Saturday, March 28, 2009

Airline Merchandising: Trouble Getting Into the Spirit (Airlines)

Some analysts, according to The New York Times point to Spirit Airlines as the go-to, nouveau airline-business model.

But, as model airplanes go, this one gets me unglued.

Spirit reportedly was the first airline to make consumers pay for checked bags, the carrier charges for advance-seat assignments, and even collects (credit cards only) for snacks.

Largely because of this new push and an alleged lack of transparency about some of the moves, the airline's rating on, while far short of a scientific poll, falls short of two stars.

Undoubtedly, the fee frenzy will accelerate among U.S. airlines. Major U.S. carriers seem to have found their footing with capacity reductions and merchandising tactics.

Some estimates peg the revenue haul from ancillary services at around $5 billion per year.

All of that bundling, unbundling and re-bundling of products will be at a fever pitch as airlines create new fare brands and seek to turn almost every ancillary service into a new fee opportunity.

However, in the midst of the current economic nightmare, I believe there will be business opportunities for airlines that opt to go against the grain and endeavor to add to the travel experience instead of merely subtracting from it.

The merchandising thrust for many U.S. airlines is too loaded with new fees for things that consumers previously got for free. Give me some airlines whose missions are not centered around gouging travelers.

If airlines are going to ratchet up their merchandising, then at least provide services that make the trip more pleasant instead of charging for services that previously came with the price of a ticket.

I like some of Sam Shank's ideas in a post on his Dealbase blog, when he cites ways airlines might gain incremental revenue by providing things like discounts for lounge access. Hotels, too, Shank says, can get into the merchandising act with easy-to-book room upgrades or late checkouts that would be available on hotels' websites and through metasearch solutions.

The U.S. needs a healthy airline industry that's making money. But, that won't happen in the long term if carriers further alienate their passengers with less service for more money.,

Friday, March 27, 2009

Continental, TripAdvisor Team on Metasearch Promotion

I guess Continental is very pleased to participate in the metasearch channel and in TripAdvisor's new flights search tool, in particular.

Continental and TripAdvisor partnered in a TripAdvisor Million Miles Sweepstakes so TripAdvisor could "celebrate our new flight-search service," according to an email announcing the promotion.

Talk about some marketing clout for metasearch.

The sweepstakes winner, according to the rules, will receive 1 million Continental OnePass miles plus $5,000, with the total value pegged at around $25,000.

To receive the prize, you have to enroll in Continental's OnePass loyalty program. I guess there will be a ton of new sign-ups.

So besides the eventual sweepstakes winner, the other winners here are TripAdvisor, Continental and the metasearch sector.

Meanwhile, searching for a Newark-Orlando flight using the TripAdvisor tool, I found a Continental flight bookable at,, and -- all for $199.

They each had their own marketing messages within the grid, including Continental's "Low fare guarantee," but not much other differentiation.

Incidentally, I wonder how Expedia Inc. plans to differentiate ("Go with confidence") and sister company Hotwire ("Book here!) in metasearch now that neither charges consumer-booking fees.

Maybe some kind of sweepstakes would work:)

Farecast, Shermans Travel and the IRS

Deal-publisher Shermans Travel's e-mail popped in this morning, offering me a week in London for six nights from $789 courtesy of VisitBritain and Globus & Monograms.

Farecast's e-mail had popped in 20 minutes earlier, notifying me of a Las Vegas deal for $44 per night. (Turns out the $44 deal was for a 2-star hotel. Listen, Farecast, do I look like 2-star material?)

The deal-makers and discounters are having a field day, as I wrote in Travel Weekly a few weeks ago.

But, now, the economy is in such a state that even the IRS is getting into the act, promising taxpayers with huge offshore accounts that their penalties would be reduced if they voluntarily start to pay federal taxes.

Deals, deals, deals.

Unfortunately for me, my 117 offshore accounts seem to have dried up years ago.

And, speaking of Farecast's $44 per night hotel rooms, MGM Mirage and DubaiWorld seem to be close to a bankruptcy filing in regards to their $8.6 billion Tamara AudiCity Center resort and casino project, according to the Wall Street Journal.

Alas, later in the day the Wall Street Journal reported that MGM Mirage indeed made a payment and apparently came to the project's rescue. So, that bullet has been dodged for now.

Meanwhile, even Google, having "over-invested in some areas in preparation for the growth trends we were experiencing at the time," announced it was axing nearly 200 "roles" from its sales and marketing team.

You gotta love marketing-speak: These weren't jobs and paychecks at Google. No sir. They were "roles."

Yes, last night I blogged about some new roles that might be added to spur a Twitter Summer Travel Stimulus Plan.

C'mon, with the way things are going, we'd better do something fast.

Thursday, March 26, 2009

A Twitter Summer Travel Stimulus Package

With apologies (not really) to Congress and President Obama, if you really want to read about an alluring stimulus package, you've come to the right place.

Actually, the idea is the brainchild of a friend and industry colleage, Susan Black, who figured out an easy, effective and cost-efficient way to stimulate summer travel.

Susan's simple solution: Since your travel company must get involved in social media and because some members of your team may be slow to grasp the etiquette and culture, then just go out and hire a summer intern or two who "gets it" and let them tweet-up a storm.

Susan advises that your company needs to find a summer intern who is passionate -- not only about Twitter or whatever medium you choose -- but about your company's sweet spot. In other words, if your company operates a ski resort, then find a college kid who knows the difference between a a mogul (the snow-related thing) and, well, a mogul (the person who calls the shots in the boardroom).

The intern's salary won't break the bank, and your company may find a Twitter-savvy future full-time employee who might one day become your company's mogul (the CEO variety). You never know.

Susan mentions that you should also hire a "strategic consultant" to give the intern direction and to figure out how the Twitter plan fits in with your company's broader goals. Susan just so happens to be one of those aforementioned strategic-consultant types. But, this is not an advertisement for her services. For that, she would have had to pay for an exhorbitant banner ad in a column alongside or below this post:) Hire whomever you want or don't hire anyone to get your social media act together.

But, I know one thing: Within certain limits, of course, you have to give this intern some free rein. You have to let your tweeter flex his or her stuff in the 140-character per-tweet world.

If you make our ski buff tweet all corporate-speak, you lose. If you are just going through the motions for the sake of being involved in social media, the effort will fall flat and the Twitter Summer Travel Stimulus Package will end up as stimulating as a complex derivative instrument.

ExecTweets and the Richard Branson Twitter 'Scrape'

I just discovered ExecTweets, launched March 23 by Federated Media Publishing in partnership with Microsoft and with an assist from Twitter and its open-source platform.
ExecTweets is sort of a Twitter-aggregator, almost a Twitter-bypass for people who want to sort through the Twitter clutter and focus on the tweets of top executives in retail, technology, media/advertising and assorted industries.
Federated Media described the initiative here, pointing out that ExecTweets is a way to follow C-Suite executives without sorting through all of the low-lifes (my words and I'm kidding) that you already follow on Twitter.
Which brings me to Richard Branson, who is a featured ExecTweets tweeter. Of course, all of this ExecTweets tweeting appears to be going on without the express permission of the assembled tweeters, but there is an email address at the bottom of the home page for CEO tweeters who want to opt out.
I made reference to the "Richard Branson Twitter Scrape" in this post's headline because it reminded me of how metasearch engines, back in the day, used to scrape airline sites for fares. Of course, there doesn't appear to be any "scraping" in the classic sense going on here, just some neat aggregation through an an appealing API.
Branson's ExecTweets and Twitter posts aren't very earth-shattering at the moment. He's soliciting Ask Richard Anything questions, and informing us that thongs were given out "on our our first V Australia flight from Sydney to LA!"
Hey, in what other blog besides the Dennis Schaal Blog can you read about OTA booking fees, cool new applications and thongs?
Anyway, ExecTweets has a lot of potential. You can follow Steve Case and other bigwigs, although I don't see many travel industry folks yet, other than Branson and Billy Sanez, an American Airlines communications executive.
Speaking of which, shouldn't there be room on ExecTweets for an online travel journalist and blogger with the initials D.S. and the Twitter moniker @denschaal?
There I go again with my shameless self-promotion:)

Wednesday, March 25, 2009

Expedia's Booking Fees: The Trigger Point

There's a rumor circulating in some circles that Expedia Inc. CEO Dara Khosrowshahi decided to remove consumer-booking fees on airline tickets and "go after" Orbitz, which still charges fees, because Dara was angry that Orbitz Worldwide picked Barney Harford, an Expedia alum, as Orbitz's President and CEO in January.
I have no clue what Dara, which is what everyone calls him, thinks of Orbitz's selection of Harford, who left Expedia in 2006.
But, I doubt the validity of the whispers I'm hearing.
Instead, I do know what had to be a conversation topic in the Expedia Inc. boardroom.
Priceline, which bid adieu to consumer-booking fees on airline tickets in 2007, saw the number of airline tickets it sold worldwide climb 65.3 percent in 2008.
And, while price-conscious consumers were filling Priceline's coffers, the number of airline tickets that Expedia sold worldwide in 2008 stagnated. There was 0 percent growth.
Not all of the disparity in the respective growth rates is due to booking fees -- but much of it has to be.
So, Expedia's dropping of booking fees, followed by Travelocity's match, represented a chance to make up some of that market-share loss, and to try to crush the weakest of the Big Four online travel agencies, Orbitz.
Expedia's initiative resembles the way major airlines sometimes try to drive smaller competitors off the runway and out of business.
As I reported, Orbitz is dependent on the booking-fee model, and hamstrung in its maneuverability because of GDS agreements with its overlord, Travelport. Unless amended, Orbitz is locked into those agreements through 2014.
So far, Orbitz's only answer to Expedia's and Travelocity's still-temporary booking-fee deletions is a hotel sale, which runs through May 31, as do promotions by its three main competitors.
Undoubtedly, Harford and his chairman, Jeff Clarke, who just so happens to be president and CEO of Travelport, are trying to figure a way out of this mess.

Tuesday, March 24, 2009

Should Expedia Opt Out of Behavioral Ads Push?

Imagine if your reading habits at the library or bookstore were public record and advertisers used that information to hand you a cellphone application when you walked into Best Buy?
Switch to the online arena and that's basically what's happening with Expedia's new PassportAds program, which I described here.
Expedia and others inside and outside the travel industry are selling advertisers data from your Internet cookies, supposedly without any personally identifiable information, so marketers can more-effectively target you when you surf around to major travel and non-travel websites.
When did our online travel buying habits become commodities? Probably quite some time ago, but now major websites, seeking new revenue streams, are accelerating the sale of information about your browsing habits.
While Expedia's program is for ads to be posted on U.S. websites, international advertisers are getting involved in the program, and Expedia is mulling expanding PassportAds internationally.
I don't mean to pick on Expedia. Other major websites are getting into this arena, too. It is a major trend in the advertising industry.
The FTC proposed some guidelines on the behavioral-advertising issue. Among them, the FTC rightfully argues the cookie-sellers should prominently disclose these practices to consumers and not necessarily bury these disclosures within hard-to-fathom privacy policies.
Expedia's partner in the venture, BlueKai, gives consumers the option of managing which of their buying preferences gets shared with advertisers or opting out altogether.
I visited that page, and BlueKai knew, for instance, that I would be traveling in the next 7 to 14 days.
As Expedia and other travel companies engage in bolstering their media programs by selling cookie data, at the very least they should explain their behavioral-advertising business on prime real estate, their home pages, and give unwitting consumers the option of withdrawing from these advertising programs.

Monday, March 23, 2009

Meta-morphosis: TripAdvisor Metasearch Displays 'Brand'-New Stuff

Travel agencies and airlines long-complained that metasearch tools don't allow for branding and differentiation, but now TripAdvisor's new flight search tool is heeding their messages.
TripAdvisor started displaying airline and online travel agencies' branding messages within its flight grid. Again, I'm not talking about ads served above or off to the side of flight-search results, but messaging within the flight grid.
When I searched for an LAX-JFK flight, TripAdvisor displayed a flight bookable on, with the tag line, “This is How to Fly;” the same flight through Travelocity, with the tag line, “You’ll Never Roam Alone;” and the Virgin flight through Expedia, with the tag line, “Go With Confidence.”
With OTA booking fees tossed aside, at least for now, merchandising and differentiation is key.
That's because, as is par for the course, all three companies offered the flight for the same fare, $259.
But, at least, for the first time that I’ve seen, the airline and the two OTAs had a chance to get their branding message across.
Baby steps, but significant nonetheless.
So, I agree with what Yen Lee said in the UpTake Travel Industry Blog that there are still huge opportunities in metasearch and transforming metasearch tools into something that offers a better consumer-shopping experience is key.
And as Rick Seaney of FareCompare and Susan Black of Chimney RockPartners commented, it looks like unbundled, a la carte or standalone (you pick the word) airline products, from lounge access to Perrier Jouet, may be the next sweet spot for the channel.
It puts the onus on companies like TripAdvisor, Kayak, Travelzoo, Farecast, FareCompare and Mobissimo, to display these disparate offerings in a consumer-friendly manner.
Not easy, at all.

Sunday, March 22, 2009

Corporate Responsibility Advice to Royal Caribbean and Cruise Critic

From a corporate responsibility perspective, here's my advice to Royal Caribbean and Cruise Critic regarding the Royal Champions episode: Come clean.
I have read the statements from the cruise line and Cruise Critic, and read the interview with Royal Caribbean's Bill Hayden.
In short, Royal Caribbean is accused of contacting active, online-cruise reviewers, getting their contact information from Cruise Critic, and then wooing them and seeking to manipulate their writing in ways subtle and not-so-subtle.
What is blatantly missing in all of this in the aftermath of the disclosures is any admission of wrongdoing on anyone's part, other than Cruise Critic saying that "at this time, we have decided that it is not in Cruise Critic’s best interest going forward to contact members on behalf of Royal Caribbean or any other cruise line."
From my days in dealing in crisis communications as an editor-in-chief of a corporate responsibility magazine, I can tell you that the best approach in these types of situations is to let it all hang out, admit where you screwed up and let us know how you plan to reform your ways in the future.
Has Cruise Critic done such favors for advertisers and major travel companies in the past? Was it pressured to do so by anyone? Was there any internal debate about it? Were any privacy policies violated?
And, will Royal Caribbean end any involvement with the Royal Champions? Does it admit that it was wrong to try to manipulate the social-media airwaves in such a manner?
I say to both companies: We'd respect you a lot more if you if you conduct some internal reviews of your behaviors, publish the results openly, and let us know what steps you are taking to ensure that this kind of thing won't happen again.

Reviewing Review Policies on TravelPost and TripAdvisor

Lost in the Royal Champions' controversy, in which Royal Caribbean organized and wooed this group of frequent cruise-reviewers, is the fact that a lot of review websites these days incentivize reviewers to pen their opinions.
As I wrote here a few days ago, I oppose the practice of review compensation.
Now, as it turns out, Kayak-owned TravelPost, in its quest to give TripAdvisor a run for its media dollars, is aggregating and posting user reviews from some sites that compensate their reviewers.
To its credit, Travelpost itself doesn't compensate people who write reviews for TravelPost. And, neither does TripAdvisor pay reviewers.
But, TravelPost is partnering with sites, including IgoUgo,, and , that compensate reviewers to varying degrees.
IgoUgo offers reviewers Go Points from American Airlines and Amazon; Epinions provides a revenue share; and makes reviewers eligibile for a $1,000 gift card.
TravelPost provides a way for consumers to filter in or out the source of TravelPost reviews.
But TravelPost, which says it values transparency, should provide explicit information for consumers about the review policies of its partners.
In that way, consumers would be able to make up their own minds about whether they should read or disregard reviews from incentivized critics.
It would only enhance TravelPost's reputation if it does so.

Saturday, March 21, 2009

Airlines, OTAs in in Metasearch Gridlock

Now, the real work begins.
There is so much sameness to metasearch these days, now that Expedia and Travelocity removed, at least temporarily, their consumer booking fees on flights.
For example, when I compared Delta fares on JFK-Dallas flights for the end of March, I found the following uniformity in a side-by-side grid display of fare offerings using the TripAdvisor flight-search tool: Delta, Expedia and Travelocity all were selling the Delta flight for $369.
Why click on one over the other?
Until recently, Delta, or most other carriers, probably would have offered the cheaper fare because Travelocity and Expedia tacked on their booking fees.
So, with the booking fees on hold, how are airlines -- and the OTAs, for that matter -- going to distinguish themselves in this, ahem, metasearch gridlock?
It is an important question for the airlines because in the past few years metasearch has evolved in the carriers' planning from an experiment into a mandatory part of their distribution strategies. They need to be where the customers are -- and about 18 percent of U.S. online-travel bookers use metasearch to plan and shop, according to Forrester Research.
In a well-publicized battle with Kayak last year, American Airlines figured out one way to stand out. Kayak and others agreed to display American Airline's fares alone, without any side-by-side comparisons to Orbitz or anyone else.
I believe it is likely that other airlines will put renewed pressure on the metasearch companies to do likewise now that the playing field has been leveled.
Will that be enough?
Billy Sanez, an American spokesman, tells me there already is differentiation beyond the solitary displays. Once consumers click on an AA fare in a metasearch engine, they usually get deep-linked into, which offers a potpouri of ways to search -- by price, schedules, flights with available seats, and flights regardless of availabilties etc. You even can download a complete American or Oneworld timetable. "The job's being done," Sanez says, meaning AA is converting an attractive number of these metasearch-delivered shoppers.
But, is AA and are other airlines getting this message out to consumers in a strong enough way? If cost-conscious consumers scour a metasearch grid and see the same American or Delta fares at the same price on the airline sites, Expedia and Travelocity, will the travelers be aware enough to know that they should book on the airline link because there is all kinds of beneficial razmataz going on over there?
How can the airlines further differentiate themselves in the metasearch gridlock beyond the solitaray displays and get their message out in more clearly defined ways?
Did someone just say "Twitter?"

Friday, March 20, 2009

TripAdvisor vs. Kayak: Paid Reviews Don't Float My Boat

When I wanted to book a London hotel last year, the first thing I did was go to to check out a few properties. So, I value user-generated hotel reviews, even though I know some are fakes.
And, lately, hotel review sites have come in for some new criticisms. For example, Anita Dunham-Potter writes on Tripso that the Royal Champions, a group of frequent cruisers who are prolific in their cruise reviews, actually was organized and wooed by Royal Caribbean. And, Edward Hasbrouk's The Practical Nomad blog takes on the Champions' cruise-line champions, Royal Caribbean, as well.
Meanwhile, Arthur Frommer's blog discusses a report that claims a Scottish tourism board is coaching hotels on how to submit favorable reviews to TripAdvisor.
So, against this backdrop, I just read recommendations by Sam Shank, the founder of and current CEO of, on how Kayak, which owns TravelPost, might unseat TripAdvisor as the dominant player in the hotel-review sphere. Well, Shank seems like a smart guy with a lot of good ideas, but one recommendation seemed fairly shocking and off-base, given the credibility beating that hotel-review sites are taking these days.
In the Up Take Travel Industry News blog and in further detail on his own DealBase blog, Shank suggests that Kayak start giving TravelPost's frequent hotel-reviewers a revenue share of ads that appear on their review pages. Other review sites, like HubPages, already pay "royalties" to reviewers, he notes.
Well, I think paying hotel guests for reviews is a royally bad idea. You've heard of pay to play? Well, this borders on play to stay.
Hotel reviews should be genuine, heart-felt or rant-inspired and devoid of commercialism. I want the reviewer's honest assessment of whether the room smelled of smoke or the reception-desk folks had their snoots in the air.
After all, in his posts, Shank criticizes TripAdvisor as being too commercial, cluttering up the works with too many ads, and being saddled with conflicts of interest because TripAdvisor is owned by Expedia.
Would there be any conflicts if TravelPost reviewers started churning out reviews just to keep the ad dollars rolling in?
If I wanted to read a professional hotel-reviewer's angle on the latest W Hotel in Miami or any other property, I'd read Travel + Leisure.
Kayak and its TravelPost unit, which are aggregating hotel reviews from around the Web, appear well on their way to making the hotel-review arena much more interesting.
But, paying for citizens' reviews just ain't the way to go.

Thursday, March 19, 2009


With apologies to Fred Flinstone and Yapta, too, I have to say, "Yabba-Yabba-Doo," about some of the pro-consumer developments taking place in the flight-booking arena.
And, thankfully for all concerned, I don't say, "Yabba-Dabba-Doo," very often. (Incidentally, for those young folks playing on Twitter, as I do, Fred Flinstone was a cartoon character "back then," as my kids like to put it.
Anyway, in the old days of online-travel booking, before the days of metasearch and the developments I'm about to describe, you did some comparison-shopping, booked a flight and hoped you got a decent price.
But, today, you not only have Kayak,, Mobissimo and a cast of thousands (I exaggerate) to help you mix and match fares, but Farecast will dive deep into its data mine to predict if the fare will go up, down or sideways in the next week, month or holiday weekend, for that matter.
Then, this week, we have a flurry of new activity by Travelocity, with its PriceGuardian program, and Priceline with its Pricedrop Protection scheme, both of which refund money to Joe Consumer if Betty Consumer (no relation) later booked a flight or vacation package for the same itinerary at a cheaper price. Priceline's Pricedrop (it does have a nice ring to it) even refunds the difference to Ralph Consumer, who successfully made a flight bid using Name-Your-Own Price, if Nancy Consumer reserved a no-bid published fare at a lower price.
The likelihood of that happening is so remote that the data-crunchers at Farecast would have to give you the odds.
So, if Travelocity and Priceline are silently, behind the scenes, monitoring fares on your behalf (and they promise they will) to see if later bookers got lower deals on the same itineraries, Yapta instructs consumers how to get credits from the airlines if travelers booked directly on an airline website and subsequently the fare dropped. And for $15, Yapta even will phone the airline for you.
What happened to the days of pressing the enter key on your PC and booking a flight -- and just winging it, hoping you got a deal?
It's all about empowering consumers, and making the travel industry more transparent.
That's why I say: "Yapta-Yapta-Doo!"

Wednesday, March 18, 2009

JetBlue and Social Networking Differentiation

Some companies "get" social networking and some companies just don't. ("Sometimes you win, sometimes you lose, and sometimes you choose between the two." But I digress.
Take JetBlue, and its perspective on social networking. Morgan Johnston, the guy behind many of the airline's tweets, told me how JetBlue stumbled in the beginning of its Twitter experience and then figured out a way to engage its followers. Today, if you can't figure out where to drop your bag at the airport, give JetBlue a tweet and the airline will try to hook you up, Johnston says.
But, alas, I follow companies on Twitter all day long and see them just pumping out promotion after promotion. There's no personality to it. No candor. No transparency. Duh, little value.
Some companies just don't get it.
I liken it to the difference between an effective PR person and an ineffective one (you know who you are...or maybe you don't.) The good ones will level with you and not try to spin a journalist like a top. For the others, all they do is spin, spin, spin -- and these have no credibility.

Tuesday, March 17, 2009

Travelocity PriceGuardian: Less Than Meets the Eye?

I'm not privy to Travelocity's slicing and dicing of the numbers regarding the new Travelocity PriceGuardian program unveiled March 17, but I have to believe there isn't a great deal of financial risk to operating this program.
PriceGuardian basically promises Travelocity's U.S. customers that they will get a refund of $10 to $500 if another Travelocity customer books the "same" flight-hotel package at a lower rate.
Sounds good.
But, the emphasis here is on the word "same." To qualify for a check, the Travelocity vacation-package booker would have to travel on the same airline, on the precise flights -- departure and return -- occupying the same type of seat and purchasing the same fare class of ticket as the passenger who booked a cheaper vacation package.
And, that is just the flight portion of the qualifying challenge.
The Travelocity customer would also have to stay in the same hotel, book the same room type and checking in and out on the same days as that other bargain-hungry Travelocity consumer who booked a cheaper package.
If one customer books a queen bed and the other a king, or departs on an earlier flight or a day or two later, then no deal.
I mean, sheesh! (And, you can quote me on that.)
Check out the terms and conditions for yourself.
And, contrast Travelocity PriceGuardian with Orbitz Price Assurance, introduced in June 2008. The Orbitz program merely deals with the price differential on flights, so the odds of receiving an Orbitz check have to be a lot more in the Orbitz customer's favor than for the Travelocity vacation-package booker.
Granted, Travelocity sells huge numbers of vacation packages so I'm sure the online travel agency will be cutting a bunch of checks before the booking window closes on the promotion May 31.
So, feel free to comment, as always, if you feel differently (or agree), but it looks to me like believe the Travelocity PriceGuardian blitz is more marketing than substance.

What is Travelocity's Roaming Gnome Planning?

The Travolution Blog speculates that Travelocity's dropping of air booking fees for consumers could be offset in some way if Travelocity ramps up its media business and launches a metasearch product of its own. Travolution is betting that Travelocity has this metasearch plan ups its sleeves.
It would be a logical move for Travelocity, which could enhance its Ratefinder tool on IgoUgo by integrating a metasearch offering there.
And, it would be a big reversal for Travelocity to go with a metasearch product as the OTA always has argued that travel companies shouldn't put too much focus on price.
Does anyone remember the conference several years ago when then-Travelocity CEO Michelle Peluso mixed it up with Kayak's Steve Hafner over the future of metasearch? As the world turns....

Travelocity to Match Expedia on Booking Fees

The Wall Street Journal reported this morning that Travelocity likely will announce today that it matched Expedia and would drop its consumer booking fees on flights for tickets sold through the end of May.
Travelocity also plans to unveil a program similar to Orbitz's Price Assurance program on flights, according to the report. The Travelocity program would deal with vacation packages, however. Consumers would get compensated if they book a vacation package and the price drops after the booking.
Travelocity's decision to drop its booking fee on flights really puts the pressure on Orbitz, which would the sole major online travel agency charging a booking fee for flights if Expedia's and Travelocity's booking-fee moves become permanent after May 31. Priceline dropped booking fees some time ago.
And, Orbitz, more dependent on air ticket sales than its competitors, would be hard-pressed to drop booking fees on a permanent basis because it takes a majority of its profits from booking fees.
Orbitz finds itself between the proverbial rock and a hard place.

Monday, March 16, 2009

Sabre Edges Past Travelport in Market Share

Sabre, the company that owns Travelocity, went private in 2007 so all those stats that journalists and analysts love to crunch were MIA (as in Missing In Action) over the last two years, until March 5 when the Southlake, Texas, company released its fourth quarter and full-year 2008 earnings report and accompanying data.
Sabre lost a bunch of money for the year, but a review of the stats shows that it actually gained global market share, surpassing Travelport GDS (i.e. Galileo and Worldspan.)
In a declining travel market, the Sabre global distribution system (GDS) crunched 383 million transactions in 2008, 3 percent fewer than in 2007. But Travelport's segments fell faster, 11 percent, to 372.1 million. Of course, it is possible that Amadeus may have processed even more segments than Sabre. It's hard to say because Amadeus is a private company and hasn't publicized its numbers. It also counts transactions differently than Sabre and Travelport do.
So, how did Sabre overtake Travelport? Methinks that one major factor is that Expedia swapped out longtime partner Worldspan in favor of Sabre as Expedia's primary res system. And, all of those bookings definitely add up.
You have to love the travel industry. Expedia helps Travelocity's owner, Sabre, overtake Travelport, which controls Orbitz. So many plot twists:)

Sunday, March 15, 2009

Cuba Travel: An Opening

The U.S. Treasury Dept., following Congressional directives, reinstated the right of U.S. citizens to visit "close relatives" in Cuba once every 12 months.
It's a meaningful opening, and could signal the day when ordinary Americans might have the freedom to travel to Cuba.
Might even Barack and Raoul begin a dialogue one of these days? Now, that would be something. We might have to tackle healthcare first.
But, if we can talk to Tehran or Damascus, why not Havana?

Friday, March 13, 2009

Robert Reich on FareChase and Orbitz...Sort of

About a year or so ago, I wrote a story about Robert Reich, the former Labor Secretary. His book, “Supercapitalism,” argued that corporate responsibility is as meaningless as “cotton candy” because corporations can’t be moral or immoral, selfish or altruistic.
Basically, he said, you can’t attribute human emotions to companies because their sole mission is to improve the bottom line and bring dinero to shareholders.
I’m sure Reich wouldn’t disagree with me, though, that people make corporations tick, and behind every product launch, acquisition or bankruptcy, there are people in those corporations that either thrive or suffer.
Which brings me to FareChase and Orbitz.
I was sad to hear that Yahoo decided to shut down its FareChase metasearch operation. Assuredly, whomever was doing the grunt work over there at FareChase is either looking for another assignment or job because of the downsizing.
I visited FareChase in Kfar Saba, Israel, about a half hour from my cousins’ house, in 2001, and got to know the group of developers, who were doing some work for Orbitz at the time, and making a name for themselves in the U.S. market from a nondescript office in a small Israeli town, a few miles from the West Bank. Lior, Boaz … a great bunch of guys, and women, too.
They developed a great product, which will disappear in a few days, a victim of Yahoo’s new prioritizations.
Which brings me to Orbitz Worldwide. As I write this on March 14, OWW stock is at $1.29 and there are questions from investors about the viability of the company. Expedia’s dropping its own booking fees has put further pressure on Orbitz, which charges a booking fee. Orbitz still is dependent on air sales -- in contrast to Expedia and Priceline, with their great hotel businesses --and gets a majority of its profit from the booking fees.
Anyway, I hope Orbitz makes it. There are a bunch of good people who work there and they have developed innovative things. Orbitz led the way years ago with its TLC alerts to customers’ mobile devices, informing them of gate changes and delays. Much of the rest of the travel industry followed Orbitz’s lead on that one.
And, Orbitz’s Price Assurance program, mailing checks to Orbitz bookers if their airfare dropped in price after they booked, seems like an innovative and winning approach to me.
So, yes, corporations aren’t human and the bottom line is the bottom line for Orbitz and a ton of other companies feeling the pinch in these pressurized times. But, Orbitz offers competition, adds value, and a living for a bunch of good people who work there.
Priceline was in a similar position years ago, when it’s stock was teetering.
So, for Orbitz, let’s hope a comeback is in the cards.

Expedia to Orbitz: OWW-ch

Expedia's move to drop its consumer booking fee puts the squeeze on Orbitz Worldwide (stock symbol OWW), in particular. Jake Fuller, the online-travel financial analyst, tells me why OWW is feeling the pain.
"My bet is that the Expedia no-fee sale will become permanent and that is a real problem for Orbitz and Travelocity," Fuller says. "Orbitz generates around 60% of EBITDA from booking fees and carries a significant debt load."
Orbitz's stock already was reeling -- for real.
While Travelocity and Orbitz charge booking fees, Priceline does not, but was under pressure, too, because of the notion that Expedia's action might secure it additional market share.
The Wall Street Journal outlined some of the stock market dynamics from Expedia's punch.
It all leaves Orbitz, with its stock trading well below two bucks, in a tight spot.
"In other words, Orbitz cannot afford to cut the fee as that would mean it could not service the debt," Fuller adds. "If they do not cut [the booking fee], Orbitz would face share loss and potential debt service problems."
No word yet from Travelocity on any answer to Expedia.
"Travelocity is also heavily weighted to booking fees and presumably carries significant debt from its buyout by Texas Pacific Group," Fuller says.
Now, the big question that remains, of course, is whether Expedia picks up enough volume to offset the revenue loss from its missing-in-action booking fee.
Interestingly, Expedia's decision to drop its booking fee came just a few weeks after Expedia's and Travelocity's fares began appearing side-by-side in the TripAdvisor flight metasearch engine.
Travelocity and Expedia finally are playing side-by-side in metasearch -- but Travelocity might be thinking that Expedia ain't playing fair.

Thursday, March 12, 2009

Travel Metasearch Frenzy or Finale?

Yahoo has decided to scrap FareChase , effective March 25.

Say what? The decision comes as travel metasearch, or comparative shopping, seems to be kicking into high gear. TripAdvisor, bent on international expansion, recently launched its new metasearch air solution, and a few weeks earlier Travelzoo debuted .

There are a number of things going on that at first glance make it appear that Yahoo’s shuttering of FareChase, acquired by Yahoo in 2004 for $20 million and change, might be a unique situation.

First, Carol Bartz, occupying Yahoo’s CEO position since January, has the company focusing on all-things strategic and FareChase obviously wasn’t in the plans. And, second, Travelocity, which just renewed its agreement to be the air, car and hotel provider on Yahoo Travel, has sparred with Yahoo for years over the prominence that Yahoo gave FareChase on Travelocity turf….meaning Yahoo Travel

The thinking here is that Travelocity, which spurned participating in FareChase but now participates in TripAdvisor’s air metasearch tool alongside Expedia, may have played a key financial role in helping Bartz decide to give FareChase the boot.

However, along comes Yen Lee, the former general manager of Yahoo Travel and the current President of , who tells me that metasearch is “done.”

Say what (again)?

Yen was around when Yahoo bought FareChase and at the helm of the travel unit when the thing was launched. I was one of the people he tapped for the Yahoo Travel Search advisory council when Yahoo was looking for some input and feedback on FareChase’s development.

But, now Yen believes that metasearch is finished, largely because price differentiation for air, and hotel, too, is fairly miniscule. Especially when you consider that Expedia just dropped its booking fee, at least for now. (Expedia, by the way, has been experimenting with varying booking fees in divergent channels, including Hotwire, which doesn’t have one, either, for some time.)

So, if you search for a flight around two weeks from now from Expedia land (Seattle) to Yahoo land (San Francisco) using the TripAdvisor metasearch engine, you come up with a Virgin America fare ($139), an Expedia fare ($139) and a Travelocity fare ($146). Not much differentiation except for Travelocity, which is still charging a booking fee (as of this writing).

Not to mention -- which Yen did -- all of the price guarantees in the hotel industry, which make price diffentiation (metasearch’s bread and butter) a fleeting kind of thing.

So, are Travelzoo and TripAdvisor too late to the game? Is Kayak cooked?

What about a flurry of new metasearch announcements that one vendor tells me are in the pipeline?

I think Yen may be overstating the case. Despite the lack of price differentiation, the various metasearch solutions, including the predictive ones from Farecast and Farecompare, still have a lot of value as aggregators and they are poised to cash in on the burgeoning media biz. Anyone who recently has spent a few hours trying to sort out flight options when trying to book a trip can attest to their worth.

And, the online travel agencies, with their allegedly broken business models, were supposed to be dead by now, too.