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Innovation in Travel: Meet 6 New Companies Who Are Reinventing The Travel Space

“What’s new on the horizon for travel?” “Who are the new start-ups we need to be watching?” “Who are the new players offering something different?”

These three questions were very much at the core of The EyeforTravel North American Innovation Award, held as part of TDS North America just over a week ago in Las Vegas. EyeforTravel picked six of the industry’s hottest start-ups and invited them to “pitch” to our panel of investor judges. Before we reveal the winner, we’ll look back at the chosen participants:

Roger Wong, Director of Product & Marketing, Room 77: http://www.room77.com/. The concept here is that if you can choose your seat on a plane, why can’t you choose your room in a hotel? We all know what it’s like to turn up expecting sea views and find ourselves overlooking some grubby bins. What Room 77 offers is the chance to see what individual rooms within a hotel look like, and how to book that room. With 560,000 rooms in the database (and counting), this is not a force to be reckoned with.

Brian Harniman, President, BusinessTravel.com: www.businesstravel.com. This start up aims to capture the business of corporate travel for small business with 20 employers or less. This market is ripe for the picking with over 40 million of these enterprises in the US alone. The unique hotel search facility enables you to find a business hotel with all the small but important requirements you might need- whether that be an iron, wifi… or even on-demand movies for evenings off!

Travis Katz, CEO, Gogobot: www.gogobot.com. With a host of national and international awards under its thumb, and a spread of investors already committed to the Gogobot phenomenon, there’s no doubt that this website has a lot to offer. Miles away from the likes of TripAdvisor, the ethos of Gogobot is that when you plan a trip, you should get the advice and tips you need from your extended network of friends, family and colleagues, and from people who “travel like you.”

Adam Goldstein, CEO, Hipmunk: www.hipmunk.com. Hipmunk is a brand new style of flight meta-search that aims to, in their own words, “take the agony out of travel planning.” It tells you things that other meta-search sites frankly don’t, like which will be “dark flights” for plane sleepaholics. It then shows you in a clearer than clear capacity- the cheapest, the quickest, the shortest stopover, and more. With features like this, it is understandable why so many have converted into Hipmunks.

Sam Shank, CEO, HotelTonight, www.hoteltonight.com. HotelTonight is an app for iphone and now android, which gives consumers the opportunity to book a same-day hotel whilst on the move, direct through your mobile phone. The business model is to use distressed hotel inventory to fill last minute rooms with last minute guests. It’s a super slick app, and the deals can knock off up to 70% of the usual hotel price. Great for consumers and good for hoteliers looking to fill those empty hotel rooms.

Chris Patridge, Chief Backbid Hotelier, Backbid, www.backbid.com. Backbid is a brand new company that truly empowers the traveller. Have a flexible hotel reservation already? Post it to backbid, and let other hoteliers in the same area bid for your business, and let them offer you a cheaper rate or more incentives to move over your booking to them. An exciting business model and unlike any other we’ve seen.

So our six panellists came up against our three judges- Leonard Brody, of Examiner.com, Dana Settle of Greycroft Partners and Jonathan Kletzel of PWC. They were grilled on every aspect of the business- the investment potential, the business model, the consumer perspective and more.

The judges were thrilled to announce the winner as HotelTonight and the runner up as Hipmunk. The CEO & Co-Founder of HotelTonight, Sam Shank, previously CEO of Dealbase.com and prior to that CEO, TravelPost.com, was at the show to collect the award. There will be more specifically on HotelTonight’s plans for the future in our next article in this series.

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“Best deal guarantee and parity should not apply in flash sales in a standard way”

IN-DEPTH: The group-buying flash sale model for travel is a marketing promotion primarily towards a given market at a given time – so the price should be in relation to how big the given market is and how many potential customers are reached through the promotion and how long it lasts, says Gregory Linn, Director - Hotel & Travel Europe, Groupon.

By Ritesh Gupta

Cracking the code on inspiration is being pursued by several travel intermediaries and these also include those belonging to the flash sales category. These travel sites are helping people decide where to go on vacation and also enabling them to book the trip.

Members of such sites like to be “inspired”, typically with no specific destination in mind. It is also being shared that average advance purchase for hotel properties is over 60 days, which is exponentially longer than other OTAs. So such offering is proving to be an effective way for partners to build a base on their books well in advance.

At the same time, concerns have been raised about the implications of flash sales. Be it for turning hotel rooms into a commodity like an airline seat or high cost and revenue management challenges, the industry has highlighted negative aspects.

Assessing the situation, Gregory Linn, Director - Hotel & Travel Europe, Groupon, says there is no better way to achieve higher RevPar and Occupancy rates for hotels if their usual sales channels have failed to achieve maximum capacity – especially with an attractive discovery package and millions of travel newsletter deals subscribers on hand – this is where the group-buying flash sale model is most relevant – massive marketing to millions at no direct cost, only the actual buyers of the package may incur some cost if the price of the package does not cover the break-even point of the hotel.

“This is why the partnership between the group-buying site and revenue management has to address this point to make sure the break-even point is met, or to use part of the marketing budget to cover the possible extra cost,” said Linn, who is scheduled to speak at the forthcoming EyeforTravel’s Online Marketing & Social Media Europe 2011, to be held in Amsterdam (October 10-11) this year.

Linn spoke to EyeforTravel’s Ritesh Gupta about the latest trends. Excerpts:

How has flash sales as a concept progressed this year? How is it being perceived in the travel industry as this juncture?

Gregory Linn:

Most major OTA’s, online booking platforms and even some hotel chains have embraced the concept in some way or another in or before 2011 – the general feeling seems to be not to miss out on the drive and force of this concept.

While a section of the industry believes that social commerce movement fills a gap in travel discovery and buying, an hotelier in one of our interviews mentioned that conceptually flash sales are extremely attractive to consumers however there needs to be a distinction between retail and travel flash sales. Unlike when making a retail purchase, a consumer does not have the opportunity to take a day trip to a hotel they discovered via a flash sale. They have to rely on the Internet and online browsing to complete their buying experience therefore they do not fill a “buying gap” they increase the buying options. What do you make of the situation?

Gregory Linn:

One of the main ideas behind group-buying sites for travel is push-marketing, where email newsletter subscribers get few deals pushed to them without them having a pre-conceived idea of where or when to go somewhere. If they like the package, the price and the destination, they will buy on impulse. This differs greatly from normal OTA’s and booking engines, even for flash sales, as they act on pull-marketing, meaning that potential customers have thought through the possible destinations already, and will check first based on the thousands of destinations available and may also have many other comparable offers under evaluation and thus act less on impulse.

Right now it is too easy to join flash sales. They have gone from invitation only to anyone can sign up. There needs to be a stronger barrier to entry. It is being pointed out that for flash sales to separate themselves from the average OTA (in both the eyes of the buyer/consumer and supplier/hotel) they will need to change their business model to become more of an exclusive club providing customers with a tailored list of products based on the customers preferences, one to one marketing. What’s your viewpoint regarding the same?

Gregory Linn:

Several models exist in this regard. Private sale websites are becoming more accessible, and should probably re-focus to more tailor-made and exclusive offerings. Group-buying websites on the other hand want to be accessible to as many people as possible and provide economies of scale and massive exposure to all partners involved. This also allows the latter model to include tailoring and preferences, it can be achieved thanks to the data available from the email subscribers, only adapted to a larger amount of people than for the private-sale sites.

For flash sales, hotels are being recommended to make sure they display the rack rate on their booking engine so that consumers understand the value they are getting from the hotel flash sales deal. What do make of this suggestion for finding the right price/ discount?

Gregory Linn:

This could definitely help the consumers realise the value they are getting out of the flash sale deal, although the “perceived” value will probably depend more on the difference between the flash deal price and the usual market price, which is usually available on various OTA´s and booking websites, even often available on the hotel website itself. Rack rates are gradually disappearing, as they rarely apply.

How do you think the hotel industry has responded to the challenge of dealing with the complexities of revenue managing highly discounted prices?

Gregory Linn:

The hotel industry still has to come to terms with two concepts and differentiate them – the traditional concept is to know what maximum discounted price hotels are ready to display regarding purely sales operations (where margin is key), this is handled quite well, notably by revenue management and sales departments. The new concept, which still needs to be fully grasped, as it is a combination of coordination between sales, revenue management but mainly marketing departments, is to know what maximum discounted price hotels are ready to display regarding a special discovery offer/deal that is going to be highlighted among few other offers to millions of new potential customers (with little or no margin, or at some cost in agreement with the marketing department and budget).

As far as the expectations of the buyer is concerned, it is being said that consumers want to know that they’re getting the very best deal before they book, and they need more flexibility. In fact, a new private sale travel site unveiled last week says it has launched with the only Best Deal Guarantee in flash-sale travel. How do you assess the clutter in the marketplace and along with it the accompanying challenges?

Gregory Linn:

Rate parity is a hot subject between hoteliers and OTA’s – this in my opinion should only apply to the traditional sales model I mentioned previously. Best deal guarantee and parity should not apply in flash sales in a standard way with the group-buying flash sale model for travel, as this is a marketing promotion primarily towards a given market at a given time – so the price should be in relation to how big the given market is and how many potential customers are reached through the promotion and how long it lasts.

New players are launching their operations in Europe. How do you assess the market to shape up?

Gregory Linn:

There is definitely going to be more consolidation in the market, as large number of players that have launched in the last year have either been bought by larger players or have closed down due to lack of funding and lack of reaching sufficient growth in user base. There might be room for some new niche players, otherwise 3 to 4 companies will probably shape and lead the development of the industry.

 

EyeforTravel’s Online Marketing & Social Media Europe 2011 Gregory Linn, Director - Hotel & Travel Europe, Groupon is scheduled to speak at the forthcoming EyeforTravel’s Online Marketing & Social Media Europe 2011, to be held in Amsterdam (October 10-11) this year.   For more information, click here   Or   Contact:   Gina Baillie VP, Marketing, EyeforTravel E: gina@eyefortravel.com T: UK +44 (0)207 375 7197

 

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Nearly all touch smartphone and iPad users use their mobile device for travel-related activities

A study has found that 67 percent of iPad users are frequent travellers, 60 percent have booked travel with device, and 93 percent regularly engage with device while traveling.

According to Greystripe’s research, Smartphone and Tablet Travel Insights, recently conducted on the use of touch smartphones and iPads in travel, while nearly all touch smartphone and tablet users use their device while traveling, iPad users are more likely (60 percent) than iPhone and Android users (49 percent) to use their device to make a travel booking.

Greystripe surveyed 971 touch smartphone and tablet users in order to better understand how frequent travellers use their mobile devices for travel research and planning.

Key findings:

• Most iPad (67%) and touch smartphone (55%) users are frequent travellers.

• Mobile is a critical part of the travel shopping process for iPad and touch smartphone users who frequently travel.

• Nearly all touch smartphone and iPad users use their mobile device for travel-related activities, including research and planning travel.

• Nearly half of touch smartphone users and the majority of iPad users have booked travel using mobile apps and websites.

• Touch smartphone and iPad users who travel frequently differ slightly in usage of their mobile devices for travel research, planning and booking.

• iPad users are more likely to book travel using their mobile devices, likely due to the iPad’s larger canvas and enhanced navigation.

• Touch smartphone users are highly influenced by discounts, promotions or coupons when making travel decisions. iPad users are less price conscious and are less influenced by discounts, promotions or coupons.

Because iPads are so portable, many travellers with the device use it to make travel arrangements:

- 47 percent have used their iPad to book a hotel

- 37 percent have used their iPad to book a flight

- 28 percent have used their iPad to make a restaurant reservation

- 24 percent have used their iPad to rent a car

Greystripe found that both iPad and touch smartphone users are more likely to use the mobile web for their travel needs than apps:

- 69 percent of iPad users compared to 60 percent of super smartphone users have used the mobile web to book travel, get travel information or research local attractions, restaurants and activities.

- 50 percent of iPad and 52 percent of touch smartphone users have used apps to book travel, get travel information or research local attractions, restaurants and activities.

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Priceline.com launches Tonight-Only Deals service

Online travel company Priceline.com has launched a new Tonight-Only Deals hotel reservations service that is being bundled into its Hotel & Rental Car Negotiator app for the iPhone and iPod Touch.

Current Hotel & Rental Car Negotiator app for iPhone users will need to download this newest version of the app in order to get the Tonight-Only Deals service. The company shared that users will have access to an exclusive inventory of 3-star and 4-star hotel room in 34 cities that can be booked for check-in that same night, with a maximum 4-night stay, at discounts of up to 35 percent off published prices found elsewhere.

“Usage trends show that approximately 70 percent of priceline.com’s mobile customers are booking hotels for same-day check-in, so there’s a clear market need for the Tonight-Only Deals service,” said John Caine, priceline.com’s senior vice president, marketing.

The deals will be posted on the service at 11:00 a.m. local time. Room reservations can be instantly booked up until 11:00 p.m. local time, or until they sell out. Cities where Tonight-Only Deals can be found include Atlanta, Boston, Chicago, Dallas, Denver, Ft. Lauderdale, Honolulu, Houston, Las Vegas, Los Angeles, Miami, New Orleans, New York, Phoenix, Portland, San Antonio, San Diego, San Francisco, Santa Fe and Washington, DC. More cities will be added in the future.

The Tonight-Only Deals offering is not yet available for Android.

Priceline.com recently launched its first hotel app for the iPad, with real-time map scrolling and native within-the-app booking functionality. Priceline.com also offers its Hotel Negotiator app for Android.

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“More marketers are placing big bets on digital to tell their brand stories”

Internet ad revenues rose 23.2 percent—to a record $14.9 billion—in the first half of 2011, according to figures released by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC US).

The rate of growth more than doubled year-over-year, as last year’s first-half ad revenues of $12.1 billion had represented an 11.3 percent increase over 2009. Internet ad revenues for the second quarter alone also reached new heights, increasing 24.1 percent to $7.7 billion. That performance compares to last year’s same-period revenues of $6.2 billion, up 13.9 percent from 2009.

Display

Display-related advertising—which includes banner ads, rich media, digital video and sponsorships—totaled more than $5.5 billion in the first six months of 2011. Display increased 27.1 percent over the same period in 2010, substantially exceeding the previous year’s growth rate of 16 percent. Digital video once again commanded double-digit growth—up 42.1 percent over a year ago, and moved close to the $1 billion mark with $891 million in half year 2011 revenue.

Display accounted for 37 percent of all interactive spend in the first half of 2011, with search remaining the leading online category at 49 percent of the total—nearly $7.3 billion. Search and Display each grew about 27 percent year-over-year, with Search more than doubling its previous year’s growth rate of 11.6 percent.

In other online ad formats, dollars spent on lead generation increased 25.4 percent over the same period in 2010, but classified ad dollars were down two percent and email spend decreased 34.2 percent.

Revenue models

Ads using performance-based models increased faster than ads using impression-based models, rising to $9.6 billion. Impression-based ad spend did grow by 10.8 percent, though that pricing model accounted for only 31 percent of total ads, down from 35 percent year-over-year.

Annual Figures

The following chart highlights half-year Internet ad revenue since the IAB began measurements in 1996.

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Hipmunk ready with its Android flight search app

Travel search site Hipmunk has announced the availability of its flight search offering for mobile devices running the Android operating system.

Acknowledging that more travellers are turning to their mobile devices to search, modify, and book flights, the company shared that about 20 percent of its searches come from mobile devices. Hipmunk launched its iOS applications earlier this year.

The app lets users find and book flights. The company says its app was built to respect the uniqueness of the platform and users’ expectations from device. For instance, Hipmunk shared that it has designed the Android app interface to allow users to navigate the app more intuitively. The “back button” works well to dismiss search results, rather than a graphical back arrow like iOS, and the email and sending options have a distinctly Android feel.

Features of the Hipmunk Android App include:

• Flight results displayed in the same visual timeline Hipmunk site users know and love;

• Flights automatically sorted by “Agony,” a combination of flight duration, number of layovers, and price, with the option to sort by flight price, duration, departure and arrival time;

• At-a-glance WiFi information;

• Multiple booking options, including directly with many airlines;

• Booking through the mobile browser, or a finish code to book later from a computer;

• Ability to email search results to a friend, family member, or colleague;

• Android “back button” compatibility to dismiss results;

• Saved searches that allow users to easily flip between up to five recent searches to find their best travel options.

“There’s no technological reason that Android apps can’t be just as good, if not better, than iOS apps,” said Ryan Oldenburg, Android Developer at Hipmunk.

The company launched in 2010, is based in San Francisco, and has funding from Ignition Partners, Y Combinator, SV Angel, Webb Investment Network, Quest Hospitality Ventures, and several angel investors.

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Stelios’ new airline name already registered: reports

Even as easyJet’s founder Sir Stelios Haji-Ioannou intends to set up an airline branded Fastjet, it has emerged that the name has been “registered as a company by someone who is not connected to the easyGroup empire”. According to a report filed by marketingmagazine.co.uk, the name Fast Jet Limited was registered to a private address this week at Companies House.

As per the information available, the registration took place a day after easyJet received a notice from Sir Stelios Haji-Ioannou that he intends to set up an airline branded Fastjet and that a website, www.Fastjet.com, has already been established.

According to The Telegraph, “one James Cooney registered the name Fast Jet Limited on companies house only this week to a residential address”.

easyJet has a number of rights under its agreements with Sir Stelios and easyGroup IP Licensing Ltd (a subsidiary of easyGroup Holdings Limited) as described in the Circular to shareholders dated 16th November 2010. “To the extent that any activity of Fastjet, Sir Stelios or any company controlled by him infringes or would infringe those rights, easyJet will take necessary action to protect the rights of easyJet and the interests of its shareholders,” stated easyJet. “Sir Stelios also alleges that easyJet has breached the terms of the binding comfort letter between him and easyJet of 10 October 2010 and that that letter is no longer in force, claims which easyJet emphatically rejects.”

easyJet continues to seek constructive dialogue with easyGroup and Sir Stelios.

Meanwhile, Ryanair CEO Michael O’Leary has reportedly said that erstwhile rival Stelios Haji-Ioannou may struggle to repeat his success with EasyJet Plc should he start another airline.

“If he were to set up a airline in Europe this time around it would be much more difficult now because Ryanair is much larger than when he set up EasyJet and EasyJet is much larger,” O’Leary said at a shareholders’ meeting in Dublin. “All he has done so far is set up one page on the Internet. I wouldn’t hold my breath.”

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Google introduces AdWords for video

Google has launched a limited public beta of “AdWords for Video”. This new feature, according to the company, enables advertisers to use a dynamic, auction-based system to place and manage video ads on YouTube and the Google Display Network.

“Google AdWords for video combines the science of online advertising with the emotional engagement of video,” stated the company.

The development means advertisers can manage video campaigns across YouTube and the Google Display Network using the same AdWords interface that is used for search, display and mobile ads.

The system offers four types of placement: In-stream (including pre-, mid-, and post-roll, with an opt-out option after five seconds), in-search (in the viewers’ search results), in-display (showing against similar content), and in-slate (the viewer chooses which ad to view while watching longer-form content). Video ads can show on YouTube or the Google Display Network. In the display format, advertisers will have an option to run click-to-play ads. The in-stream option does not require advertisers to pay for the ad unless the viewer watches more than 30 seconds before skipping through.

As explained by a report posted by mediapost.com, a dashboard in the Google AdWords for video platform allows advertisers to set budgets, as well as monitor impressions, views, average cost per views, total costs, and website clicks. Advertisers enter a headline, description and thumbnails, display URLs, destinations and more. A preview window gives advertisers a view into where and how the video will run.

Google is making it easy to get started by offering a $100 coupon to new customers.

The company has rolled out the service in public beta in the US, UK and Germany.

YouTube product manager Lane Shackleton said, “Our vision is for advertisers to reach engaged audiences by easily creating a Trueview video ad campaign and bidding on our revolutionary cost-per view basis. During this test, advertisers will be able to quickly create a video ad campaign using the same AdWords interface that they do for search and display ads. We look forward to rolling this product out to all advertisers in the coming months.”

Trend

When it comes to various forms of content, the power of online videos continues to rise. Video campaigns are being attempted to capitalise on the combination of advocacy and the format in order to showcase inspiring and engaging content.

According to the Internet Advertising Bureau (IAB), two thirds of UK marketers are planning to increase their online video advertising spend in 2011.

A recent survey revealed that when users search online for popular destinations, hotel chains, airlines, etc. a staggering 90% of the first SERPs had no video content. While the power of video to drive new, high-quality traffic to websites has been proven and leveraged in many markets, the e-travel industry seems to be mostly blind to it. This means that any travel website enhancing its offerings by adding video content will stand out from 90 percent of the competition.

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“If the OTAs are going to stay complacent they will get hurt badly”

IN-DEPTH: As Google continues to strengthen its offerings in the travel sector, other meta-search engines will likely take note of Google’s approach, and to some extent mimic their format. As for OTAs, until now they haven’t been required to innovate and Google’s flight search experience exploits that lack of innovation, says Bruno Perez, vice president and co-founder of RevPar Guru.

By Ritesh Gupta

The booking phase is traditionally an area in which the travel sector has placed most of its emphasis. Most sites are travel inventory and booking sites, focusing on shopping processes aimed at maximising RoI.

Google says when it looks at the phases of the travel cycle - Dreaming, Researching, Booking, Experiencing and Sharing – it sees potential for innovation, particularly in the early stages of Dreaming and Researching, and the final stage, Sharing.

Consumers spend a lot of time online on the orientation process, and an interesting question is whether they find what they are looking for in the dreaming and researching stages.

Start-ups in the travel search arena believe that the industry is dominated by established companies stuck on ancient technology who haven't meaningfully innovated their search experience in a decade or more. In addition to start-ups, Google, too, is now gunning for a place in this category.

EyeforTravel’s Ritesh Gupta spoke to Bruno Perez, vice president and co-founder of RevPar Guru about the same. Excerpts:

How do you assess Google’s initiatives in the travel sector?

Google already has innovated by offering a cleaner, simpler interface, which has become the company’s signature style. Think back to when the search engine first launched 13 years ago. It differentiated itself by offering a straightforward portal to the web. Google Hotel Finder offers a similar approach. The search functions are integrated with Google Maps and offers innovative ways to compare and contrast data. (For example: room rate compared to typical price). Compared to traditional listing sites like TripAdvisor, Google’s hotel search results pages aren’t cluttered and overwhelming. Google is extremely creative and therefore there is no doubt they will offer the most advanced features for the search engine.

The Google Flight Search tool definitely wins on great speed. At the same time, the industry says the tool shouldn’t have been out with such limited coverage. Flight meta-search sites point out that the biggest challenge for a meta-search site is coverage. If it does not cover the market in full, there is no justification for the service. What do you make of Google’s Flight Search offering considering other options in the marketplace?

Normally Google loves to use the word “beta” to describe its latest experiments. So even though Google didn’t label Google Flight as an “experiment,” that’s exactly what it is. The fact that they launched with the U.S. market was a good idea as Google can closely monitor and make any necessary changes prior to a global launch. This soft launch approach is appropriate as more Americans travel domestically than abroad and only 30 percent of the US population has passports. The map suggestions feature shown in the initial search is really a new way of highlighting destinations that a traveller may not have considered. The addition of Google Maps into the equation is also by far superior to anyone else. Expanding to the international market will not be complicated for them and the market coverage will most certainly be up to par.

It is being highlighted that the next big move in online travel will address and offer answers to a broader palette of travel questions. It would be about - inspiring where to go and combining data to promote adventure and info sharing about things to do, rather than bunches of data, fares, availabilities and promotions. What do you make of such viewpoint for the travel search category? Where is it headed?

I believe that viewpoint is right on track. Especially in this economy, people want to make sure they get their money’s worth out of travel and seek assurances that the destinations they choose are the right ones. For travel providers to continue to improve their revenues, they must find ways to connect and improve the travel experience.

Google’s beta version Hotel Finder is already offering more than the traditional sites (i.e. Kayak, etc.). It’s entirely possible Google will further incorporate it’s search engine capabilities and offer ways to search for travel based on interests like sports, hobbies or other adventure travel. Promoting the attributes of a destination through websites makes perfect sense. It’s also a perfect opportunity to produce higher revenue.

Do you think Google’s Flight Search is actually quite validating to the travel meta-search space? And as far as the negative impact on a stakeholder from the travel sector is concerned, to what extent would this be right - the biggest losses will likely be seen by the OTAs, since they rely heavily on Google for traffic and have been the slowest to innovate?

The bottom line is that Google began as a search engine and that’s what it does best: streamline the search experience. Other meta-search engines will likely take note of Google’s approach, and to some extent mimic their format. As for OTAs, until now they haven’t been required to innovate. Google’s flight search experience exploits that lack of innovation. If the OTAs are going to stay complacent they will get hurt badly. Competition can be a good thing, however, because the consumer will benefit OTAs will be forced to adjust to improve their search, booking and rewards programmes.

Google Flight Search leaves OTAs in the cold – intentional or early stages? How do you assess the situation?

I think Google Flight Search will ultimately create a platform for the OTAs to advertise. It wouldn’t surprise me if after a successful test period Google throws a bone to the OTAs forming some sort of inclusion or partnership. A Google-OTA partnership would be line with the company’s increasing forays into the travel and hotel industry.

How can hotel and flight meta-search sites leverage their customer loyalty and brand equity to stave off the threat from Google’s foray into the travel arena, be it for its Google Hotel Finder or Flight Search tool?

They’re going to have to come up with a way to reward loyalty, whether it’s through discounts, rewards programmes, etc or focus on customer service levels that promote that loyalty. Also, unlike less known OTAs, Google is already a household name and has broad recognition where certain customer bases may not be aware of specific alternate search options for travel. So, in that respect, OTAs must be aggressive in marketing their own brand. For OTAs it comes down to “out simplifying” Google rather than out innovating them.

Kayak processed 443 million user queries for travel information in the first six months of 2011, representing growth of 49% over the same period last year. And airline travel queries accounted for approximately 86 percent of the queries performed on its websites and mobile applications. What do you make of the role of meta-search sites in the hotel decision making process considering that a hotel selection involves more complex decision making - taking into account exact location, amenities, quality, as well as price?

Google aside, meta-search sites face an uphill battle when it comes to their abilities to handle the hotel decision-making process. For some travellers price comparison is not enough, location, amenities and popularity are important factors that is not readily available on most meta-search site. The sites best able to integrate these customer needs –without overwhelming – are the one best poised to remain significant players in the meta-search marketplace.

Without knowing the actual statistics I think that sites like Kayak and Orbitz will be the losers in the game as far as airlines are concerned. However unless Google Hotel Finder and Google Flight get combined, sites such as Expedia will continue to offer a better travel search experience in offering packages.

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PrivateFly.com secures £2m funding

Online aggregator for private jet charter PrivateFly.com has raised £2 million from eight private investors.

The company’s network accesses over 7000 aircraft based globally.

The funds will be used to roll-out the offering to new international markets, to deliver significant usability upgrades across all its platforms, including those for mobile apps and enhanced real-time integration of pricing and availability with aircraft operators.

“The recession has been a catalyst for change in the private aviation industry, with increased cost-consciousness creating a clear demand for more price transparency and immediacy. PrivateFly.com has used this to its advantage, delivering significant enhancements in response speed, price and ease of use within the charter segment,” said PrivateFly’s chairman, Richard Carrick.

Adam Twidell, PrivateFly’s CEO and co-founder, said that the traditional broker with legacy business practices is being threatened by new business models, just as online travel aggregators challenged high street agents several years ago. The opportunity for change is significant, he said.

Investors in PrivateFly include:

- Travel tech entrepreneur Sam Friend, founder of wotif.com.

- David Scowsill, president of WTTC (World Travel and Tourism Council)

- Richard Carrick ex-CEO of Hoseasons, and PrivateFly’s Chairman

- Damon De Laszlo, an industrialist with interests in many companies in Europe and the US

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