m-Travel.com and Travel Distribution News

Archives for September 2009

« August 2009 | October 2009 »

Orbitz removes change and cancellation fees on hotels

Orbitz has decided not to charge change and cancellation fees on hotel bookings.

The online travel company says since travel plans often change, it is trying to make it easier for customers to adjust their schedules accordingly.

Orbitz clarified that even as it will no longer charge a fee to change or cancel a hotel reservation, some hotels may have non-refundable rates or impose fees that Orbitz is required to pass along. Also, this move excludes hotels booked as part of a package, e.g. flight plus hotel bookings. 

In April this year, the company had introduced Total Price hotel search results making it easier for consumers to search for hotels and know the total cost of lodging up front. One month later, Orbitz launched Hotel Price Assurance, promising customers the best Orbitz rate for their hotel.

Earlier this year, Barney Harford, president and CEO of Orbitz Worldwide, mentioned that the online hotel distribution landscape is still very immature. It is still very complicated for consumers to compare all the different options.

“It is remarkable that it’s 2009 the online travel industry is been around for over 10 years. Yet now consumers still have to click, click through and select their hotel before knowing how it’s going to cost.”

| Comments (0)

Europcar and Accor come up with a customised car rental offering

Europcar and Accor have launched a customised car rental reservation service.

When an Accor customer confirms a hotel reservation on www.accorhotels.com, a pre-selection of three vehicles available for rental from Europcar is proposed. The selection is based on the customer's destination, hotel and length of stay.

Accor customers reserving a Europcar vehicle through this system qualify for exclusive discounts of up to 20 percent on the cost of their car rental. Plus, members of the Accor AClub loyalty programme can earn points.

Accor’s e-commerce director Romain Roulleau said partnerships, such as the one with Europcar, is way of securing customer loyalty while generating traffic and additional revenue.

“Cross-selling, and especially the addition of partners to the reservation channel, will help to make the accorhotels.com portal a genuine distribution platform for the sale of complementary services,” said Roulleau.

Accor is the first hotel group to use the new online reservation system developed by Europcar.

| Comments (0)

TUI Travel to target “attractive M&A opportunities”

TUI Travel has confirmed a number of financing measures that, together with existing facilities, will enable it to refinance its shareholder loan with TUI AG that currently amounts to approximately £900 million.

The group plans to raise £300 million by issuing to international institutional investors senior unsecured convertible bonds due 2014, which will convert into about 7 percent to 8 percent of shares on maturity. It will arrange a further £140 million in revolving credit facilities, maturing in June 2012.

TUI Travel also is deferring the final loan repayment of £150 million to April 30, after net debt passes a seasonal peak.

Shareholder loan

TUI Travel’s existing shareholder loan from TUI AG currently amounts to approximately £900 million. This is due for repayment by 15 January 2011. Under the terms of the shareholder loan, TUI Travel is required to repay amounts owed in the event that new external finance is raised. TUI Travel and TUI AG have agreed an amendment to the original agreement and TUI AG has agreed to waive in part the mandatory repayment obligation.

Acquisitions

The raising of financing will also allow TUI Travel to continue its acquisition strategy. In the current financial year, TUI Travel has spent £120 million on 14 acquisitions and joint ventures.

The company said it has spent £55 million entering into a strategic venture with tour operator Sunwing to strengthen its position in the Canadian market. It will take a 49 percent interest in the venture.

Three main areas of investment are:

• Bolt-on acquisitions of niche, higher growth businesses in the specialist sectors are a key driver of TUI Travel’s long-term growth. The pipeline of potential acquisitions is strong at present and we envisage the level of investment in the medium term to be similar to recent years.
• Transactions that provide an opportunity to consolidate mainstream markets and act as catalysts to drive the turnaround of underperforming businesses in the Mainstream sector.
• Emerging markets, with focus to date on Russia & CIS.

Trading

Meanwhile, trading in the period since August 12 was in line with expectations. The group shared that  the current summer season that runs until the end of October in most markets is fully sold.

Consumers are increasingly holding off on booking holidays in order to save money, but TUI Travel said it continues to achieve required load factors -- the proportion of available holidays sold -- and pricing levels by reducing capacity to match lower demand. The company said the later booking trend has continued into the winter 2009/2010 season and it was cautious about planning capacity.

Early bookings in the UK for the summer 2010 season were in line with last year, TUI Travel said, with average selling prices up 4 percent.

| Comments (0)

“Brands come across as more human in social spaces”

IN-DEPTH:  Virgin Atlantic Airways’ Allison Wightman on social media

Airlines are increasingly looking at developing their resources in order to take initiatives related to social media marketing. 

Virgin Atlantic Airways is one such airline, which has been quite pro-active in this arena. 

The airline has a cross-functional Social Spaces Forum group. It comprises personnel from eCommerce, PR, customer relations, product and service, marketing etc. The team works closely to understand the social marketplace, shape the direction for activity in social spaces and develop a framework for the business in this area, according to Allison Wightman, Head of Marketing Systems, Virgin Atlantic Airways.

“For consumers, social media is the perfect medium for sharing ideas when planning a travel trip as above all else they trust their friends viewpoint and experiences the most,” says Allison, who is scheduled to speak at Sales and Marketing in Travel Europe Summit 2009  to be held in Prague (October 13-14) this year.

Allison spoke to EyeforTravel.com’s Ritesh Gupta about trends and issues. Excerpts: 

Most travel sites are directly tied to a purchase decision, but there is also the opportunity for paid membership based communities; research and feedback communities; loyalty programme communities and of course the media property model based on advertising revenues or value of the database.  As with so much else, it comes down to developing UGC sites not because they are voguish, but because they specifically address a business need, customer need or a market opportunity. What’s your viewpoint?   

Coupling strong content with useful services in an environment where customers can easily access relevant recommendations and views from their friends is an extremely powerful proposition, its not possible to build a successful community without a strong underlying customer need and desire for it and travel presents an ideal subject matter for this medium especially given the importance of mobile as a tool when travelling.

However, I don't agree with a subscription-based model for a fee unless you are prepared to offer significant added value for a premium service. The power of social relies on unlimited networks and fees inevitably become a blocker unless the service is especially niche.

Till last year, travel companies were assessing how to develop their own strategy of how to best engage with their customers on the web. How do you assess the approach as of today? 

For brands, social media is primarily about test and learn at the moment. It is better for a brand to be in these spaces listening, engaging and responding than to underestimate the power of this platform as a new outlet for customers. It is vital to understand clearly why/who/how/what your brand and your people will do in Social Spaces and to balance sales versus service messaging. It is not possible for brands to opt out of the medium as customers are more powerful than ever before.

Last year, Orbitz shared that UGC tools, travel widgets, dialogue platforms or data, which can help with research and customer care are the most attractive to older online Americans. How should one approach planning and execute such initiatives/ campaigns from demographics perspective?

It is relatively easy to draw demographic information from each of the social spaces in which you operate so as with any advertising or marketing activity you should plan social media activity as part of an integrated marketing plan and not treat it as a separate 'campaign'.

What resources should one allocate to social media? And how should it be managed for optimal results?   

It is possible to engage in social media without allocating specific resources to it as existing roles and departments within a business still stand. The medium may be different and more powerful than ever before but the concepts are not all new. Equally, there is a huge opportunity in this arena to engage your current customers to become part of your virtual team if managed carefully.

What should one avoid to make sure social media marketing initiatives dont fail? And how should an organisation be involved for such initiatives (for instance avoiding criticism by own employees)?

It’s early days in social media and therefore test and learn is key. Being open and honest as a brand and listening and engaging with customers in a fair and transparent way should avoid failure. There is a need to be clear on a framework for engagement in social spaces that all staff is aware of. Brands come across as more human in social spaces and consequently they can be more fallible, too, so it’s vital that everyone within the organisation knows the guidelines.

As companies increase their social media marketing budgets, they are also looking at ways to measure their return on investment. Which is the best way to measure the ROI of advertising campaigns in a social media environment? 

It is complex but possible to measure revenue from social media activity but this one measure alone underestimates the benefits that interaction with consumers in social spaces can bring. 

A basket of measures in line with site or campaign objectives is a much better indicator of success such as contributions, interactions, comments, video/photo uploads, fans etc as

the overarching objective of any social media activity should be around encouraging customers to engage with your brand.

Sales and Marketing in Travel Europe Summit 2009 

Allison Wightman is scheduled to speak at Sales and Marketing in Travel Europe Summit 2009  to be held in Prague (October 13-14) this year. 

For more information, click here:
http://events.eyefortravel.com/sales-and-marketing/conference/online-marketing-strategies-agenda.asp

or contact:

Gina Baillie
gina@eyefortravel.com
+44(0)207 375 7197

| Comments (0)

Yahoo!7 acquires totaltravel.com

Yahoo!7, a 50-50 partnership between Seven Network and Yahoo!, has signed a deal to acquire totaltravel.com in Australia. Financial details weren’t disclosed.

totaltravel.com has 167,000 listings across multiple travel-related categories including accommodation, restaurants, events, shops and attractions. Following the completion of the deal, Yahoo!7 will look to combine its existing premium travel site with totaltravel.com’s listings data. 

Yahoo!7 will integrate the listings data in contextually relevant places across its network. 

“Our premium content, the ability for advertisers to target an engaged audience and the scale of Yahoo!7 will deliver the best environment for advertisers interested in a travel-minded audience,” said Yahoo!7’s CEO, Rohan Lund. 

He added that company’s technology platform, combined with the Seven Network stable of TV and magazines travel content, and now the addition of the totaltravel.com listings, will make the offerings stronger.

| Comments (1)

Trust’s new offering automates rate maintenance for hotels

Trust International has introduced Voyager|CRS Complete Rate programme to automate rate maintenance for hotels.

The new offering supports hotel companies’ wide array of strategies - control or adjust contracted and public flexible rates in the central reservation system (CRS); and disseminates them to the various distribution systems.

“We allow all derivative rates to be generated from the best available rate, lowest available rate (LAR), or a rate of their choice for all channels,” said Richard, Wiegmann, COO and managing director of Trust International.  “Our system enables our hotel customers to set up their derivative rate strategies and then we automatically maintain all the rates for them, which significantly reduces their rate maintenance costs.”

According to the company, there are numerous ways in which rates can be structured and linked to reduce maintenance effort.  

For example: A hotel is able to link all of its rates using a flat amount or percentage to a single set rate such as a BAR or LAR, or perhaps link them to a rate that is recommended by a revenue management system (RMS) or to the lowest public rate for each day. This way, by simply adjusting that single rate, Trust’s system automatically adjusts all the linked rates using the hotel’s proprietary rate strategies, streamlining it at the daily operational level for the hotel staff.

| Comments (0)

Jet2.com signs up for Galileo’s direct connect solution

Jet2.com and Travelport GDS have signed a new direct connect content agreement.  Under the new agreement, Jet2.com’s full content will be made available in the GDS channel for the first time via Galileo’s direct connect solution.

Jet2.com is now the third airline this year to sign up to Galileo’s LCC direct connect solution.

The solution, now being used by travel agencies throughout Europe, was introduced early last year with launch partner easyJet. It will be soon launched in the Middle East and Africa.

Galileo’s direct connect solution gives agents the ability to book low cost carrier and traditional airline flights in the same passenger name record (PNR). The solution enables travel agents to compare low cost alternatives alongside traditional airfares in their preferred booking environment.

| Comments (0)

Integrating social search into online travel

Interview with Adam Healey, co-founder & CEO, hotelicopter

The travel industry is witnessing quite a few interesting developments be it for predicting user preferences or figuring out how to use semantic search to provide a better consumer experience.

In order to know more about such initiatives, EyeforTravel.com’s Ritesh Gupta spoke to Adam Healey, co-founder & CEO, hotelicopter. Excerpts: 

Considering the potential of meta-search engines, has there been any significant shift in consumers’ search behaviour? 

Adam Healey: Meta-search is the fastest-growing segment online.  Why would you go to only one car dealership before you buy a car without first checking out all the other car dealerships in town?  And once you find the car you want, why wouldn't you want dealers fighting for your business?  

At hotelicopter, we're focused exclusively on hotel meta-search.  This means we have created a user experience specifically for helping travellers book the best hotel room at the lowest available price.  Through aggregation, we're able to list twice the number of hotels (over 150,000) that you'll find on the leading online travel agency sites, meaning you're more likely to find the perfect hotel for your trip.  And for every hotel on our search engine, we try and display all the rates available online for that hotel.  Travellers want to see all the options available to them before they book.

Considering this search behaviour, what do you recommend when it comes to working on a keyword list and making the most of it? And how can one assess RoI for such expenditure?

Adam Healey: Keyword lists are great for driving direct traffic through SEO and SEM, and of course ROI is easy to measure when you know your cost per click and your average revenue per user.  Evaluating growing customer loyalty and corresponding increases in direct traffic is also important in any ROI calculation.

Making sure your hotel is listed on search engines like hotelicopter is another great way to drive direct traffic.  Our meta-search model means we can drive highly-qualified traffic directly to a hotel's website, and if we're using the CPA (cost per action) model, we're talking free traffic.  We also drive highly qualified traffic to our OTA partners, including hotels.com, priceline, Orbitz, bedandbreakfast.com, Tablet Hotels, and many more.  In this manner, hotelicopter is an essential marketing partner for any hotel and OTA looking to gain access to the most qualified hotel shoppers online.  

What really impacts how Google sees your site; Maps, videos, mash-up applications, keyword-rich content, inbound links, UGC, long-tail content...? Which of these components will make your SEO strategy more successful?

Adam Healey: SEO is about three things: inbound links, internal linking structures, and relevant content.  Each plays an important role in maximising the visibility and credibility in Google's eyes of your site for particular keyword searches.  At the end of the day, while it's important to understand how to optimise sites for robots, Google's search algorithms are a proxy for determining how well you are helping people gain access to the information they are looking for.  If you're providing a valuable service and are optimised for search, traffic will follow.

What sort of progress have you witnessed when it comes to social search engine marketing effort? What new trends have you witnessed in this arena?

Adam Healey: hotelicopter is the first travel site to integrate with Facebook to provide a hotel review platform you can share with your friends.  We allow users to seamlessly post and share hotel reviews with their Facebook friends.  This makes it a lot easier to trust hotel reviews - because they are written by people you know.  An additional benefit of this feature is that over time we'll be able to customise search results for individuals based on which hotels their friends recommend.  We're really at the forefront, at the very beginning of bringing social search to the travel industry - it's very exciting.  

Would it be right to say that the main problem is that most travel suppliers do not review web 2.0/social media as part of a comprehensive Internet marketing and distribution strategy to optimise results?

Adam Healey: I think many travel suppliers are beginning to adopt social media best practices.  We have to remember how new this field is. Google went public in 2004, the same year Facebook was founded. Twitter has just come on strong in the last year.  So it's going to take time for best practices to be established. Certainly at hotelicopter, we believe social search is going to be the biggest development in travel in the next five years, and that's why we're at the forefront of integrating social search into online travel.  Our goal is for hotelicopter to understand a user's personal preferences so completely that the recommendations we make feel like we're reading your mind.  It's a worthy pursuit, because predicting user preferences is the biggest unsolved problem in online travel.

How is the semantic web going to impact the whole process of search marketing?

Adam Healey:  It remains to be seen how the semantic web is going to shake out, but it should make SEM a lot easier and more transparent to administer.  Today Google's algorithms are still quite a bit of a black box for professional search marketers.  The semantic web should make it more efficient to create and manage online campaigns, because there will be less left to algorithmic interpretation.

Sales and Marketing in Travel Europe Summit 2009 

Adam Healey is scheduled to speak at Sales and Marketing in Travel Europe Summit 2009  to be held in Prague (October 13-14) this year. 

For more information, click here:
http://events.eyefortravel.com/sales-and-marketing/conference/online-marketing-strategies-agenda.asp

or contact:

Gina Baillie
gina@eyefortravel.com
+44 (0)207 375 7197

| Comments (0)

British Airways to charge flyers up to £60 to reserve seat

British Airways has decided to charge passengers up to £60 each way to reserve their seats on flights. The new charging system comes into effect on October 7.

The new charges will affect people who want to ensure they sit together on a flight, or anyone with a preference for seats next to a window or an emergency exit or in an aisle.

Prices will range from £10 for each leg of a short haul economy class seat, to £50 for an exit row seat and £60 for an international one-way restricted fare business class seat, or £120 for a return flight. 

The airline has already stopped serving meals in economy class on European flights and the second meal in business class on a long-haul flight is to be downgraded to a snack. It is also seeking advertisers for its website and boarding passes. BA lost £401 million last year and is looking for ways to boost its revenues and cut costs.

A BA spokesman said: “Customers frequently request specific seats but in the past we’ve only been able to confirm them 24 hours in advance or on the day. We know people want to secure them in advance and have real control over their flying experience. This will allow them to do that.”

Rochelle Turner, head of research at Which? Holiday, said travellers had become used to budget airlines charging them for a service that used to be included in the "headline price". 

"We know from our members that people really don't like these extra charges - they'd much rather see a headline price that includes everything," she said.

| Comments (0)

Are airlines geared to fully leverage ancillary income?

By Raghunathan Thyagarajan

In early 2000, ancillary income started out as an innovation among European low cost carriers; today it has virtually become an airline industry standard.

Ancillary income or revenue from sources other than the ticket price is categorised by the industry as a la carte features, commission based products and frequent flyer activities and today account for a substantial portion of revenue for airlines. Today, these features comprise as much as 10-15% of most airlines’ revenues. These are clearly numbers that cannot be ignored.

More specifically, ancillary income includes a wide range of items including cabin upgrades, excess baggage handling, onboard food and beverage services, and commission through car or hotel bookings. Low cost carrier Ryanair pioneered the concept in 2001 upon introduction of its pan-European services; maverick CEO Michael O’Leary commented in 2001 in the Sunday Times, UK: "Other airlines are asking how they can put up fares. We are asking how we could get rid of them." Though these charges, by virtue of their exclusivity have been criticized by passengers, they have become common across most of the world’s airlines.

Ancillary revenue for most of the airlines is to levy a charge for services which were otherwise offered free by full service carrier e.g. checked in baggage, seat preference etc.  There are few ancillary revenues which are non-core to airline operation or passenger service but offers an opportunity for airline to earn revenue e.g. advertisement in-flight magazine, duty free sales – Onboard as well as on airline websites,  commission earned from suppliers for selling holiday-packages etc.

Airlines are approaching the concept of ancillary revenue cautiously to avoid any adverse impact on customer perception that airlines are charging for services instead of charging a higher inclusive fare.

Since ancillary revenue as a concept is still evolving – airlines are trying to take control of the delivery of the product / service to manage passenger experience.  Over a period, I expect that airlines will seek partners / specialists to manage the sourcing / packaging and delivery of product / service to generate ancillary revenue.

Preparedness

The question is this – are airlines geared to fully leverage ancillary revenues? Can airlines further increase their ancillary revenues? The simple answer is "yes they can" but there are some challenges in fully realising this revenue:

• Global Distribution Systems (GDS) are not yet fully ready to recognise this service. The codes for ancillary service just aren’t there in the systems, so how does an agent charge the passenger? The pressure to deliver a system capable of recognising ancillary income is immense and I am sure it is only a matter of time when GDS will be geared to support this requirement. But until then, the lack of a system represents a potential loss of revenue for the airline.

• Current model is not scalable - All the ancillary revenue earned by the airline comes through its own sales points i.e. airports, website, or direct sales offices. This model is not scalable as a large part of the passenger ticket sales for full service airlines take place through agents who rely on GDS to provide fare information including all taxes, surcharges and other ancillary services sought by the passenger.

• Interlining agreements are not in place - Quite simply put, if I were to travel from Mumbai to Munich via London on two different airlines, the second airline would not get the (prorated share) benefit of the ancillary revenue that the first airline charged me at my departure point.

These "losses of revenue" are certainly substantial for airlines and in today’s economic environment revenue enhancing sources must be optimized to ensure survival. Airlines should get their revenue management systems in place, push GDS to alter systems to recognize ancillary services, and develop and agree on revenue sharing models with interline and code share partners.

(This article has been contributed by A Raghunathan, senior vice president, Travel Services, WNS Global Services)

| Comments (0)