Amadeus introduced a new technology service this week called Meta Pricer. The service "allows airlines to optimise marketing and distribution reach by making cost-efficient use of travel search engines". This is a clear effort to re-insert the GDS into the travel booking value chain in an era of increased fragmentation of content. There is no doubt that there is some benefit to suppliers on reducing hits on their Websites from site scrapping technology. In an era of disintermediation, this major distributor is trying to diversify beyond segment revenue and add value in a new way. Interesting move, let's see if airlines who have successfully dintermediated Amadeus by negotiating deals with meta search engines (SideStep, Kayak, Mobissimo) would be willing to add another layer in their distribution strategy in order to reduce automated hits on their sites. Kayak has implemented an alternate strategy using ITA software to calculate fares (with a cache of availability from a GDS) limiting the query to booking only. If more meta-search vendors adopt this strategy, the opportunity for Amadeus will be further diminished.
Wednesday, November 29, 2006
This week I met with Josh Steinitz, CEO of a new start-up called the Nile Project. The Nile Project uses personalization techniques enabling the consumer to create a more customized tour of a city. The consumer explicitly choosers an area of interest, then by using Ajax, the Nile project presents the consumer a limited number of preferences related to those interest. The application uses an Ajax slider (chose a value within a range) allowing the consumer to rate an attribute on a scale (e.g. cost from budget to most expensive). These than act as dynamic filters that present content that meets a consumer's requirements. Additionally the site acts as an aggregator of ratings from other sites (e.g Trip Advisor, Travelpost). As with other Travel 2.0 sites, trips can be shared with friend, relatives and travel companions. Once the itinerary is set, the Nile Project creates a customized itinerary in a PDF file so the consumer can take it along with them on the trip. The Nile Project represents a great example on how personalization can filter content to drive a more customized travel planning experience.
Thursday, November 16, 2006
It has been my pleasure to be associated with PhoCusWright over the last 7 years. I met Philip Wolf in the late 1980s and I have always repected Philip's ability to understand emerging trends and push the industry towards a more user centric approach to online and offline travel. I have been attending Philip's conference since its inception. Each year Philip and his team strive to provide an innovative approach to conference execution and this year was no exception. With a theme "Travel 2.0 Confronts the Establishment" the PhoCusWright team again pushed the envelope by breaking down the barrier between conference content and networking opportunities. Each attendee was able to listen to the on stage content through a wireless ear bud while still interacting with tradeshow participants. I applaud the PhoCusWright team for another successful innovative conference.
Wednesday, November 15, 2006
The VC panel this morning echoed a theme I have heard a lot over the last 8 months: VCs will only invest in online travel companies that have already established customers and revenue. The important thing to remember is that the true disruptors in the online travel market where not funded by VCs. Expedia was an incubator at Microsoft, Travelocity was launched with funding by Sabre and Orbitz was founded by the airlines. History teaches us that VCs are not very good at understanding the next online travel trend and with the current climate most will likely miss the next disruptive application
Tuesday, November 14, 2006
Wow, listening to Expedia, Travelocity, Orbitz and Priceline reinforces the fact that they are really the legacy online players. Nothing new from the panel and a characterization of Travel 2.0 as "tools" misses the fragmented nature of the every increasing number of new travel sites. Will Expedia et al be able to capture the Facebook/My Space generation?
I am listening to the opening panel at this year's PhoCusWright Executive Conference. The Wall Street panel seems to be missing the Travel 2.0 wave by labeling the new move to social networks and other Travel 2.0 brands as not worthy of investment and incapable of stand-alone success. The attitude expressed seems to be missing the next disruptive impact of true Travel 2.0 apps. I am not surprised that this panel is blind to the shift as they all cover the traditional 1.0 companies that has gone public, who in general also are not understanding the latest trend.This group probably ignored Google's growth in the early 2000's because the "search area" was already established. There is a tidal wave a foot and Wall Street is still focusing on traditional 1.0 companies, what a shame.
Monday, November 13, 2006
A little later today I will be off to the PhoCusWright Executive Conference in Hollywood. As an PhoCusWright analyst , I will be blogging both on the PCWI blog site and on this blog as well. With the focus on Travel 2.0, this year's conference promises to be packed with lots of announcements, engaging presentations and controversy -
o Are Travel 1.0 companies ready to embrace Travel 2.0?
o With the recent buzz about Web 3.0 ( the semantic Web), how will that impact this week's discussions?
o What new alliances will be announced at the conference?
I will keep you posted.
See you in Hollywood!
Wednesday, November 08, 2006
Much has been written about the changing travel distribution landscape. The four GDS have been forced to lower their fees in exchange for "full content" agreements with the airlines. A closer look at these agreements reveals loopholes regarding special promotional fares. Recently there has been some rumbling from the major hotel chains about going direct. TMC platforms such as TravelBahn (Amex) and Symphonie (CWT) are being promoted as the ultimate solution for total content. GNEs have emerged as viable aggregators and alternate distribution platforms.
Within this context, old models continue to be the dominant theme as the traditional distribution players promote their definition of total content. A key point missed by this familiar discussion concerns the very nature of the Internet itself. So let me ask, how many travel Websites are there on the Web? What percentage of these sites have content in a single system? This facetious comment does have a point. There is no limit on content on the Internet. One might argue that there are a limited number of airlines, hotels and car rental companies so therefore there is a limit on the number of potential content sources. That may be true, but once you add new Travel 2.0 sites that promote user generated content, predictive modeling or mash-ups of fares and maps, the true nature of content is revealed. I believe that no single system will ever have total travel content. Ultimately it is the consumer who acts as the ultimate aggregator. The continued discussion which paints content as finite, misses the very nature of the Internet. Travel 2.0 will be followed by Travel 3.0, 4.0 and beyond. The way we think about online travel may be radically different within 10 years. Let's abandon the archaic notion of total content access and recognize that the travel industry has been permanently changed by the Web. Expecting any one source whether GDS, OTA or GNE to have full content is not only outdated, but ignores the very nature of the Web. At the end of the day it is the consumer who decides the relevance of content sources.
Thursday, November 02, 2006
Second Life is a virtual world where you can explore and interact with other online players. Initially Second Life was similar to other online multi-player games where an avatar representing your real or desired self can teleport to anywhere in the virtual world. Second Life gained additional prominence when it was featured on the cover of the May 20th Business Week. In last 6 months Second Life has attracted more traditional corporate entities. Last month my former employer, Sun Microsystems held a press conference in Second Life. Howard Rheingold author of such visionary books such as Smart Mobs, recently gave a talk in Second Life.
The travel industry has also made their mark in this new virtual world. "Starwood, owner of the chic W brand as well as the Westin and Sheraton chains, became the first real-world hospitality company to open in Second Life, and joins a growing list of other companies who are using the online world to build their brand name, test products, or simply sell merchandise (albeit digital merchandise). You can't check into aloft, Starwood's new line of moderately priced, loft-style hotels, until the first quarter of 2008. Since September , you can wander into the lobby of its digital version inside the popular online world of Second Life."
How else could real world travel companies use this virtual world? By definition, your avatar is constantly traveling, though teleportation is much faster and does not cost any money verses an airline ticket in the real world. Who provides a guide for exploring Second Life? The search functionality can be used to pinpoint particular places of interest, but what if a large travel agency developed enough knowledge of the virtual world to create tours? This is only one example. Given the recent corporate focus on Second Life the travel industry needs to pay close attention this virtually world as a way to promote their brand and provide services at a fee.