A reader emails the following:
Do you find it ironic that Ryanair is asking Microsoft to help "keep out" screen scrapers (who, one could argue, are price comparison and meta search sites) - on the same day that Microsoft announce they are buying a price comparison site in Europe. [Ciao.com]Indeed.
Fantastic and intriguing letter from Ryanair to the European Commission has just been published on the Ryanair website.
Not only does it outline in detail the carrier's concerns over third party sites but also gives a complete list of sites which have been on the receiving end of a cease and desist letter from Ryanair.
[Our story from today]
It's very confusing (cheapflights is included, for example, but is clearly a media site although it is potentially picking up Ryanair flights through its advertisers) but is basically a who's who of the online travel industry in Europe.
"Ryanair 'created panic' by cancelling third-party web bookings", says an article in the Telegraph.
Holidaymakers also complained that Ryanair’s announcement created panic among those who had booked their flights through a website singled out by the airline.Now, there really is the only one question that needs answering:
Ashleigh Brettwood from Seaham, Co Durham, booked two seats on a Ryanair flight to Girona via www.otbeach.com. Having seen a television report that mentioned otbeach.com, she assumed her booking would be cancelled and rebooked two seats on the same flight through Ryanair. She paid £208 — £63 more than the cost of the original tickets. She subsequently discovered that her original booking with otbeach.com was still valid.
“My boyfriend and I wanted to go on a budget break, but we’ve ended up spending a fortune,” said Miss Brettwood. “I’ve tried to contact Ryanair ever since, but the line is constantly engaged.
“It’s disgraceful that people who have booked their flight months ago are now being forced to rebook, and probably pay more. I expect some people have had to cancel their holiday altogether,” she said.
Today's revelation that Ryanair has already cancelled the tickets of around 2,500 people since it implemented its controversial no-screen scraped tickets shouldn't be a huge surprise.
The airline is fiercely stubborn when it comes to marketing and distribution - an approach which clearly comes from the top of the company.
And it has done well out of it so far, let's face it.
Our source for the story told us that all the ticket cancellations so far had been carried out online - in other words, no passengers had turned up at the check-in desk and been turned away.
This is quite a feat.
But given that 400-500 customers every single day this week have been on the receiving end of a cancelled ticket by Ryanair - or at least the intermediary has - it seems strange that some of the UK's tabloid press have not run 'Outraged of Essex'-style stories this week.
This leads us to believe that the cancellations have carried out strategically, to minimise any groundswell of negative consumer opinion.
Our mole with the harp in Dublin asked us if we had received any calls as yet. We have not.
Anyway, Musings made a good point about Ryanair yesterday. The airline is protecting itself - it's a natural reaction in some respects, especially in troubled times for the air industry.
Ironically, the travel trade has reacted like there is a huge injustice here - even Abta has waded in.
But one wonders that if this issue had been brought up by any other supplier than Ryanair, which is often the industry's favourite whipping boy, primarily because it does things single-mindedly and without the need for the trade, then the reaction would be any different?
Kevin May, editor, Travolution
Technorati tags: ryanair
A provocative headline for you. And not just to get your attention
Francesca Ecsery, UK managing director of Cheapflights, came up with what could the phrase of the year when talking to Travolution at the launch event last week for their new UK site.
When chatting about the recent Ryanair spat with meta search engines, Ecsery laughed cheekily and then said:
Well, we're not one of those that scrapes and slaps.Fantastic!
Perhaps it was a slow news day at The Observer for the latest edition, but at least it managed to find the time to collate some of the best quotes from Ryanair's Michael O'Leary.
Full list.
Highlights include:
[On travel agents...] Take the f**kers out and shoot them.
[On increased airport security...] You don't see the government confiscating lipsticks and gel-filled bras on the London Underground. Most of them couldn't identify a gel-filled bra if it jumped up and bit them.
And, not forgetting, his recent comments regarding, er, ancillary services in business class.
Kevin May, editor, Travolution
Hat-tip: Airline Business Blog
Technorati tags: ryanair
So last week we discovered that easyJet is – at last – appearing to be willing to work with OTAs on an official and direct connection into its fares and availability engine.
This follows its tie-in with a number of technology companies and GDSs to enable third party bookings.
This is, of course, the antithesis to Ryanair’s (current) policy.
EasyJet’s move delights many (especially the no-frills carrier itself, and the tech firms getting the glory of having the coveted easyJet API), but is still raising concerns throughout the industry.
The consternation raised by some – privately most of the time – is that easyJet takes a surcharge on the booking fee for using the API.
Some tech companies are actively avoiding the temptation to sign up to the API simply because their customers are so against paying the surcharge.
Which is fair enough.
A decent source on the tech side adds this to equation:
“There is a general feeling going around that easyJet will start pushing their dynamic packaging product a lot more going forward and this means that they want to stop other companies from competing with them.”
“Or if they do, easyJet wants to make sure that they get a share of the additional revenue generated by dynamic packaging their flights (the "POS fee").”
Throw all this into the widely held belief that the new easyJet site will be focused on more than simply providing flights (ie. full service, OTA-style approach) and the strategy becomes clearer: access at a price, but come to our site for a better experience.
There is no doubt that this is just the latest example of how airlines (given the right partnerships and vastly improved user experience) are at least acting like they are desperate to become more than just suppliers of a single and simple product, like an airfare.
The final point to consider is that – sharp intake of breath – will consumers care, or notice?
Kevin May, editor, Travolution
Technorati tags: ryanair easyjet
This might be ancient history by now – it is after all nearly a week old – but the following is well worth ninety seconds of your time.
A respectable organ such as Travolution will avoid the many puns possible. We’ll leave that to Ryanair’s official response.
The interesting point is that by confirming that its business class product is known internally as ‘beds and blowjobs’, O’Leary is admitting that Ryanair is at least thinking about a two-class transatlantic service.
This represents a massive shift in the business model of one of Europe’s most successful airlines. Will Ryanair have to rethink its refusal to distribute seats through third parties if it plans to target business travellers? easyJet had to link up with the GDSs in order to make its product accessible in an acceptable way for travel management companies. Would Ryanair do the same?
Martin Cowen, chief writer, Travolution
Plenty and rather mixed coverage around the web today regarding the second anniversary edition of the Hitwise-IMRG Hotshops list.
The quarterly report of the top 50 UK online retailers is a handy benchmark of whose flying or dying in the online world, albeit from a share of overall web traffic rather than individual performance.
So what did the May 2008 report reveal, compared to that of May 2006?
There are currently eleven travel brands amongst the top 50 – a list topped unsurprisingly every quarter since it began by Amazon.co.uk.
TravelMole led with how Thomson Holidays is creeping up on easyJet as the most popular travel brand in the UK, while E-Tid said ‘Travel companies lose web presence’. [both require registration]
The report indicated that almost all the leading travel brands – with the exception of Thomson – had seen in a decline in position since the report began two years ago:
EasyJet – 8 to 10
Expedia – 7 to 12
Ryanair – 9 to 14
Lastminute.com – 12 to 17
BA – 11 to 19
Thomas Cook – 18 to 25
First Choice – 20 to 29
Quite a number of travel brands have dropped off the list:
MyTravel (for obvious reasons)
BMIBaby
XL.com
FlyBe
Jet2
InterContinental Hotels
Monarch Airlines
Opodo
The only newcomer in travel:
TravelRepublic
The apparent slump in the performance of travel websites led the Financial Times to headline with ‘Airlines lose web customers’. Lose?
What the FT failed to do is explain in detail why this has happened.
A call to Hitwise’s Robin Goad, co-author of the list, confirms the obvious: travel was an early adopter of e-commerce and consumers, likewise, felt comfortable with booking via the web, thus why so travel sites commanded a large share of the top 50.
In the past two years, however, other retailers have emerged – some traditional offliners, others created to service existing markets but purely online – and have attracted new users.
So while growth in online travel bookings may be slowing compared to other industry verticals, it is by no means declining.
Kevin May, editor, Travolution
Technorati tags: hitwise IMRG hotshops retail
Ancillary revenues got almost as much podium time at EyeForTravel’s summit this week as social media.
There’s a shift in how airlines are thinking about this – it’s more important for them to try to squeeze as much revenue out of their core business – ie flying people around – than it is to take a commission on an insurance policy.
Ryanair’s head of sales marketing and commercial revenues, Sinead Finn, told the opening session: ‘If we depended on our partners for profit, we'd be in trouble.’
Menu-based pricing for seats is driving this focus on core product ancillaries. And in three years time Ryanair wants 20% of its revenues to be from ancillaries. Other businesses could call it ‘upselling’ (extra legroom on your seat to Sharm, anyone?) but Ryanair is used to having to defend its business model, despite its constantly lowering fares, excellent punctuality figures and bumper profits.
American Airlines, the world’s largest carrier, calls it “merchandising”. In a side room on day two, its international distribution manager Cory Garner admitted that the world’s biggest airline is currently picking up more bookings through third parties than direct. It appears that merchandising its direct channel more effectively is an increasing priority.
It’s looking at “behavioural economics” for some help here. “Customers are predictably irrational,” Garner said. “How you propose an economic transaction can be more important than what you propose.”
An issue here is that not all third parties have the infrastructure in place to be able to deliver the same merchandising opportunities as a brand dotcom, and the GDSs are a bit behind the curve as well.
(This isn’t an issue for Ryanair because it doesn’t sell seats through intermediaries. easyJet, which does, factors in potential loss of ancillary revenue into its point of sale booking fee for third parties).
Ornagh Hoban from Datalex put the issue in perspective by saying that airlines are still on a learning curve when it comes to maximising ancillary revenues. Hotels however appear to be in a win-win situation. Third parties are a valuable distribution channel, both for volumes and yields. But the big gains can come from the merchandising opportunities - upgrades, breakfast, spa treatments - through the direct channel.
Martin Cowen, chief writer, Travolution
Ryanair is 100% committed to direct distribution. When it carries 83m passengers across in Europe in 2012, as planned, virtually all travellers will book directly at ryanair.com. If Ryanair released TTV figures, there would be some online travel giants looking very small indeed.
But Sinead Finn, head of sales and marketing for the airline, offered advice for suppliers who did want to shift inventory through third parties. Make sure you have access to all the information about your customer who is booking indirect; ensure that your intermediary isn’t undercutting you on price, and only bother if you need the business.
Cormac Whelan from Datalex suggested that suppliers should only work with third party intermediaries who have invested in their own infrastructure. “This allows you to maximise the business relationship,” he explained.
The price integrity issue is why easyJet’s cheapest fares are always on easyJet.com. This isn’t likely to change. ‘Any third party booking will incur a point of sale fee,’ stated Jerry Dunn, its distribution development manager. easyJet charges ‘an average fee of £4 per segment’ for any one else wishing to sell its seats.
Finn said she couldn’t see any reason why big brands couldn’t go 100% direct. InterContinental is as big as they get, but still sees a place for third parties. Andrew Rubinacci, VP distribution marketing, told delegates at Eye For Travel’s Distribution Summit Europe 2008 that “we see OTAs as an extension of our brand and we want to make sure we are there.”
For example, visitors to London could find out about IHG’s 20 or so properties in the city through an online agent if they weren’t on familiar terms with its brands dotcom.
IHG’s media model deal with Expedia continues to make sense, even if the commercial terms of the tie-up remain top-secret.
Martin Cowen, chief writer, Travolution
Interesting observations about screen scraping in the Q&A at the end of the direct vs indirect debate.
Jerry Dunn, distribution development manager for easyJet, admitted that screen scraping is “not insignificant and it's growing”(surely not TMCs?). He suggested that EZY's availability through GDSs and its own API provide an alternative, at a cost. He also said EZY is talking to “other distribution companies” to increase the choice for third parties.
Sinead Finn, head of sales and marketing for Ryanair, said that screen scraping isn’t a big part of its business. It hasn’t stopped them from trying to deny screen scrapers access, however.
Andrew Rubinacci, VP distribution marketing from IHG, admitted that hotels too are part of the screen scrapers’ reach. IHG is trying to turn them off, but does not charge third parties for authorised access in the same way as easyJet does.
Martin Cowen, chief writer, Travolution
Plenty of coverage on news sites and blogs last week as Ryanair press released news that it is launching a new product, Ryanairvillas.com.
In short, it's a classified advertising portal. The system allows users to upload ads for their own properties to a microsite, add photos and detail product information, etc.
But there are a few things about this:
The launch shows – once again – that airlines are seeing plenty of opportunity in bringing in new elements to add to the core flight portal.
[If it turns out something like this, for example, British Airways will resemble something closer to an online travel agency]
Ryanair has product deals with Isango (for destination activities) and, of course, its well-publicised product functionality courtesy of Expedia.
Not wanting to be left out of the game, EasyJet recently signed a similar destination services deal with Viator.
But a user-controlled listings service is a very significant move indeed. And a smart one for Ryanair.
Why? Well, in theory, responsibility for the content and control of the ads rests with the user, pretty much removing Ryanair from the picture entirely apart from an initial check when the listing in posted.
Furthermore, a call into Web Reservations International, the Dublin-based company powering the Ryanairvillas system, reveals that Ryanair has definite plans to develop the platform.
Indeed, there are huge opportunities for cross-selling once the system is up and running, in terms of promotions and advertising.
And, at some point in the future, it is more than likely that live Ryanair fares and availability will be streamed alongside the ads.
Kevin May, editor, Travolution
Technorati tags: ryanair easyjet expedia
[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
This on the Ryanair news pages, announcing the launch of Ryanbare.com.
Best April Fool of the day?
Kevin May, editor, Travolution
Technorati tags: ryanair ryanbare april fool
This from the Office of Fair Trading this evening:
The OFT is aware that Ryanair has now changed its website to display prices on the first page of its booking process that include fixed, non-optional costs. The OFT welcomes the steps taken by Ryanair and other airlines towards greater price transparency for consumers and continues to monitor the situation closely.Now given ABTA's ire over this issue in recent weeks, will this be the end of the story? Hmmm...
The OFT's view is that all holiday and travel price indications displayed anywhere on websites should include all fixed, non-optional costs, and particularly welcomes moves by some holiday and travel suppliers, such as those ABTA members and airlines who are now displaying fully inclusive prices everywhere on their websites.
The OFT continues to monitor the market to ensure that consumers are no longer being misled and that businesses are not being harmed by misleading holiday and travel price indications that do not include all fixed non-optional costs.
The OFT believes that a competitive market requires consumers to be able to easily and quickly choose between prices that are comparable, fair and not misleading.
Plenty of mutterings everywhere about the Ryanair "upgrade".
Alex Bainbridge has the best analysis so far.
But, for all the apparent problems, I bet the sale is still going well.
A side issue to the technology/performance story is the fact that ABTA and the Office of Fair Trading are still hopping mad about how the airline's drive to towards price transparency is still, er, less than transparent.
Simon Bunce, ABTA's head of legal services, doesn't mince his words here:
Ryanair has fobbed off the OFT for over a year with the excuse that they could not show clear, unambiguous prices on its website because they didn't have the technology.UPDATE: Ryanair is saying "technical" problems have led to further delays and the new pricing will come into play today...
Clearly, despite working on their website all weekend, they still don't have the technology. Either that or they just don't care about how they deal with their customers.
Did anyone really think Ryanair would close its website booking engine for three days?
Er, no.
Anyway, drama over and full functionality returns.
Now a cynic might suggest that the coverage of the "closure" in the mainstream media was rather handy (PR driven, perhaps?) as returning users will be overjoyed to see the airline's "5 Million £10 Seats" promo.
Hmm.
Kevin May, editor, Travolution
Technorati tags: ryanair website closure
Contrary to reports everywhere, Ryanair.com will not be puling its website down this weekend.
A call to Ryanair this afternoon to double-check the closure was still scheduled to take place for 72 hours from 22 February, revealed that all the functionality - apart from the air ticket booking facility - will still be available to users.
Car hire, Isango tours, hotels, insurance, etc, will remain in place.
You just can't book a flight.
Nevertheless, this message has hardly been communicated well to consumers.
Here is the current homepage. [You just be able to see our circle around the note]
UPDATE: [No doubt about it now - 60 minutes after official shutdown of the booking engine]
Kevin May, editor, Travolution
Technorati tags: ryanair closure ryanair flight
