Archive for March, 2005
Much media coverage has been given the new and not so new travel search sites. WSJ – Ready for takeoff? is one of the latest. In some cases they have been called new travel sites and been compared to companies such Expedia, Travelocity and Expedia, from which they are, of course, very different. Rather than a competitor, they’re perceive a threat to online intermediaries as they further exacerbate the trend towards commoditization of travel products and total price transparency. This can easily leave the brand image of such companies in the dust. Suppliers will be more in control of their pricing but none too happy over the easy comparison with their competitors.
The escape from being exposed “naked” on the web will lie in dynamic packaging, or bundling of components within an overall package price. Of course, packages with published prices will be comparable as well, which leaves the last line of defense, the truly dynamic package, assembled by the customer on a website on the fly without a published price prior to the site visit and completely tailor made with unpriced components. It will be interesting to see how this will affect the travel search engines and their growth potential. The fastest growth is in dynamic packages with single components growing at a slower pace.
The online travel market will undoubtedly look much different five years from know. Who will be the winners?Read Full Post | Make a Comment ( None so far )
This article: JetBlue advocates and practices direct supplier relationships is the second one in recent weeks announcing a supplier entering the market as it’s own tour operator offering the entire vacation experience as a bundled package to it’s customer. The earlier one was about Starwood Hotels & Resorts doing the same.
It clearly shows, that suppliers are turning tables on intermediaries selling their product, often as a commodity with total price transparency, and become the packager themselves thus not only protecting their brand equity but also allowing them an additional margin on the whole package.Read Full Post | Make a Comment ( None so far )
Reading this item in Internet Travel News I asked myself, why is it that the travel industry manages to transfer bad habits of the old offline world to online?
Is it any wonder that many potential leisure travelers are frustrated, not only with the online shopping experience due to bad website design supported by less than perfect technology but to compound the issue by site operators not responding to basic customer questions.
This is one more reason for the owners of the key destination information, in most cases the DMOs, to enter into eCommerce themselves to satisfy the interested traveler right on their own websites rather than passing them on to a less than fully qualified third party online agent.Read Full Post | Make a Comment ( None so far )
The package market is getting more crowded every day.
Here’s another supplier site that offers brand loyal customers a one stop shopping experience SPG Vacations – Starwood Prefered Guest
Today Starwood announced their own dynamic packaging effort with the SPG Vacations site, offering their customers a one-stop shopping experience for air and car rental in addition to the Starwood accommodation. One more advantage is that on this site the preferred guest member will accrue points and benefit from upgrades that are increasingly denied to customers booking via an intermediary. Also, the component price is not disclosed, protecting their brand value.
Today, any supplier can be the entry point for a complete online package booking – how long will it take until DMOs will offer the same on their destination sites, which are one of the first ones visited in the planning process? Just one more competitor – with more to come – in the online travel marketplace.Read Full Post | Make a Comment ( None so far )
TTI’s spring conference to be held on April 12 in London promises to “Lift the lid on dynamic packaging”.
That headline made me perk up, as this is one of my pet subjects I’ve been paying attention to since before the term actually became the buzz word of the industry. I remember the days in 2001 when those two words would make my interlocutors eyes glaze over, but then again, maybe I just wasn’t able to describe it clearly to them. Not the first time that would have happened in my career… The company I was involved in was actually offering dynamic packaging as defined below, but in hindsight it was in a market not quite ready for it yet and also not entirely fault proof, both requirements necessary to succeed in web based selling.
It prompted me to post on the TravelMole bulletin board my own definition of what it is and what the state of it is in today’s online travel industry.
A truly dynamic package is “self assembled” online by the customer combining his or her choice of any number of individual components available and at the end of the process receive in real-time an all-inclusive, dynamically packaged price for either a single or multiple destination trip. What I see today, is far from what I just described.
Only in this model can I see companies being able to maintain a certain margin elasticity vs. being engaged in what is today a totally price focused and almost transparent component pricing model one where even suppliers themselves will no longer be able to maintain a decent margin, no less one that protects an intermediary who often doesn’t add any value to the transaction.
The value add can be delivered and the brand protected by the dynamic packaging solutions I described above where control over the product assembly is given to an increasingly well informed online travel buyer on new generation websites that combine all the elements necessary for planning a leisure vacation (pardon: holiday) rather than a mere trip from A to B.
I added this comment as well:
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The traditional tour operator world is indeed faced with a new and challenging reality with the continued growth of online travel distribution and the introduction of dynamic packaging with its effect on the wholesale model. The days when tour operators were able to write off the online players as strictly sellers of air and maybe hotel rooms are fading fast and that’s with no company I’ve come across at present offering what I would define as true dynamic packaging!
This is another interesting development. Print media in a tie up with a leading online travel site:
Read more about it at HotelMarketing.com
Today’s hybrid consumer needs to be reached at many different touch points across channels and this could lead to interesting marketing campaigns conducted off-line in print with conversion online at the travel site. Of course in reverse it should lead to increased subscriber numbers by exposing the magazine on the site. Both sides could be the winners.
What raised my interest is the idea of micro-sites as enhanced landing pages for the fulfillment of print campaigns. This is an area for improvement over what’s been done in the past, where URLs are posted on print campaigns but not with a specific conversion objective in mind. A well constructed micro-site branded with the campaign theme and only with relevant products that the interested shopper can purchase immediately online should increase conversion rates and be a branding tool online at the same time.
Destinations could be a big beneficiary of such an approach to go beyond their traditional information franchise and offer online conversion on micro-sites featuring relevant products by third party partner providers. Who will be the first to use this highly flexible and portable approach?
This news item from Hotelmarketing.com caught my eye and I couldn’t help but comment below:
Operators are bamboozled by search engine optimisation tactics, and see the issue as the biggest hurdle to competing effectively online.
This is according to a survey released this week by the European Tour Operators Association (ETOA). When asked what the biggest challenge to trading online was, members of ETOA overwhelming voted (more than 50%) for search engine optimisation.
Speaking to TravelMole at the ETOA annual Hoteliers Marketplace, executive director, Tom Jenkins said: “Operators don’t have enough money to spend on search engine optimisation, they don’t know how to do it and they don’t understand the technology – it’s still a young area.”
He added: “Consumers are also continuing to behave differently and the normal divisions between purchaser and supplier are becoming blurred.”
Get the full story at:Travel Mole
Here’s my rant on this:
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SEO a mystery???
Hello….! Where have these people been for the past seven years or so, since the start of online travel? It is amazing to read a comment such as this from an industry leader, claiming that it is a “young area”. They should have prepared their members for the past five years to the rapid developments that are now coming onstream. What was on their agenda? Bus parking space in Florence, or hotel commissions in London? One wonders. You bet that the normal divisions are being blurred. As a matter of fact, not only blurred but erased and at a faster pace than most people expect it to happen. With truly customer assembled “dynamic packaging” brought on by new technologies being developed, and used by the new consumer having grown up with the internet this shift from pre-assembled packages with margins for one or more intermediaries will take place at near lightning speed. Welcome to travel in the 21st century.