Silence is golden for BA and the GDSs

With seven hours to go until the supposed British Airways-GDS negotiation deadline (midnight tonight), and not a whisper from any of five main protagonists...

In other words: everyone remains happy - for the moment.

Some reports today have said fees will not be passed onto travel agents which are booking tickets via GDSs, which is a bit of a non-story as no (dis)agreement has been reached anyway.

The deadline will also be missed, as we predicted last week.

The GDSs that have responded to inquiries have greeted us with a simple "no comment".

Can we expect a last-minute flurry activity? Will at least one of the main GDSs sign at the eleventh hour?

Probably not - but it would be interesting to hear the reaction of the others GDSs if just one deal was signed, as one source close to the negotiations suspected might happen when he spoke to us a few weeks back.

Kevin May, editor, Travolution

Tough times for travel guidebooks?

Simon Quicke, author of the Inside Books Blog, emailed recently to draw our attention to book publishing giant Penguin and its concerns over the future of the innocent travel guidebook.

It appears that at a recent sales conference in Marbella, Penguin asked execs to consider the fate of the travel guidebook in the face of competition from the “this new thing called the interweb”, chortles Jeremy Ettinghausen on the Penguin corporate blog.

He may indeed laugh. But the threat to the traditional model is very real, and Penguin, which dsitributes the Rough Guides collection, is right to take hard look at how it approaches the travel sector in the years to come.

They are not alone either. Lonely Planet, that bastion of the backpacker guidebook, has invested heavily in its online presence, and the more upmarket Dorling Kindersley has also recently relaunched its website with podcasts, downloadable travel guides and maps.

[The DK site looks remarkably like the new travel channels belonging to the Guardian and TimesOnline - our recent "analysis"]

It is an incredibly interesting challenge for these once powerhouses of travel publishing.

• How do they reach consumers in an electronic way, without losing their edge as experts in print publishing?
• What can they do about inexorable rise of the travel portals – such as newspaper websites – that can effectively do exactly the same?

Kevin May, editor, Travolution

School delighted - sixth form boys devastated

Word reaches us of a school in South Wales, where teachers breathed a huge sigh of relief and performed a quick u-turn after learning a hotel where pupils were due to stay on a trip to Switzerland was located above a stripjoint.

The school, Abertillery Comprehensive School in Gwent, made the switch when parents read a review on TripAdvisor about the Hotel Continental in Interlaken.

Parent governor Delwyn Davies, who had a 15-year-old son going on the ski trip, is reported in the South Wales Argus as saying:

"I was very concerned about it. I would not have been happy if my son came back and said there was a strip joint."

Read the reviews on TripAdvisor.

Kevin May, editor, Travolution

No longer Diggered

Quick post to say we're delighted to discover that the Travolution URLs have recently been unblocked by content aggregator Digg.com.

Whether or not this is because we specifically made a point of publicising the frustrating circumstances surrounding issue in December remains to be seen.

We never did receive an explanation.

Anyway, happy Digging...

Kevin May, editor, Travolution

Poorly targeted blog comment of the year #1

We are not in the habit of highlighting bizarre comments or spam on the Travolution Blog, but this one baffled us...

Tricia's post last week, Why Google Is Great, provoked a rather bizarre response from "Anonymous" - inevitably - telling us about the results from the Nevada Interscholastic Athletics Association from April last year.

[Click here to see the full post, if you dare]

Perhaps Google is Great because it allowed the NIAA to find Travolution. Discuss...

We ALWAYS welcome comments on the blog, but even the greatest PR would struggle to find a connection between the intricacies of the online travel industry and the winners and losers of Nevada's track and field competitions.

For the time being Blogspot's Comment Moderation will remain switched off - in fact, it has been for a few months. But be warned...

Kevin May, editor, Travolution

We can learn a lot from tech-savvy Indians

Indian online travel portal Travelguru has inked a deal with Air Deccan, India’s second largest airline, to provide budget hotel bookings and holiday packages to the carrier’s passengers.

The partnership will allow Air Deccan passengers to book 2,500 hotels, including some 1,500 budget/ economy hotels, through its website. The hotels are located in 160 cities across India including all destinations that Air Deccan serves.

The deal also guarantees Air Deccan passengers access to the best available hotel rates.

Travelguru founder and CEO Ashwin Damera, during a panel discussion held at PhoCusWright conference last September, indicated that such partnerships were imminent.

Damera had observed that India is unique in that both consumers and the online travel industry are evolving simultaneously.

In this way, Indian online travel portals like Travelguru are perhaps better placed than their European counterparts to get more creative in how they distribute travel content.

Oh, the joys of youth.

This does beg the question where the European market is headed and how such creative partnerships could be used to build online brand loyalty.

And where will the GDSs fit in?

Some GDSs provide hotel content to some airlines, but there has been talk for ages about how they could expand this part of their business and use it as a selling point in their airline negotiations.

It would come in particularly handy for those really prickly airlines which are always moaning about their distribution fees (you know who you are).

Tricia Holly Davis, chief writer, Travolution

No green screens here

Following our post earlier this week about the new Expedia corporate blog, Overheardbin.com, a concerned Amadeus staffer emailed us:

"Diligently reading your blog, as I do every morning, I nearly fell off my chair when I got to this part: 'When will the GDSs include user reviews in their green screens and corporate self-booking tools?'

"I'm sure it was in jest, but just for the record, our interface is most definitely not green."

And just to emphasise the point, the sender attached a screen grab on the interface in question.

Bless 'em...

Kevin May, editor, Travolution

Travolution@PhoCusWright ITB

Those kind folk at PhoCusWright in the US have invited Travolution to their European spring conference, taking place during this year’s ITB in Berlin.

As well as blogging live from the two-day event on Thursday 8 and Friday 9 March, I will be appearing on a panel to discuss user-generated content on both days.

Also on the panel, one of the conference’s talkback sessions, will be Marc Charron (managing director, TripAdvisor Europe), Patrick Landman, (managing director, Clearstays) and Daniele Mancini (e-business director, Costa Crociere).

For the full programme and details on how to attend this prestigious event, visit the PhoCusWright@ITB web site.

This will be the second time Travolution has attended one of PhoCusWright’s conferences in Europe, following the event in Brussels last September.

• A round-up of our live blogging from the Brussels event
• Madeleine Wood, from Spannerworks, also sent this despatch from PhoCusWright’s landmark event in Hollywood, California, last November

Meanwhile, PhoCusWright analyst John Bray will be speaking at the Travolution Summit on the 24 April in London.

Kevin May, editor, Travolution

US senator aims to ban social networking

More distressing news from America’s Republican leadership appeared this morning.

Apparently, Alaskan Republican Senator Ted Stevens (the same genius who reportedly described the Internet as a “series of tubes” ) has introduced a bill which seeks to ban access to Wikipedia and social networking sites from schools and libraries.

An article in Computerworld reported that Stevens, last month, introduced a bill, which, among other things, would require that any school or library that gets federal Internet subsidies would have to block access to interactive websites, including social networking sites, and possibly blogs as well.

The article reported that the definition of those sites in the bill is so vague that it could include sites such as Wikipedia and would almost certainly ban MySpace.

The bill, entitled Protecting Children in the 21st Century Act, is similar to the Deleting Online Predators Act, which passed the House of Representatives last year, but failed to clear the Senate.

The intention of both proposed laws is to protect minors against online predators.

Noble as that intention may be, banning any educational materials—be they online or not—opens a Pandora’s Box that we would be wise to leave sealed.

Stevens’ rhetoric is disturbingly similar to another Republican Senator who represented the citizens of Wisconsin in the 1950s.

“McCarthyism is Americanism with its sleeves rolled.”

Many Americans today who read that quote from McCarthy wince with disgust.

Let’s hope there are enough of those people sitting in the US Congress.

Tricia Holly Davis, chief writer, Travolution

Expedia blog bares corporate travel baggage

A new blog, Overheard Bin: Business Travel as Usual (www.overheardbin.com), set-up by Expedia's corporate travel division, will give business travellers and company travel managers a forum to debate current industry trends, exchange ideas and, most importantly, air their likes and dislikes, a la TripAdvisor (which is also an Expedia subsidiary).

As far as I'm aware, this is the first user generated review-like forum established by a corporate travel management firm.

Business travellers, unlike their leisure counterparts, are obligated to book certain suppliers under corporate negotiated deals, so, theoretically, a poor review of a favoured airline or hotel, should not impact whether a traveller selects that particular supplier.

However, company travel managers are increasingly mindful of their employees' "experience" on the road, so a damming review of a supplier could make them question their preferred relationship.

But there are other implications. For example, the forum could be used to "out" those suppliers which are not living up to the terms of their negotiated agreements, or are putting unreasonable demands on corporations in exchange for a favourable rate.

Travel management firms too could find themselves under greater scrutiny.

By far the biggest question such a forum raises is just how long it will be before social media starts to influence corporate-supplier negotiations.

When will the GDSs include user reviews in their green screens and corporate self-booking tools?

Thus far, no scathing reviews have appeared on the blog, but corporate travellers and travel managers are not exactly shrinking violets, so stay tuned.

Tricia Holly Davis, chief writer, Travolution

Hotels.tv - first media review

A bit of chatter in the travel trade media today following the official launch of Hotels.tv, which claims to be the “first independent video hotel review and bookings site”.

Here’s our review:

The hotel information that is available (I’ll get to that in a bit) is about the most comprehensive I’ve seen, providing distances to nearest tube stations, check-out times, whether there is a fitness centre, modem lines, conferencing facilities... The list goes on.

The site also scores big points for having clearly visible essential information, including local UK and international contact numbers on the home page.

This may sound a bit strange, but I liken it to having a phone in a hotel room—you never use the thing, it’s just good to know it’s there.

I also like the idea of the currency tab, which allows you to display room prices in various currencies, though it would be more helpful if there was an exchange rate function.

I first tested the site’s search capability by requesting a Marriott hotel in Cape Town, South Africa. This was a trick question- there are no Marriotts in Cape Town.

The site returned the message: “These hotels are not yet available, however are coming shortly”.

These hotels are coming shortly? Does this mean Marriott hotels are coming to Cape Town shortly?

They very well may be, but this is not what the message meant.

I got the same message for various destinations, even when I just did a broad city search, without choosing any particular hotel brand.

Of the 10 city searches I conducted (excluding Cape Town), the site returned information for only two - Barcelona and Paris.

It would seem, at this stage, HotelsTV.com is missing the “hotels” bit.

Despite not returning any results for the eight cities I entered, the site did provide a brief destination information box.

Whilst the idea is a good one, the cheesy brochure description is somewhat flawed. A better idea would be to give the local weather, time difference, best times of year to visit, which carriers fly there, etc.

The site also prompted me to “Click Here to tell us what you are looking for”, so I did.

I was sorely disappointed to see an email registration form, which was followed by a bold banner assuring me that someone would respond to my email.

I don’t know about you, but I don’t want a response to my email because I don’t want to have to send an email in the first place.

I want to get the information I’m looking for then and there and preferably in three clicks or less. If I can’t, I’m gone.

But what really irritated me was that, when I hit the “back” button, I got the “This Page Cannot Be Displayed” message. Aargh!

After re-loading the site, I clicked on the video player tab, which rather bizarrely took me straight to a review of the Rookery Hotel in London.

Fascinating as the Rookery was (admittedly, the room looked great), I tried to search for a video of another hotel, but to no avail.

The last stop on my review road test was the feedback section, which to my disappointment is effectively an online survey of the Hotels.tv website.

Not exactly what I had hoped for.

I was more interested in watching video clips of customers giving their opinion of various hotels, a la TripAdvisor, which, as it turns out, recently added a video feature.

Instead I got a lesson on the Rookery’s Victorian claw footed bathtubs.

Tricia Holly Davis, chief writer, Travolution

Apologising via YouTube

JetBlue, the US budget airline, has been having a few problems of late following a string of cancelled flights and a major backlash by passengers.

But while some CEOs would hide behind the scenes and let the press office take a battering from the media, David Neeleman, who also founded the company, has appeared on TV across America to answer questions but also taken the novel approach of posting a slightly toe-curling apology on YouTube.



Can anyone imagine the boss of a certain high-profile European low-cost airline doing the same? Thought not...

Kevin May, editor, Travolution

Confusing article about Online vs High Street #94

TheLondonPaper, a free newspaper in the capital which more often than not spends most of its time on the seats of tube trains, produced an article today titled: When internet booking isn't the only way to fly.

The piece is not available online - only on a digital edition here - but it is loosely an advice piece about the merits of visiting a travel agent rather than booking online.

It follows a month or so after the Holiday Which? magazine produced a similar investigation, arguing that High Street travel agents are nowhere near being able to match the prices of the online operators.

Today's piece in TheLondonPaper has good intentions, providing readers with a breakdown of various destinations and fares for different booking options (package, hotel-only, flight-only).

But, typically, it compartmentalises 'traditional' companies such as Thomas Cook and Kuoni against online players Expedia or Lastminute.com.

The conclusions:

In three of the five regions considered, a travel agent was found to provide the overall cheapest option.

And here are some, erm, insightful soundbites:

"We checked web reservations for flights and noticed that the prices were often surprisingly high and involved inconvenient stop-offs."

"We found that booking a last-minute flight online is almost always more expensive than via a travel agent."

"We also found that booking accommodation directly with a hotel will almost always be cheaper than on the net."

What the article does not say is whether the price for the travel agent products were cheaper or more expensive on any of their own online channels, such as Thomascook.com, FirstChoice.co.uk or Kuoni.co.uk.

The survey also only used Expedia and Lastminute, rather than any travel or meta search engines, such as Sidestep, AustraliaTravelMarket, et al.

Interestingly the two areas that scored well for the online travel agents were both in the long-haul market, Australia and Thailand.

The problem with so-called investigations into the online and traditional routes to buying travel is that the methodology is always going to be difficult simply because of the size of the market and the variables associated with products.

In other words: it is almost impossible - and ridiculous to attempt - to summarise the benefits of one booking method over another.

Kevin May, editor, Travolution

Scottish agents wade into BA-GDS row

The Scottish Passenger Agents' Association issued a press release yesterday morning attacking British Airways over its ongoing dispute with everyone various parts of the industry over costs which might be handed back to passengers and corporate travellers if negotiations with the GDSs fail.

The SPAA claims a 300% hike in fees is "yet another unfair cost imposition - which will impact particularly on Scottish travellers".

[Read the full statement here]

The organisation's air committee governor, Brian Potter, says:

"We will be forced either to use BA’s own online booking facility to source purely BA itineraries - with the resulting increased administration workload, or to pass on the increased charge to our customers; and there is little doubt that the other major airlines will quickly follow suit, should BA’s decision go unchallenged."

The SPAA will find that driving people to use "BA's own online booking facility" is exactly their intention.

Just eight days until the "deadline" of the 28 February.

It will be missed - or least some of the contracts will not meet the deadline.

Kevin May, editor, Travolution

Telegraph writes about online travel

Interesting article in the Sunday Telegraph yesterday about the sweeping changes affecting the traditional travel industry and the impact of the web.

The piece starts off with a look at the MyTravel-Thomas Cook merger but eventually gets into some issues we at Travolution have been discussing for the last 15 months.

Declaration of interest: Simon Ferguson, Travolution's publishing director, who must've impressed a member of the national press with his presentation to the Travel Technology Show last week, is quoted throughout the piece.

Minor error in the article. It says there are "50m travel blogs" on the web. But thankfully, in reality, there are closer to 5 million.

Kevin May, editor, Travolution

Why Google is great

With all of the recent flutter of activity and Chinese whispers surrounding the Thomas Cook-MyTravel merger and Expedia's relationship with TripAdvisor, some of you may have missed out on the news that Google was recently crowned the number one employer in America by Fortune Magazine.

For those of you who think, "big deal", think again.

When a start-up technology company which has only been in existence for 9 years steals the leading role from the corporate establishment as the most desired employer in America, it is a significant event.

This year is not the first time Google has made Fortune's "Top 100" list, but it is the first time the search engine giant clinched the top slot, beating out biotech leader Genentech, which landed second place, and established corporate kings such as S.C. Johnson & Son and Cisco Systems, which took seventh and 11th place, respectively.

Starbucks, Google's fellow West Coast, "alternative" start-up and commodity equivalent, if you will, landed in 16th place.

So what makes Google so great?

Well, for starters, Google produced 2,229 new jobs last year alone and recorded revenues of $6.1 billion in 2005.

But that's not why Google is the darling of the corporate world. After all, almost anyone can make a lot of money. Look at Enron.

Google's founders Larry Page and Sergey Brin did not only set out to revolutionise the way people communicate and receive information. They set out to establish a new corporate culture, akin to the University campus-like environment where Google was born.

It is the successful creation of this new corporate environment which was recognised by Fortune and earned Google its well-deserved title as the best place to work.

Google employees have access to an onsite medical staff, a gym, spa, swimming pool, recreation room, and a whole other host of amenities.

Employees also get free, gourmet meals (including sushi) and snacks. The only downside, apparently, is that new Google employees, dubbed Nooglers, tend to put on a few pounds thanks to all the free, gourmet food.

There is onsite childcare and employees can even bring their dogs to work (provided Fido does not foul on the mainframe, bark or bite fellow staff) .

Little wonder why the company received more than one million applications last year.

Sure, Google expects its pound of flesh in return, but what company today doesn't expect its employees to work long hours, spend time on the road away from their families, and produce great results?

The difference with Google is that it is actually holding itself up to a higher standard, one which we should hope other corporations will take note of and endeavour to copy.

Under the old corporate contract of the mid-20th century, a company guaranteed loyal employees a secure future, benefits, and a healthy retirement plan.

The last remnants of that old contract were shredded in the 1980s and, subsequently, employees have been left to fend for themselves (unless you live in France).

Companies with generous pension programmes inked decades ago have been forced to slash thousands of jobs to meet their commitments (eg General Motors).

Sadly, the vast majority of today's employees cannot count on their employers for a secure and generous retirement.

Moreover, the skyrocketing cost of childcare means that, even with both parents working, one salary is often sapped to cover daycare and school fees.

This problem is exacerbated in single-parent families.

Some companies, such as Deloitte & Touche USA, which took 76th place on Fortune's list, are slowly adapting their policies to encourage women back into the workplace by providing flexible working hours and childcare assistance.

Some will say that Google's contribution to the evolution of the internet will be its legacy.

Indeed, it will be. But I, for one, believe that Google's contribution to changing the corporate landscape and making the workplace a better place, will perhaps be its most significant achievement.

Tricia Holly Davis, chief writer, Travolution

Why technology geeks don't belong in the Bush

As some of you may know, my conspicuous absence from the blog these past few weeks is owed to my extended holiday in South Africa, where I had VERY limited access to email.

What email was available ran at painfully slow speeds and just when a page had finished loading....BAM, it would crash.

Apparently this is was due to something called "dial-up". Does anyone know what that is?

While this was more than mildly annoying, after a week or so, I started to get used to being disconnected from the world--just.

Out in the bush it was just me, the lions, the rhinos, the panthers, and the bushmen (and bush women).

Who needs Internet when you've got nature and vast skies chock full of stars? Let's face it, the only "stars" I ever see are the landing lights from planes coming into Heathrow.

Alas, the novelty of my technology gap-week was short-lived.

Whilst relaxing in my camp one morning waiting for my next safari, I picked up a copy of the local newspaper and there, on the cover of the business section, was an article about Google.

I suddenly felt homesick.

I yearned for my laptop.

I wanted to search for something. I wanted to file-share. I wanted to mash something up.

I WANTED TO CHECK MY BLOODY EMAILS!!!!!!!!

Thankfully, my partner, also a technology geek, shared my pain.

We vowed that the next time we were in the Bush (yeah, right), we'd be armed with a satellite.

After all, what good is a "once-in-a-lifetime" experience if you can't email all your friends, who are trucking to work in the snow, to tell them what a fab time you're having?

That just spoils all the fun, doesn't it?

Tricia Holly Davis, chief writer, Travolution

Silver surfing blogger?

What do you call an 82-year-old blogger?

A Blogtogenarian!!

Well, I thought it was funny...

Kevin May, editor, Travolution

Hat tip to Roy Greenslade's blog on the MediaGuardian

Weekend Caption Competition #7

Our - unfortunately - far too infrequent caption competition makes a welcome return this week.

And, of course, we couldn't resist wondering what might be going through the mind of Dermot Blastland, boss of First Choice, following the somewhat leftfield merger this week of his two rivals, Thomas Cook and MyTravel.

Entries via the comments button

[Thanks to Travel Weekly, who are also running the picture.]

What happened to Expedia wanting to use TripAdvisor content?

In September last year we wrote a story about Dermot Halpin, president of Expedia EMEA, who said during an on-the-record discussion at the PhoCusWright event in Brussels that he would be keen for his online travel agency to take a feed from TripAdvisor's content.

Nothing wrong with that - indeed it would make perfect sense for Expedia to want access to the reams of user-generated content buried in the world's most popular independent review site.

The story became interesting when it emerged that rather than simply arrange some kind of partnership (they are sister companies under the Expedia Inc brand after all), the pair were actually involved in "ongoing discussions".

Although an early resolution appeared to have been hampered by "technology issues", according to Halpin, the lack of movement following the event fuelled speculation that the two couldn't actually reach an agreement because of slightly more serious concerns - i.e. strategic or commercial.

Follow ups in the past few weeks have revealed nothing - but perhaps everything...

TripAdvisor has not responded and Expedia says it has "nothing to update" us on.

Spies tell us talks have broken down.

UPDATE: Should have mentioned TripAdvisor is feeding content to the Expedia site in Australia via a Destinations page. This also applies to the Canadian site. Tim on The Boot has a good piece of analysis on the issue written in January following the implemenation of the Australia deal. There is also an interesting addition to the debate in his post's comments section.

Kevin May, editor, Travolution

Emergency Emergency - social networking in action

Not really travel-related at all, but certainly worth a mention.

Story on the BBC talks about a social networking idea from the Human-Computer Interaction Lab at the University of Maryland, where the all the 911.gov sites across the US will be incorporated and "citizens could leave text, video and photos on the site of emergencies, natural disasters and terror attacks".

More here (PDF).

Fascinating idea. It builds on a Web 2.0-style project for the people of Chicago, known as ChicagoCrime.org, which uses a Googe Maps mash-up to plot crime rates across the city.

Kevin May, editor, Travolution

British Airways will receive an angry letter

Interesting turn of events in the ongoing British Airways-GDS contracts renegotiation saga.

The Business Travel Coalition is assembling signatories for a letter to BA chief executive Willie Walsh to highlight what it says are plans that threaten to "impose new surcharges and withholding content from GDSs and the travel management companies corporations they serve".

In other words: if BA starts to get heavy-handed with the business travel community, by passing on costs to them once the GDS contracts are signed, then it can expect to feel a collective ill wind in the future.

Some of the biggest firms in the corporate world are lending their support to the letter, including PricewaterhouseCoopers and Airbus UK, as well as a number of high profile business travel agancies such as International Travel Management and MTS Travel.

The letter says:

"You are directly threatening the loss of your most valuable customers by imposing costs already included in the price of our tickets and hampering technology that is critical to the efficient functioning of our modern corporate travel programmes.

"We urge you to move promptly to conclude your GDS negotiations with your best customers’ concerns top of mind."

It concludes with a very open threat:

"Our companies will direct future business to airlines that build their distribution programmes around our preferences; as you are aware, we do have a choice in air travel.

"As you conclude your current GDS negotiations, we urge you to rededicate British Airways to achieving our mutual success."

The letter is due to be sent to Walsh some time after the 20th February, the cut off date for signatories.

41 companies have signed the letter so far...

[Read the full letter here]

No response from BA as yet...

Kevin May, editor, Travolution

Travolution@TTS - We're over here...

Coverage of the Travel Technology Show will be live for the next two days here.

Normal service resumes on the Travolution Blog on Thursday.

Kevin May, editor, Travolution

Spannerworks acquisition overshadowed

While all hell was breaking loose over the Thomas Cook-MyTravel merger, announced earlier today, readers may be interested to learn of another significant ownership change.

Spannerworks, the Brighton-based digital marketing agency, headed by Arjo Ghosh, has been snapped up by rival US giant iCrossing for a cool £40 million.

Rumours of a deal between Spannerworks and a US search company have been circulating for a few weeks, but the purchase by iCrossing, which counts ex-MySpace chairman Richard Rosenblatt in the same position within the team, is a major achievement for Ghosh and the team.

Spannerworks will continue to operate out of Brighton in the UK, with Don Scales and Jeff Herzog from iCrossing joining its board of directors.

Ghosh started the agency just ten years ago and it has grown steadily to now have a staff of 70.

The agency has also had some significant wins in the travel sector in the past year, including contracts to work with the likes of Thomson and Cheapflights.

Last year Spannerworks also hired Antony Mayfield as its first head of content and media – signalling its intent to add elements of social media into its search marketing strategies for clients.

[Read Mayfield’s personal blog here]

Kevin May, editor, Travolution

Why the Thomas Cook-MyTravel merger was always going to happen

The timing might have come as a bit of shock, but nobody seriously doubts the reasoning behind today's announcement that UK-based MyTravel is to merge with its German-owned rival Thomas Cook.

Indeed consolidation appears to be a theme for the travel industry in the mid-2000s, with the GDS sector shrinking last year - in terms of ownership - following the acquisition by Travelport of Worldspan.

[December cover feature on future of the GDSs here]

That particular deal followed the massive shake up of the online travel agency market in 2005 with the £577 million purchase of Lastminute.com by Sabre and that of Ebookers for £201 million by the then Cendant group (now Travelport).

[Interestingly both Sabre and Travelport are now in the hands of private equity groups]

So now we have the Big Three, rather than the Big Four in the traditional sector.

This is clearly the biggest story for quite a few years in the industry, but people shouldn't be surprised.

The pre-packaged, so-called bucket and spade holiday market - the core part of the traditional UK-Europe holiday business - is in decline.

All four operators have attempted - with varying amounts of enthusiasm and success - to diversify into areas such as dynamic packaging and city breaks.

However there has been a huge question mark for years as to whether the new and vastly empowered consumer base - kowtowing to the freedom the web has given them - would be able to support four companies.

Today's announcement supports this view...

Even with extended product ranges and impressive websites coming on stream, consolidation has never been a question of "if" but "when".

The most likely merger was probably always going to be between Thomas Cook and MyTravel - both have operated their businesses in similar ways and have not particuarly digressed into new areas.

So where it gets interesting now is how the Big Three will operate as businesses.

First Choice is increasingly moving into the long haul market; Thomson will be counterbalancing the drop in pre-packaged sales by actively pushing its new strategy of uber-dynamic packaging, using a combination of its own aircraft, accommodation and third parties suppliers, including other accommodation and flight providers.

As for the Thomas Cook Group, which it says will now be the number one travel company in the UK, expect the company to not drop its focus on its pre-packaged holidays - like Thomson - and make a major push on its short-haul business.

[Read the opinions of some city analysts on the Guardian website]

[Download the KarstadtQuelle AG presentation here (PDF)]

The next question, of course, is this: what is next for the online-only outfits? Rumours are still circulating about what Expedia should do next...

Kevin May, editor, Travolution

CarRentals vs Travelsupermarket - you decide

Earlier this week we wrote a story about a growing war of words between CarRentals.co.uk and TravelSupermarket.

• CarRentals had a go at TravelSupermarket...
• ...TravelSupermarket hit back with a strongly worded statement...
• ...everyone starts getting a little hot under the collar
  

The basis of the argument is that CarRentals believes meta search engines, like TravelSupermarket (which it singled out especially), are only “playing” at providing comprehensive information to consumers.

CarRentals suggested, in not so many words, that meta search engines have built a reputation by hoodwinking consumers into thinking they are getting a comprehensive set of results (which it claims it can provide).

Anyway, the latest missive from Gareth Robinson, CarRentals marketing director, (a response to a response – keep with us on this one) goes like this:

“TravelSupermarket is missing the point. Sites such as theirs have their place in the market - they use a particular business model based on pay per click (PPC), but we feel there is a gap in the market for a comparator that is commission (CPA) based rather than click revenue based.

“The PPC approach used by these comparators is a great revenue stream for them as most visitors will click through to different providers several times. But that isn’t beneficial to the companies paying to be listed as it’s costing them without guaranteeing a booking.

“As a result many companies choose not to work with these comparators, largely because of the potential for escalating costs involved in the PPC approach. Ultimately this means consumers don’t get the breadth of choice to find the best deals.

“We get paid a commission on actual bookings, meaning it’s in our interests to offer the best possible deals for consumers and this is at the core of our commitment to offer a fairer, more comprehensive comparator site.”

Expect this one to roll and roll…

[Incidentally, see how they get on in a GoogleFight - it's pretty overwhelming]

Kevin May, editor, Travolution

Travolution goes to the Travel Technology Show

Some more housekeeping stuff.

Next week is the annual Travel Technology Show at London's Earl's Court.

Travolution has a major presence there this year [suddenly feels like we've come a long way in such a short space of time] and we will be doing a number of things:

• Chairing four seminar sessions
• Sharing a speaking platform with Heather Hopkins (Hitwise) and Francois Jordaan (LBi)

...but perhaps most exciting of all:

• We have a dedicated blogging stand, where delegates can come along and post their opinions live to a blog created exclusively for the event on the 13 and 14 February.

Visit the blog here or read Travel Weekly's TTS preview.

Kevin May, editor, Travolution

Travolution guest edits Travel Weekly

Our sister publication Travel Weekly clearly thought Travolution sits around twiddling its thumbs much of the time, so asked me to guest edit its edition this week.

I looked at some of the regular sections and decided to give them an online flavour. The news section also featured a far higher technology-online travel focus than normal.

A radically different - some might argue, obviously Travolution in style - front cover was also created specially for the edition.

Rather handily the edition will be the one circulated at next week's Travel Technology Show.

This is the leader I wrote [trying to be slightly controversial – at the end – for a predominantly traditional readership from within the agency community]:

Regular readers wondering why the editor of Travolution has been handed the reins of Travel Weekly for a special edition needn’t be worried.

Martin Couzins, who usually has the weekly privilege of writing in this space, approached me with the initial idea of producing something slightly different to coincide with next week’s Travel Technology Show.

So while there is a focus on what you all might call ‘technology issues’, what you will read about in many of the pages in this edition of Travel Weekly is actually something broader.

This week’s Mystery Shopper, for example, browsed the leading online travel agency websites; while the lead feature looks at the changing role of agents and operators in the ‘brave new world’ of the Internet.

The Big Interview features arguably one of online travel’s most important men – Google head of travel in Europe Esteban Walther. Like it or not, his mammoth organisation has an enormous influence on how travel products are now sold.

But why is it so important to suddenly home in on these issues?

Travolution has spent the last 15 months focusing on the profound changes sweeping the industry, triggered primarily by the power the Internet now has over the lives of consumers.

This has been happening for a while, you might say. Of course, this is true, with some online players celebrating more than a decade in business.

But the travel industry is about to face new challenges.

Take-up rates of broadband are now so high that the Internet is almost a constant presence in the home and workplace, meaning consumers are just seconds away from researching a holiday, looking for decent product and, ultimately, booking a trip.

It’s a mildly controversial statement to make, but there are large parts of the industry that are still dismissive of this fundamental shift in the way people now interact with each other and travel companies.

To ignore these changes, or fail to recognise how to meet the challenges ahead, could be a truly fatal mistake.

It was actually a lot of fun putting the edition together, although coming a day after our own press day for the February edition of Travolution did test endurance levels a little bit.

Kevin May, editor, Travolution

TripAdvisor quietly unveils video tools

TripAdvisor chief executive Steve Kaufer told us last year that the site would start introducing some major new features in 2007 - and users are starting to see a few of their plans.

The latest one is very interesting, but appears to have been introduced without any PR push just yet.

Registered users can now upload their own videos to the site or browse others based on a tagging system that ensures either hotel, destination, restaurant or local attraction is assigned to each clip.

[Hat tip: Hotel-Blogs, which has gone through the process of uploading one of his own clips]

The move is a significant one, even if - we suspect - TripAdvisor is actually waiting for a bit of volume before making an official announcement

The top-rated video, for example, has been voted for by just 178 users so far [this will no doubt increase].

Other handy features include a reasonably high upload limit of 100MB per clip, which is the same as YouTube.

The introduction of videos comes just a week or two after the launch of the MyTrip functionality, allowing users to save pages and individual reviews for later viewing.

Kevin May, editor, Travolution

SilverSurfer Air or Brits Abroad Airlines

The transatlantic business-only carrier SilverJet probably didn’t have the over-55s in mind when it launched recently, but its name certainly has a handy ring to it, if Amadeus is to be believed.

The travel technology provider got a selection of journalists together over lunch today to unveil its Future Travel Tribes report.

The study, co-authored with the Henley Centre research group, has earmarked four key consumer groups that will have a massive impact on the airline industry in the next decade or so:

• Active Seniors (older global population will travel)
• Global Clans (migrant communities expected to reach 250 million by 2020)
• Cosmopolitan Commuters (work in London, live in Berlin, for example)
• Global Executives (frequent travelling businesspeople, especially from the BRICs)

As well as – rather obviously – pitching itself as the key technology provider for systems it says will be needed in the future, Amadeus reckons completely new airlines (or offshoots of existing carriers) will emerge solely to target the new groups.

The mind boggles:

Grey Air? ExPat Airways?

Of course the business community is already being served by a handful of exec-only (priced?) carriers, but airlines dedicated to particular markets does sounds rather intriguing.

In the meantime there is a rather hefty report to wade through, so more to come, we suspect…

Kevin May, editor, Travolution

Travel loves affiliate marketing

So says a new report from E-Consultancy, which reveals the eight biggest sectors for affiliates, topped by the travel and flights sector.

• Travel/flights (30%)
• Entertainment/music (27%)
• Electrical goods (24%), computer/laptops etc (24%)
• Gifts/gadgets (22%), books (22%)
• Fashion/clothes (21%)
• Financial services (19%) and mobile phones (19%)

Some interesting titbits of information about affiliates across the internet:

• Only 15% of affiliates are signed up with just one network...
• ...but two-thirds are signed up with three networks or more
• Half of all affiliates promote to ten advertisers or less
• "Google is damaging the affiliate marketing industry", 34% agree, 26% disagree
• Over half say "spyware is a major problem", with only 13% disagreeing

Get the full report here

Kevin May, editor, Travolution

Web 2.0 in 4 minutes and 31 seconds

Fantastic video clip from Digital Ethnography:



Kevin May, editor, Travolution

Times and Guardian in separated-at-birth shock

Here is the new TimesOnline Travel section...


...and here is Guardian's recently relaunched travel section...

One wonders what the new TravelMail will look like...

And the next UK newspaper to relaunch its travel section is...

Without too much fanfare the Times Online website has relaunched today, including a vastly improved travel channel.

The redevelopment of the site follows similar moves by The Guardian - in December - and the widely anticipated new TravelMail site, home of all travel content and deals from the Daily Mail and the Mail on Sunday.

News Corporation, owner of The Times newspaper and the buyer of MySpace for $580 million in 2006, has spent around £10 million on the relaunch of the entire site, including marketing and design.

A senior travel exec at one of the site's main rivals has taken a deep breath and emailed to say, rather kindly:

"Some good stuff in there – they have lots of scope moving forward and have covered the commercial areas very well."

In recent weeks we have been highlighting what we believe will be one of the most interesting growth areas in online travel during 2007.

Traditional newspapers have a very interesting proposition over some of the other players attempting to create online travel portals. Reams of professionally written and decent content ("content is king", remember!), plus strong relationships with travel advertisers.

It is therefore absolutely no surprise at all to see media groups entering the online travel space with the obvious enthusiasm they are currently showing.

Kevin May, editor, Travolution

GDS angst and speculation

We have some interesting analysis to add to last week’s story about British Airways supposedly intending to slap a distribution tax onto all bookings made through the GDSs.

Senior industry sources tell us that BA is playing a clever – and they would consider, dirty – game.

Unlike the recent airline/GDS negotiations in the US, BA is apparently NOT threatening to pull out of the GDSs if agreement is not reached on distribution fees. That leaves the GDSs without the option of saying “go ahead, if you dare…”.

Instead, our mole suggests, BA is demanding “unfeasibly large cuts” in their GDS booking fees and, if they don’t get these, threatening simply to add the full GDS booking fee to any bookings made through this channel – which would make GDSs the most expensive way to book BA.

And – in fairly short order, you can bet – any other airline.

So what does this mean? Apparently corporations and travel management companies are up in arms. They claim that their bookings (made through the GDSs) deliver BA’s highest yields.

BA is now slapping them with the distribution cost for these yields, our free talking source tells us.

“This is a tax – a huge transfer of wealth from the travelling Joe Public and corporate Britain directly into the BA coffers,” another source complains, adding:

“It’s like being told by Colgate-Palmolive that I must pay more for their toothpaste in a supermarket than anywhere else, because of the cost of getting it there. This is not the way the real world works.

“BA has to stop trampling over the people who make its business work – be they cabin crew members, corporate customers or travel agencies.”

Finally our source reckons BA is putting all GDSs in a position where a significant ‘opt-in’ charge for access to BA’s full range of fares is inevitable.

The GDSs have two options: stick to their guns and risk a situation where travel agencies become the most expensive place to buy BA tickets – and even then there is no guarantee that BA will give them its full range of fares; or stiffen the existing UK opt-in model and ask travel agencies to shoulder an even greater proportion of BA’s distribution costs.

“Either way it sucks – for everyone except BA,” laments our snout. “TMCs and the airline’s corporate customers need to tell BA that enough is enough.”

Kevin May, editor, Travolution