Sound familiar?

TUI Travel UK and Ireland boss Dermot Blastland is always good value for money when talking to the press, and his ten minute speech at TUI’s first anniversary media bash last night was no exception.

XL Leisure Group’s collapse last week was, Dermot claimed, down to the fact that it “wasn’t a well-run company” and that it “couldn’t compete with the cost-base of large-scale companies like us”.

Scale? Hasn’t lastminute.com’s Ian McCaig made that word his own? Apparently not. Dermot went on to say that the market was polarising into big players such as TUI and Thomas Cook and specialist/niche operators and any businesses “stuck in the middle” will suffer.

TUI of course has a strong set of specialist businesses, so it’s got a good position at both ends of the market. So good a position that Dermot said the business was having “a cracking time”, as indeed is its rival Thomas Cook.

“We’re both having record years,” he confidentally stated.

I wonder if lastminute.com – or any of the online travel agencies - could say a similar thing?


Martin Cowen, chief writer, Travolution

Travolution Summit - panel videos!

Kevin May, editor, Travolution

All inclusive holidays popular in a weak economy

Guest blog post from Robin Goad, research director at Hitwise UK:

The combination of a weakening economy, falling house prices and a rising cost of living thanks to inflation mean that many British consumers are looking for ways to cut their expenditure.

Add in the impact of a strong Euro (although not Dollar), and it seems likely that one area facing a cutback in consumer spending will be travel. One interesting trend we have noticed which indicates that this may be the case is an increase in searches for ‘all inclusive holidays’.

As you can see from that chart below, the amount of traffic that travel websites are receiving from this price-sensitive / budget-conscious search term has increased by 24% compared with last year.

The table below illustrates the top 10 search terms containing the phrase ‘all inclusive holidays’, and it is noticeable that people searching for such packages are more concerned with the 'all inclusive' element than with where they want to actually go.

Six of the top 10 search terms don’t mention a location at all, whereas - by way of comparison - nine of the top 10 searches containing the term ‘cheap flights’ over the same period include a destination.

Another thing that jumps out is the low success rate for the term ‘all inclusive family holidays’. Almost two fifths of people searching for this term don’t find a relevant result in a search engine that they a happy to click through to, highlighting a potentially lucrative area for SEO or paid search activity.

As you can see, the people currently looking for location specific all inclusive deals are choosing warmer sunshine destinations around the Mediterranean and Red Sea: Spain, Egypt, and Turkey.

This leads me on to another hypothesis: as money is tight and the strong Euro means that European destinations are becoming more expensive, will we see a decline in travel to Europe and bumper year for domestic tourism?

Throw in 10 days of lovely sunny weather, and it seems likely that UK holiday bookings will be up this year.

Not so fast. I heard a representative from TUI (which owns Thomson Holidays) on the Today programme the other morning claiming that overseas bookings from the UK were up - and the company’s financial release bears this out.

Back to the Hitwise data and the news also isn’t great. As you can see from the chart below, the amount of traffic that searches for both ‘uk holidays’ and ‘british holidays’ send to travel websites is on the decline.

Maybe a few more weeks of good weather and some first hand experience of the strong Euro will help reverse this trend?

We’ll keep and eye on this and report back with any changes.

Robin Goad, research director, Hitwise UK

Read more of Goad's posts

Leading travel stocks after a third of 2008

[UPDATE at bottom of post]

Some interesting stats...

Expedia: started 2008 on $0.31 a share. Now $0.25. -19%

British Airways: started 2008 on £3.09 a share. Now £2.48. -19%

EasyJet: started 2008 on £6.13 a share. Now £3.24. -47%

MoneySupermarket (owner of TravelSupermarket): started 2008 on £1.40 a share. Now £1.14. -19%

Orbitz Worldwide: started 2008 on $8.50. Now $8.78. +3%

Priceline: started 2008 on $1.15 a share. Now $1.26. +10%

Ryanair: Started 2008 on Euro 0.39 a share. Now Euro 0.30. -23%

SilverJet: started 2008 on £0.48 a share. Now £0.15. -69%

Thomas Cook: started 2008 on £2.82 a share. Now £2.66. -7%

TUI Travel: started 2008 on £2.94 a share. Now £2.41. -18%

Travelzest: started 2008 on £1.01 a share. Now £1.02. +1%

Travelzoo: started 2008 on $0.14 a share. Now $0.11. -21%

UPDATE:

Sam I Am asks in the comments about the market conditions as a whole.

FTSE 100: started 2008 on 6456. Now 6215. -4%

NASDAQ: started 2008 on 2652. Now 2464. -7%

So one might say that the Orbitz and Priceline in the US - and not Expedia - are bucking the trend, while airlines in the UK are seeing a decline in share price worse than the overall market decrease.

Kevin May, editor, Travolution

New Holidays Uncovered, er, uncovered

After our news story a week or so back, Thomson has finally unveiled the first stage of its new-look HolidaysUncovered - a site it acquired in September 2007.

Certainly a cleaner homepage...


Some other new bits of functionaility worth checking out.

Kevin May, editor, Travolution

Technorati tags: thomson holidaysuncovered holidays uncovered

All the fun of the Farecast...

The Seattle Post Intelligencer is reporting that Farecast has been sold for $75m (£38m at today’s exchange rate).

The buyer is currently not known. The report suggest Expedia as ‘one natural choice’. Expedia told the paper that it doesn’t comment on rumour and speculation, as we all know by now.

Farecast positions itself slightly differently from other travel2.0 businesses. It datamines historic pricing data from a number of partner sites to let customers know if the current price offered is likely to go up or down. Its air fare tool is well established, its hotel channel still in beta.

The business has an impressive line-up of VC backers, as reported by Travolution’s US correspondent last year.

Farecast’s model is an interesting one, and with intelligent search being such a buzzword at the moment it'll be interesting to see who has taken it over. $75m/£38m is an interesting price point – spare change for someone like Google, well within the range of someone like Amadeus, maybe a punt too far for someone like TUI Travel plc.

Martin Cowen, chief writer, Travolution

TRAVOLUTION AWARDS DEADLINE 'FAST' APPROACHING

Not long now before our annual awards on 24 April.

Even less time to get entries in!

There are many awards out there but none where you can get up close and personal with the likes of Brent Hoberman of lastminute.com fame, Peter Ward, WAYN, Graham Donoghue, TUI Travel, and many more in the same room.

There are 19 awards covering advertising, marketing, innovation, newcomer, tour operators and travel agents.

Worthy of a mention in their own right are the Smart Agent, Online Travel Brand and Travolution Achievement Award.

The deadline for entries is almost upon us so put your heads together and let us know the digital achievements you're most proud of from the past 12 months.

More information at www.travolutionawards.co.uk

Linda Fox, lead reporter, Travolution

The Thomson Oracle

"Customer choice and technology are blowing away the traditional ways we choose a holiday," says Thomson in a press release.


The wise heads at the company put their minds to good use recently by predicting [often not the best idea but let's see what they think] what might happen to some elements of travel:

• Holodecks – for an advance preview of what their holiday might feel like, Thomson.co.uk customers could soon experience Star Trek style “holodecks”, where holograms, simulated sounds and smells will enable them to discover virtual hotels and resorts, and even soak up a “real” sensations, like a stroll on the beach, skiing on the slopes or simply partying the night away!
• Mobile phone swipes – Customers deliberating over their future holiday will soon be be able to save holiday information to their phone by swiping their mobile over a dedicated in-brochure/on-line bar-code. The digitally transferred information will then be downloaded by a travel consultant, who’ll be able to see the customers’ preferences before making any recommendations as to their destination.
• Rapid contact facilities – Thomson.co.uk envisage a rapid contact search facility that will help people track family and friends overseas. By simply logging onto a dedicated website, a pop-up will show the location of the family or friends phone.

#2 and #3 really aren't that far away though, are they?

Nathan's Midgley of Travel Weekly's typically waspish response last year to holodecking.

Kevin May, editor, Travolution

Technorati tags: thomson science fiction RFID airport mobile

Getting it right with Mr and Mrs Right

Case Study time at the TFM&A conference in London today. And travel is an obvious area where CRM can work wonders.

Customers tend to book their holidays at the same time of year, each year, according to TUI Travel, with January and June still the twin peaks in the cycle.

Its e-CRM manager Louise Kendall says Thomson – still the UK's biggest holiday brand – is using this business-wide finding to timetable campaigns targeted as previous bookers.

Customer retention is becoming increasingly important for travel businesses, as promiscuous consumers put it about, loving and leaving suppliers because there are so many seats and beds around.

So, why should someone settle for Mr/Mrs Right now, when we're confident that Mr/Mrs Right will always come along?

Thomson will email you a year after your booking, gently reminding you that they are still around and interested, if you are.

A week later, there will be a more determined approach - emotional blackmail might be a bit strong, but there is an attempt to pull on our heart strings – if not purse strings – by featuring images and videos, reminding us of that great time we had together last year, and how easy it would be for that to happen it again…

Personalization of emails is nothing new - it is doubtful that there are any online travel businesses sending out the same email to its entire database.

Mark Brennan, MD of Thomson's email partner CreatorMail makes the distinction between a generic email blast and an e-trading platform – once email products are instilled into the fabric of an organisation and resources made available, you can create an emotional bond with the recipient, turning the email into a cost-effective marketing device, rather than a trash-can item waiting to happen.

[NB: TFM&A has obviously done its research in this area. CreatorMail won a Travolution Award in 2007 for its work with Thomson - Ed]

Martin Cowen, chief writer, Travolution

Technorati tags: thomson creatormail email marketing

The travel conference of the year!

Big day today. We are officially launching our Travolution European Summit 2008, produced in association with PhoCusWright.

We have started assembling what we believe will be the best line-up of participants from the online travel industry you are likely to find anywhere in the UK in 2007.

Confirmed so far:

• Caroline Cartellieri, Expedia UK (managing director)
• Graham Donoghue, TUI UK (new media director)
• Steve Hafner, Kayak (chief executive)
• Adam Healy, VibeAgent (chief executive)
• Brent Hoberman, Mydeco.com (executive chairman)
• Chris Lee, Barclays Commercial Bank (head of travel sector)
• Yen Lee, Kango (president)
• James Lohan, Mr and Mrs Smith (managing director)
• Ian McCaig, Lastminute.com (chief executive)
• Chris Nixon, Travelsupermarket.com (acting managing director)
• Andrew Owen Jones, Amadeus (director, travel distribution solutions)
• Jeff Revoy, Yahoo (Europe vice president, search and social media)
• David Soskin, Cheapflights (chief executive)
• Robert Torres, Google (managing director, travel advertising and marketing– North America)
• Gareth Williams, Skyscanner (chief executive)
• Philip Wolf, PhoCusWright (president and chief executive)

More names will be added in the coming weeks.

Delegates places, more information, programme, and the rest, available from the conference website.

Kevin May, editor, Travolution

Travolution Predictions for 2008

Our predictions for 2007 12 months ago didn't work out fantastically well - but then, who would've forecast the mergers of Thomas Cook-MyTravel and TUI-First Choice.

One we did get exactly right was the floatation of MoneySupermarket (parent company of Travelsupermarket).

So without further ado, are the Travolution Predictions for 2008. Add your own in the comments section below (please keep them serious).

* Consolidation for the first time amongst the OTAs in Europe. Hotel-strong Expedia to buy air-strong Opodo perhaps?

* Cheapflights to NOT go public on the London Stock Exchange.

* Holidays Uncovered content to feature on TUI Travel sites by Easter.

* TripAdvisor to incorporate third party OTA booking engines.

* Expected economic squeeze will be felt in High Street retail before OTAs.

* New websites for at least 50% of Europe's flag carrier airlines.

* SilverJet to reach Heathrow (codeshare?).

* Homeworking agencies growth to plateau.

Kevin May, editor, Travolution

Technorati tags: predictions 2008

Look out for more deals in the user review sector

Do not underestimate the significance of the purchase by TUI Travel of Holidays Uncovered, which we were pleased to unravel with the help of Travel Rants earlier this week.

Although the newly formed PLC didn't mention it by name in its trading update on Wednesday 26 September ("an independent package holiday review site"), Holidays Uncovered is most definitely now a TUI Travel-owned property.

[Nevertheless, Graham Donoghue, new media director at TUI Travel, brushed aside any queries about the deal during the Travolution Question Time on Tuesday night]

A bit of digging around in the past few days has revealed a number of things:

• No-one has a clue as to how much the deal is worth (an affiliate network told us today it regularly pumped around £30,000 a month into Holidays Uncovered, and guessed at around £2 million).
• Secondly, the deal was so hush-hush, with even some senior members of TUI Travel kept in the dark.
• The previous owner has never been seen in public and spends much of his time, according to one source, on the QE2.

In all seriousness, this deal is a major step forward for TUI Travel as it looks to develop its brand along similar lines to Expedia, which bought TripAdvisor in 2004.

The Holidays Uncovered site has, in the words of one TUI exec, "user experience from hell" - but it is likely the site will be overhauled over the coming months.

There is, inevitably, a certain amolunt of scepticism in the industry as to the motives behind the deal and whether TUI can do to Holidays Uncovered what Expedia did to TripAdvisor - in other words, a successful integration of an independent review site into a mainstream business without it losing its credibility.

There are plenty of reasons as to why the deal has taken place, but primarily because of its reasonably high traffic and very good page ranking. "SEO-ed to the hilt", is how one contact put it rather more bluntly yesterday.

It certainly appears that every second site is introducing or improving its user reviews, mainly to improve user experience and help with search engine optimisation.

But in a market which is seeing so-called traditional companies making huge efforts to boost their web presence, it is likely that deals such as that for Holidays Uncovered - or between individual review sites - will become commonplace in the next few years.

Kevin May, editor, Travolution

Technorati tags: expedia tui thomas cook tripadvisor review

TUI Travel sharewatch

TUI Travel officially came into being today.

For those with their heads buried in the sand since early this year, TUI Travel is the trading name of the recently merged First Choice and holiday division of the German TUI AG group.

The new PLC is listed as of this morning on the London Stock Exchange.

See the Yahoo Finance ticker for TUI Travel.

So the old Big Four are now the Big Two. Hogwash.

Listen to anyone with any clout in the industry and they will admit that the "Big Two" is a bit of a fallacy. There are many other "big" travel providers around these days.

The sooner the industry wakes up to the new world the better. Thankfully this is finally happening.

Meanwhile, over on the Yahoo Finance page for Thomas Cook PLC shares, EasyJet has found itself in a rather nice position today with a banner ad for its latest sale. Three cheers for online advertising...


Kevin May, editor, Travolution

Technorati tags: thomas cook tui travel shares

Web advice in the Guardian

The Guardian newspaper got in touch last week, asking us to contribute to its Top Tips 2007 feature for the following Saturday.

Happy to oblige, of course.

Travolution joined the likes of one our advisory board members Graham Donoghue (TUI), alongside Sabrina Wolfe (Cheapflights) and Barry Smith (Skyscanner) to produce a list of tips for readers surfing the web for holidays.

Our own little nugget of advice:

"Desktop pingers help you keep up with offers and fares from online travel agents and don't clog up your inbox. Expedia.com's Fare Alert tool notifies users when a particular price for a route becomes available. STA Travel's Skinker lets you know when fares, blogs and podcasts are updated."

Read the full article here.

Kevin May, editor, Travolution

Online travel in 2006

2006 will perhaps be remembered as the year that the traditional travel industry woke up to the internet in a big way.

In the UK the likes of Expedia, Lastminute.com, Opodo et al have been blazing a trail for online travel agencies for years, but this year has seen those pre dot-commers realising exactly what can be achieved on the web.

Thomson, the UK multiple with a traditional bricks and mortar presence as well as aircraft and tour operating business, said it would be continuing its aggressive growth strategy that will ensure the web is its primary portal to reach consumers.

The other members of the so-called group of Big Four, such as Thomas Cook, also made a concerted effort to push their online brands.

Away from the package holiday market, other suppliers, such as British Airways, which have had an online presence for years, unveiled their own innovative new websites during the course of 2006.

Indeed the new BA.com caused quite a stir in the industry when it relaunched in November as, to all intents and purposes, it mirrored both in terms of functionality and design many of the online travel agency sites.

A string of other airlines and hotels also took the plunge and invested resources into their online businesses.

Meanwhile, Web 2.0 has moved from being something the geeky end of the internet community talked about at conferences to where some of its core principles are heralding a new age for the travel sector.

In fact, user generated content – in the form of reviews – on sites such as TripAdvisor is almost a benchmark for where a travel website should be if it just wants to scratch the surface.

The mash-up is becoming the de-facto method when trying to show some level of advanced functionality on a site.

But look beyond these already rather simple tools and there is a world of opportunity in the guise of travel social networking with sites like WAYN.com, Yahoo!’s Trip Planner and Answers, Travelpost and RealTravel.

We cannot mention 2006 without commenting on the influence of some of the key US players on the market.

On the one hand, the American owners of Lastminute.com and Ebookers is finally beginning to unravel (Ebookers relaunches in April 2007 and Ian McCaig has taken over from Brent Hoberman at Lastminute.com).

But the likes of Sidestep, Kayak and Mobissimo are expected to shake up the already burgeoning travel/meta search market. This will be a key to keep an eye area in 2007.

Finally, there is plenty to say about private equity and the role of venture capital groups in the industry.

VC-backed Travelport snapped up rival GDS Worldspan earlier this month, and just a few days later Lastminute.com and Travelocity owner Sabre Holdings was sold for a cool $3.75 billion.

Nobody is really sure as yet as to what the long-term effects will be on an industry that arguably needs stability, but in many respects is seeing large swathes being run by short-termist investors.

Kevin May, editor, Travolution

Sights you seldom see

Imagine our surprise when Travolution was trying to access the Thomson website this evening, only to be greeted by this:

Travolution@WTM-All Good Things Must Come to an End

Well bloggers, the Travolution conference at World Travel Market finally wrapped up yesterday, after two-days of star-studded performances by leading experts in the online travel world.

True, there wasn't any singing or dancing (well, at least not until we all got to the pub), but there were some heated debates about what the future will hold for online travel.

Nancy Lyndhurst, product manager for travel, O2, said website owners need to produce simplified, mobile-friendly sites if phones and PDAs are to take off as a method for booking travel.

Several panellists theorised about how long tailing will change the search process and price point.

Is cost-per-click dead? Maybe, maybe not, but site owners must be willing to pay to get their brand noticed.

"As soon as Google doesn’t find you slowly die," warned Adam Freeman, deputy commercial director, Guardian News & Media.

Not surprisingly, the final discussions of the conference turned to the importance of social networking and user generated content, and the impact these will have on the online space--a recurring theme throughout the two-day event.

"I’m incredibly jealous of TripAdvisor," Graham Donoghue of TUI, exclaimed during the closing session. "The more we trust the customer, the better off we'll be."

Freeman agreed, "You need to share your space with consumers and re-think control. As long as customers come back to you as a source of information, then you will be OK".

Delegates from Gail Kenny Executive Search, which hosted the closing soiree, asked panellists how they are dealing with the current talent shortage.

Most panellists said they were resorting to kidnapping.

No, they didn't really, but admitted that it's an issue.

Finding talented people will probably be more of an issue now that the Democrats have won back control of the American Congress and Donald Rumsfeld has at last resigned.

That is to say all the Silicon Valley wiz kids who have been hiding out in Britain for the past few years, can now safely return home.

Don't worry though, we'll be back for next year's conference.

Tricia Holly Davis
Freelance Journalist and American Refugee

Travolution@WTM-Power to the People

A consistent theme carried throughout the two-day Travolution conference, which took place during World Travel Market , was the increasing power consumers will have over the online travel market.

Whether it was John Bray from PhoCusWright, who discussed the impact of the shift to a consumer-centric society, or Graham Donoghue from TUI Northern Europe, who said, "The more we trust the customer the more successful we will be," the message was clear: consumers are wresting control back from the grip of suppliers and suppliers had better get used to it.

Hugo Burge, vice chairman of Cheapflights, agreed, "Viral marketing and social networking are now incredibly important".

Donoghue said, "If we don’t embrace user-generated content we're stuffed".

This is great news for sites like TripAdvisor.

"Trust is online gold dust," remarked Marc Charron, European head of TripAdvisor, noting that 90% of consumers trust recommendations from other consumers.

"We already trust the advice we get advice from friends, so what's different today is that we are trusting strangers," said Charron.

Sometimes this is counterintuitive.

Wikipedia, for example, defies conventional wisdom, observed Cherron.

"You’d think Wikipedia would be rubbish since anyone can contribute to it, but, as it turns out, it is just as accurate as the Encyclopaedia Britannica.

Actually, that's not all that surprising.

The majority of definitions entered into the first edition of the Oxford English dictionary were in fact submitted by someone confined to an insane asylum.

Don't believe me? Look it up on Wikipedia.

Tricia Holly Davis
Freelance Journalist

Troogle - by any other name

Look across to the right hand navigation bar and you’ll see a new function – a vertical travel search engine powered by Google.

Or, Troogle, as some of us have been calling it for a few months now. [“Obsessed”, is how one senior Google figure jokingly, we hope, described us today!]

In typical Google fashion, however, it is actually rather simpler than just being a travel vertical search engine.

Google Co-Op, the official title, is a service (in beta) that allows users to create their own engine and dictate which websites to search.

We have therefore created the Travolution Travel Search Engine, and embedded it into the Blog.

At the moment it searches around 20 different websites, including Lastminute.com, Expedia, Travelsupermarket, Kelkoo, Thomson, BA, Ebookers et al.

The significance of this cannot be underestimated. This is essentially a customised search engine that allows users to only search for products in websites of their own choosing – in our case, travel-related sites.

"Google Co-op was built to be scalable enough to cover a wide array of topics," says our Google friend.

"Our goal is not to focus on particular verticals. Instead, we’ve tried to create a system that can make information more discoverable across all topics.

"We want to point people to the most relevant and useful information on the web, not keep them on Google."

Let the debate begin...

Kevin May, editor, Travolution

Welcome to the October edition

Travolution is away at an RBI conference, so just a quick mention of the October edition of our magazine, which is available from today.

Two features from the new issue concentrate on what the tourist boards are doing with their web strategies, covering the overseas organisations and those working to increase inbound tourism to the UK.

* Destinations online – International
* Destinations online – UK & Ireland

Elsewhere in the issue we have gazed into our crystal ball to see how the web will transform in-flight entertainment in the future. We also carry out a profile of Travelzoo, the masters of the weekly travel deals email, which is making waves in the UK just 18 months after arriving from the US.

There is also the full transcript of the September meeting of the Travolution executive advisory board, featuring representatives from Yahoo!, Ebookers, TUI, Lastminute.com, BA.com, Expedia and the Global Travel Group.

We hope you enjoy the issue. Full service will resume shortly on the blog …

Kevin May, editor, Travolution