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.

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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.

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!

According to Logan Tod at the Travel Trust Association Conference last week (via Travel Weekly) annual growth in online sales is slowing and forecast to fall to 5% a year by 2010. Last year saw a 15% growth rate, this year is more likely to be 12%.

This is entirely understandable in my opinion. We’ve experienced such huge growth lately due to the influx of web users and increasing confidence among consumers in security and trust of websites. It’s natural that it can’t continue to grow at the same rate anymore.

I expect our growth to continue though due to the massive improvements we are making to our site. Keep adapting and optimising your online offering and this slow down in growth may well not affect you at all!

Of course there may well be more growth to be had as consumers move away from travel agents, and the shift to the web from Viewdata for agents themselves may help keep growth higher.

According to a new study from a company called Transversal.

I blogged yesterday about declining customer satisfaction figures with online travel agents. Now today there is a press release from Transversal saying that their study has found that travel sites are amongst the worst at providing customer service online and responding to customer emails.

Travel has one of the slowest response times to emails apparently. Not all that surprising to me (as someone who works in the industry). Out of all the sectors, travel provided the worst customer service online for the last two years. 2007 has seen improvement in travel companies abilities to respond to customers questions but apparently 60% still remain unanswered.

60% is a huge figure to remain unanswered. This needs addressing as you are losing customers and cannibalising your own conversion rates by not even responding to customer enquiries. Time to devote some staff to monitoring your incoming email and making sure you respond speedily!

According to the latest J D Power survey anyway…

The industry as a whole has slipped in their rankings from a score of 810 out of 1000 down to 802. Not a massive slip but in these days of advanced internet applications we should be trying to raise that figure significantly.

Hotwire, Travelocity and Expedia have all done very well. Other findings include:

  • The accuracy of reservations made on independent travel websites has improved slightly since 2006. In 2007, 95% of reservations were reported as error-free, compared with 94% in the previous year.
  • The study also finds that nearly one-half (49%) of all travel-related reservations in 2007 were booked on the web, an increase from 46% in 2005.
  • Across the industry, independent travel websites overall receive their lowest marks for appearance/design of website.
  • Generation X and Y travelers are more likely to book a reservation on price-focused websites, such as Priceline.com and Hotwire.com, compared with Baby Boomers and Pre-Boomers.

Here’s the list of results:

What this says to me is that:

  1. Consumers expect a much better experience than travel sites can provide currently. Their expectations are advancing quicker than we can develop new online experiences for them.
  2. OTA’s are spending so much on advertising and product that they are not advancing technically at the rates they used to be. OTA’s used to be some of the most advanced websites around, no more I’m afraid.
  3. Usability is not being embraced by the travel industry. This needs to happen and fast!

I would love to see if satisfaction has improved with other types of online travel players such as hotel brands and tour operators. My gut feel is that this result is another sign of the consumer shift to doing it themselves and away from online travel agents. Also a sign of the increasing sophistication of the historically lacking tour operators.

Travel Republic has been on my radar since I booked accommodation for a trip to Cuba with them. I found the experience really good, the sites simple to use, they had a great selection of hotels and most of all they were cheaper than anyone else I looked at. Since then I’ve booked with them many times and will continue to do so while they provide such good prices.

It’s pleasing to see that they have come top in a prestigious listing of companies by sales growth rate. The Sunday Times Fast Track 100 was published yesterday and Travel Republic have come top by posting a whopping 284% sales growth year-on-year. It’s the first time a travel business has topped this list That’s pretty damn impressive in my opinion!

Considering that Travel Republic is a fairly new entrant to the online travel agency marketplace, has not got many of the bells and whistles of other OTA’s and doesn’t boast the most amazing user experience, or any web 2.0 features I reckon this is testament to the following.

  • Great stock: they seem to serve destinations a lot of other OTA’s don’t
  • Great prices: I have consistently found Travel Republic the cheapest for hotel bookings
  • KISS: ‘Keep it simple stupid’, there’s a lot to be said for a simple user experience and Travel Republic is so easy to use it is a breath of fresh air
  • Great online marketing: they certainly seem to have PPC nailed and their SEO looks pretty good too

It’s always good news for a sector to see a relatively new entrant doing so well. Keep it up Travel Republic!