Archive for October, 2005
Looks like yesterday’s hunch was the right one:
In an interview yesterday, Mr. Silverman said he chose to stay most involved in that unit because it probably had “the most upside but also the greatest challenges.”
In particular, the travel division faces powerful resistance from its big suppliers. Hotel chains are balking at the markups taken on rooms sold by the online agencies. And airlines have been fighting the fees charged by reservation systems. This has slowed down what had been very fast-growing businesses.
“We are still making a lot of money, but the rate of growth, top line and bottom line, is slowing significantly,” Mr. Silverman said.
Mr. Keung, the CIBC analyst, said: “Henry wants to leave a positive legacy. The real challenge is the travel distribution business, so that is where he belongs.”Read Full Post | Make a Comment ( None so far )
What’s striking to me in this breakup, is the choice of company that Henry Silverman has chosen to lead – travel distribution. While I’m certainly not privy to what led to this choice, it seems significant in that it tells me he must consider it the most dynamic part of the conglomerate with the highest future growth potential.
It will be interesting to follow the strategy they develop in the marketplace, competing against Travelocity and Expedia. Who knows, more mergers in this space might be on the horizon!Read Full Post | Make a Comment ( None so far )
This looks very much like another step by Travelocity in the right direction, away from the commoditization of online travel by offering added value. This buying tool enhances the customer experience quite significantly and I venture the guess that travel shoppers using this tool might even be willing to pay a few dollars more for the convenience. If executed well, this feature then gets rolled out on the main site with the benefits available to a larger audience.Read Full Post | Make a Comment ( None so far )
The functionaliy touted by Travelocity here for vacation packages is really quite limited in terms of customer focus and flexibility. What is still missing is the possibility to combine multiple destinations in one itinerary, e.g. a European or Asian trip.
Just imagine how larger the growth and potential for margins will be once these types of tours can be booked conveniently and on one site in future!
It will be interesting to observe who will push these key features first in their marketing effort. Travelocity is well on its way on this subject.Read Full Post | Make a Comment ( None so far )
Another article talking about the need for a customer centric approach being necessary to grow online travel in future.
At a recent industry gathering I was quite struck by the lack of awareness among participants of this topic and how important it is to offer customers a vastly improved online travel buying experience to assure profitable growth.
Tools that enable the more experienced segment of online travelers to assume more control over the product they purchase will become a key asset for online travel providers down the road as we move to a more advanced web.Read Full Post | Make a Comment ( None so far )