An approaching "Storm" of smartphone competition

Things are heating up even more on the smartphone front as RIM introduced the new BlackBerry Storm which will be available later this month. RIM's BlackBerry owns the enterprise smartphone mobile space. Recent surveys we've completed as part of the PhoCusWright special report "The Future of Mobile Travel" shows the iPhone gaining ground on the BlackBerry with a significant number of frequent business travelers (at least 4 business trips a year) stating that they are considering an iPhone.
The growing smartphone war has positives and negatives for the travel industry. On the positive side, smartphones patterned after the iPhone will have a more practical mobile Web browser experience. The downside comes in application development. Our research is indicating that downloading applications is a more practical strategy than simply repositioning current Website information. In addition to Apple's iPhone App store, Google and Blackberry have announced plans to open app stores as well. The cold reality of this trend is that travel companies who are serious about mobile applications will need to port their app to multiple environments. The iPhone SDK is a good development platform but very closed in nature. In contrast the Google Android platform promises to provide a more open environment for mobile platform development. Even Symbian OS now owned by Nokia is talking about a more open computing approach. Those travel suppliers and intermediaries who believe that simply translating their current Website to work with Web browsers on multiple handsets is a sufficient mobile strategy, will need to rethink that approach as smartphones become the standard device for business and leisure travelers. Yes Web browsing is definitely on the iPhone, but even with the ability to use the two finger pinch to zoom in on Web content, there is a major difference between an iPhone app verses viewing a Web page on the Safari browser.

Here is the screenshot for the Travelocity Web page on the iPhone. Yes you can zoom in but this is still not a practical way to book itineraries.

















Compare that to the screenshot of the Travelocity iPhone App. Sure the Travelocity app does not have booking capabilities but the UI is much easier and more practical to use for a future booking platform, which BTW our research shows frequent business and leisure travelers want (especially for irregular operations!).

The First Android Phone versus the iPhone

T-Mobile introduced the first Google Android phone this week. This long anticipated new platform combines elements of the iPhone (touch screen) and the Blackberry (pull out keyboard). Since I began researching mobile technology for the "Future of Mobile Travel" special report from PhoCusWright, I have been saying that the iPhone is a game changer. This message became more real to me as I purchased an iPhone earlier this month. Like any device it has its pluses and minuses. The same is true with the new Google Android platform. Both of these phones are shifts in the way people view their mobile device. Here's my brief take on the two devices and how they will impact the travel experience:
1) The iPhone - The most exciting part of the iPhone is not the phone itself but the combination of the phone's capability and the large number of inexpensive apps available through the Apple App store. Though downloading apps is nothing new, bypassing the "deck" of the mobile carrier presents a more intuitive, flexible and direct environment to load applications. There are currently 175 apps listed in the travel category and another 121 apps listed in the navigation category. The simple concept of locating yourself though GPS and looking at your immediate surroundings for restaurants, shopping or movie theatres is made simple by apps such as "Nearby" or "Where To". Surprisingly few travel companies with the exception of the online folks such as Travelocity or TripIt have released iPhone specific apps (though a lot more are on the way). Once travel companies start realizing the ease of distribution available to iPhone users I anticipate many more traditional brands populating the travel category. The iPhone is a mediocre email device particularly for those Blackberry thumb users who can type long letters rapidly from the phone. The email application works fine for me as I normally wait to respond (unless it is an urgent message) until I power up my laptop or desktop. I had no trouble connecting the iPhone to my MS Outlook. The Web browser is another strong element, but even with the larger screen and ability to expand using the two finger pinch, browsing on the iPhone is much improved from other devices but NOT a replacement for the Web. Our research has uncovered the fact that many travel companies are simply porting their current Web pages onto mobile devices and even with the iPhone's improved graphics, booking travel on the mobile Web browser can be challenging. The other approach of downloaded apps seems to be a much preferred way to penetrate the iPhone market. A strength that Apple has verses Google is the control of the hardware and software. The hardware control includes the firmware (software that is embedded on the hardware) giving greater consistent performance. The message here is simple, all travel companies should develop applications for the iPhone.
2) The T-Mobile G-Phone wants to be both a Blackberry and an iPhone. Surprisingly, currently the T-Mobile version only connects up with Gmail and in fact you need to have a Gmail account to use the G-phone. No doubt Microsoft Exchange may become a future capability, but until it does the G-Phone cannot replace the Blackberry. I will hold off my full evaluation of the device until I actually see the physical phone. My sense is that the Google Android platform can match the iPhone look and feel and simplicity of Web browsing. How apps are created and distributed will be a key element of the success. According to Strategy Analytics, the Android mobile operating system will account for 4 percent of all fourth quarter smartphone sales in the U.S., a small % but likely to grow. If the Android operating system spreads quickly and if developers gravitate to the application development environment, the same ease of use of downloading apps for the Android powered systems may further cement this process as the preferred delivery of travel specific apps, provided a central store is created. If the carriers remain in control your ability to download apps may be limited by the traditional control the carriers have put on new app distribution. The lack of control over the firmware may be an Achilles heal for the G-phone but it is too early to determine if the need to work with a variety of firmware is truly a market inhibiting problem.

Agent POS International Innovation

My loyal blog readers will recall my frequent posts over the last few years regarding an independent travel agent point of sale (POS) application. An interesting discovery that has been a result of product analysis I am doing for a large Middle Eastern TMC is the fact there is clear trend with many European and Middle Eastern 3rd party software providers to combine various elements of the agent's workflow processes in a multi-facet platform that includes a booking engine, a Web based agent POS, a customer profile database (often referred to as a CRM system), a workflow engine, a mid office and accounting system. I believe that a reason this integrated platform is emerging outside the US has to do the with need for international agents to deal with more complexity at the point of sale and the requirement to generate an invoice from a mid-office accounting program due to the large number of accounts still on credit. The fact that so many travel agencies in different parts of the world still offer credit to corporate accounts and in some cases leisure clients is not a surprise to anyone who understands the global travel market. What is surprising is how 3rd party providers such as Dolphin Dynamics, Tech Tuners and ProCon Solutions have embraced a more holistic approach to the agency needs by providing a solution that supports both corporate and leisure sales.

In his article for PhoCusWright entitled Travel Agency Technology, my colleague Bob Offutt described this platform as the agency of the future:






Now let's compare this with a diagram from a presentation yesterday from TECH TUNERS a Dubai based 3rd party developer and distributor of Sabre's TRAMS accounting system:



















In fact my my diagram from the 2003 PhoCusWright / Travel Tech Consulting report on Dynamic Packaging also describes a similar architecture.

The interesting aspect of this platform evolution is where it is happening and why. In the US the GDS still dominate the agent POS with the exception of mega-TMC initiatives or 3rd party products such as G2 Switchworks POS (now owned by Travelport). There is a clear distinction between corporate POS (e.g. TRX's Agent Desktop) and leisure POS (e.g. Revelex's PowerAgent.) Outside the US due to a need to integrate multiple sources, currencies and accounts on credit, traditional back office functions have shifted to the mid-office. The issues associated with this complex booking process exists for both the corporate and leisure agency. Of course the leisure agency also needs the ability to store net rates a solution that is also offered by many of these non-US third party vendors.

Clearly there is a global trend to provide a more function rich point of sale application for the travel agent. Is there an opportunity to bring this solution to the second and third tier TMCs and leisure agents in the US?

Recent research by my colleague Douglas Quimby of PhoCusWright highlighted the dominance of the GDS platform in the US in his study the "Travel Agency Distribution Landscape" PhoCusWright tracked agency usage of alternative POS technology.
This slide shows that with the exception of the very large TMCs the majority of agencies in the US still use native GDS as their POS.
Clearly an opportunity exists to capitalize on the growing need for a multi-source and integrated application that combines multiple agent processes in a Web based solution.

American Express' Social Networking Initiative

At the NBTA conference American Express announced "plans to launch a business-to-business online networking community for the corporate travel industry." There are a couple of interesting aspects of this announcement. Social networking is finally being embraced (though only a limited short "hug") by the corporate travel community. I moderated two sessions at the conference on social networking and both were well attended. BusinessTravelConnexion.com is being promoted as a way for corporate travel executives, suppliers and other providers to connect with each other in an online community. No one knows how successful this effort will be, but I applaud Amex for launching the initiative. A concern I have was actually part of my presentation during one of the NBTA sessions where I stated that communities naturally exist and cannot be created. Will the Amex Business Travel Connexion tap into existing communities? Will travel managers and suppliers find a forum hosted by the top TMC a proper avenue to connect? Time will tell if the Amex initiative will be successful in tapping existing communities. The other interesting aspect was that I received a call from Amex last week asking whether I would be blogging about the new service. At least Amex is recognizing the power of the Blogisphere.
I also had my first experience moderating a panel at NBTA during an earthquake. I have lived in California for 23 years, but I still have not become accustomed to earthquakes, even though I was at the World Series for the big Loma Prieta earthquake in 1989. Unfortunately we lost about 70% of our audience who fled the session. This is shame as the panelists from Sabre Cubeless and Cisco were excellent. Next year NBTA is in San Diego affording us all another opportunity to experience the earth shake beneath our feet.

AA's battle with Kayak

There has been a lot of media buzz regarding the announcement that AA was pulling their inventory from meta-search engine Kayak. The news was first leaked by Tech Crunch on July 23rd. The article stated that AA was pulling their inventory from Kayak and considering doing the same for Orbitz, which Kayak uses to supplement direct connections with airlines. As originally conceived by SideStep, the meta-search application would satisfy two important market needs: (1) consumers like to compare fares from multiple sources through a single query (2) airlines could benefit from direct bypass of other more costly channels especially OTAs such as Expedia. SideStep was originally launched as a downloaded application that automatically appeared in a sidebar when the user visited sites such as Expedia and entered their flight request information. Recognizing the challenges with downloaded apps, SideStep a few years later moved to a completely Web-based comparative shopping platform. Other sites such as Mobissimo, Farechase and Kayak soon appeared. (note: Farechase was actually the first such meta-search engine and was acquired by Yahoo! back in 2004). At first the OTAs were very negative towards these new meta-search engines. The only exception was Orbitz where Kayak founder Steve Haftner was also one of the original founders of Orbitz and thus had particular pull with his former company. At the PhoCusWright Travdex conference in the spring of 2005 in Dallas, Bill Bliss at that time a senior marketing VP at Expedia, presented a session on why mega-search was a bad idea due to the lack of customer ownership (meta-search engines do not fulfill tickets, but instead send the user to a supplier or OTA site). This negative position soon changed as the OTAs recognized the value of these meta-search engines in generating leads. In fact as the market dynamics shifted and airlines were faced with skyrocketing price of fuel, most of the major airlines stopped compensating meta-search for referrals. At the same time the OTAs continued to provide compensation to these sites. An insider at one of the major meta-search companies told me that as much as 60% of the company's referral revenue was coming from OTAs. AA's decision to pull out of Kayak was based on this reality where more revenue was being shifted to OTAs rather than the AA.com site. The threat to withdraw from Orbitz is more serious and as of this writing has not been implemented. Unfortunately even the best airlines still miss the nature of the Web. Rather than limiting reference sites, AA and other major carriers should be syndicating their booking engine on as many sites as possible. The Web has an unlimited number of specialty sites and syndication has the opportunity to gain incremental revenue from a variety of sources. Comments by AA and other carriers that their dollars are better spend in SEM (Search Engine Marketing), are a bit silly as their brand is so ingrained in the mind of the American consumer that finding AA.com through Google is not a challenge. The idea whereby all consumer traffic could be generated through an airline's site conflicts with the very nature of the Web which is constantly expanding and fragmenting users based on their interest groups. The consumer wants comparative shopping and actions by AA with Kayak demonstrate a lack of sensitivity to the true nature of the Web.

GNEs and GDS bypass

I just returned from a two week business trip to the Middle East working with a client in Kuwait. I've fallen behind again in my blog entries and I will try to rectify that over the next few days.

First up, a discussion of a recent article in Flight Magazine about demise of the so called "GNEs" (GDS New Entrants or "Genies"). This article bemoans the lack of success of these alternative distribution initiatives citing the sale of the G2Swithworks' agent POS to Travelport and the refocus of ITA Software to create a new CRS for Air Canada, as the end of an industry push towards alternative distribution. This article missed a fundamental issue in regards to the GNEs, the source of their difficulties has to due with poor market positioning. To set the record straight, the term GNE was coined by Derek Lewitton while he was Director of Distribution Strategy and Planning at United Airlines. It was 2005 the GDSs and the airlines were in heated discussions regarding new agreements. The prior few years had seen a reduction in segment fee charges by the GDSs related to the airlines willingness to provide total contact (including Web only fares). Derek organized a meeting with large corporate customers and TMCs introducing these new companies (ITA software, G2 Switchworks, Farelogix) labeling them GNEs. Also in attendance were TRX and Cliqbook. The travel and general press latched on to this labeling and throughout the year there were a flood of articles stating how these GNEs would use modern technology to bypass the traditional mainframe based GDSs. The root of the problem was not in these new companies' technology, but rather the positioning of these firms as replacements for the GDS. This was an absurd notion from the start. The power of the GDS lies in the 100,000 of travel agency desktops deployed as well as the engine behind online travel agencies (OTAs) such as Expedia. No single company, no matter how well funded can displace the dominance of the GDSs in the market overnight. In fact, one of the black holes that drained lots of cash and development time at G2 Switchworks was the development of a neutral agent POS. Meeting the complex requirements of the travel agent is not an easy task as many prior attempts (e.g. TRX's SELEX) have yielded limited results. Ironically it was this very application that was desperately needed by Travelport who operate three different mainframes (e.g. Apollo, Galileo and Worldspan). Since 2005 I have been involved with a number of initiatives in both the corporate and leisure space which involved a direct connection into an airline's CRS bypassing the GDS. The reality is that bypass is an evolutionary not revolutionary process. In fact the GDSs themselves are working to migrate their remaining legacy mainframe technologies to more distributed server based computing. The bottom line is that traditional GDS bypass will continue to happen especially as airlines unbundle their services to maximize ancillary revenue. ITA Software's re-engineering of the Air Canada CRS attacks the issue at the source as most airlines operate their CRS as a partition of the GDS with the same limitations that exist with mainframe GDS technology. The most striking limitation is the coupling of the passenger information with the transaction symptomatic of a 1960s IT design created to maximize throughput during an era of very limited bandwidth. With the need for airlines to become more customer centric, this coupling prevents dynamic pricing based on customer value, a basic tenant of CRM. The evolution away from this legacy environment will continue as the GDSs evolve and alternative distribution continues to gain steam on an individual project basis. This is all happening away from the scrutiny of the travel press, until the next round of GDS / airline negotiations. This topic is far from dead just not quite as public as it was in 2005.

SITA Air Transport IT Summit

I am in Brussels today speaking at the SITA Air Transport Summit. My talk is part of session called "Getting ready for your digital traveler". I will be speaking on Mobile based services in travel- where are we today ? Challenges and opportunities".
I was fortunate to share a van ride this morning with Yemmi Agbebi, Director of Portfolio Marketing from SITA based in the UK. Yemmi was directly involved with the Bluetooth test at Manchester Airport. Essentially SITA working with the airport installed Bluetooth stations that enabled various services for travelers. Announcements are made every few minutes instructing travelers to go to a Bluetooth area and and agree to receive messages regarding their flight. Research showed that the average traveler checks the flight board 4-5 before going to the gate. By enabling the Bluetooth communication, travelers received information about their flight lessening the anxiety associated with the boarding process. The most interesting aspect of this test is the impact on airport stores. Once enable and accepted by the user, airport stores send electronic coupons with bar codes that offer discounts to items at the shops. So how did the test go? (note I am quoting these stats by memory so please treat them as estimates). Approximately 7.2 million passengers go through the Manchester airport on an annual basis. 42% of them enabled this Bluetooth connection. The average expenditure per passenger increased from approximately 12 BPS to 16 BPS. The general feedback has been very positive as customers appreciate the information about boarding and the discount offers from the airport merchants.
This is another example of how Europe is way ahead of the US in mobile technology. Considering the current economic pressure on airlines and airports, the Manchester mobile test proves that mobile marketing can have an impact on consumer behavior.

Airline Ancillary Revenue and the Long Tail

This week I am London and I had the pleasure of presenting to and participating in the Datalex User Group meeting. Datalex who has been a Travel Tech client for many years, provides a distribution platform to airlines and travel agencies. The audience consisted of major carriers and travel distributors. One of the hottest topics we discussed is the concept of ancillary revenue. This can be defined in a number of ways. The traditional model was developed by low cost carrier RyanAir who essentially charges for all services (bags, refreshments, etc..) and in addition also sells merchandise on board. Due to the fuel crisis we've seen the legacy carriers follow suit with baggage charges and other fees. The airline term is ancillary revenue, but I believe the real opportunity is the Long Tail. At the conference, I had the pleasure of meeting Chase Cunningham most recently of the now defunct low cost carrier Skybus. Chase was in charge of ancillary revenue for SkyBus. Chase spoke about selling everything from in flight advertising to merchandise (a la RynanAir) . Due to his efforts Skybus even sold Ohio State football tickets on their Website.
I believe the coming wave in mobile and in-flight technology presents an interesting opportunity for airlines to expand the concept of ancillary revenue. By expanding the ancillary revenue definition beyond fees for formerly free services, to more of a Long Tail concept, airlines have a unique opportunity to help promote airport merchants, and destination services. The mobile platform in particular is an excellent way to provide more destination type of services. Rearden Commerce a major corporate booking tool supplier has released a Blackberry version of their product that allows ancillary services such as show tickets and restaurants reservations to be made on the smartphone. There is no reason airlines could not provide a similar service and profit from the referral. When onboard Internet arrives courtesy of suppliers such as AirCell, the airline can use the captive audience to sell a much more expanded version of SkyMall. Now a days when you go to the movies, all sorts of advertising is displayed while you wait for the previews to start. Airlines have an equally captive audience. Of course care needs to be taken to not overload the passenger with promotions as that could anger the traveler and hurt the brand. Providing the right balance of destination oriented content for the on board and mobile experience is in the near future and represents an important ancillary revenue opportunity for airlines.

Is History Repeating Itself with Google Android?

I am old enough to remember the early days of personal computing. In fact the first Mac I worked on did not have its own hard drive and thus required switching out floppies to do any simple computing task. My first non-Mac "personal" computer was a suitcase sized Compaq which ran DOS and Lotus 1-2-3. The advantage of the Mac GUI was obvious. When the first version of Windows was released it contained many Mac like functions and through later releases soon became the dominate GUI for PCs. Despite Apple's initial innovation, Windows based-PCs are the standard.

I am starting to question whether history is repeating itself on mobile devices. There is no dispute that Apple's iPhone represents a game changer in the world of mobile technology. With the first practical mobile Web browser, the iPhone delivers a vastly improved Internet mobile experience, though the telephone aspect of the device is still in need of enhancement. The Google mobile platform is in its infancy, but we should see Android based mobile phones by Q4 of this year. Google has announced an agreement with the Open Handset Alliance, a consortium of 34 handset manufacturers, carriers and chipmakers that have said they plan to support Android products and services. As an open-development platform, third party applications will flourish. Apple's iPhone is clearly the innovator, but the market will likely be flooded with iPhone clones with 18-24 months. Will the Android platform do to the mobile phone what Microsoft Windows did to the PC market? The answer is not completely clear as the mobile industry has many operating systems - Symbian, Palm and of course Windows Mobile. There are also a variety of development environments including Java and Brew. In addition to an innovative design, Apple's iPhone also shifted a significant part of the revenue from AT&T to Apple, something very much on the minds of all mobile carriers. This economic shift plus the power of Google to dominate the mobile market is something to watch as Google Android enabled phones appear later this year.

QuickMobile

I had the opportunity to attend the Dow Jones Wireless Innovation Conference last week in Redwood Shores, CA. The event is primarily designed to connect new mobile start-ups with funding, but the show had some interesting panels where today's hot mobile topics where debated (e.g. open systems, Internet devices, LBS). More on panel discussions coming soon in later blog entries. There were some interesting companies showcased at the event.

I had the pleasure of meeting Patrick Payne CEO of a new Vancouver BC start-up called Quickmobile. The company has developed a mobile marketing platform specifically designed for the global travel and tourism industry. The application enable the delivery of coupon offer to the traveler.

I was very impressed with company's capabilities and approach. Offers that are received are personalized, relevant, timely and valuable to the consumer sent on an opt-in basis only. Quickmobile was able to show how an SMS message can be sent that when accepted sends a bar coded coupon to the user. How can this be used? Here are just a few examples:

• Hoteliers - could use this method to send coupons for hotel services such as a discount at the restaurant, bar or spa to promote on property services
• Travel Management companies or leisure travel agents can promote "long tail" services (restaurant discounts, activity promotions) to increase loyalty and add to traveler convenience.
  

Mobile advertising will explode over the next few years. The key to mobile promotional campaigns is giving the consumer control over what they receive and making sure the offer is relevant. Quickmobile understands this need and is a company to watch.

Microsoft acquires Farecast

Yesterday's disclosure that Microsoft had acquired Farecast was a surprise to many in the travel industry. Is this a new online travel initiative from the original creators of Expedia? Will Farecast be integrated into Microsoft's Live Search?
First a bit of background. I was first introduced to Oren Etzioni through my client Fetch Technologies. This was back in 2002 when the company was called Hamlet. The founders of Fetch are well recognized experts in AI as is Oren Etzioni . I have to admit that I was a bit skeptical during my initial discussion with Oren on whether a predictive fare model would be embraced by the travel consumer. My next interaction with Oren was at a PhoCusWright Travdex conference in Dallas back in 2005. My colleague and friend Philip Wolf commented to me that Oren's presentation at Travdex was the most technical he had seen. This presentation helped reinforce that Farecast was more than a service that tracked historical fares to recommend a buy or no-buy decision. The algorithms created by Mr. Etzioni use advanced AI technology to look at historical fare history creating a recommendation based on complex data mining techniques. It is my belief that this is the core value recognized by Microsoft and thus triggered the acquisition. I doubt if Microsoft is interested in becoming a major travel player, but I do anticipate that the Farecast technology will be expanded to other non-travel segments and incorporated into Microsoft's Live Search. Of course things could change if the Microsoft/Yahoo deal went through as Yahoo! has many travel properties including Farechase which was the first meta-travel search engine.

Travelport and G2Switchworks

On Friday April 4, 2008 Travelport announced that they were acquiring from G2 Switchworks "certain software assets and intellectual property to be used in the development of a future Travelport agent desktop solution." Given all the hype of GDS verses GNE over the last four years, what does this deal mean to alternative distribution?

There are a number of ways to look at this announcement.

• The need for a multi-source desktop- G2Swithworks recognized from the start that to be successful as an alternative distribution platform they would need to provide travel agent call centers with a new multi-source desktop that could mirror the multi-source nature of self-booking applications and sites. Over the last four years G2 has worked hard to develop this platform. Despite this effort, though travel management firms (TMCs) particularly the second and third tier TMCs, have tested the G2 platform, few have actually signed up to run their entire agency using the desktop application. One reality is that despite the drop in financial assistance from the GDS to the TMCs, this type of monetary compensation for larger TMCs still exists. With economics playing a role in keeping the GDS as the platform for the TMC, G2 found that having a better more intuitive application was not enough to develop the necessary beachhead customers to be successful.
  
• A recognition that current solutions do not provide the right platform for TMCs going forward - On the Travelport side, with the acquisition of Worldspan last year, Travelport not only had agents on their Focalpoint/Viewpoint desktop but also inherited the Worldspan's GO! point of sale solution (POS). The announcement to acquire the G2 POS is confirming that neither of these long standing agent desktop applications can truly support the multi-source and workflow needs of today's modern TMC agents. A simple but often overlooked aspect of the G2 platform is the housing a more robust traveler profile outside the GDS. This is a critical requirements for any truly multi-source platform. An GDS-independent profile should allow the airlines to target specific customers with dynamic offers representing their value as a customer, a clear part of the unbundling effort.
  
• Eliminating a potential competitor: By acquiring G2, Travelport may simply be eliminating a potential competitive platform that would put pressure on the GDS/Airline negotiations when they are set to expire in 2010/2011. In addition, the Travelport action may be designed to prevent Sabre from acquiring the G2 platform. A bit of history of the GDS might put this into a different perspective. Back in the early 1980s at that time Apollo (the domestic GDS that is now part of the Galileo brand) licensed a travel agent back office system from an independent firm called ADS. The goal was to expand Apollo's offerings to travel agencies by becoming the chief provider of back office accounting software. After this announcement, Sabre, Apollo's chief competitor, bought the ADS company and incorporated it into their agency solution essentially trumping the licensing deal. This scenario was repeated in the late 1990s after Galileo licensed the GetThere corporate booking solution, Sabre turned around and acquired the company. With both G2 and Sabre now both owned by the Texas Pacific Group perhaps Travelport perhaps was simply heading off another potential competitive effort that would have again allowed Sabre the upper hand in a new platform initiative.

The G2 approach further reinforces the concept of a shift of aggregation to the TMC from the GDS. Today even with content agreements with the major airlines, no GDS has total content as some low cost carrier (LCCs) and Web only content still exists.

So what does this mean for the big picture of alternative distribution? I have repeatedly stated my belief that the GDS are not going away. The role of competition often is to accelerate development outside the constraints large companies. With perhaps the exception of Apple, few companies innovate due to the dysfunctional nature of large corporations. Time and time again, particularly here in the Silicon Valley, small start-up create innovative applications disrupting the market. When the disruptor is acquired, the larger organization can benefit from the start-ups innovation. I see the G2 acquisition by Travelport as an important evolutionary step in travel distribution, providing the market a much needed robust multi-source platform for TMC agents.

American Airlines Facebook Widget

American Airlines announced today the release of a widget for Facebook in an effort to "understand how consumers interact with one another"." The tool allows Facebook users to share trips within their network and comment about their experiences. American has always been a leader online going all the way back to the late 1990s when they introduced an early attempt at personalization with BroadVision (later replaced by ATG) on AA.com. I doubt the agenda is really to understand customers as AA has extensive research on customer behavior both at AA.com and through more traditional survey methods. It is more likely the widget's purpose is to understand how AA can work within a social network to help influence future bookings. AA is also working with Microsoft on delivering ads in Facebook. As with any social network effort, sometimes the results are not what the vendor expects. For example, here is the first comment on the TravelBag Facebook page: "The design sucks. It should allow the end user to control what shows on his/her profile page. Get rid of the goofy suitcase. It eats up about an inch of screen space and adds absolutely nothing to the user experience [just add "American Airlines" into the box title]." And this comment "Disappointed as a loyal AAdvantage member that this can't pull in my existing reservations from AA.com." These comments point to the challenges of creating widgets for social networking and the need to integrate the widget with the existing reservation process. That being said, I applaud AA's effort to find a place within the expanding role of social networking.

Unbundling Air Fare Costs

,Today Delta matched earlier moves by United and USAirways to charge $25 for a second checked bag. This is both a reaction to increased operating expenses due to escalating fuel costs as well as the clear desire to unbundle airfare pricing. It is interesting to note that this fee " will not apply to first-class or business-class customers or members of Delta's frequent-flier program who log at least 25,000 qualifying miles of travel per year." "Those travelers will still be able to check up to three bags without extra fees". This week JetBlue also announced a fee for seats with more legroom, a practice used by United for many years. Apart from the obvious economic motivation for these actions, unbundling airline pricing is as much about customer segmentation as product differentiation. For years the airlines have resisted the notion of the airline seat as a commodity. Despite this effort, most travelers only differentiate the airline's product based on their personal loyalty value (e.g. frequent flyer programs and in particular the ability to upgrade) or poor service experience. I have to confess I have fallen into this trap as well as every time I fly AA I seem to have a problem, though countless stories of a similar nature can be found with any airline. The more interesting effort at play here is the customer segmentation strategy. Yes airlines tend to be lemmings and add fees or change services based on a market leader implementing a change, but trying to better target higher value customers is a noble goal for any business. The irony of the airline industry is that thought the carriers pioneered loyalty programs, they have great difficulty in implementing customer segmentation at the point of purchase. This is both due to the number of players in the value chain (e.g. travel agency (or TMC) GDS, payment providers) and the legacy technology used to distribute their inventory. As long as the customer information is wrapped together with the transaction stored in a old 60's style mainframe, airlines will have continued challenges in their attempt for differentiation their products and ultimately offering dynamic pricing reflecting the customer's true value. The market leader in unbundling airfare costs has been Air Canada and thus their motivation to re-engineer their airline CRS system with ITA software.

WiMax at airports

WiMax's first commercial rollout may very well be at U.S. airports. The goal is to provide a faster upload of manifests, flight plans and onboard entertainment for incoming aircraft. For those not familiar with the term, WiMAX (Worldwide Interoperability for Microwave Access) is a wireless industry coalition whose members organized to advance IEEE 802.16 standards for broadband wireless access (BWA) networks. In other words, WiMax is like WiFi on steroids, faster connections covering a wider area. It is interesting to see our industry embrace WiMax as a way to improve productivity. Proximetry, a San Diego based company who provides the software for this initiative hopes to use WiMax to replace the current "sneaker net" process in respect to uploading information on board. It is unclear if the same WiMax technology could be used by consumers.

Sprice: Meta Search for Static Packages

I had a great conversation this morning with Jerome Thil the CEO of the French meta-travel search company Sprice. In Europe and other parts of the world purchasing static vacation packages has been the norm long before the advent of the Web. That buyer behavior has changed a bit with the concept of dynamic packaging, but roughly 80% of travel-related searches by European consumers still focuses on static packages. The Sprice meta-search capability is currently only available on the Spice French site:



For those not up on their French the "Sejours" button starts the travel search for packages. The package meta-search capability took 4 years to develop and uses an interesting technology approach to capture the unstructured and non standardized content from package seller Websites. Rather than using intelligent agents to screen scrape the site, Sprice built an extraction application as an extension to the open source Mozilla Firefox browser. As a Sprice developer uses this modified browser to identify fields on a given site, the extension records the session and thus captures the structure of the site. When the user enters a search query, behind the scenes, the Sprice technology sends these knowledgeable browsers to the sites tracked and extracts the information. Please note that this is a fairly simplistic way to describe the technology as cleansing and parsing the data is a major step in providing consistent comparisons across sites and thus the 4 year development cycle to bring this to market.

Comparative shopping is at the heart of the Web. Rather than focusing on air or hotel shopping as many competitors are already doing (e.g. Kayak, Mobissimo, Farecast), Sprice is focused on the package segment providing important functionality to markets that still predominantly purchase pre-packed tours. User generated content and mobile applications are on the near Horizon for Sprice, particular as the company has a long standing relationship providing the travel channel for the large European Telco, Orange.

iPhone SDK: The Good News and Bad News

Yesterday's announcement concerning the availability of the iPhone SDK (Software Development Kit) is significant for potential travel application developers. The iPhone has shifted the focus from cell phones to mobile Internet devices with the first full function mobile Web browser. Applications written for the iPhone can be downloaded directly from the Internet bypassing the traditional walled garden of the wireless providers. The announcement specifically emphasized application development for the business market to compete with RIM's Blackberry, the leading corporate smartphone. Venture capitalist firm Kleiner Perkins Caufield & Byers announced it was creating the $100 million iFund to help new developers for the Apple handheld platform. As a result there is a lot money on the table to encourage developers to create corporate oriented apps. Are you listening travel software vendors? That's the good news.

The bad news goes to the heart of what Apple is about: proprietary software. Though the iPhone design is truly revolutionary, the corporate strategy of a proprietary operating platform environment may constrain development. There is fear among developers that Apple will limit the ability for third-party developers to distribute apps, in the same way they did with the iPod gaming market In addition the ability to write the application once and have it shared across devices is impossible with this proprietary approach. For example many of the current mobile applications are written in Java which can run any device that has a Java Virtual machine (JVM). This week Apple also announced that they will not support a Flash Virtual machine on the iPhone limiting the use of Macromedia's Flash, a very popular way developers have added animation and desktop functionality to Web apps. In addition, the Telcos are not happy with Apple as the iPhone has eliminated the revenue associated with the control over application distribution that has been a driver for the walled garden approach. A slew of new iPhone like devices is already hitting the market with many more on the near horizon. Apple has again been pivotal in the development of new platforms as it was in the creation of the personal computer, but may fall victim to the same low marketshare fate if open applications environments such as Google's Android platform take hold allowing a more practical path for cross platform mobile application development. I don't believe we'll see the iPhone's share of the mobile market diminish as it did in the early days of the PC, but limiting third party application development is never a good thing in the age of open source computing.

Farelogix and ITA software: An update on GNEs

A news release late last month announced a new relationship between Farelogix and ITA Software. First a bit of disclosure, Farelogix has been a Travel Tech Consulting Inc. (TTCI) client and I have known the founder of ITA Software since 1997 when I participated in a presentation at Sun Microsystems (another TTCI client) where Jeremy Wertheimer first presented the ITA faring solution as part of a visit by a major TMC. Many in the corporate travel world may falsely believe that the concept of a GNE (GDS New Entrant a term coined by a former UA executive back in 2005) is old news and is no longer relevant based on the 5 year agreements signed last year between the major airlines and GDS. How are the GNEs continuing to survive and why have the three original GNEs embraced each other? It is important to note that G2Swithworks the other major GNE who received lots of press in 2005 already has a relationship with ITA Software as well as sharing a funding relationship with Texas Pacific Group who now also owns Sabre). In 2006, ITA shifted their focus away from GDS bypass to building a next generation CRS (Central Reservation System) for their "beachhead client" Air Canada. Farelogix has successfully continued to sign direct connection agreements with major airlines and was selected to provide the plumbing for BCD Travel's Renaissance Project. There are four major trends that continue to provide opportunity for these so-called GNEs

1. Unbundling of Air Pricing- The move by the airlines to provide a menu approach to pricing that charges different fares for different levels of services (e.g. a different price if you don't check bags or change your ticket) is being implemented or considered by all the major airlines. Whether the traditional mainframe-based platform of the GDS can accommodate this new pricing strategy is still an open question.
   
2. Leverage to Negotiate lower GDS Fees - Another key issue keeping the GNE activity alive is whether GDS fees can be further reduced beyond current agreements. The fixed costs in operating a GDS may limit how low their fees can go in the next round of negotiations. Even though we are about 3-4 years away from the renegotiation, airlines continue to support alternative distribution as a way to provide leverage for future negotiations.
   
3. Flexibility to Control Distribution - In 2006, Farelogix released its Distribution Manager software which enables " TMCs to effectively control the sourcing for each supplier's inventory through preferred booking sources, while maintaining contractual commitments to the various Global Distribution Systems (GDS) and direct supplier relationships." This control over distribution may be used by the TMC or corporation to gain further leverage in airline negotiations
   
4. Shifting the Aggregation point to the TMC - The reality of travel distribution is that content continues to remain fragmented. For example, corporate buyers continue to push hotel reservations through the GDS (either through self-booking or call center activity) but a good portion of hotels are still booked via the telephone. In Europe, where travel inventory has always been fragmented, a need to integrate boutique hotels, rail, ferry and other components into a super PNR is still required. BTN highlighted this in a recent article regarding HRG and BCD super PNR efforts.
   

So back to the issue at hand, why a partnership with ITA and Farelogix? The answer is simple, ITA has proven over the past 8-9 years to have the best 3rd party shopping and faring application. Farelogix has taken a more agnostic approach to faring offering SITA faring application, accessing the GDS faring models or now with this agreement offing ITA Software as an alternative.
Please don't misinterpret my comments here as I am NOT voicing the old hackney message that "The GDS are dinosaurs and are history" These companies still are at the heart of travel distribution both online and off. The ongoing viability of GNEs due to the factors above will continue to push the market to provide a more flexible distribution solution that ultimately allows suppliers to better segment their clients and target their best customers with special offers (a basic tenant of CRM). As the ultimate purchases of business travel, the corporate buying community needs to pay attention to this trends to insure that total supply is offered and that the corporation in conjunction with their TMC controls the distribution choices allowing additional leverage in supplier negotiations.

Alaska Airlines - Jenn Virtual Assistant

Alaska Airlines has introduced an avatar interface called Jenn on its Website. My longtime blog readers will recall me mentioning the historic Knowledge Navigator video that was introduced at MacWorld in 1989 and my belief that an intelligent assistant would truly be a killer app for the travel industry. Even though the Navigator concept eventually led to the disappointing Newton, the concept of having an avatar assistant continued to be tried. Way back in 2000, Eurovacations (a site created by Rail Europe Group and U.S. tour operator Avanti Destinations) introduced an avatar to assist in travel planning. At that time the underlying natural language search technology was not yet developed and thus Eurovacations dropped the avatar after about a year.
Interactive voice applications have been part of the travel reservation process for many years but this Alaska avatar is the first example of combining interactive voice, natural language search and an avatar interface all developed by NextIT Corporation. I caution the reader not to misinterpret my comments here. I am not saying the new Alaska airline interface can replace human interaction. In a way the innovative avatar approach simply mimics help applications that have existed for years. What may make this avatar approach work now other than the new technology behind it? We are in the midst of a generational shift where young adults who spend much of their free time with games such as World of Warcraft are entering the work force. In addition, even though SecondLife has lost lots of its luster it has brought the concept of computer animated avatars into the online consumers' awareness. Jenn is an application to watch.

InsideTrip - A new spin on the Mega-Travel Search model

A new meta-search company, InsideTrip was mentioned today in Tech Crunch.










The model is the now familiar multi-site airline search pioneered by SideStep, Kayak, Farecast and Mobissmo (not to forget the original pioneer, FareChase which only recently was put on the front page of Yahoo! Travel ). The twist is a rating system that evaluates the quality of a given selection based on three specific categories - speed, comfort and ease and 12 so-called "pain points" such as number of stops, security wait time, legroom, aircraft type, connection time, and gate location. Users can indicate which of these pain points are most important and the service will generate a unique TripQuality score for each ticket result. Interesting concept that mirrors the corporate purchasing philosophy of "Total Cost of Ownership" which measures products and services often assigning a numeric score to a qualitative evaluation. A bigger trend is represented here as well which includes personalization techniques adopted by Kayak and Mobissimo as well as semantic search evaluations by start-ups Kango, Nile Guide and Circos. The commonality is a system that filters search results based on user designated criteria. This level of personalization applied to travel search is long overdue and can produce results that are more in sync with the user's needs. That being said, the Achilles heel for these type of personalization techniques is simply a concern that the filtering may eliminate choices that would be acceptable to the user. With gradual maturing of the market for meta-search, competitive efforts promise to continue to provide different tools to filter content to better meet a user's profile. Who owns this preference profile and whether it can be used across sites, is an emerging battle for customer ownership that is underlining the goal to position the company as the first stop in travel search.

Expedia connects into Micros Fidelio

The Micros Fidelio and Expedia announcement today regarding a new direct connection capability is a significant development for the hospitality industry. A challenge for all hoteliers has always been the distributed nature of property based systems (PMS). Hotel general managers control inventory and pricing through their PMS where they evaluate room occupancy and rates in effort to maximize RevPAR (the revenue generating effectiveness of a hotel property that is calculated by multiplying the average daily room rate (ADR) by the occupancy rate). This connection opens the door for more dynamic hotel pricing online where the general manager can go to their internal system adjust pricing and deliver it electronically to the OTA. This property level connectivity was the original approach of Newtrade Technologies, a Canadian company purchased by Expedia way back in 2002. After the acquisition the focus shifted from property based connectivity to central reservation (CRS) connectivity. This has worked well for large chains such as Hilton, but did not help smaller European chains such Sunstar Hotels. The majority of hotels outside the US are small chains or boutique properties. Micros Fidelio is the leading provider of property based technology and thus this new connectivity promises to provide more control over price and inventory for smaller property as they work to distribute their inventory through Expedia.

Sabre's new Cubeless Social Networking Platform

Sabre introduced a new enterprise level social networking application today. American Express was named as an initial distributor of the application expected out later this year. The announcement is important for a number of reasons. This is the first significant social networking application created by a travel organization targeted at the internal corporate community. The Cubeless application is a brand new platform developed by Sabre Studios designed to facilitate communication to and between travelers, travel arrangers and other key corporate stakeholders. Though the precise ROI may be difficult to calculate, one should not underestimate the value of this application. Frequent travelers by their nature often feel isolated from the internal corporate community. At the same time these travelers are generally willing, and in some case anxious, to share their travel knowledge. The Cubeless application builds upon this need by allowing the employee to voice their opinions. In addition, the new Cubeless application can be used to exchange knowledge among the internal TMC staff as well. Corporate buyers should view this application as an opportunity to create more of a two-way dialogue with their best clients, the frequent travelers. A common concern about implementing a social networking application for the internal travel community is the fear that only very unhappy or very happy users will take the time to comment. This concern ignores the fact that the unhappy employee already is communicating their dissatisfaction to fellow employees. By allowing a forum to share information, the internal travel department can gain insight into employee opinions and expertise. Also it is important to note that from a generational perspective, younger employees have already embraced social networking as their preferred platform for all personal communication and thus will likely find this platform useful for internal corporate networking. Expect other social networking announcements by TMC and 3^rd party software developers over the next six months.

Agent POS platform

Yesterday, I had the opportunity to talk with Steven Bloom from SkyGate a Danish travel technology company. SkyGate has developed an agency POS platform called NewPort. The conversation and demonstration provided further evidence that the need for an enhanced point of sale platform for travel agents is a universal requirement throughout the global. For European travel agents, there has always been a requirement to deliver so called "backroom functionality" to the desktop due to the multi-source nature of European travel inventory and the need to drive invoices from the agent desktop. NewPort uses both cryptic formats and Web-based CRM techniques to deliver a platform that is easier to implement while significantly enhancing the call center reservation process. SkyGate has created a limited set of cryptic commands that are seamlessly integrated into an Amadeus booking window. This includes an innovative command which checks to see if two one-way fares are cheaper than a roundtrip fare. The NewPort off GDS profile system synchronizes with both the GDS profile as well as Self-booking tools such as iFAO's Cytric. The POS system was designed with the corporate travel agent in mind with the goal of both simplifying the transaction and enhancing the CRM aspect of the call by allowing the agent to reference prior trip activity as part of the reservation conversation. This may sound somewhat basic, but due to nature of traditional GDS only POS systems rarely will a corporate agent use past history as a way to enhance the reservation process (e.g. "Mr. Jones I see that for your last trip to London you stayed at the Park Plaza Victoria, shall I confirm you at the same hotel for this trip?). It my belief that all travel agents both leisure and corporate need a more open, robust point of sale tool that not only incorporates GDS information but seamlessly blends Web content and CRM capabilities into the reservation flow. SkyGate's NewPort product addresses this need in a practical and innovative way.

Reputation within a Social Network

I had the pleasure this morning to meet with one of the founders of Circos. In one of my earlier blogs I classified Circos in the same category as Kango. After meeting with Mario Jobbe, it became clear that Circos has a different spin on the semantic search space. Circos has launched a preview which focuses on the travel industry, in particular hotel search, but the company plans to enter other non-travel segments as they grow. One interesting feature that allows the user to look at the profile of a given author at a travel site such as Trip Advisor or Yelp!. By graphically showing the key attributes evaluated by the author of the comment, the user can get a sense of the relative frequency and reputation of the given author. This is an important spin on the semantic search approach recognizing that the opinions of the more trusted authors play a role in the value of their comments. This is just touching the surface of an important social networking dynamic that mirrors real world social networks, reputation. Suppliers have continued to express concern that review sites only contain very positive or very negative comments representing the two ends of the bell curve. Understanding the relative reputation of the author within a given site such as Trip Advisor is an important a feature easily determined by clicking on the author's name. Circos carries this one step further by aggregating 500 review sources into a single search response and thus allowing the user to evaluate the author across multiple entries posted on different sites. As review sites continue to mature, the value of a particular review can be impacted by the reputation of the author.

Airline Wireless connectivity

The recent Orbitz for Business survey results regarding the value of Internet connectivity on the plane continues to produce headlines like this " Most Business Travelers Don't Need Wi-Fi On Planes". Conclusions such as this based on this research are very misleading. According to news reports (as I have not had access to the actual survey results) the question asked whether the traveler would take a less convenient or more costly flight to get Wi-Fi. This is obviously a loaded question. Wrapping the issue of in-flight Wi-Fi adoption with flight selection is absurd. Business travelers are on airplanes for one reason only, getting to their destination so they can conduct business. In my view business travelers and the corporations they work for, will embrace in-flight broadband connectivity when it is available. In fact I would go farther to say that connecting to the Internet while on the plane will become as common as connecting in your hotel room is now. Whether the traveler will use the connectivity for business or pleasure is a different issue. Having logged thousands of miles over the years I frequently see business travelers both playing solitaire or watching a movie on their laptop or portable device as well as working on business. Let's not draw any conclusion until wireless ubiquity in the air becomes a reality.

From Cell Phone to Mobile Sensor Platform

No one would disagree that the cell phone is quickly evolving into a personal mobile computing device. Thinking of a cell phone in terms of a mobile sensor platform helps solidify the true nature of the evolution of mobile technology we are witnessing around us. What makes a mobile device a sensor platform? With A-GPS becoming standard, the ability for mobile devices to sense location is obvious, but the device could sense other things as well such as temperature, motion, barometric pressure to just name a few. In addition the ubiquitous nature of broadband wireless connectivity which is on the near horizon (e.g. WiMAX, city wide Wi-Fi coverage) promises to turn the mobile phone into the ultimate thin computing device connecting to the network for information download or upload. Here are some thoughts

• Imagine taking a picture on your cell phone camera and having it automatically uploaded to your Flickr home page.
• How about providing real-time Trip Advisor reviews when you enter your hotel room based on your immediate impressions.
• Barometric and temperature sensing could provide more realistic weather updates
• Motion sensors can track your movements and provide an opportunity to share your "walking tours" with other leisure travelers
• Restaurant reviews could be accessed from an online database triggered by your location
• Applying social networking techniques to idenfity other travelers with similiar interest is another likely way mobile technology could improve the travel experience.

The number of potential applications for the travel industry is only limited by our imagination. The computer in your hand will allow travelers to interact with online content combining feedback, information and advice all based on your location. This vision is rapdily becoming a reality.
It is my pleasure to be the lead analyst for PhoCusWright on a new special report: "The Future of Mobile Travel" Sponsorship is still available. Please contact Bruce Rosard (brosard@phocuwright.com) if you are interested in becoming a sponsor for this timely special report.

Why Corporate Self-Booking continues to be stuck in Travel Management 101

I am listening to a BTN/Concur sponsored Webinar regarding corporate self-booking tools. Perhaps I have a bit of a jaded view on the subject as I have been involved with corporate self-booking since the early 1990s. This presentation contained no new information. The reason the corporate travel industry seems stuck in a loop of discussion of adoption and expense integration, I believe, is due to the very nature of the "corporate buyer". Managing travel at a company is rarely a career (though there are some exceptions). As a result, the person at the company who is tasked with managing travel costs changes every 3-4 years. Often these individuals come from non-travel backgrounds (finance, procurement, admin services). In 2008, it is amazing to listen to a Webinar which so dated and doesn't seem to address current online issues such social networking (blogs, user vendor ratings). The corporate travel industry needs to wake up and recognize how consumer online travel and general tech trends will impact the industry.

Circos debuts at Demo 2008 - a Kango competitor

Demo 2008 is the annual event where start-ups get to do a brief pitch to potential investors. Circos is a new qualitative search engine:

According Tech Crunch:

"Circos most like Kango, which has also taken on the task of categorizing hotels based on user reviews. VibeAgent also has a search engine for its own site that will search hotels based on qualities.

While Kango auto-generates tags after pouring through user reviews, Circo lets users search for any qualities they’re interested in. The engine then grades and ranks the results by each quality on an “A” through “F” scale based on how well the description fits for reviewers. For example, a hotel reviewers feel is spacious would rate highly if searching for openness, but poorly if you’re looking for a tiny room.

As with most search engines, Circos’ real test will be whether its application draws users away from other hotel and restaurant sites with less sophisticated search engines. Currently there are a bunch competing in the space. However, Circos says their technology can easily be extended to other categories since their algorithm does all the tough work of pulling the most relevant qualities from reviews. If hotels and restaurants don’t appeal, another category may hold their home run."

This announcement demonstrates the unfilled market need for more qualitative search results. The key to the success of new start-ups such as Circos or Kango will be measured on their ability to become the first stop for qualitative travel search. This will require not only a great product (producing results that better match a user's search descriptions) but creating enough of a brand buzz to draw traffic from user generated review sites such as Trip Advisor or IgoUgo, not an impossible task, but one that will require both paid promotion as well as successful viral marketing effort. These companies both sit in the planning part of the travel research and buying process and thus can benefit from referral fees paid by OTAs and suppliers. Semantic search is an important area to watch for the online travel industry.

What do the Expedia PPC agreement and the Kayak acquistion of Sidestep have in common?

Two stories from late 2007 and early 2008 signal a shift in the online travel model. In November 2007 at the PhoCusWright conference in Orlando, Expedia announced a new agreement with IHG that included a pay per click (PPC) compensation model. The acquisition of SideStep by Kayak this month is another significant development. How are these two announcements related? The Kayak/Sidestep merger is a clear validation of the referral model, but also demonstrates the need for scale to be an online travel player globally. The Expedia PPC contract element reflects the simple fact that many people shop OTAs and end up buying at supplier sites a phenomenon that has been validated by PhoCusWright and Forrester research. For Expedia, being paid for referrals represents a new and important revenue stream. You then add Travel 2.0 players such as Farecast, Kango and the Nile Guide, and the value of search and travel planning tools represents a major growth area for online travel here in the US and globally. As the economy softens the value of the referral model is likely to increase as suppliers scramble to fill airline seats and hotel beds.