.

“So what we are doing for next year’s contracting is giving static rates to those that require them but over and above the allotment it shifts to Dynamic Pricing.”

She cited an Accor study which showed that one major player had lost A$50,000 in potential commissions in a single year by sticking with the static model.

However, Ms Cary said despite continued resistance there had been significant change in attitudes over the past 12 months.

“A year ago we were talking with people about Dynamic Pricing and no-one wanted to know about it, now we’re getting a mixed reaction,” she said.

“A third of the wholesalers we’re talking to don’t want to hear about it. They are either resistant to change or don’t understand the benefits of Dynamic Pricing.

“Another third want to make it happen and have the technology to do so.

“Then there is the remaining third that can see they need to do it but their technology is holding them back.”

Ms Cary said a couple of major Singaporean businesses – Chan Brothers and HIS – are now connecting directly to the Accor system, and predicted others will follow.

She said technology is crucial and that wholesalers who are serious about adapting must invest to ensure they are not left behind.

Accor offers Dynamic Pricing to wholesalers either direct or through the GDS, Pegasus, WorldRes and the Internet.


Deals Up In The Air For Amadeus

AMADEUS is making inroads in into the Asia Pacific aviation market, recently announcing a couple of significant deals with carriers from the region.

Bangkok Airways will use its Revenue Integrity product to better manage ‘no-shows’ while Amadeus e-Travel technology is powering the freshly launched American Airlines website in Japan.

Vice President Marketing at Bangkok Airways, Peter Wiesner, said the airline hopes to cut ‘no shows’ by up to one third.

“We expect to save US$1.75 million a year from reduced no-shows, reselling seats which wouldn’t have been paid for, and more accurately forecasting our load factor,” Mr Wiesner said.

Meanwhile in Japan, American Airlines has launched a new website powered by the Amaeus Internet Self-Service engine e-Travel® Planitgo.

Putting the traveller firmly at the centre of their online sales strategy, Planitgo allows the airline to reduce costs and increase online yield.

Japan has been classified by Nielsen/NetRatings as an “emerging online market” with double-digit growth online time over the past year. 

The Japanese spent 12% more time on the web at home in 2004 compared to 2003, showing key potential for online travel sales in that market.

American Airlines joins five other airlines with Japanese websites powered by e-Travel Planitgo – Air France, Cathay Pacific Airways, Korean Air, Philippine Airlines and Thai Airways. 

Amadeus said more than sixty airlines worldwide use Planitgo.


Rapid Asian Growth for has boosted Asian sales revenues by 135% over the past 12 months, while increasing its regional property portfolio by 76% over the same period.

Company CEO Graeme Wood said in a statement is also reaping benefits from its online sales agreement with low cost carrier Valuair.

During 2005’s Asian product focus has been signing up hotels in the secondary cities of China, Taiwan, Malaysia and Indochina in response to demand from business travellers visiting these regions.

“Meanwhile, we have been adding to our current product offerings in the major cities like Hong Kong, Singapore, Kuala Lumpur, Jakarta, Bangkok and Manila,” Mr Wood said.

In the second half of 2005, will focus on expanding its presence in Hong Kong.

“On the leisure front, our focus has been developing a more diverse product range to include serviced apartments, golf and dive resorts as well as boutique hotels that cater to travellers who prefer an alternative to a normal hotel stay.”

To meet corporate demand, has been adding properties that feature facilities such as broadband internet access, fitness centres, business centres and work desks.
Major branded hotels are also playing a greater role.

This includes working with many of the Asian based regional and global hotel groups such as the Mandarin Oriental, Shangri-La, Intercontinental, Le Meridien, Raffles International, Pan Pacific amongst many others.


Wholesale Changes? Not Likely

By Martin Kelly

WHOLESALING sounds like something that should only happen at a fruit and vegetable market. Yet the middleman is an intrinsic part of the travel industry, and has been since ancient times.

The question now is whether the wholesaling sector is headed for rocky times unless the traditional single-channel business model – selling through travel agents – changes.

Senior industry executives privately say that wholesaling is vulnerable, lagging as air and hotels have moved forward, using the Internet to bypass traditional distribution channels and sell direct to consumers.

At first glance, this argument makes sense, at least for small wholesalers.

They simply don’t have the capital to invest in new technology, or the time to develop fresh strategies, while the complicated nature of international holiday packages demands personal service.

But what about the big boys, who can pretty much do what they want – why haven’t they changed?

The answer, according to the likes of Qantas Holidays and Creative Holidays, is that the agency distribution system works, Internet or not, especially for international travel.

For smarter wholesalers with good product and service, the traditional agency channel is working overtime

Head of Qantas Holidays, Simon Bernardi, says the direct/travel agency split has remained static: at 10% direct and 90% through travel agents.

“The Internet has been good at selling air and capital city hotels, but certainly land is still being booked through traditional means,” says Bernardi.

“People prefer to make a phone call or get a brochure – that hasn’t changed.”

He says there’s been some disintermediation with many people now buying land and air separately.

Bernardi also adds that the Internet offers no real price on holiday packages,  which can be bought cheaper through the big wholesalers.

Creative Holidays Managing Director Justin Montgomery claims there is a big opportunity for wholesalers selling exclusively through travel agencies in the low-cost low-commission airfare environment.

On July 1 standard Australian domestic airline commissions fall from 5% to 1%; while  in many cases international rates have already fallen from 9% to 7%.

“Travel Corporation has taken the strategy of staying with the trade and not going direct because every other competitor seems to be doing that, and at some time there’s going to be a breaking point,” Montgomery says

Montgomery believes agents will become more selective about who they deal with, and ignore wholesalers selling direct.

“We are now at watershed period, and I think agents are saying we can make money (in the new environment but) if a supplier is selling direct, why would we support them?”

Peregrine and Gecko’s takes a similar position, although from a slightly different perspective, as it has always sold direct and marketed its brands heavily through consumer media.

“The vast majority of Gecko’s sales come through travel agents in Australia and the proportion is very stable,” Gecko’s Brand Manager Steve Wroe says.

He adds that a web presence is essential because “it’s what consumers want” but Peregrine and Gecko’s believe there is no need to fiddle with the standard approach – even when entering new, web-savvy markets such as the UK.

Why? Because if it ain’t broke, don’t fix it.


Black Friday Changes Nothing in Long-Running Soap Opera

By Martin Kelly

Black Friday, July 1, has come and gone and nothing has really changed.

For those of you living under a rock, this is the date Qantas cut its standard domestic commission to Australian travel agents from five per cent to one per cent.

Meanwhile, generic international commissions are down around seven per cent and will certainly fall further over the next few years.

Therefore the days of making an easy buck by selling an airline ticket are gone, while the era of travel agents charging a service fee is here.

Which is not so bad – service fees have brought prosperity to agents from New Zealand to Ireland, and other sectors of the industry are still offering significant commission rewards.

Certainly, the industry’s major technology providers see it as a business opportunity and have launched a plethora of linked product.

Yet such developments continue to be coloured by sporadic outbursts over airline behaviour – perhaps because it is basic human nature to resist change.

Once again, the airlines – Qantas in particular – are the Bad Guys, an essential character for every long-running melodrama or soap opera.

And that’s what this is.

Just like Days of Our Lives, a lot of things appear to be happening short-term but leave the country for a year or two and you will have missed nothing.

Similar story lines, same major players, a few bit actors killed off and a couple of new stars to get the juices flowing.

In this case, the baddies have done what they always do – looked after themselves first and everyone else second.

But it is important to note that the airlines are still rewarding productive travel agents and chains with higher commission levels.

Some even say that Jetstar, which has proudly declared itself a no-commission airline, is being written into Qantas sales agreements.

Yet selling direct to the public and cutting out the agent remains very much a priority for all carriers.
Of course, technology is at the heart of what they are doing. The internet makes selling direct as simple as saying World Wide Web.

Perhaps travel agents could let bygones be bygones and learn a trick or two from the Bad Guys in this saga and apply them to their own business.

Lesson One: cut costs, create greater efficiencies, improved productivity and increased profits.

For airlines, that generally means sacking staff and outsourcing to cheaper locations.

Now that won’t be feasible for already stretched travel agents, so they can look to some of the new back office and travel management products the GDS are now marketing to save time with all the messy procedural stuff.

All these products also link with service fee software.

Lesson Two: marketing. The airlines are all over the internet using the latest digital marketing techniques.

Now while that might not be suitable for many agents, technology can really help market smaller businesses such as travel agents.

In particular, database management and email marketing offer enormous opportunities if handled with sensitivity and integrity.

The advantages are many - no mailing costs, and the chance to immediately pitch offers to those with a declared interest.

And there are many other opportunities.

Lesson Three: keep a close eye on what the baddies are doing to learn how best to look after number one.

After all, airlines are the masters at that game.


Flight Centre Acquires Online Market Share

FLIGHT Centre has aggressively entered the online affiliate marketing space, with some competitors claiming it is paying up to A$40,000 a month to sell travel through several major websites.

Over the past three months, Flight Centre has done deals in rapid succession with high-traffic sites, and

It is primarily selling domestic airfares and its hotel inventory through these sites, while also heavily advertising the new ‘Search Compare Book’ online campaign.

Further website signings are likely, intensifying competition and forcing up pricing in a sector previously dominated by the likes of Flairview Travel, Octopus Travel and the Online Travel Corporation (which is now part of the UK Lastminute).

Global Head of Marketing at Flight Centre, Colin Bowman, says the giant retailer – which some analysts feel has previously ignored the Internet to its detriment – is now fully committed to an online, multi-channel distribution strategy.

 ”In the last three months we have increased our emphasis on this medium and moving forward it’s going to be a bigger part of what we’ll do as part of our multi-channel push,” Mr Bowman says.

 ”We are really looking at the online space with consumers trending more to the web, either to purchase or for research.”

Bowman says Flight Centre has been looking at a number of new sites but scoffed at suggestions his company has been paying over the odds for an online presence, while declining to comment on specific figures.

“We’re not about to sit back and are always looking at new Internet opportunities, which we continually assess on a Return On Investment basis before making a business call.”

He says that Flight Centre has to be competitive in this area even though it may be taking revenue away from consultants.

“At the end of the day it’s all about promoting our product to the customer – we’ll deal with revenue issues internally,” Bowman says.

May 12, 2005

Internet Roars In Lion City But Traditional Retail Stable

INTERNET bookings in mature Asian markets such as Singapore have already reached 15%, online operator Zuji believes.

However, the National Association of Travel Agents Singapore is more circumspect, estimating that the internet and direct bookings now account for around 10% of the Singapore travel market.

NATAS Chief Executive Officer Robert Khoo says traditional travel agencies are holding their own in the Lion City, generally regarded as the most net-savvy of all South-East Asian markets.

Mr Khoo says demand for traditional agents is increasing with a 15% boost in local agency numbers over the past five years.

Both NATAS and Zuji agree that booking trends are changing due to the emergence of Singapore as the primary regional hub for Low Cost Carriers (LLC), which in 2004 accounted for 7% of all flights from Changi Airport.

Freshly fluid consumer travel patterns are also having an impact, with the General Manager of SA Tours, Alicia Seah, saying business is strong for her company, one of Singapore’s largest travel agencies.

“The main difference now is that there perhaps is less emphasis on booking flights and more on-the-ground (product) such as organised tours, cars, restaurants and cruises.”

Singaporeans are also travelling more often, says Khoo. “Previously, many Singaporeans saved, sometimes for years, to go on one long international vacation,” he says.

“Now, many have the money but not the time to take long vacations so the trend is to take several short trips on a free and easy basis.”

Zuji says internet booking is getting especially strong strong support from the small to medium business sector in relatively mature Asian market such as Singapore and also Hong Kong.

It says yearly growth (end 2003 to end 2004) was in triple digits in all markets – Australia, Singapore, Hong Kong, Taiwan, Korea.

Director of Corporate Affairs Kim Stockham says hotel sales are particularly strong, growing at around 300% a year.

She adds that much of Zuji forward growth will come from hotel sales following a renewed corporate and marketing focus.


Online Product Flies For Air NZ

Air New Zealand says customers have embraced the introduction of accommodation and car hire – either bundled or dynamically packaged with airfares – on its website.

Global Direct Sales General Manager, Chris Hunter, says: “It’s progressing well and we are happy with the way things are going so far – we’ve had a pretty good uptake.”

He says the product initiative was driven by regular users of its web site.

“Our customer base clearly demanded we sell more than just air tickets on the site,” he says.

“So we went through a significant number of business before deciding to add these components.”

Mr Hunter says consumers are happy to book relatively expensive holidays online.

“We are finding that the decision to travel is driven by the discounted (and bundled) ‘Hot Deals’ but then consumers are upselling themselves.

“Certainly many people are not afraid of parting with significant amounts of money on the credit card.

“I think our strong branding helps with that; we are seen as very trustworthy.”

Mr Hunter says Air New Zealand is continually reviewing the site.

“The brand life online is much sorter than offline,” he said, adding that a major focus of the site is converting the inbound market.



Suppliers Gain Market Share From Online Retailers

ONLINE travel agencies are losing customers to suppliers in the world’s biggest travel market – a finding that has strong implications for online Asia Pacific businesses.

According to the latest report from PhoCusWright, 40% of online travel shoppers in the United States price check on web agency sites before booking direct with the supplier.

Airlines have been the big winners with “nearly half of online travel shoppers” booking air (either through the call centre or web site) after cruising retail sites.

“This compares to three out of 10 who have shopped online travel agencies but ultimately purchased direct from a hotel or car rental company,” PhocusWright says.

“Low price guarantees, loyalty points and improved website navigation and services have impacted this shift.”

Service is also a factor. “More than twice as many online travellers (36%) believe the supplier-direct channel provides the best customer service compared with 15% who choose the online travel agency channel.”

Even traditional agencies fared badly with just 33% of respondents claiming they provided the best service.

Meanwhile, nearly four out of 10 (38%) of online travellers believe suppliers offer the lowest prices, up from just 14% in 2002 – a 24-point gain in two years.

Online shoppers also believe that suppliers offer the lowest fees (44% vs. 29%), most bonus miles/loyalty reward points (51% vs. 14%), and an easier change/cancellation policy (39% vs. 17%) compared to online travel agencies.

“Online agencies have lost their footing with leisure travelers in 2004 as a result of aggressive supplier efforts to better manage inventory and win business through online and offline direct channels,” according to Susan Steinbrink, PhoCusWright analyst and author of the report.

“The key to their long-term, Internet survival will be in successfully upselling the customer with valued multiple travel components.”

A total of 500 interviews were conducted via telephone from International Communications Research/ICR’s centralized telephone center between Oct. 6 and Oct. 16, 2004, for the survey.


Cendant to Launch New Regional Vendor Platform

DISTRIBUTION market leader Cendant TDS is launching an integrated online product platform through Galileo that will – for the first time – see the company distributing packaged wholesale products through its agency network.

The Regional Vendor Platform (RVP) – due the final quarter of this year – will also aggregate and distribute air, hotels car hire, cruise, destination activities, insurance and foreign exchange through traditional and online agencies.

Utilising the Travel Service Aggregator (TSA) technology Galileo developed with Webjet and Microsoft, RVP will allow agents to directly access and book the live inventory of contracted suppliers via a web interface.

Cendant TDS Managing Director John Guscic says RVP will feature “all types” of online and offline product, although suppliers must have a robust technological capacity to ensure seamless integration with the web-based application.

“It will be used as a booking front-end for agents or sites to provide the most robust and integrated content platform available in the market,” Guscic says.

“I think it’s a great opportunity for suppliers and wholesalers to expand their product reach.”

Guscic says that work is already well advanced on the technical aspects of RVP, which will be integrated into GDS desktops.

“The TSA technology is so robust; it integrates into the mid and back office, enabling touchless transactions.

“This product is a great success story for the Australian travel industry and has already been rolled out globally.

“It is being used by UK consolidator and wholesaler Travel 2/Travel 4, while Harvey World Travel is using the TSA platform in a B2B environment.”

Planning for the product accrual strategy is now underway with Cendant set to appoint a dedicated partnership and relationship manager.

Director, Product Management and Marketing, Kurt Knackstedt, is currently scouting product from all sectors.

“We want everything,” he jokes.

Guscic adds: “We want all the content we can get then let agency customers make the decision on what they want to buy.”

In terms of marketing, Guscic claims RVP will give Galileo a major advantage over its competitors, although TIAS also offers agents an aggregrated database – albeit without air – through Traveltools.

“No-one else will have the suppliers, the technology or the distribution reach, while agents will be able to get all content through the same booking engine rather than visiting separate websites or making lots of phone calls.”

Guscic claims that Galileo’s share of the Australian Global Distribution Systems market has grown 10% over the past year and now sits at around 50%.

Its agency partners include Harvey World Travel, Flight Centre, American Express, and BTI.

May 13, 2005

GDS In Star Chamber

SOME of the world’s leading airlines are pushing publicly and aggressively for GDS distribution alternatives through the Bangkok-based Star Alliance.

At a press conference in Japan last week, the Star Alliance told media that it would actively support new entrants to the distribution marketplace -provided the price is right.

And in a further backhander to the incumbents, Star Alliance Chief Executive Officer Jaan Albecht says the “new entrants” – known as GNEs – may provide better service for less money.

“Our 16 member carriers currently pay a combined total of around US$2 billion in annual GDS fees and we see a definite potential to reduce these,” says Mr Albrecht.

“The GNEs will not only allow the member airlines to cut distribution costs, but also permit the carriers to explore new functionalities which the current GDS do not provide.”

He says Air Canada, Lufthansa, SAS, Singapore Airlines and United are at the forefront of this initiative on behalf of all Star Alliance members.

The aim is to draw up a single strategy for selecting GNE partners.
“It is our aim to finalise the GNE selection by the end of the year,” says Albrecht.

Star Alliance was established in 1997and claims its members represent almost 29% of world airline revenue.

Members are Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, Spanair, TAP Portugal, Thai Airways International, United, US Airways and VARIG Brazilian Airlines.

South African Airways will be integrated over the next 12 months.


Good Times Ahead in 2005 – Abacus

ABACUS International has forecast solid growth in Asia-Pacific travel bookings for the rest of 2005.

The Singapore-based GDS reports that bookings for the first four months of this year are already up 21% over the same period in 2004, which was the best for a decade.

Vietnam was the standout performer during April with a 25% increase in bookings over March.

The established North Asian markets of South Korea (22%) and Hong Kong (16%) also grew strongly, while FIT bookings in Indochina and Central Asia increased 14%.

Four out of five bookings (78%) made in Asia-Pacific during April were for travel within the region.

Abacus President and CEO, Don Birch, says: “We are seeing signs of solid growth which, barring unforeseen circumstances, we expect to continue for the rest of the year.”

He says total bookings on the Abacus system during April increased by 7% month on month to 2.9 million, up 10% over the previous year.

A black spot has been the slow recovery of passenger traffic to the tsunami hit markets such as Krabi and Phuket where “we are seeing a 60% to 70% drop in bookings” over last year.

Abacus now distributes through 11,000 travel agency locations in 22 markets throughout the Asia-Pacific region.


Sabre Bids For Lastminute

Sabre has offered to buy Plc for 577 million pounds to add to its Travelocity brand and create Europe’s biggest online travel retailer.

It is offering 165 pence a share in cash for Lastminute.

Analysts believe the offer is fairly priced but say there is still a chance rival U.S. groups such as IAC/InterActiveCorp or Cendant Corp may counter bid.

Lastminute Chairman Brian Collie endorsed the Sabre approach, telling reporters: “This is the only offer we’ve ever had, and it’s a very good one.”

Sabre says buying Lastminute will strengthen its negotiating position with global airline and hotel companies, allowing it to offer better deals to customers.

May 13, 2005

Melbourne Hotels Win Asia-Pacific E-Marketer Award

Crown Towers Hotel and Crown Promenade Hotel in Melbourne have been jointly named Asia-Pacific E-Marketer of the Year in the annual TravelCLICK and Hospitality Sales and Marketing Association International (HSMAI) awards.

The Melbourne properties scored the award, restricted to TravelCLICK customers, for significantly increasing business through electronic distribution channels.

During 2004, Crown Towers, a 482-room luxury hotel, used search engine marketing to increase its website visitors by approximately 41%.

Over the same period room nights 40%, while 2004 revenue rose 50% over the previous year.

Sister hotel, the Crown Promenade, a 465-contemporary property, targeted travel agents and became one of the top 15 hotels in Melbourne, based on revenue booked through the GDS, within one year of opening. 

Hyatt International was selected as the Overall E-Marketer of the Year winner based on its strong performance in electronic channels and effective use of both targeted electronic media and competitive knowledge.

Other E-Marketer Award winners are:

  • North America E-Marketer of the Year – Kimpton Hotel & Restaurant Group
  • Latin America E-Marketer of the Year – Country Club Lima Hotel
  • Europe/Middle East/Africa E-Marketer of the Year – Radisson Edwardian International Plaza Hotel Heathrow
  • E-Marketer Lifetime Achievement – Tom Civitano, Executive Vice President Sales & Marketing, The Plaza Hotel, New York

TravelCLICK is a US-based company that provides electronic marketing and price benchmarking services to the hotel industry. It has more than 8000 customers across 140 countries.



Search Engine Marketing Takes Off – Are You On Board?

SEARCH Engines are going gangbusters. Advertisers – travel companies prominent among them – are lining up to get on board. Just look at the first quarter results for the two biggest brands, Google and Yahoo!.

Google’s first quarter profit quadrupled to US$369.2 million. Revenue – almost entirely from online advertising – increased 93% to US$1.3 billion. The news pushed Google shares, which listed last August at US$85, beyond US$220.

Meanwhile, Yahoo!, the most popular US website, posted net income of US$205 million for the first three months of 2005, more than double its US$101 million profit for the same period last year.

Big money, massive profit growth rates, something is very real happening here. In simple terms, the Search Engines are getting mobbed by businesses large and small which want to advertise with them.

And this is just the beginning. Search Engine Marketing (SEM) – the art of highlighting websites, brands or products in response to consumer “keyword” queries – is still in the first flush of youth.

Google, which has entered the lexicon and seems to have been around forever, is just 10 years old. Yahoo! was started in a Stanford University trailer in 1994, and listed a year later.

Here in Australia, the SEM story is equally positive. Why? Because SEM is cost-effective (for now at least) and it works. In fact, Australian internet advertising in general is on the rise with SEM the current star performer.

According to a survey by emitch and Roy Morgan Research, prominent advertisers estimate that 9% of their total advertising budget (or around A$800,000) will be allocated to the internet in 2005.

These experts are increasingly shifting their spend to SEM and believe the major strengths of the internet as an advertising medium are (1) targeting capabilities; (2) customer reach; and (3) cost effectiveness.

They also saw “immediacy” and “accessibility” as major strengths.

And with travel one of the most searched for categories on the Internet, there are clearly major opportunities for travel businesses to market online, with very real benefits for those who get in early.

The buzz among travel industry early adopters is very strong. At the recent Search Engine Room conference in Sydney, around 25% of the 250 attendees came from travel, with many actively using SEM to great effect.

Importantly, it’s not just airlines, hotel and destination sites who are getting on board. Corporate travel, car hire and destination sites are all using a mix of organic and paid search to generate sales leads.

Organic search results are the links which appear on the main panel in response to a keyword searches such as “cheap airfares” or “Gold Coast hotels” – while paid search is generally the boxed listings to the side.

Most experts like to have a mix of the two to balance risk and return.

Paid search advertisements are priced – and ranked – according to demand. Researcher Frost & Sullivan estimates that the average cost of a keyword is around A$1, although prices can range from 10 cents to $50.

Organic results are much less predictable with high rankings determined by a number of factors, in particular relevance of text, number of site links and popularity.

In Australia, the clear search engine market leader is Google with around 50% of eyeballs, followed by ninemsn and Yahoo! (which also offers organic and paid search to numerous partner sites, including ninemsn, through Overture).

Combined, these sites are just about the most popular segment on the Internet, and Nielsen//NetRatings reckons search engines have a “reach” of 71% among the 13+ million Australians with Internet access.

That’s a lot of potential customers. Can they find you?

May 13, 2005

TIAS Signs More Suppliers

Avis, NSW Holidays and TravelPoint have joined Australia’s TIAS TravelTools booking database, which now features 37 suppliers.

General Manager Sales and Marketing, Gerald Chait, says the number of travel agents using the system had also increased.

“Over the past month we have seen a significant increase in activity and May was a record month for agency subscriptions,” he said.

Three new suppliers have also joined the TIAS online payment system, TIAS Tips – Captain Cook Cruises, Spacewalker Gold Coast and Infinity Gold Coast.

Chait said TIAS Tips can now be integrated into a supplier’s host booking system.



Flurry of Deals For eNett

THE flurry of announcements from eNett International has continued with Tramada the latest company to announce an alliance with the Australian technology provider.

eNett has moved quickly to capitalise on the push for travel agent service fees in Australia and announced a series of distribution agreements over the past two weeks for its Travel Service Fee (TSF) product.

These include arrangements with Galielo and now Tramada, which supplies travel management software to the retail travel industry.

eNett claims TSF enables travel agents to easily move to a service fee business model from July 1 when Qantas cuts domestic airline commissions from 5% to 1%.

CEO Anthony Hynes says: “TSF is a very simple product which can be fully integrated for ‘booking-to-back-office’ processing and reconciliation, interacting seamlessly with existing agent systems.

“It can also be set up to offer batch processing or operated as a standalone desktop solution to make the process easier and more cost-effective.”

The company also markets the eNett payment and accounts management system.

Partners include Qantas Holidays, Calypso, Sunlover Holidays, The Travel Corporation, P&O Cruises, Scenic Tours, Globus & Cosmos, the AOT Group and Australian Pacific Touring. 

Also on board is MasterCard International for credit card connectivity, and ANZ Banking Group.


Tramada Links With Amadeus

TRAVEL Management Software provider Tramada is seeking further distribution opportunities after sealing a fresh agreement with Amadeus, announced just days after its exclusive arrangement with Sabre expired on April 30.

Tramada Director David Lanning says while “it’s still business as usual with Sabre” the company is keen to further expand its distribution network and access a greater number of travel agents.

Managing Director Michael Rudny says Tramada is also talking with Cendant and hopes to have an agreement in place by the end of this year.

“I think there are great growth opportunities for Tramada, and Sabre has graciously understood that were we to remain exclusive to them we could never reach our full potential,” Rudny says.

Tramada has 1500 travel agent clients from most leading groups including Jetset, Travelscene, American Express, Harvey World Travel and Traveller’s Choice.

May 13, 2005

STB Supports Wired 2005

ASIA’S first home-grown travel distribution and technology conference – Wired 2005: Asia Travel Matrix – was launched today with a three-year marketing commitment from the Singapore Tourism Board. 

Wired 2005 will bring together all major Asian industry players in travel’s most dynamic sector, reflecting the increasing maturity of the local travel technology and distribution market.

Based on three basic pillars – Bold Thinking, Fresh Ideas, New Technology – Wired 2005 has already won strong industry support.

Apart from the STB, other foundation partners include Akamai, Yahoo! Asia, Millenium and Copthorne Hotels, Pegasus and HEDNA.

To be held at the Grand Copthorne Waterfront Hotel on October 20-21, the event has been founded by two of the region’s leading travel communication specialists – Yeoh Siew Hoon and Martin Kelly.

Stay tuned for further details.

May 13, 2005

Hungry Octopus

Australian travel agent sales have passed the A$10 million mark at

GM Peter Smith says while is best known for its accommodation listings, “we’ve seen a significant increase in transfer and sightseeing bookings over the past year.”

He says that the local Octopus sales team has been boosted to drive continued growth. now has 22 offices around the world and was recently named the UK’s fastest-growing travel company.

May 13, 2005


Travel Distribution Strong But Net Income Down 44% At Cendant

By Martin Kelly

EVER thought about creating a global travel content and distribution empire? The people at Cendant Corporation, based out of New York, certainly have.

And what’s more, they have done something about it. Over the past couple of years, Cendant has bought up big, with travel and real estate the major focus.

Over the past 12 months alone it has acquired Orbitz, ebookers and Gullivers Travel Associates.

Other travel brands it owns include Galileo, Avis,,  Budget, Ramada International, Howard Johnson etc.

I’m sure you get the idea; they are big – but how big?

Well, to give you an idea of scale, Cendant is capitalised at more than US$22 billion on the New York Stock Exchange, while Sabre Corporation (which apart from the GDS also owns Travelocity) is worth around US$2.5 billion.

But no-one said running a company of this size was going to be easy, as an analysis of its recent second quarter results reveals.

On the plus side, Cendant’s Travel Distribution Services division went well and is expected to continue its strong performance, driven largely by recent acquisitions and solid gains from established internet businesses, albeit from a low base.

“We expect growth to accelerate,” Cendant’s President and Chief Financial Officer, Ronald L. Nelson.

However, the Cendant accounts reveal that total net income for the company slumped 44% to US$387 million despite booming real estate and travel markets.

The reasons for this are a little hazy, although it’s safe to assume financial indigestion flowing from the challenges of integration are a significant factor.  

Meanwhile, as part a bid to focus on core activities, Cendant will sell its Marketing Services Division for US$1.83 billion and embark on a US$2 billion share buy back over the next 18 months.

See, not easy, a fact recognized by the stock market with Cendant’s share price going nowhere over the past year.

The second quarter result was undeniably patchy. It revealed steady demand for Global Distribution Services (Galileo) but issues in its Vehicle Rental and Hospitality Services divisions.

Highlights from Travel Distribution Services (excluding contributions from Orbitz, Gullivers and ebookers) include:

  • A 48% increase in revenue and 21% growth in pre-tax profit to US$143 million.
  • Organic growth of 47% in online gross bookings at Cendant’s travel agency businesses (or US$14 million increase in revenue). 
  • Strong growth and higher margins from, which has now migrated to the Orbitz technology platform. 
  • Steady result from GDS cash cow Galileo which generated 3% revenue growth – from US$396 million to US$410 million.
  • Global air traffic up 6% by GDS segment but US domestic air yields down.

Nelson claimed the recent acquisitions would really start to kick in during the second half of 2005 and through 2006.

However, analysis of the company’s overall forecasts reveal that total “income from continuing operations” will probably be down between 5% and 10% for the full year.

Once again, the strongest growth will come out of travel distribution, where Cendant is forecasting an increase in pre-tax earnings of up to 43%.

However, vehicle rental remains troublesome with decent revenue growth undermined by discounting combined with increased vehicle and depreciation costs.

“In order to offset these increased vehicle costs, we recently raised pricing at both Avis and Budget. To date, these price increases appear to have been successful,” said Nelson.

On face value, Cendant’s accommodation brands booked a solid quarter, with RevPAR increasing 10%, while revenue grew 12% to US$130 million.

Yet pre-tax profit was down 17% over the previous year due to marketing and other expenses.

Oh well, when running a global travel giant, you’ve got to be philosophical. You know, win some, lose some.


Promiscuity Disrupts Marriage of Convenience

By Martin Kelly

AIRLINES and the GDS. Hardly a marriage made in heaven, more like a union of convenience, but one which has reaped significant benefits for both parties over many years.

Yet now one of the partners is getting restless, and it’s not the GDS. The airlines are pushing for change, throwing money at younger, sexier companies who reckon they can do it – distribute airfares to travel agents, that is – for much less.

And while most of the preliminary skirmishes have been fought overseas, the show came to Sydney last week, when Star Alliance CEO Jaan Albrecht declared: “We want to bring new players into the market.”

In a wide-ranging speech packed with Darwinian analogies – only the fittest will survive etc – Albrecht told the National Aviation Press Club that the Star Alliance is working with the new players to come up with web-based GDS alternatives.

Broadly speaking, these entrant companies offer airline inventory direct to travel agents through internet portals at a fraction of the distribution cost charged by GDS.

For example, ITA Software has claimed it will charge airlines just 50 cents per segment. Compare this with Star Alliance estimates that the average GDS charge per ticket is more than $16.

“By exploring the potential of so-called new entrants, Star Alliance member carriers will be able to break the dominance, cost structure and poor flexibility of the Amadeuses, Galileos and Sabres,” Albrecht said.

“Welcome, good old GDS, to the world of competition. It seems to be time for you, to evolve as well.”

The response of local Galileo boss, John Guscic, was equally Darwinian.

“It took an asteroid to wipe out the dinosaurs, but it will take more than gum flapping to undermine the value that the GDS brings to travel agents,” Guscic said.

Managing Director of Amadeus, Tim Russell, said there would be room for both players, something Albrecht agreed with.

“In a nutshell, we have a healthy respect for them and Amadeus is looking at how we can serve that market,” Russell said.

By “that market”, Russell said he means simple point to point travel.

His comments also highlights the inevitability of the GDS getting involved in web-based distribution alternatives, either developing their own or buying into one of the new players like G2 SwitchWorks, ITA Software and FareLogix.

All this debate follows moves in the United States, where seven of the largest carriers have signed with G2 SwitchWorks “as a provider of choice for alternative-GDS distribution services between them and key agency clients”.

Five of the carriers – American Airlines, America West Airlines, Continental Airlines, Delta Air Lines and Northwest Airlines have also agreed to pre-pay distribution fees, of up to eight million tickets, in exchange for transaction discounts and the opportunity to acquire a minority stake in G2 Switchworks.

So, as you can see, it is more than just posturing by the so-called Legacy Carriers, fired and challenged by the success of Low Cost Carriers distributing direct to consumers through the Internet.

They have clearly targeted distribution costs as a manageable expense – unlike oil prices – and are doing everything they can to bring them down.

However, come what may, you can be sure of one thing – while the boundaries within the marriage of convenience between the airlines and GDS might shift, the relationship will most certainly endure.

Better the devil you know, right?


China’s Independent Travel Market Takes Off

By Martin Kelly

Excellent sales growth from China’s leading online retailer Ctrip once again exceeded market expectations and set a cracking pace in the world’s most exciting travel market.

Results from rival China travel retailer eLong told a different story – that of a company still establishing itself … strong sales were counter balanced by increased spending on acquisitions and marketing.

Consequently a clear split has emerged between China’s two big independent travel brands in the eyes of regional travel industry analysts.

That is, Ctrip, which is already making money, will remain dominant for the foreseeable future, while eLong focuses on building for the longer-term.

Analyst William Bao Bean from Deutsche Bank commented: "In light of eLong’s focus on customer acquisition rather than profitability, transaction metrics are the key to measuring success.

"eLong is getting traction as its relationships with portals are driving much higher traffic – but it is now up to the company to convert traffic into customers."

He said other players such as CYTS and Cendant (via their joint venture) are not yet having impact on the independent travel marketplace.

eLong’s net sales for the second quarter were RMB52 million ($US6.42 million) driven mostly by hotels, although the growth in airline ticket sales exceeded expectations.

Ultimately, though, eLong lost RMB11 million ($US1.35 million) for the quarter.

Ctrip powered on, recording net sales for the second quarter of RMB129 million ($US16 million), up 60% year on year. Net income was RMB56.5 ($US6.8 million), an 80% increase on last year’s result.

President and Chief Financial Officer of Ctrip, Neil Shen, who is leaving the company, said the results "highlighted our strength in strong organic and balanced growth.

"We have a healthy business model that we believe will continue to enable us to take full advantage of the vibrant travel industry in China."

Analyst Bean said: "Ctrip hit the ball out of the park again in the second quarter and is gradually cementing its position as a category leader in the China market based on its execution, high barriers and strong growth.

"While risks remain, including the economy and execution, we believe the outlook for Ctrip in the near and long term is good as it leads the small but fast growing independent travel market. "

Revenue at Ctrip is dominated by hotels at a ratio of around 2.5 for every airline dollar. Hotel bookings are also growing marginally quicker, although the most spectacular growth is coming from package tours, albeit from a very low base.

Online transactions are steady at 30%, compared with 20% for eLong.



Search Engine Pricing Blowout For Travel And Hotel Websites

By Martin Kelly

Paid Search Engine Marketing costs in the travel sector have blown out dramatically over the past 12 months with sales conversion rates for Australian accommodation sites in particular reaching unsustainable levels.

Industry experts such as Frank Grasso from e-Channel say sales conversion rates have rocketed to almost US$90 per customer for some new players in competitive categories, while a study by researcher Frost & Sullivan confirmed it is a major concern for the industry.

“The increasing pricing problem is worse for new entrants into the market because they get hit twice: they have to pay a higher cost per click and due to their lack of brand presence they have a lower conversion rate,” says Grasso.

This is clearly making the first sale per customer uneconomic and forcing a strategic reassessment with websites justifying the high SEM cost by attempting to generate repeat business.

Grasso says the average cost per click for top position with popular terms such as ‘Sydney Hotels’, ‘Singapore Hotels’ and ‘Bangkok Hotels’ for an established company range between US$2 and US$2.95 on Google.

“A year or so ago we would have been able to get the top position for much less,” he says.

Managing Director of Amplify, Richard Noon, says: “What we are seeing is people moving more to a lifetime acquisition mode because they can’t justify paid search on a single sale basis.

“However, the jury is still out on whether this is the right approach, but clearly some players are prepared to play that game.”

Meanwhile, a report from Frost & Sullivan has revealed that rising prices and increasing competition for top ranking keywords are the top two concerns for Australian travel search engine marketers.

But Research Director, Technology, Foad Fadaghi, predicts paid search in the travel and accommodation category will still grow by at least 30% over the next 12 months.

He says the strongest growth will come from companies marketing destination activities.

Fadaghi estimates that travel is the dominant force within the Australian search engine marketing industry with 17% of total spend, closely followed by financial services on 14%.

Grasso says the rising costs are forcing many travel and accommodation companies to reassess their search marketing spend.

“The answer to this dilemma is to get smarter when devising a search engine marketing strategy,” says Grasso.

“Companies should allocate some of their budget towards PR and Branding, while using search as an acquisition tool. 

“Advertisers also need to become more aware of what the lifetime value their customers is and work out how much they are willing to pay to acquire a new customer. 

“The most successful search engine campaigns are the ones that follow a strict Cost Per Acquisition benchmark.”

Noon says the cost blowout throws the spotlight back on the importance of organic search and other marketing tools.

Both Frank Grasso and Foad Fadaghi will be speaking at TRAVELtech in Sydney on August 30. 



The News Is All Good, Or All Bad – It’s A Matter Of Perspective









By Martin Kelly

OMIGOD – the world has changed. Things are different now. Those crazy kids aren’t reading newspapers, all they do is talk and text on mobiles; they’re always online and you can’t even talk to them any more.

I mean, even Rupert Murdoch reckons the internet is the way to go!

Recent reports, many of which were read online, carried the shocking news that media baron Rupert Murdoch believes newspaper editors must embrace the internet, saying print news executives “sat by and watched” as a generation of digital consumers turned away from print.

He could be talking about travel.

The omnipotent CEO of News Corp cited a recent report by the Carnegie Corp in the United States showing that 44 per cent of respondents between 18 and 34 years old said they use websites at least once a day for news.

In Australia, figures from Nielsen//NetRatings reveal that 13.2 million, or 84%, of people aged 16+ have access to the internet, 50% of users have broadband, most spend 30 minutes a day online, and that travel (like news) is one of the most popular categories with 36% “reach” among users. The vast majority of users are aged between 25 and 54.

Murdoch said that newspapers face a dire future unless the way they gather and deliver news changes dramatically. Otherwise, he said, the steady migration of readers and advertisers to web will continue unabated.

“The trends are against us,” Murdoch told the annual meeting of the American Society of Newspaper Editors. “We’ve been slow to react. We’ve sat by and watched. Unless we awaken to these changes, which are quite different than those five or six years ago, we will, as an industry, be relegated to the status of also-rans.”

So why am I telling you this? Well, replace ‘news’ with ‘traditional travel businesses’ and see what you come up with. Murdoch’s words should resonate with us all because he is simply talking about consumers wanting their product delivered in a different format more suited to the times.

Also, remember, it’s Rupert Murdoch, one of the world’s smartest businessmen, who is saying this. And, while he may be well north of 70, the so-called ‘Dirty Digger’ knows a good thing when he sees it, and it is not too proud to see the error of his ways.

The same applies Kerry Packer who, like his former compatriot, did not become insanely rich by ignoring the bleeding obvious and is set to make another large fortune with the upcoming listing of Seek, the market-leading internet job site.

Murdoch concluded that the future is strong, provided the newspaper industry – like traditional travel businesses – finds the correct balance of product delivery to satisfy a new generation of customers.

“I’m still confident of our future, both in print and via electronic delivery platforms. The data may show that young people aren’t reading newspapers as much as their predecessors, but it doesn’t show they don’t want news. In fact, they want a lot of news, just faster news of a different kind and delivered in a different way.

“And we are uniquely positioned to deliver that news. We have the experience, the brands, the resources, and the know-how to get it done. We have unique content to differentiate ourselves in a world where news is becoming increasingly commoditized. And most importantly, we have a great new partner to help us reach this new consumer — the Internet.

“The challenge, however, is to deliver that news in ways consumers want to receive it. Before we can apply our competitive advantages, we have to free our minds of our prejudices and predispositions, and start thinking like our newest consumers. In short, we have to answer this fundamental question: What do we – a bunch of digital immigrants — need to do to be relevant to the digital natives?”

Ends/ 20 April, 2005.