Monday's Travel InsideOut

Orbitz Worldwide shuffled the deck a bit in the wake of Dean Sivley’s exit a couple of months ago from Orbitz for Business and his appointment as president and CEO of Travel Guard. The OWW chief operating officer post will not be filled, the company said, as its previous occupant, Mike Nelson, takes over as president of OWW’s Partner Services Group. Nelson will bring along some of Sivley’s alliance marketing/media-business duties in the expanded PSG.

Securities and Exchange Commission/Orbitz Worldwide: DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS: On July 8, 2009, Orbitz Worldwide, Inc. (the “Company”) announced certain organizational changes in the way that it aligns its business, product and technology teams with its major areas of strategic focus. As part of those changes, Michael Nelson will transition from Chief Operating Officer to President, Partner Services Group and will have responsibility for partner services and customer operations on a global basis. The Company does not currently intend to appoint a new Chief Operating Officer. Read More

-----

In increasing the Star Alliance’s antitrust immunity, the DOT disregarded much of the advice of the Dept. of Justice and gave short shrift to the concerns of online travel agencies. The decision means Continental, United, Air Canada and Lufthansa can coordinate the way they market to travel agents, wholesalers and corporations.

Travel Weekly: STAR ALLIANCE GETS CONTINENTAL AND ANTITRUST IMMUNITY: The Transportation Department on Friday approved the Star Alliance’s request for expanded antitrust immunity that would bring Continental into the group as part of a four-carrier joint venture with Air Canada, Lufthansa and United.

In so doing, the DOT rejected most of the advice of the Justice Department, though it accepted some suggestions to limit immunity in certain markets dominated by Star members. The grant of immunity extends to 10 of the alliance’s 22 members: Air Canada, Austrian, BMI, LOT Polish, Lufthansa, SAS, Swiss, TAP Air Portugal, United and, now, Continental. Read more

-----

We’re waiting for the other shoe to drop, so to speak, on United Airlines’ new credit-card policy for travel agencies. Will a global distribution system (GDS) bias United’s flight displays out of the stratosphere so they will be impossible to find? Will some of the online travel agencies take similar steps? Expedia, for one, hinted at its displeasure.

Dennis Schaal Blog: EXPEDIA NOT SO HAPPY ABOUT UNITED’S CREDIT-CARD PLAN: Major online travel agencies have been missing-in-action about their take on United Airlines' plan to make some travel agencies foot the airline's credit card fees, beginning July 20.

Expedia recently broke the silence, if you read between the lines. Read more

-----

ICANN – not to be confused with Carl Icahn – is feeling the heat on its travel spend. Turns out that the power behind Web-domain management feels that personal navigation in the form of global travel is a worthwhile endeavor. (We believe Carl Icahn probably travels a lot, too.)

ComputerWorld: ICANN's $12M TRAVEL BUDGET: GOODWILL MOVE OR INFLUENCE BUYING?: ICANN now spends 22% of its budget on travel and meetings in far-flung locales worldwide. Is it looking to build grass-roots support for its decisions or using its growing financial resources to influence various power players in the domain name community?

The group responsible for managing the Web's domain name system, the Internet Corporation for Assigned Names and Numbers (ICANN), has grown in the 11 years since its inception to become a powerful organization with a nearly $55 million budget built on the domain registration fees it receives. Read more

-----

United, American and US Airways are in the cross-hairs amidst new speculation about “the most vulnerable airlines," although one analyst says they likely will dodge the bullet again.

Wall Street Journal: U.S. AIRLINES FLY INTO CREDIT SQUEEZE: The recession, plunging travel demand and a tough lending environment are battering U.S. airlines, raising the prospect of a liquidity squeeze that could lead to bankruptcy filings by winter if conditions don't improve.

The five largest hub-and-spoke carriers are expected to report second-quarter losses, starting with AMR Corp.'s American Airlines on Wednesday and followed by Delta Air Lines Inc., UAL Corp.'s United Airlines, Continental Airlines Inc. and US Airways Group Inc. next week. Read more

-----

Key Hilton decision-makers and the investor crowd got together on Mexico expansion. The Hilton Garden Inn brand finds Mexico ripe for development.

TravelAgent Central: HILTON REINFORCES EXPANSION PLANS THROUGHOUT MEXICO: Hilton Hotels Corporation hosted a development forum in Mexico City this week to reinforce the company’s plans to expand throughout Mexico. The event, held at the Hampton Inn & Suites Mexico City – Centro Historico, came following the recent announcement of the company’s plan for the first Hilton Garden Inn management agreement in Chiapas, Mexico. The forum brought together executives from Hilton’s development team, representatives from three of the company’s brands (Embassy Suites by Hilton, Hilton Garden Inn, and Hampton Inn by Hilton), and key decision makers from Mexico’s hotel investor and development community. Read more

-----

Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

Travel InsideOut is Copyright (c) 2009 by Dennis Schaal. All rights reserved.

Expedia Not So Happy About United's Credit-Card Plan

Major online travel agencies have been missing-in-action about their take on United Airlines' plan to make some travel agencies foot the airline's credit card fees, beginning July 20.

Expedia recently broke the silence, if you read between the lines.

Expedia Inc. spokeswoman Katie Deines, noting that Expedia.com had not been included in the United plan yet, said: "Expedia has not received a letter on this topic from United. We won't speculate on how hypothetical actions taken by our supply partners may or may not impact Expedia's business, but we are unsupportive of actions by travel suppliers that increase costs to consumers. We are closely monitoring the developments and have no further comment at this time."

So, Expedia is "unsupportive of actions by travel suppliers that increase costs to consumers."

This means that if United forced Expedia.com to pay United's credit card fees when Expedia.com customers book a United flight, then Expedia.com likely would pass on the cost to travelers.

The development occurs just as the dust has settled on the move by Expedia.com and its competitors to eliminate consumer booking fees on flights, and could force them to reinstitute the booking fees, implement new fees of some sort or eat the costs.

PhoCusWright financial analyst Jake Fuller has estimated that Expedia and Orbitz earn about $10 per ticket in GDS incentives and commissions, while Priceline gets about $2 on retail flights. Paying the airlines’ credit card fees would cost the online agencies about $6 to $8 per ticket, effectively wiping out the bulk of their GDS incentives and commissions.

The other OTAs have been reluctant to step into the line of fire on the sensitive topic.

In late June, Travelocity stated: "We are engaged with United to understand their planned actions regarding payment processes, but aside from that we don’t have anything else to say on the matter at this time. Thanks for understanding."

And, Orbitz Worldwide and Priceline both declined to comment on the issue.

Likewise, Amadeus has been the lone global distribution system (GDS) vendor taking a stance.

Amadeus North America spokeswoman Debbie Iannaci told me: "Airlines need to be cautious about adopting policies which could potentially have a detrimental affect on travel demand in the current environment. And we have always believed that the marketplace ultimately determines the success of any model. This action could potentially shift significant costs and risk to travel agencies at a time when they can least afford the burden. That cost could also inevitably be passed on to the traveler. Those additional costs and inefficiencies could have a detrimental effect on demand at a time when the industry needs travelers traveling."

Behind the scenes, I'm sure the OTAs and GDSs have plenty to say to United on the credit card issue.

It's good to see Expedia and Amadeus, at least, having the guts to be public about it.

Airlines Bringing Behavioral Ads to In-Flight Entertainment Systems

I just found out, through the Shearwater Blog, that the latest bit of travel news in airlines' drive for ancillary revenue and behavioral advertising is that carriers will be delivering targetted ads to passengers through the airlines' in-flight entertainment systems.

If I hadn't just read up on it, I would have thought this was a "Saturday Night Live" parody.

But, Jetera Precision Media, a Danbury, Conn., company owned by Venture Capital and Consulting Group and with former Southwest Airlines CEO Jim Parker on the board, just put into production an ad delivery and targetting system that combines reservations data about travelers' intent with publicly available information about individual passengers to serve up ads tailored to that passenger on seat-back TV systems.

It is unclear at this point which specific companies are selling Jetera their reservations data.

But, here's how it works. In a FAQ on its website, Jetera explains: "The reservation information comes from any one of the multiple travel e-commerce sites, hotel and airline reservation systems. Then by partnering with some of the largest publicly available consumer data companies in the world we enrich that reservation data. The result is that we can then ultimately offer, for the first time, marketers and brands an unmatched level of relevancy, timeliness and action-ability."

It looks like the reservations data would be coming from "Airlines, Global distribution systems (GDS), Large Travel Companies, Hotels and Vacation Ownership Companies, Rental Car Firms, [and] Cruise Ships" because Jetera aims to partner with these travel suppliers and distributors in addition to marketers and advertising partners.

As I wrote yesterday and March 24 in the Dennis Schaal Blog, and recently in Travel Weekly, Expedia, Google, BlueKai, and others with travel industry ties are working hard to further commoditize travelers' reservation data to deliver targetted ads to you when you surf the Web and now, it turns out, some marketers will be going after you in your aisle or window seat, too.

It's all to the advantage of the traveler, goes the refrain. Marketers are telling travelers that advertisers are almost providing passengers with a public service when those ads for cellphones or credit cards bombard you during your travels.

And, oh, "Yes," Jetera explains, "passengers will be in complete control and have multiple opportunities to opt out should they choose to do so."

It sounds to me as if such behavioral advertising may become so omnipresent that efforts to opt out could become a full-time job.