By Tim Hughes, The Boot
TRAVELtech continues. Rod Cuthbert the CEO of Viator gave a great presentation earlier this morning. He have very few slides, instead relying on pictures of destinations and activities to tell his story.
A number of these photographs showed the tough side of consumer travel from the extremes of pictures of terrorism and panic to images of the drudgery of never ending lines at airports filled with despondent people wishing they were on holiday rather than going on holiday. From this he talked about how hard it is becoming for a consumer to travel. The uncertainty of arrival times, the challenges of travel in economy class, the need to varying degree to limit what you can carry on board etc.
When travel becomes hard, he argues, people start to look at their discretionary spend and think of alternatives outside of travel such as LCD screens, new generation games consoles and home cinema sound systems. Have no data to back this up but I agree with him. Travel used to look only to other forms of travel for competition (international versus domestic, retailer vs retailer, supplier vs supplier). Not sure what the solution is or how we open up our marketing to fight the Harvey Norman, Best Buy or Dixons of the world but it reinforces the need to keep the purchase and consumption process simple for consumers.
TRAVELtech: Hotelscombined – bringing meta-search and affiliate marketing together
Posted: 28 Aug 2007 12:20 AM CDT
TRAVELtech continued. Yury Shar gave a little more insight into meta-search and his company Hotelscombined. My earlier profile of them is here.
The interesting point from his speech today is not that he is generating good traffic – though he is with 450,000 visits per month. The interesting story is that his number one source of traffic is affiliate program. He shared that 38% of traffic is coming from a network of 1,500 affiliate. Search is still critical with SEM ranking number two at 34% and SEO third at 20%.
I was working on the assumption that paid search and to a lesser extent SEO would dominate the traffic feed for meta-search. With no data backing it up was assuming that these would be responsible for 80% of traffic for a meta-search provider, not the less than 65% that Hotelscombined generates. Congrats to Yury of building this great affiliate network.
Yury also passed on this four tips for search engine optimisation marketing efforts:
Give yourself time – it takes 18-24 months for a start up to "prove" itself to Google as a legitimate content provider;
Design the site – design the site for both consumers and search engines. The site needs to be specifically designed to be shopped and indexed by Google. As he puts it – it is easy to design a site with great content that Google cannot be "seen" by Google;
Register and open a Google Webmaster account; and
Design a long term link strategy – Does not mean building fake links or becoming a hard core "black hatter" but working on links and traffic generation through content optimisation has to be part of marketing plans. For example making sharing of and imbedding of links by customers and easy thing to do.
TRAVELtech: Interview with Travel.com.au CEO Adam Johnson
Posted: 28 Aug 2007 12:05 AM CDT
TRAVELtech continued. Interview on stage with Adam Johnson the CEO of Travel.com.au the operator of both Travel.com.au and now the sole owner of Lastminute.com.au.
Couple of interesting metrics and number from the interview:
They are now profitable (measured on monthly numbers). Recent full year financial results showed a loss but now profitable on a monthly basis;
Expecting 30-35% topline and bottom line growth for FY08 – TTV of $130-140mm;
Marketing spend will stay around 2.5% of TTV. All of this online, 80% of it likely to be on SEM;
15,000 hotel bookings per month; and
500k subscribers to newsletters on both brands.
He is very conscious that the area they need to work on is less around brand and traffic but conversion. Would not share numbers but admitted to be behind competitors on converting traffic into booking. As he says "need to focus on utility" around pricing, functionality and product.
Travel.com.au are celebrating their 10th year this year. They were one of the first in the world to do international flights online. Not that this is much to brag about. As Adam joked, "In the early days we had 100% of the online international fares market. All two of the bookings made were made with us."
TRAVELtech: the forth phase of online travel – "too much information"
Posted: 27 Aug 2007 11:32 PM CDT
More from TRAVELtech. I talked some months back about my theory about how the short history of online travel can be broken up into three phases. For a quick recap here is what I said
Phase 1 (1995-2003) – I know where I want to go, find me the cheapest price.
Consumers treated online as a price based flight business. They knew exactly where they wanted to go from and to. All they wanted help on from an OTA was price. Not information, not help, not recommendations, just price.
Phase (2000-2006) – I want to find a deal on where to stay, can you help me with rates, availability and advice.
Consumers gain in confidence and cheap hotel deals flood the Internet. Consumers now begin asking OTAs for limited advice on finding and booking of accommodation.
Phase 3 (2005 – now) – what do I do next, where should I go next.
For the first time ever the consumer starts to ask an open ended question of the Internet. Instead of the specific questions of phases one and two where the consumer knew most of what they wanted to know – consumers gained the confidence, tools and networks to ask for advice from OTAs, "the crowd" and the Internet at large. "What do I do next?" Content started to drive traffic and sales like never before. Best available rates and set pricing from suppliers made it harder for the OTA to offer deal advantages.
In my presentation today at TRAVELtech I talked about my thoughts on the future of online travel – phase 4 going by my timeline. Here is what I said.
Phase 4 (2009 and beyond) – Too much information
Consumers begin to feel overwhelmed. They are searching sites with 50k, 100k and maybe 200k hotels (though a comment here says that the sites like HRS claiming 200k hotels are exaggerating a little). There are review sites with 20 million or more reviews. Social networks are producing hundreds of friends with thousands of recommendations. Emails, RSS feeds, SMS suggestions and more are flooding into consumer inboxes. Too much information!!
The challenge as we head into this phase is to take all this information and build a coherent story for consumers. My expectation (and hope) is that this will produce a return to the need for customer loyalty. For online retailers making a connection with customers that they keep through the development of loyalty programs – be they actual rewards, good deals, community building and other marketing and product activities.
The reason to care about this history is that it helps us in planning our products and marketing plans for the future. One of the downsides of a maturing industry is that growth in the traditional markets (US and EU) takes more work and greater innovation. One of the upsides is that we now have a history to look to in preparing of the next trend.
TRAVELtech: The true cost of booking an airline ticket
Posted: 27 Aug 2007 11:21 PM CDT
First of my posts from the conference TRAVELtech. Have been listening to Tim Russell (MD of Amadeus Australia).
Tim made a very good point when looking at the costs of booking an airline ticket online. He presented research indicating that at a dollar charging level the cheapest place to book a flight is usually the airline’s own website where there is normally only a small credit card fee but no booking fee. Call it $0-$15 per booking. In the middle of the cost spectrum there is the online and offline agent where there are fees and charges ranging from $10-$30 per ticket. Finally At the end of the spectrum there is the full service Travel Management Company (TMC – corporate travel agent). These providers can charge upwards of $50-$60 per ticket.
On the crude measure of dollars per ticket, the airline direct site is the cheapest. However, Tim brings in the great point that when assessing the cost of booking we should really also be considering the time cost is searching and completing the transaction. When this is taken into account the cost spectrum is turned on its head. The TMC booking takes the least amount of time – say 15 minutes, the time it takes to make a phone call to a dedicated agent. Next comes the online agent who can display multiple carriers in one place making searching faster. Finally the airlines direct site takes the longest – more than an hour because of the need to search more than one supplier before taking a booking.
Including these measures it becomes a neck and neck race between the cost of TMCs and online agents with airlines coming third.
If you are booking a leisure flight for the family and have all the time you need then time does not come into account but certainly in the corporate area there is a huge time difference between the different travel booking channels. Goes part of the way to explain the success of Webjet in Australia despite the huge fees they are charging.