U.S. online travel players to focus overseas
February 15, 2008
News here from ZDNet that some of the largest online travel agencies in the U.S. may shift their focus abroad in order to keep growing their business. Chief execs at Priceline, Orbitz and Expedia all said at a summit this week that they would be focusing on emerging markets in an aim to capture as much of those markets as possible.
Asia-Pacific seems to be the particular focus but there is still work to be done in Europe by some of these large players. Orbitz, Priceline and others such as Travelocity do not have the profile in Europe that Expedia have built up. I’d expect to see some more aggressive tactics over here from companies like them.
This could make it an even tougher year from domestic players especially with the economic climate in the U.S If the Americans stop spending I’d expect them to put their efforts into regions which are not so economically challenged.
Expedia sees economic worries around the corner
February 15, 2008
Good article from Reuters here talking to Expedia CEO Dara Khosrowshahi about the prospects the current economic climate presents to the online travel agent.
It’s yet to show whether it will bite in the UK. Apparently more people than ever have booked their holidays in January (here and here from Travel Weekly). They believe 16% of people who plan to travel this year will have already booked in January. The fear among travel companies must be that if the economic conditions really bite we may not see all the rest of the 84% book as their plans may change as they reign in spending.
Time for some innovative marketing and aggressive pricing policies to make as much of the profits as you can before anything worsens perhaps? Or time to book a cheap holiday online.
How might an economic downturn affect the online travel market?
February 13, 2008
Reuters have been holding a Travel & Leisure Summit in Los Angeles and this was one of the topics of conversation. The main answer seemed to be that deals will be key!
While consumers may tighten their belts, hoteliers may give better rates to online travel agencies as they will be more eager to fill their rooms. This should really benefit the large online agents such as Priceline, Expedia, Orbitz etc.
While a recession could erode demand generally it can also have the opposite effect in the activity of bargain and deal hunters as more people hunt for something affordable. This could benefit not just the big players but also the price comparison websites as they have access to so many rates they are the obvious place for any bargain hunter to start their search.
Another factor of economic weakness could be airlines who cannot fill all their seats, this should push them to offload unsold stock to online travel agents and may mean that there are some better deals than usual available.
Of course this is all conjecture, at the moment we have no idea how bad an economic downturn could get (wait for the commercial property market to show it’s weakness) or how long it could last.
My tip for this year is price comparison websites. They are positioned well as far as price goes for a year of weaker demand and this has to be the year that they finally improve their user experience to a point where they are so easy to find deals that they start to erode market share of slower moving websites (remember, a lot of price comparison sites are technology companies rather than travel). Looking forward to seeing how Kayak, Mobissimo, Travel Supermarket etc get on in this economic climate!
Online travel stocks downgraded
February 7, 2008
CNN is reporting that some U.S. online travel stocks have been downgraded and as a result many more have dropped in value. Priceline, Orbitz and Expedia have been downgraded by analysts and Travelzoo have underperformed.
It’s interesting, makes me wonder if there is more about this than economic shocks in the U.S. I’d hazard a guess that they are beginning to suffer to price comparison sites and more technologically adept traditional players.
The growth these online agents experienced a few years ago had to slow eventually and it looks like the market is displeased. Expect Expedia to do best as they now have the media angle with Tripadvisor advertising revenues to take into account.
Tripit gets a business focus
February 5, 2008
Business travel arrangement has always been best left to someone with experience at making sure all the timings match and everything runs like clockwork. Now Tripit have branched out by announcing a move to provide services aimed at business travellers and those who arrange/manage business travel.
I’m really loving Tripit, the beta works amazingly well and it’s definitely got a long life in my opinion. I’d like to see them actively trying to get more travel providers to sign up to allow their email confirmations to be processed as soon as possible. At the moment I’m just testing it and I’d really like to be able to play with it for real using my own travel plans. The new business functionality allows you to add meetings into an itinerary. A Tripit travel plan can now contain all your travel plans along with daily weather, driving directions, client meetings, restaurant reservations, city guides and more (massive room to cross sell off the itinerary here).
What’s the future for Tripit? Well, it could do fine on it’s own if it applies a sprinkle of advertising in the right places, or maybe it will tie up with online travel agents or become an affiliate to other sites and offer suggestions to fill any gaps in your itinerary (now that’s quite a nice idea, gaps for travel products but also pre-travel products maybe, copyright me please Tripit 
). However, my one fear for Tripit is that they get bought by a major player and just become a way of them helping users organise travel. Tripit adds the most value because it’s a standalone site and not linked to anyone, I hope they stay independent as they show so much promise!
Travel predictions for 2008
February 5, 2008
PhocusWright has released it’s 2008 Travel Trends report which looks at some of the developments in the marketplace that it expects to dominate the year. There’s a brief overview here.
In short they expect:
- Mobile to grow (no massive surprise there, it’s been coming for years but travel has been very slow on the uptake)
- Consolidation in the industry to continue (again a safe bet, I don’t think we’ve seen the last of the mergers, however this year I expect to see online only concerns looking at mergers to stimulate growth and increase market share)
- Social and e-commerce approaches to converge (strange one this, I know there’s a lot of social experiments that are totally unconnected to a companies e-commerce facility but this will continue as players find their feet in the social waters. Any decent foray into social should always have an e-commerce edge anyway, even the most brand focused campaign should be aiming to drive bookers at the end of the day)
- Metasearch to come of age (this could be the biggy! I’m waiting for Kayak or someone like that to launch fully dynamic packaging through metasearch, that could be a clincher that sees off the competition. I also expect tour operators to move towards a more metasearch model online by supplementing their product through GDS’)
- Media-based pricing (interesting move from Expedia earlier this year that has triggered this one, will certainly be interesting to see if others move this way, especially those with their own stock as price flexing to match their media spend will be more difficult)
I think they’ve missed one big thing that we will begin to see on travel websites and that’s intelligent or guided search. My number one complaint is the lack of relevance in cross/upsell offerings that are pushed at you during an e-commerce process. The rise of tagging and meta data on products will help push this forwards (as well as the rise in technologies that provide this kind of functionality). Another interesting area to watch will be semantic web, expect to see a travel site of some sort try to get this right this year. Interesting year ahead!
Trends in the European online travel market
January 30, 2008
Denmark’s Center for Regional and Tourism Research has released it’s latest figures on European online travel trends this week.
The report shows a 24% increase in sales of travel products online in 2007 (compared to 2006) and shows they now contribute 19.4% of the market as a whole. They’re expecting a further 18% growth in 2008 and up to 15% in 2009.
The UK still contributes the biggest share at 30% of online travel sales.
Packages accounted for 14.6% of sales, looking like there wasn’t much change from last year. God knows where dynamic packages fit in the report though, there’s no explanation. In fact it must be really hard to classify travel these days with so many sites selling components as a package (of course, as I’ve said before consumers really don’t know what’s a traditional package and what’s dynamic…).
Here’s the breakdown by type of product, full details can be found here.
Online travel user journeys, how to improve
January 17, 2008
More effort put into holiday research than mortgage research
January 17, 2008
According to the Motley Fool, one third of UK consumers put more than 10 hours into researching their holidays before purchasing. They found that only 21% of UK consumers would put the same effort into researching a mortgage purchase and only 11% would research that much for a bank loan.
Personally I’m not surprised, and I’d probably do the same. It’s really an indication of society today and shows that personal pleasure is more important to the populous than financial security.
Good news for anyone in online travel though! Tools to help users perform research are going to be a big deal this year!
