Confronting the Social Buying Dilemma!

By - Marco Saio - Industry Analyst!

The Expedia-Groupon partnership has finally stirred me to acknowledge and poke an inquisitive stick at the new 900 lb gorilla in online travel: the social buying phenomenon.

During this period of strained supplier-OTA relations and Google search domination, the concept of group/social/daily/ buying (insert buzzword bingo here) further adds another interesting and disruptive dimension to the online distribution power struggle.

The group buying trend is flourishing very rapidly, this is unquestionable, the question though is how will this affect new business models for travel suppliers and now OTAs?. 

Let’s dig deeper and consider the potential benefits and risks facing suppliers using basic scenarios. The four biggest group buying companies for travel deals are; Groupon, LivingSocial, Coupons Inc and Gilt Group.

Ryanair's cautious. Are oil prices or Facebook to blame?

By - Tim Gunstone

Ryanair is cautious about future growth…it blames oil prices, I would like to know if customer mobile browsing habits or Facebook is also an issue?

The Irish Times on Wednesday last week told us “Despite plans to cut its winter capacity, and the hedging the airline has put in place, it expects its fuel bill will rise by €350 million in its 2012 financial year. As a result, net profit is expected to remain flat at about €400 million, a level that falls considerably below previous market expectations of €490 million.” 


For the full story go to http://www.irishtimes.com/newspaper/finance/2011/0524/1224297637594.html

Is the travel industry in rude health? Or just doing a Nero and watching their industry burn?

By - Tim Gunstone


If the last 2 years have been hard for you as a travel professional, it’s been really hard for me as a publisher of travel conferences, news and research articles. In the hands of cost focussed (and I would say) short sighted CFOs, the industry limited their purchases of research, conferences and pretty much anything that helped you plan for a successful future ….this made life in EyeforTravel harder for a while.

But the first half of 2011 has seen a 100% turn around, dynamism and optimism is back and as a result all of our shows have grown. This belies my grim weekly reading of the Economist. So who is right, the seemingly dynamic travel industry? or the doom and gloom of the Economists?

User reviews – A missed opportunity for hotels?

How to manage user reviews continues to be an issue that puzzles many hoteliers across the world. Should you reply to each review to show you are listening? Should you leave conversations about your hotel to continue uninterrupted?   Should you encourage guests to post user reviews following their stay?

Although the answers to these questions may seem obvious to some, in my opinion hotels are still not getting it right.

I’ve recently been on holiday to Italy and stayed in a wide variety of places ranging from small B&Bs in the middle of the countryside to bustling beach resorts. I enjoyed each and every place I stayed and whilst some have since asked me to leave my comments online, most properties have not asked.   

I feel that this is a missed opportunity.  If asked, I would not only share my enjoyable experience of their property but would also provide constructive feedback. I'm a busy person and to be honest unless I’m prompted it’s far too easy to forget to go online and write anything.

Google’s acquisition of ITA Software is approved

It’s been a dramatic weekend for the online travel industry as last Friday saw The US Justice Department approve Google Inc's purchase of ITA Software (but with stiff conditions).

The deal, which had been rumbling on for months, will have sizable implications for the online travel industry.  It represents a huge shift by Google into vertical search, something which has long been feared by online travel brands.

Google said it was "excited" to get the deal approved, and would soon bring out a new travel search tool. 

Stating on their blog ‘How cool would it be if you could type "flights to somewhere sunny for under $500 in May" into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily?’

Whilst they might be excited, many online travel brands including Kayak, Farelogix, Sabre and Expedia are not.  Last autumn the site - FairSearch.org - was set up to fight the deal.  They argue the deal will harm competition in the industry, limit innovation, and expand Google’s dominance in search overall.


FairSearch.org are however pleased by the announcement that antitrust laws will be enforced.   They feel this enforcement action represents a significant milestone against anti-competitive behaviour.

The deal will most certainly affect search traffic – we’ll be discussing this (the good and the bad) in upcoming posts so stay tuned!

It’s important to note also that the deal will still be subject to further disputes.  The Federal Trade Commission and Justice Department are both contemplating an investigation into claims the internet search giant manipulates its results but there has been no decision made on which agency may take it up.

EyeforTravel

April Fools Winner Announced!

The winner of the free pass was chosen this week after a joke-off on the twittersphere. We invited all our contacts to tell their best travel joke to win a free pass to The Travel Distribution Summit Europe this May. Elliot Pritchard of Travel Republic was the chosen one- with this joke:


 "How many copywriters does it take to change a lightbulb? A: The dark is a wondrous place, full of mystery and intrigue"


We liked it. Runner up goes to Greg Abbott of DataArt for his excellent un-PC jokes. See #tds2011 on twitter to see them!

EyeforTravel

The Rise in Travel Deals in the Online Travel Space - Hotwire launch in the UK

Last week I had the pleasure of meeting with Clem Bason, President of Hotwire, the leading US discount travel website. He was visiting London for Hotwire’s launch into the UK market.

Owned by Expedia, Hotwire offers discount hotel deals in cities worldwide.  Unlike flash sale sites such as the private sale site Jetsetter and group buying sites like Groupon and LivingSocial, the key difference with the Hotwire business model is that the customer does not see the name of the hotel when searching for discounted offers. 

This enables the hotel to offer heavily discounted deals without fear of damaging their brand name. I feel that this is an important differentiator as many hotels partnering with flash sale sites don’t seem to be considering the damage to their brand. A cheap deal at a hairdresser’s might lure a customer back if they are impressed with the cut, but taking a hotel break for leisure is not something people have the luxury of doing that often – surely  making them unlikely to go back and pay full rate? I see most flash sale buyers to be bargain hunters in search of that one time deal.

When quizzed on the competition from the sudden flood of flash sales sites offering travel deals, Clem did not see them as a trend that has longevity.

Lastminute.com already has a similar unnamed hotel discount offering to Hotwire for the UK market with their ‘Top Secret hotel’ option however Clem was not afraid to take on the competition highlighting that Hotwire offer a wider range of hotels that can be booked for a prolonged period and not just 1 or 2 nights.

Hotwire aim to encourage travellers to consider booking their hotel deals for longer periods which enables the hotelier to discount further. I think this is ideal for hotel bargain hunters. I personally love researching specific hotel details before booking a place to stay though!

Travel Ticker® which is part of the Hotwire offering has interesting behind the scenes functionality whereby the customer is offered deals that specifically relevant to their prior search behaviour on the site. Collecting such information on consumers and their preferences is certainly a key trend to watch in the online travel space and will be something we will be discussing in more deal over the coming weeks.

EyeforTravel