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Archive Category: Partnerships

How are “handpicked” travel deals impacting the interplay between marketing and e-commerce

IN-DEPTH: Expedia’s Charlie Severn says Groupon Getaways with Expedia is arguably the least expensive way for hotels to reach a global audience. The value for hotels will be in establishing relationships with travellers once they do purchase a room. This offers an opportunity to connect with a customer they might not otherwise reach.

By Ritesh Gupta

Travel start-ups don’t refrain from emphasising that travel intermediaries and sites till date haven’t really focused on trip planning, and instead they mainly focused on trip booking. These companies believe that providing truly inspired solutions for travellers will produce important revenue and value gains.

A tremendous piece of electronic commerce is in a shift associated with developments like Facebook purchasing, social recommendations supplanting more traditional marketing, and coupon/flash sales creating a major change in the interplay between marketing and e-commerce.

The concept of private online travel clubs and its members being offered exclusive hand-picked offers is increasingly becoming popular.

The flash sale and group buying space has gotten quite crowded lately, but there is a great range in what each offers. Hotels now need to research the ones they are interested in, pick the one or two that they want to work with and decline the rest.

In this arena, one of the major recent developments has been the launch of Groupon Getaways with Expedia. Online travel company Expedia and local e-commerce specialist Groupon have started their joint offering, as they announced the first live deals on the site this month. The “handpicked” travel deals are being typically offered around 50 percent off retail rates found at other online travel sites.

Inspiration

Charlie Severn, Director of Marketing, New Channels (Groupon Getaways) at Expedia told EyeforTravel’s Ritesh Gupta: “The Groupon local commerce business extends naturally into travel. It is a new, convenient way for consumers to explore the world. Our goal is to inspire exploration, both close to home and far away. Consumers not only get a chance to visit someplace new, but they can buy the deal now and then choose when to travel later.”

Inspiring consumers is a major reasoning among all the players in this category.

For instance, Jetsetter says cracking the code on inspiration is a big focus. Jetsetter was inspired by the editorial and photos of a glossy travel magazine, and it intended to bring that type of storytelling to e-commerce. Its focus: Inspire people to travel; Introduce them to new destinations; Provide a fast and efficient booking engine.

“At LivingSocial Escapes, we set out to inspire travel buying,” Doug Miller, SVP New Business Initiatives, LivingSocial told EyeforTravel in an interview recently. “If Facebook is where people share experiences, LivingSocial is where people discover and buy experiences,” added Miller.

Expectations

As far as the expectations are 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 recently says it has launched with the only Best Deal Guarantee in flash-sale travel.

Severn says Groupon Getaways with Expedia works with suppliers to create deals that cannot be found elsewhere.

“Our goal is to provide a value of up to 50 percent off from what could be found elsewhere in the market. Our travel suppliers benefit by being featured to the dedicated audience of millions of Groupon Getaways customers. The benefit is these consumers enjoy a travel experience they wouldn’t have otherwise considered. In addition, it allows consumers a new convenient way to travel. Buy a travel deal, book and stay at their convenience,” explained Severn.

Suppliers

Severn says hotel suppliers should view this new product as a great way to introduce their brand and inspire travel among a consumer audience that is open to adventures.

In addition, according to Severn, the programme allows travel suppliers to fill rooms that may have gone unsold.

“Finally, travel suppliers have a great opportunity to up-sell an additional a range of options including additional room nights, food & beverage and property activities to drive overall revenue and deal economics,” he said.

Jetsetter recognises that the power of private sales is the element of surprise and in ensuring that a consumer cannot “plan” to book via a private sale. When a partner is featured on a private sale site too frequently, the end effect is that consumers will wait for that sale, thereby cannibalising full price business. The company typically recommends a sale on Jetsetter 2-4 times per year, depending on the partner.

At LivingSocial Escapes, it is recommended that one should stay in-control of the opportunity to upsell premium room types or cross-sell amenities through your reservation desk.

“This early engagement with your customers is not possible with all social and flash commerce sites. It turns out that many Escapes hotel partners find customers really excited and ready to further upgrade their experience when making the reservations with their LivingSocial voucher. Thanks to the voucher’s “trip-in-a-box” savings, travellers are free to immediately add a few personal touches to their getaway,” said Miller.

In an interview earlier this year, David Krauter, general manager, SniqueAway mentioned that hotels should make sure the experience and audience of the private sale or group buying site are in line with their target customer. In addition, a property should plan their participation in these sites as part of their overall marketing plan, considering how it fits into the advance purchase strategy for peak and shoulder seasons. Finally, private sale members are looking for an experience, so be sure to include stellar photography that highlights all you have to offer.

“At the same time, hotels should not assume private sale sites are for only last-minute and distressed inventory as they provide excellent access to new customers. Don't assume rate is all that matters for these highly desirable customers. Hotels should make sure that their offer is compelling across all fronts, including travel dates, room types, and the entire stay experience,” said Krauter.

Late last month online travel agency Orbitz, too, launched its weekly members-only flash sale initiative. Exclusive Orbitz “Insider Steals” can be found on Orbitz.com by registered email members only. According to Orbitz, the company’s participating hotel partners recognise the limited-time, members-only aspects of this offering, and “are willing to offer extremely attractive rates in exchange for broad email promotion to millions of Orbitz members.”

Concerns

Over the last month or so, concerns have been raised about Groupon-Expedia offering. For instance, it is being questioned: could the Expedia/Groupon combination turn hotel rooms into a commodity like an airline seat – a product with little or no differentiation – left to compete almost exclusively on price? Forrester referred to high cost and revenue management challenges (the potential lack of controls and large volume of sales will strain travel sellers' revenue management models and pose a credible risk of dilution).

Commenting on this, Severn said the Groupon Getaways with Expedia channel provides suppliers an opportunity to generate exposure for their brand among its shared customer base of 50 million consumers.

“Because the channel limits the # of deals that are featured each week, travel suppliers benefit through strong exposure and high consumer engagement,” said Severn. “In addition, Groupon Getaways with Expedia allows consumers new experiences and adventures. This focus creates a wonderful customer experience, but also adds brand value for participating suppliers.”

Expedia says its offering represents a new marketing channel for hotels to reach more than 50 million combined Groupon and Expedia members, many of whom are highly engaged in social media and often share great Groupon deals with their networks.

Promise

Severn says “this channel is arguably the least expensive way for hotels to reach a global audience.”

“The value for hotels will be in establishing relationships with travellers once they do purchase a room. This is a terrific opportunity to connect with a customer they might not otherwise reach,” said Severn.

The field of travel social and flash commerce sites will grow, and clear differences will emerge. Some will bring travel industry expertise into the heart of the company, and some will outsource it. Some will create demand and inspire travel, and some will simply push deals on unsold rooms. Some will build a global audience, and some will focus on a select segment. As Miller says in general, the concept of social or flash commerce works for travel.

“It’s highly measurable and performance oriented,” concluded Miller.

Read More:

Assessing the latest trends in the social buying category

Pioneering a new category in the online travel space

“Private sale sites aren’t only for last-minute and distressed inventory”

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“Asia” – The travel industry buzzword

This coming March the Travel Distribution Summit Asia 2007 is returning to Singapore. A selection of the most highly qualified speakers from the most trusted worldwide travel brands, will meet to discuss the opportunities and challenges of this evolving market. Companies represented include: Expedia, Cathay Pacific, Virgin Blue, Shangri La Hotels and Resorts, Hilton, Continental Airlines, MakeMyTrip.com, Abacus, Travelport, Europcar, Yahoo!, Zuji, SpiceJet and many more. (for a full list of speakers scroll to the bottom of this article)

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Sabre Travel, Proximus Belgacom sign deal

BRUSSELS -- Sabre Travel Network, a global distributionsystem (GDS) that connects travel suppliers and agents, has signed a contract with Belgian mobile phone operator Proximus to make its Virtually There personalised travel website available through Proximus’ wireless Internet service. The deal gives Proximus customers who book their travel through a Sabre Connected travel agent full access to their personal travel details at virtuallythere.com, via the Proximus network.

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Motorola, Microsoft jointly market smart phone

Motorola and Microsoft have jointly introduced the new Motorola MPx200 mobile phone with Microsoft Windows Mobile software, the first in a series of smart phone and Pocket PC wireless devices designed to create a virtual "remote control" for the Web-centric, work-centric, mobile professional. The alliance of the two companies will also include cooperation on joint marketing and wireless developer programs.

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MSNBC offers Wireless Traveler news service

REDMOND, Washington -- MSNBC.com, the web site of television network specializing in breaking news and original journalism, has launched MSNBC Wireless Traveler, a way for unwired mobile professionals to stay on top of the latest news and information. MSNBC is a 24-hour cable and Internet joint venture of Microsoft and NBC News.

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Microsoft and partners make Wi-Fi access easy

REDMOND, Washington -- Microsoft is teaming up with high-speed wireless service provider T-Mobile HotSpot as well as Boingo Wireless and Wayport with the goal of making it easier for U.S. customers to find, access and use Wi-Fi network discovery configuration capabilities.

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Boingo, Intel promote wireless for business travel

SANTA MONICA, California -- Boingo Wireless has signed an agreement with Intel to initiate a joint marketing campaign promoting wireless Internet access services to business travelers. The marketing campaign is in conjunction with the recent introduction of Intel Centrino mobile technology for notebook PCs that features integrated wireless LAN capability.

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Wi-Fi offered at key business travel locations

WESTLAKE VILLAGE, Calif. -- Nomadix and Swisscom Eurospot have announced several key business locations at airports, major rail stations, hotels and conference centers in the United Kingdom and Germany that have been enabled for public access Wi-Fi.

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Wi-Fi access for guests now at smaller hotels

With the rapid growth of wireless Internet access installations in hotels in the past year, it won't be long before guests regard this new technology as a standard and routine service. Only a few months ago, new Wi-Fi hotspot networks were trumpeted by luxury hotels. But today, wireless services are available at lower-priced, smaller hotels.

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Cometa Networks formed to offer national Wi-Fi

NEW YORK -- Technology giants AT&T, Intel and IBM, and global investment concerns Apax Partners and 3i are pooling their collective technologies and capabilities to create a new company, Cometa Networks, that will provide broadband, wholesale, wireless Internet access nationwide.

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