Growth, Growth and More Growth at Jin Jiang

By Martin Kelly

CHINA’S largest accommodation group, Jin Jiang Hotels, will more than double in size over the next four years, Michael Meade, Senior Vice President – Sales and Marketing, told Wired Travel Asia delegates.

Meade said Jin Jiang, which aims to grow from 220 hotels and inns to 500 by 2010, will also expand beyond China and plans to list on the Hong Kong Stock Exchange by the end of this year.

The company’s aggressive growth plans reflect the dynamic nature of the Chinese hotel market, where just 3.3% of hotels are managed by international brands, and the strong support of its ultimate owner, the Chinese National Government.

Right now, Jin Jiang is in the midst of transition – just like the Chinese accommodation market, which Meade said is currently characterised by:

– Dominance of the online duopoly – Ctrip and Elong
– Relationship selling and reservations process
– Reliance on phone and fax
– Very late booking profile
– Low credit card penetration (but this is changing)
– Price-sensitive
– GDS growth, particularly in Shanghai and Beijing, although slow elsewhere

He said Jin Jiang is methodically driving change as the company moves to take advantage of its market-leading position without upsetting its delicate internal balance.

Rushing technology such as Revenue Management Systems does not work, Meade said, nor does GDS (so far), online rate parity and outdated reliance on facsimile machines.

“We are taking it step by step, and are doing training, training and more training,” he said.

Many of the changes focus on technology, distribution and Customer Relationship Management (CRM).

Jin Jiang has already developed its own Central Reservations System – JREZ – with the Thayer Group, which is going to become increasingly important to the group as it attempts to convert hotel-direct bookings to the CRS.

Jin Jiang will also introduce customer loyalty programs next year as part of an integrated CRM platform incorporating its Property Management Systems.

Meanwhile, it is well into a website rejuvenation program that started with jingjianghotels.com earlier this year.

This revamp is now moving through into the individual sites as part of an overall strategy to increase online sales, either direct or through intermediaries.

The design focus with the new websites is on cleaning up the traditionally busy, glitzy Chinese look into a more international information-based format with stronger, cleaner images, and online booking engines.

“Online is just going to go off,” Meade said, adding that over time Jin Jiang would like to become “a one-stop online shop” offering travel, accommodation, tours and transport.

Chinese consumers are gradually getting the hang of booking over the web with Ctrip reporting that 35% of its bookings are now taken online, a major improvement.

In future, Meade sees major opportunities for online competitors to Ctrip and Elong, dynamic packaging, mobile reservation technology, and “Last Minute” products.

November 8, 2006

No Mystery As Shoppers Hit The Web: Airlines First, Retailers Last

By Martin Kelly

AIRLINE websites singaporeair.com and cathaypacific.com finished first and second in an Asian consumer satisfaction survey of six regional websites run by IFH Worldwide in which retail site asiatravel.com finished a distant last, it was revealed at Wired Travel Asia 2006.

IFH Chief Executive Officer Thomas Kraft said major hotel groups Shangri-la.com (3rd) and ichotelsgroup.com (4th) were also polled, as was Zuji, which finished fifth in the first mystery shopping exercise of its kind conducted in the region.

Each site received 10 visits from different shoppers in the guise of either leisure or business travellers planning short-haul Asian trips from Singapore or Hong Kong.

The results were mostly consistent across both groups except for Zuji, which ranked highly among leisure travellers (79% satisfaction ranking) but less well with business travelers (64% satisfaction ranking). Zuji’s overall satisfaction ranking was 71%.

Asiatravel.com was by far the worst-performing site with an overall customer satisfaction ranking of just 52%. Customer comments on this site included:

– Not able to book online for sites
– Had to drill down to another page to activate booking screen
– Unable to book as there were error messages on the screen
– Easy to find on Google, poor visibility of Yahoo! and MSN

Zuji fared much better although some were peeved that booking a flight or hotel still took five clicks, while others thought it took too long for new customers to familiarise themselves with the sites and that “not all pages” loaded quickly enough.

Slow page loading time and too many clicks were also raised in the customer appraisal of ichotelsgroup.com, with a couple of reviewers complaining they to drill down two or three pages before their selection was available. Its overall satisfaction ranking was 73%.

Shangri-la.com performed very well with many positive comments (“easy and efficient” – “very trustworthy”) although the payment took 15 seconds to appear. Shang’s overall customer satisfaction ranking was 77%.

Cathaypacific.com also did very although was chipped for not having a ‘home’ link on all booking pages while site loading was again an issue. Cathay’s overall customer satisfaction ranking was 78%.

Finally, Singapore Airlines may have topped the survey with a customer satisfaction ranking of 82%, but customers still had issues with six clicks to book, slow page loading and SQ not offering the best or equal rate for 35% of its products.

None of the sites polled ranked very well with search engines, however some Wired Travel Asia 2006 delegates argued that the keyword search terms – Air Ticket, Hotels and Destination (in question) – were too nebulous to give a meaningful result in this area.

In summary then, the IFH mystery shoppers were generally happy with the online experience at the sites visited (apart from asiatravel.com) but were consistently disappointed with the number of clicks needed to book and slow downloads.

Like you and me, they have better things to do with their time.

November 8, 2006

Travel Wired: Hotels – Full Rooms, Empty MInds?

By Martin Kelly

Passion for travel is the reason many of us got involved in the industry.  It couldn’t have been the money, right?

Yet passion gets you nowhere inside a corporate straight-jacket, where you’ve got to bury the animal within.

Still, the passionate traveller still lives in all of us … we all have opinions on what makes a good – or bad – travel experience.

It just takes someone to ask what turns us on or off.

This proved to be the case at Wired Travel Asia, when a number of high-profile speakers were asked which section of the industry could do with a makeover.

The results may surprise you.

As you would expect, the airlines copped some flak – let’s face it, they are such an easy target, particularly among frequent travellers.

“I can’t imagine a worse experience than I get with the airlines – I travel with them all the time and they treat me like crap,” said Jim Donnelly of IgoUgo.

Airports also came in for some feedback.

“I understand that airports have to balance safety and security, but as far as I’m concerned most airports are still stuck in the dark ages,” commented David Peller of ITA Software.

However, hotels fared worst of all.

They were continually chided by a wide range of speakers for a lack of product differentiation and poor service delivery – especially when matched with the advertising hype.

At least two speakers told anecdotes of waking up in hotel rooms and not having any idea of where they were staying – not just the hotel, but the city and country.

That’s because there were no regional reference points to be found, no personalisation of the destination experience, just relentless delivery of a corporate service ethic – a special bed or pillow complete with copyright – to the point of blandness.

Hang on, that’s probably the point.
Eureka, says the sales and marketing guru to his CEO, we have now ensured that our customers will get exactly the same product whenever they stay at Brand X … no matter where it is.

Just like McDonald’s.

To illustrate the point, Thomas Kraft from IFH threw up two slides of virtually identical hotel rooms, and asked the audience to spot the difference.

They couldn’t, until he revealed the rate and brand for each property – one was $100 more expensive (or cheaper, depending on your perspective).

Chalk one up for the suits in the back room, but is that what the accommodation industry is all about – price?

D’oh – of course it is.

Just look at boutique hotels, which you’d assume tick all the boxes when it comes to product differentiation and style.

Lovely, yes, we all agree, but increasingly hitting price points only the wealthy can afford.

In other words, you must pay through the nose for the experience otherwise you’re stuck at Brand X.

See, we’re returned to price because the hotel industry says the customer must pay more for differentiation.

Why? Differentiation is about imagination and that costs nothing (unless you leave it to an ad agency).

Indeed, according to Chairman of the Global Brand Forum, Karthik Siva: “Branding in the online world is all about the process (and) the first thing you have to understand is – are you different or are you the same?” 

I think he’s got a point, and suspect the worm may start to turn, particularly if you assume frequent travellers are voicing opinions that will, sooner or later, filter through to the mass-market.

Then there’s the fact that the hotel industry is full of legacy companies that have yet to face genuine competition from well-funded and well-run upstarts, as has been the case with aviation.

Bring it on seems to be the consensus.

November 8, 2006

Pace Moderates at Market Leader

ONLINE travel retailer Webjet’s year-on-year sales growth has slowed during a period of heavy marketing, according to September results for the company.

The results also show that Webjet’s cash reserves have grown to A$25.5 million – almost a quarter of its market capitalisation – with no word yet on what the company will do with its windfall.

In the September quarter, Webjet’s pre-tax profit increased 15% to A$1.2 million compared with the A$950,000 it made for the same period one year ago.

Total Transaction Value increased by 52% year on year to A$60.2 million – a record period for the company but well behind comparative growth for the June (110%) and March (93%) quarters.

Yet the slower growth was accompanied by a tripling of the Webjet advertising budget for the quarter – A$1.2 million compared with A$400,000 for promotion over the same period last year.

Webjet has said it will continue this aggressive marketing approach.

Another feature of the September results is the skinnier 1.8% pre-tax profit margin – a 20% fall on the 2.2% margin the company enthusiastically reported for the March quarter.

Webjet’s annual meeting is scheduled for November 2 when the company will elaborate on its future plans, in particular the A$25 million it is sitting on.

Ends.

Entrepreneurial Mr Smith Goes Online

By Martin Kelly

Breakfree founder and serial entrepreneur Tony Smith has set his sights on online accommodation distribution and marketing with a new company called Roamfree.com that has bought ResOnline and owns equity in hundreds of small destination websites.

Smith turned a $70,000 investment into a $200 million windfall when he sold publicly-listed Breakfree Limited – which had 3400 holiday rooms under management – to MFS for shares in early 2005, which have since almost tripled in value.

He sees big opportunities in building a major online accommodation booking and distribution business by focusing on small operators that fall through the cracks while building a portfolio of cross-linking destination websites.

“We’re growing quite dramatically,” he says.

“ResOnline had five staff when we bought it. Now we’ve got 19 coders working and 34 staff … by next February we should have 50.”

Booking technology is central to the Roamfree stategy, commercially connecting the company with a potentially massive network of small accommodation providers.

ResOnline allows accommodation managers to provide an online booking service through which they manage the inventory and take the bookings. It costs A$99 a month or 5% of bookings.

Meanwhile, the company is set to launch a new tech product called Last Minute Manager that manages inventory through third-party sites.

“We also own heaps of destination specific websites – we’ve got 200 at the moment but we might go to 2000,” he says.

These sites – such as byron-bay.com – are generally well established and have comprehensive linking networks, ensuring crucial high-profile search visibility.

“Some of these sites have been around 10 years,” Smith says.

Joining Smith in the new venture is former Breakfree General Manager Mark Frawley, and his brother Bryan Frawley.

All three were instrumental is growing Breakfree and are watching the latest moves by MFS – which include the proposed acquisition of travel giant S8 – with intense interest due to past experience and significant shareholdings in the company.

“There have been some people sitting there and scratching their heads, thinking can they execute?” Smith says.

“I just know from personal experience that these guys have a very big capacity for hard work and making things happen.”

Smith adds: “When I started as a travel agent in Bondi Junction everyone said to me ‘travel agents are stuffed, you will go broke’.”

Yet by focusing on niche opportunities, initially with Sports Break Travel, then Schoolies Week on the Gold Coast, and finally holiday apartment management rights through Breakfree, Smith became wildly successful despite the doubters.

“Right to its dying day Breakfree was a travel agent but everyone thought it was a resort company,” Smith says.

“I think there is massive potential for MFS-S8 and that it will be very big.”

Ends.

Travel Wired: Don’t Call Me, I’ll Call You

By Martin Kelly

Excuse me, but I didn’t realize how glamorous speaking on a mobile phone while flying could actually be. That is, until I visited the OnAir website and saw images such as the one used for this column.

Gee, these people are having fun. Maybe they’ve just met and he’s showing her photos of his happy family stored on the phone for moments like these. Or perhaps his wedding ring is about to come off and he’s screening the infamous Paris Hilton video (now available for mobile download).

One thing is for certain, they are not calling anyone.

That because you can’t do that inflight – yet.

But it’s coming fast so you’d better enjoy those moments of high-flying silence, assuming you don’t have a burning urge move to from business or economy class to what The Economist has termed the “chattering class”.

OnAir has just done a deal with Ryanair to equip its entire fleet of 250 Boeing 737s with small base stations, called picocells, that allow mobile phones to be used inflight without causing interference with ground based networks.

The first inflight conversation should be happening on Ryanair by the middle of next year.

Meanwhile, Qantas has teamed up with AeroMobile, Panasonic Avionics Corporation and Telstra to develop a new inflight mobile phone and “electronic device” service it will be trialling on domestic routes in the first quarter of 2007.

You may have guessed that this doesn’t turn me on.

I like flying just the way it is – apart from the odd crying kid or incontinent row mate – because no-one can get to me and the normal rules don’t apply.

At 35,000 feet, I can order a Bloody Mary at 9am without feeling like a loser; look forward to crappy food; read a whole book in a single sitting; watch three movies in a row without interruption; and not talk with anyone for 12 hours.

But that’s me – what do other people think?

The answer may be not that differently.

According to an OnAir survey, most leisure travellers (59%) would not even turn their phone on while flying, although a slim majority (54%) of business travellers would, desperadoes that they are.

Can you imagine – three drinks in, and halfway through the latest King Fu epic from Hong Kong – the phone rings and it’s Rajid from India (“How Are You Today”) asking if you have a mobile phone (?) and want to switch service providers.

Believe me, that’s what will happen … it’ll never be that deal-making conversation, just the everyday junk that I get on planes to leave behind.

Yet what I and other consumers think doesn’t really matter. For the airlines it’s another revenue opportunity, and one that they are not going to pass up.

So order that Bloody Mary while flying toward a flaming sunrise and reflect on our smaller world.

Ends

Travel Experiments With Click To Call

Several travel companies have teamed up with Google to trial its new Click To Call advertising scheme, which the company launched in Australia last week.

Australia is one of the first test markets for Click To Call and Google has major hopes for the product, which is particularly suited to small businesses with no real web presence.

For example a travel agent without a website could run a Click To Call campaign to drum up business. It can also work for larger companies using call centres to support specific campaigns.

Product Specialist Jeremy Wood said a big advantage of Click To Call is that it puts prospects in contact with businesses “much further along the buying cycle”.

Wood said Click To Call is follows the Google auction system, where rankings are based on the bid amount aligned with keyword relevance, while anyone can sign up for the Beta trial.

He explained at a travel industry briefing in Sydney last week that the Click to Call ads appear in the sponsored links section and are defined by a telephone icon.

Prospects who click on the ad can enter their phone number and are called back within two seconds.

“When they pick up the phone it is already dialing the advertiser,” Wood said.

“Google picks up all the phone charges and the advertiser never gets the user’s phone number.”

Google would not say which travel companies have embraced the scheme.

Ends.

New Site, New Platform Just In Time for Lastminute.com.au

By Martin Kelly

Lastminute.com.au is finally breaking free of its dated UK-based technology platform and developing one of its own.

The popular site will also revamp its look and feel, while retaining the ‘love it or hate it’ pink branding, in a bid to improve its poor sales conversion rate which TRAVELtech estimates trails industry leaders by around 10 to one.

Managing Director Adam Johnson said the new site and back end will be ready for launch in early 2007, adding that consumer research is now under way to assist with project scoping.

“It will be a brand new Australian-built site featuring the latest Web 2.0 and Travel 2.0 tools,” he said.

“We want to build a site focused around usability.”

Johnson said Lastminute.com.au – a 75: 25 joint venture between Travel.com.au (TVL) and Travelocity which lost A$250,697 during 05/06 – is using clunky and costly 2003-era technology hosted in the UK.

“Lastminute.com.au has suffered from systemic administrative problems resulting from its reliance of remote systems … TVL is now repatriating management systems and processes to eliminate this problem,” the TVL annual report said.

The project is being overseen by General Manager – Commercial, Chris Meehan.

In another big change, the site will also embrace new positioning based around the tagline “Live Every Lastminute”.

It’s part of a move away “from being a $2 shop online” into higher-yielding territory, Johnson said.

“Price is clearly not the most important factor for customers,” he said.

Meanwhile, Lastminute’s profile will get a serious lift this financial year with parent company TVL boosting total marketing budget for its two main brands by 70% to A$2.6 million.

The majority will be spent promoting Lastminute.com.au, now clearly more important to TVL than online travel battler travel.com.au.

During 05/06, Total Transaction Value at Travel.com.au slumped 34.8%, while revenue fell 7%. Overall it lost A$23,000 for the year.

Lastminute.com.au, on the other hand, had a reasonable 05/06 (even though it lost more money thanks to incurring A$607,000 in impairment charges) on a number of measures, including a 51% increase in revenue to A$4.7 million.

Most of Lastminute’s income comes from selling hotel rooms on commission although it also offers flight, car hire and gifts.

Johnson says the brand has great recognition, while visitations are high with 244,000 average monthly unique visitors, according to Nielsen NetView figures quoted by the company.

But it has an awful conversion rate.

TRAVELtech estimates that, based on site visits and assuming a similar room rate, Lastminute.com.au converts 90% less of its visitors than Wotif.com.

People are looking in large numbers, but they are not buying.

Why? That’s what Lastminute.com.au is now trying to find out.

Johnson said a recent change to the site’s hotel availability display has improved conversion over the past couple of months, while being able to source 228 day inventory through Travelocity has helped.

“We are seeing encouraging signs – it’s made a difference but there is no one silver bullet.”

He believes the fact Lastminute.com.au offer rooms, air and car will give it a competitive advantage over single offers sites as the local market matures.

“It’s quite clear the market here is18 months to two years behind the UK and US and those markets are now beginning to be dominated by one-stop shops.”

Only time will tell.

Ends.

TotalTravel Expands Into NZ and UK

By Martin Kelly

Fast-growing destination website company TotalTravel.com has made its first international move by launching TotalTravel sites in New Zealand and the United Kingdom.

Marketing Director Paul Fisher said other offshore sites will follow.

“There’ll certainly be others,” he said.

“We’re looking at markets that make sense – English-speaking destinations where people can fly fairly cheaply on Low Cost Carriers.”

Fisher said the NZ and UK sites are still very much in soft launch mode.

“We’re initially rolling the product out for free and then further down the track when traffic builds we’ll offer additional (paid) products,” he said.

TotalTravel offers a destination directory featuring travel guides supplemented by paid links to suppliers.

The company, based in Byron Bay, has grown rapidly in recent times.

Staff numbers have increased from 12 to 40 in just 12 months, while Hitwise now rates TotalTravel.com as the second most popular “Destination and Accommodation’ website in Australia.

Fisher said it received a record 1.4 million unique site visits during August.

Advertisers are also catching on, particularly as search engine marketing costs increase.

The Australian site now hosts 6500 advertisers – most of them small accommodation business – who generally pay annual subscriptions starting at A$295.

“We’re starting to get a lot of the big guys coming on board now because paid search costs in the travel sector is so expensive,” Fisher said.

“As I said at TRAVELtech, the travel industry has a very ‘long tail’ (meaning that it is mostly small businesses).

“We started at the tail and are now working on the body.”

Ends.

Slower Growth At Wotif.com

By Martin Kelly

The spectacular year-on-year sales growth at Wotif.com will be cut in half from October to a more than respectable 24% through 2007, the company has predicted.

This compares with an August sales increase of 50% when compared with last year.

October is the 12 month anniversary of Wotif.com expanding its sales window from 14 to 28 days.

Chief Operating Officer Robbie Cooke estimates that single move last year increased company sales by around 15%.

“That’s my gut feel,” he said.

Meanwhile, Wotif.com sold 2,740,000 room nights during the 05/06 financial year – an increase of 40% of the previous 12 months.

Australian room nights were up 37%, New Zealand room nights 42%, Asian room nights 96%, UK and Europe 44%, North America 78%.

The average value of rooms sold on the site has grown 3.5% from A$128.15 to A$132.57.

Wotif.com made a A$16.5 million net profit on revenues of $45.5 million in the 12 months to June 30.

CEO Graeme Wood said Woitif.com will remain focused on its core Australian and New Zealand markets, participating “in the expected organic growth as customers migrate from traditional sales channels to the online environment.”

Targetted international growth is also on the agenda, Wood said.

“In particular, markets that display characteristics such as high internet penetration, consumer trust in transacting online, relatively high accommodation supplier fragmentation and the absence of a dominant online player.”

Wood said while present growth is in line with the trends outlined above, “it is uncertain whether (that) will continue once the October period is reached given the strong growth experienced post-October 2005 following the booking window extension.”

Ends.

Internet Leaves QF Holidays Behind

By Martin Kelly

Australia’s largest travel wholesaler, Qantas Holidays, has been hammered by consumers for failing to anticipate and meet their online needs.

Its profit before tax slumped to A$45 million – a fall of A$19 million or 29.1% – in the year to June 30.

“This result was driven by lower air travel customers, particularly in the domestic market, where the continued unbundling of product offerings accrued through the increased use of online booking,” the company said in a statement.

Or to put it in plain English, customers who once booked air and land through Qantas Holidays are now trawling travel websites for the cheapest deal and booking components separately.

Clearly, Qantas Holidays has long-term issues.

Parent company the Qantas Group remains in fair shape despite posting a net profit of A$480 million that was 30% less than the previous financial year.

No surprises that this was largely to surging fuel prices – in fact, fuel now accounts for 30% of net operating costs, up from 17% two years ago.

Investors thought it was a decent result and sent the Qantas share price up by around 5% in heavy trade.

Chairman Margaret Jackson said: “We have strong revenues and operating cashflows, improved gearing, the right aircraft and a new airline in Jetstar that has delivered strong earnings growth and industry benchmark cost containment.”

Jetstar’s profit before tax was way down, however … A$11 million compared with A$36 million … thanks around to around A$14 million in international startup costs plus higher fuel and leasing costs. Its yield also slumped by 4.8%.

Profit before tax on ‘Qantas Mainline’ operations fell 27% to A$542 million.

Ends.

Google: Trust Us – We’ll Tell You What You Need To Know

By Martin Kelly

Google CEO and Chairman, Eric Schmidt last week declared that the famously secretive company is trying hard to become more transparent.

But don’t expect this to happen overnight.

Schmidt made it clear at the Search Engine Strategies conference in San Jose that Google takes competitive advantage very seriously and will not do anything that remotely compromises its position.

As for advertisers, “we’re trying to find ways we can give (more) information to advertisers that is truthful and accurate.”

This will take time, he said.

Meanwhile, Schmidt admitted that click fraud – where companies repeatedly click on the ads of their competition in a bid to send them broke – is “a very serious problem” but one “I believe we have under control”.

His comments come on the heels of a report by Google in which it says the amount of click fraud has been over estimated by sections of the industry.

In a 45 minute interview, he also said that Google – for all its reach, ambition, new deals and innovations – will not stray far from its core mission.

“Our fundamental goal is to provide the most accurate search result,” Schmidt said.

At present the number of quality links a website has is major factor in determining page ranking and Mr Schmidt said Google is investigating additional methodology.

“We are investigating various ways of improving search beyond links but I can’t discuss that – it is highly proprietary information.”

In terms of product innovation: “The test we apply is not whether we think the product is great but whether it improves people’s online experience.”

He said competitors are only “one click away so we are trying to keep our customers happy by giving them choices and empowerment.”

Ends.

Travel Wired: Online Gets Bigger While Passengers Get Smaller

By Martin Kelly

Getting out of the United States late last week felt like leaving a war zone.

Security was tighter than a travel agent’s profit margin with a slew of news crews prowling LAX for horror stories.

But the only tear jerker I had was one they wouldn’t be interested in – the Qantas starvation rations on the way over – perfect for those on a diet and a nightmare for everyone else.

It’s pretty obvious that this is an airline looking to cut costs any way they can. The food is basic and sparse.

I used to think that Singapore Airlines had no right to fly between Sydney and Los Angeles; now I’m not so sure.

What I am certain about is that online travel is already big and getting much bigger in the United States.

It has a far greater media presence than traditional travel operators, especially if you count airlines telling customers to book direct.

The marketing is anything but sophisticated – cheap and fast are the major messages.

Both Orbitz and Priceline are running TV campaigns offering savings of up to $US200 on holidays when flights and hotels are combined (ie dynamically packaged).

Accommodation website Hotels.com has taken a different tack in a promotion it is running on AmericanAirlines boarding card wallets.

Hotels.com is offering “Great Deals Direct From The Experts” complete with a photo of a few call centre staff looking like Blues Brothers extras, wearing dark shades and stony expressions.

The twist, of course, is that they are promoting people over machines with the tagline: “Call our certified experts 24/7 or go online today”.

Interesting – perhaps they have discovered people close a deal better than any computer and are worth the extra money (hotel sales were up during the June quarter for parent company Expedia).

AmericanAirlines, meanwhile, flush with its first profitable quarter in eons, is continually pushing the message that “we guarantee you’ll get our lowest fares at AA.com”.

Travellers who find a cheaper fare elsewhere will get a US$50 ticket voucher.

The good news is that is enough to get yourself a decent meal before boarding your next long haul flight.

Believe me, you’ll need it.

Ends.

Join The Conversation – Or Else!

By Martin Kelly in San Jose

“Join the conversation” – that’s the advice from leading online reputation management experts on the best approach to handling bloggers with a negative fix on their company or industry.

As Nan Dawkins, Partner at RedBoots Consulting, says: “It’s not a conversation if you’re not responding to criticism.”

Blogging is the tip of the social search iceberg, and a big topic at the Search Engine Strategies conference in San Jose.

Online ‘communities’ have been a constant reference point for speakers across all tracks.

Websites continually referred to include del.icio.us (URL, link tagging), flickr.com (image sharing), digg.com (links/stories/tools) and technorati.com (blog search engine and resource).

In travel terms, TripAdvisor, Travelocity, Expedia and Travel Planner from Yahoo have also been referenced, though not always in glowing terms (more on that later).

Yet for all the hot new sites, blogging remains front of mind for a couple of reasons:

1) Many of the speakers have their own blogs (ergo blogging must be important)

2) Blogs can have a major impact, positive or negative, on brand reputation if picked up by one of the ‘communities’ listed above

According to statistics cited by Dawkins, blogs account for 26% of search engine rankings on Fortune 500 companies.

Meanwhile, 62% of consumers regard bloggers as the most trusted source of information.

She says Techorati claims that one new blog is being created every second and that there are currently around 53 million blogs in existence.

So what can you do if a blogger takes a dislike to your company or product and those negative thoughts are ranking high on search engines?

CEO of Converseon, Rob Key, agrees that joining the conversation is the best initial strategy – send an email, correct any factual errors, don’t be heavy-handed.

He advises the creation of social media sites by companies under attack to push negative blogs down the rankings and off the vital front page.

“Create social media relevant to your industry,” he says.

Travel reviews on sites such as Travelocity, Expedia and TripAdvisor, came under he spotlight when a hotelier in the audience complained that her property was getting bad reviews (surely it wasn’t for any good reason?).

Her issue is that because the reviews on these sites are anonymous, there is no way to contact reviewers to address their issues.

Likewise, there is no guarantee the reviews are real because in most instances reviewers are not required to prove that they stayed at the property in question.

In other words, reviews could be posted by competitors or consumers with a grudge.

“Also it means we could be posting stuff about our own property, but that’s not really the point,” she says.

Ironically, the advice she received was to do exactly that, post her own comments, and also encourage (presumably) satisfied guests to post their own comments and hopefully drown out the negativity.

In other words, join the conversation.

Ends

Money Buys Results Online

 By Martin Kelly

TRAVEL has an incredibly high 50% click-through rate on paid search advertisements, delegates at the Search Engine Strategies conference in San Jose were told this week. In other words, one of every two site visits generated by a search engine request comes from a paid link. Senior VP at ComScore Networks, James Lamberti, said travel is way ahead of other industries when it comes to getting consumers to hit their sponsored links. He said the click-through rate across all industries is just 13% (up from around 12% on a year ago) on paid ads. 

Lamberti, whose research applies to the massive United States market, attributed the high hit rate on travel being “a highly developed category” with savvy marketers serving heavy demand. The conference also heard from Nielsen//NetRatings that travel buys far more online advertising – across both search and display – than any other industry. Other big spenders include electronics, media and telecommunications (display); retail and pharmaceuticals (paid).

Ends.

Case Study: Fishy Business Hooks Thousands Online

On an average day, 10,000 visitors typically pay $20 each to tour the Georgia Aquarium. That alone is a huge win for a tourist destination that only opened last November. But here’s an even bigger deal — 93% of tickets are sold online, directly from the Aquarium’s Web site. Plus prior to opening, sell-out fundraising efforts were conducted online. Whether you’re in ecommerce entertainment, or drive donations, this MarketingSherpa Case Study should prove inspirational:

CHALLENGE

The Home Depot Co-founder Bernie Marcus understands the power of customer convenience in marketing.

So, way back in 2001 when he and his wife, Billi, decided to become the primary benefactors of a public aquarium for Atlanta, first they registered the domain name GeorgiaAquarium.org.

Over the next five years of committee meetings, fundraising and building, the Web remained at the forefront of marketing plans. Why not, the newly-formed marketing team wondered, see whether convenient ecommerce could be used for everything from individual donations to visitor tickets?

Why make people mail in donation checks, or stand in line at ticket windows later on, when they could just point and click?

But, how do you get loads of traffic for a fundraising Web site of the unbuilt Aquarium? And, how can you train the public, who are used to buying on site tickets at amusement parks and zoos, to go online instead when the Aquarium opened?

CAMPAIGN

As Kristie Cobb, Director of Membership & Annual Programs explains, "Online was brought in a year and a half before we launched." Here’s the four-step plan the team used (plus, see creative samples below):

Step #1. Limited "Teaser Site" with email offer launched October 2004

The Web site’s job was to begin building a relationship with visitors that would lead to donations and ticket purchases down the road. That meant sticky content from the start. In addition, the site needed enough content and inbound links to begin the long haul out of the search engine sandbox into high visibility.

"Coming soon" or "under construction" pages are worst practices in Web design — visitors and search engine spiders leave quickly.

However, Bernie Marcus knew the power of PR — he didn’t want to load the site with every piece of information from the start but rather allow limited tidbits from time to time to build the story. He strictly disallowed the staff from any mention of the biggest news — three Beluga whales — on the Web or in PR until two weeks before opening.

Therefore, the team got creative, digging up scraps of information that Atlanta residents and aquarium fans around the world would find fascinating. Examples — an ever-evolving series of aerial photos of the Aquarium’s construction, as well as stories about each of the lesser fish as they arrived.

Plus, the Web site featured a ‘join the email news list’ call to action to start garnering names for future promotions.

Step #2. Fishscales online donation appeal launches Feb. 14, 2005

Just as other building committees use named bricks for fundraising, the Aquarium decided to build a wall of lit-up glass bricks called ‘fishscales.’ Each scale would contain the name of an individual donor.

"Atlanta’s a big drive-time city. It’s got one of the longest commutes in the US," says Cobb. So, in addition to emailing a fishscales offer to everyone on the site list, the Aquarium also launched a full-out radio campaign. "A lot of the stations did spots with Bernie. They’d have him come on the show."

The team made fishscales’ ecommerce back end as appealing as possible by adding an animated Flash interface where the donor could see how what they typed in would actually appear on the ‘scale.’ (Note: This is something Apple’s ecommerce team also uses to make buying an iPod from them directly online more appealing.)

Last, but not least, the team reviewed Web analytics for the first 24 hours of Fishscales’ selling to determine if and where on the site visitors went to immediately after making the donation. Then they redesigned that ‘thank-you page’ at the end of the ecommerce process to contain links to the most appealing pages.

This way, donors would continue to be educated and involved in the Aquarium’s site rather than being dead-ended.

Step #3. Pre-launch annual passes offered online Oct. 12, 2005

Six weeks prior to opening day, and amid a growing volume of launch PR, the team decided to send out an email campaign offering annual passes to the general public.

This was a bold move given that no one had yet toured the Aquarium. Would the public buy passes online site-unseen?

The pricing was careful — just a little over twice the posted daily ticket cost. Plus, pre-opening pass holders were entitled to visit the Aquarium two days “before” the official launch.

Step #4. All-new Web site launches

In the meantime, the Web team were busy rebuilding the site completely in time for opening day. In fact, they considered the new site as an entirely different site because its goal was so very different from the first site. The new site’s goals were in order: 

– sell "timed" tickets (a benefit ensuring you never stood in
line or fought your way through a too-full Aquarium)
– allow pass holders to reserve timed tickets
– book group events
– gather donations

From initial wirefame to the final site, every aspect of the navigational design was built around these goals. In fact, the ticket purchasing form was built in as an integral part of the left vertical navigation bar appearing on every single page of the site.

Prior to launch, the team invited selected members of the public to a computer lab to use the site as part of a consumer usability study. Then, based on feedback, the designers add more "click here" hotlinks than you find on most sites today.

Plus, any possible bumps in the shopping cart were smoothed out to provide the easiest possible experience and reduce potential abandonment.

RESULTS

Since the Aquarium officially opened Nov. 29, 2005, it’s hosted nearly 2 million visitors, 93% of which purchased their tickets via the Web site. That’s an astonishing accomplishment — and one we’re not sure any other similar amusement destination has matched.

The team had hoped to sell 20,000 Fishscales in 2005. However, their estimates were far off. The program sold 35,000 Fishscales and had to be shut down in a little over four months because the wall the scales were destined for simply couldn’t be made any bigger.

The email announcing the annual pass offer got a 72.3% open rate and a 36.7% clickthrough rate. 8,000 passes were sold via ecommerce and phone in the first eight hours of the offer. Subsequently, these pre-opening passes sold out completely. Faced with unexpected demand, the Aquarium had to pull the offer off the site ahead of schedule.

The new site’s navigational architecture has proven quite successful. Despite the fact that the site is loaded with plenty of educational and newsy information, more than 90% of incoming site traffic funnels quickly into the reservations and ticketing areas.

Georgia Aquarium – http://www.georgiaaquarium.org

Search And You Will Find – Maybe…

In the good old days – you know, like three years ago – according to legend you could get a white label travel site happening supported by a basic Search Engine Marketing campaign and live very nicely off the proceeds.

But, so the story goes, you’ve got no chance of doing it these days with new travel sites facing major difficulties in getting the traffic and links they need to scale the organic listings, while high Pay Per Click costs render an SEM campaign uneconomic.

Search engine marketing expert Frank Grasso, boss of E-Channel, has set out to test that theory with a new accommodation site he has launched using product from Octopus Travel called TuesdayIsland.

Frank intends putting A$80,000 on the line for this little experiment … the site cost A$45,000 to build and A$35,000 will be spent on optimization. In a bid to grow organically, any revenue will be ploughed back into a Google Adwords campaign.

“My feeling is that it’s going to be very, very tight and I’m not sure if we’re going to break even without a separate advertising budget – at least in the beginning … we will have to wait and see,” said Frank.

• Frank will be presenting TuesdayIsland – http://www.tuesdayisland.com as a Search Engine Marketing case study at TRAVELtech in Sydney on August 22. You can register for updates at http://www.tuesdayisland.com/experiment

Profit Up, Excitement Down

WEBJET will record a pre-tax profit of between A$3.2 million to A3.4 million for the year ended June 30, well up on the previous year but not enough to get investors excited. Its share price stayed at around 30 cents – well down on its 12 month high of 50 cents. However, CEO David Clarke pointed out that Webjet’s capitalization has increased over the same period to just under A$100 million due to a massive 72% rise in shares on issue, from 224 million shares to 310 million shares. He said there would be no decision on how to utilize the A$23 million cash it has in reserve until the end of this year. Around 60% of Webjet’s gross profit comes through service fees.

Travel Wired: Opinion – Not Everything Is B&W

By Martin Kelly

POLITICS is complicated and the best exponents generally turn everything into a black and white issue – good guys versus bad guys (no surprise who rescues the damsel in distress).

So you can see what Australian Federation of Travel Agents CEO Mike Hatton is trying to do when, clearly rattled by the growth in online bookings, he identifies the Internet as the travel industry’s ‘bad guy’.

“The message is simple – if you have booked over the Internet and have a problem, who are you going to call – Ghostbusters or some airline’s offshore foreign-manned call centre?,” Hatton told Travel Weekly.

But has AFTA made a mistake? Should the organization be providing online leadership and education to its members rather than criticizing the fastest-growing sales channel in travel?

Comments like these are also incorrect. Most, if not all, of Australia’s leading online travel sites have local call centres and can provide personal assistance if required (and often for a price).

Obviously, that is beside the point – reason has no role to play in a good old fashioned witch hunt.

These anti-Internet sentiments are the reason behind a new campaign AFTA is trying to get off the ground based around the slogan: “Without a travel agent, you’re on your own.”

Hatton, who lifted this idea from the United States, has received top-level support for his stand.

AFTA Chairman and Managing Director of Travelscene American Express, Bob Steel, told Travel Today that the Internet is good for research but “a very dangerous tool for consumers to book on.”

Whatever your thoughts on this statement, Steel, a successful businessman, is no hypocrite – Travelscene American Express has a basic website that does not accept bookings, only email enquiries.

However, a lot of mainstream AFTA members have more sophisticated websites that take online bookings, including two of Australia biggest travel agencies – Flight Centre and Harvey World Travel – not to mention a slew of smaller operators.

Politically, AFTA is clearly in a no-win situation with its present stance, which denigrates a key sales channel and does nothing to represent those travel agents who have chosen to use the internet for their own means.

Surely, the time has come for AFTA to take a positive stance on the Internet and help members adapt to a radically new sales business environment.

Fortunately, at the moment it’s largely trade press rhetoric.

It should not be allowed to go any further because selling travel over the Internet is not a black and white issue, and smart politicians do not paint themselves into a corner, as Hatton and Steel appear to have done.

Ends.

Heard About User Generated Content? It’s The New Word of Mouth

By Martin Kelly

Word of mouth – always the most powerful of marketing tools – has taken on a whole new meaning with the Internet.

The emergence of travel review sites like Trip Advisor (which claims more than five million “unbiased reviews and opinions you can trust”) and IgoUgo ensures that the latest travel news – both good and bad – travel at warp speed around the globe.

These sites are basically travel search engines couched in user-generated content – beside every review will be PPC links to relevant product.

At present, most of the user comment concerns hotels but is slowly spreading to trip planning and will one day encompass every aspect of travel as people search out opinions from other travelers.

User reviews are also common on leading international retail and hotel websites, although some of Australia’s biggest online brands are yet to take the hint and get moving with this aspect of what has become known as Travel 2.0.

While consumer product reviews appear on Zuji, Expedia, Hotel Club and Rates To Go, at the time of writing Wotif.com doesn’t give its customers a voice; nor does Travel.com.au, Lastminute or Webjet.

Chloe Lim, Marketing Director of Flairview Travel, which owns Hotel Club, Rates To Go and Asia Hotels, says user reviews are one “of those features that is becoming a ‘must have’ rather than a ‘should have’ – people are demanding it.”

The potential of this new environment for the travel industry is enormous, and so are the risks.

The fact is that bad news travels fast, and there are plenty of upset travellers using reviews to lift on the lid on their latest travel disaster …

"…This is the kind of place in which you’d prefer to sleep in a snow suit during the hottest months of summer rather than let your skin touch the bedspread," wrote one TripAdvisor reviewer

“The entire staff seemed devoid of any humour, personality or notion of customer service and the atmosphere was vaguely reminiscent of a shoddy fairground Haunted House ride," wrote another

Suddenly, there is genuine, real-time transparency on the traveling experience – fresh opinions, immediate feedback – not just glossy travel brochures, although some reviews certainly read as if they’ve been written by the marketing department.

“…The staff is absolutely top-notch. The rooms are serene. The spa is literally to die for. This place takes pampering to a new level. "

“… Situated as the resort is on a private peninsula, everywhere you go you are surrounded by a fabulous panorama, the service was attentive and it was heavenly for relaxation."

And therein lies an interesting dilemma – how do you control the information appearing on these forums?

The answer is you really can’t, apart from keeping tabs on key sites and correcting any misinformation. An overly negative spray will be spotted, as will a supercilious blurb.

Arthur Hoffman, Managing Director of Expedia Australia, says it screens reviews to ensure no obscenities slip through the net but beyond that it is largely free speech.

Flairview Travel restricts review opportunities to people who have actually stayed in the relevant property to overcome potential issues.

Lim says Flairview is not going to move into forums and message boards and will still with review, potentially introducing a search capability based on hotel ratings.

Clearly, customers are on the move and travel businesses must surely keep up or otherwise get left behind.

Ends.

Growth Back On After US$4.5b Sale

 

Cendant has sold Travelport, formerly known as Cendant Travel Distribution Services, to the Blackstone group for US$4.5 billion cash.

Blackstone, one of the world’s leading private equity groups, has not yet revealed its plans for Travelport, which has annual sales of US$2.5 billion and owns some 20 major travel brands acquired in a buying spree over the past five years.

These include the Galileo GDS, Gullivers Travel Associates, Orbitz and Cheaptickets.

Travelport CEO Jeff Clarke told the New York Times that each of its three divisions is profitable and that Blackstone wants to keep present management in place.

Integration has been a significant issue for the company in recent times but Mr Clarke, who joined the company two months ago, flagged further growth.

"As a private company, Travelport will now have considerably greater financial latitude and firepower to take advantage of burgeoning opportunities in the travel market," Mr Clarke said.

Cendant said the sale proceeds will primarily be used to reduce the debt carried by its Realogy and Wyndham subsidiaries.

The sale is expected to be completed by August.

Ends

Asian Branding On Table

WOTIF is considering ramping up its Asian branding effort as regional sales continue growing at more than 100% a year.

CEO Graeme Wood said: “We’re definitely looking at increasing our marketing in the region.

“Obviously we don’t have the same word of mouth in Asia that we do in Australia.

“If we want to grow quickly we have got to get awareness happening.”

Wotif is a well-known brand in Australia, where it claims 36% market share.

Awareness dramatically increased following the spectacular float of the company on the Australian Stock Exchange.

Shares that were pre-sold to institutional investors for A$2 in late May are now trading for around A$3.30, valuing the company at A$681 million, according to CommSec.

Mr Wood said Asian business currently comprised less than 10% of its sales but was its fastest-growing region, albeit off a lower base.

He said the challenge is now to increase the Wotif brand profile across the region and the company is evaluating a range of marketing options.

“We want to grow as quickly as we can without putting too much stress on people and resources,” he said.

“It’s a balancing act to grow both the supply and the demand side.”

China is apriority for the company but Mr Wood declined to highlight any other target markets, while conceding credit card acceptance many Asian companies is a difficult hurdle to overcome.

Wotif employs a small sales team in Singapore “which is being led out of Brisbane right now”.

He added that Asian hoteliers had been receptive to the Wotif pitch.

“We don’t get too many knock backs when we approach properties we want to work with.

“For those new to the internet it’s an educational process but they appreciate the business we can bring, particularly the Australian inbound traveler.

Ends.

Content Is King

- It's All About The Information - 

TravelTrends founder Martin Kelly has diversified and now also runs a communications consultancy specialising in travel.

"I am particularly interested in bigger picture, strategic work but happy to pitch in with the bread and butter tasks that good communication entails," he says. Services include:

- Strategic Communications
- Media Releases & Distribution
- Crisis Management
- Thought Leadership
- Industry Advocacy
- Positioning, Messaging
- Marketing Plans & Execution
- Engaging Content

Martin is a communications, public relations and media professional with extensive high-level experience across the travel, internet, property and banking industries, both in-house and as a consultant.

He is skilled at working collaboratively and building lasting relationships, accustomed to pressured, complex environments.

Contact: martin@traveltrends.biz

./././.

No Vacancy Returns
July 17-18, 2018

Exciting times ahead for No Vacancy, which has been acquired by National Media from founder Martin Kelly, who also publishes TravelTrends.biz.

The new era kicks off with No Vacancy - The Accommodation Business Expo at Sydney’s new International Convention Centre on July 17-18, 2018.

“We’ll be taking No Vacancy to another level, combining high quality content with a large trade show featuring up to 150 exhibitors across all verticals, transforming it into the business hub of Australia’s accommodation industry,” says Harvey.

He says the accommodation industry is worth more than $18 billion to the Australian economy. “Yet surprisingly, given the size of the industry there is no dedicated exhibition designed to meet all its needs.”

“No Vacancy - The Accommodation Business Expo will fill this void and offer hoteliers and other accommodation industry professionals a platform to discover products and ideas to optimize their properties, create amazing guest experiences and ultimately boost their profits.”

Historically No Vacancy has been very much an accommodation marketing conference, but the new look exhibition will embrace all aspects of the accommodation business.

Content is still central to the event and will be expanded upon with more topics, more sessions and more speakers.

The exhibition will showcase the best quality suppliers across design and decor, property management, operations and finance, housekeeping, spa and leisure, in-room and guest-facing technology, and marketing, distribution and reservation solutions.

“We are really excited about where we can take No Vacancy and look forward to working closely with the community that's been supporting the event since 2007,” said Harvey.

For more information, contact:

Mark Harvey, MD, National Media
Phone: +61 7 5510 5101  //  0419 775 488
Email:
mharvey@nationalmedia.com.au

 

TRAVELtech Australia 2018

Returning in 2018

Change is the only constant in travel and so it is with TRAVELtech, which will be returning early in the second quarter of 2018.

The event has been bought by National Media - one of Australia's most respected event management companies - from founder Martin Kelly, who also publishes TravelTrends.biz.

Kelly says he’s happy TRAVELtech is in good hands and will remain connected in a programming and moderation role.

“I’ve really enjoyed creating and running TRAVELtech but it was time to step aside and let someone else with the capacity to accelerate their evolution take it on,” says Kelly.

He will now focus on further developing TravelTrends.biz, while also consulting to travel companies on communications, innovation, industry trends and strategy.

Mark Harvey from National Media says TRAVELtech, founded in 1999, will evolve into a much larger event.

"We have plans for become the main exhibition and conference in Asia Pacific for travel technology buyers, travel agencies, tour operators and transport professionals to source, learn and network," he says.

"It will bring together a large selection of specialist suppliers showcasing the latest innovations across distribution, reservation, business operation and sales and marketing."

For more information, contact:

Mark Harvey, MD, National Media
Phone: +61 7 5510 5101  //  0419 775 488
Email: mharvey@nationalmedia.com.au