Travel Technology

New traveltechnology.com Website

2010-04-12T11:38:00.000-07:00

I am pleased to announce the launch of the new Travel Tech Consulting Website at http://www.traveltechnology.com. With the launch of the new site I will be discontinuing my blog at traveltechnology/blogspot.com as the new site incorporates my blog, Twitter feed and company information. Here is the new RSS http://traveltechnology.com/wp-rss.php. Please visit http://www.traveltechnology.com for more information on Travel Tech Consulting.

Airline Twitter Network Analysis with NodeXL

2010-03-22T09:07:00.001-07:00

Travel Tech Consulting, Inc. and Connected Action Consulting Group LLC have put together a brief video presentation that provides insight into network analysis for airline Twitter feeds using the open source tool NodeXL. Network analysis goes beyond simply monitoring brand or promoting specials using social media. Network analysis allows travel companies to understand who are the key influencers in the network and how they connect with others. For example, it is not necessarily the user with the most Twitter followers or Tweets at a travel company needs to follow, but it is how the user is connected to others. The video uses United Airlines and Delta Airlines Twitter feeds as an example.

Analyzing Aviation Social Media Networks with NodeXL from Norm Rose on Vimeo.

Yes UA Breaks Guitars Does Impact Loyalty

2010-03-08T06:59:00.002-08:00

My wife's Facebook friend recently posted this message declaring that she does not fly UA because they break guitars. I recently spoke at the EzRez Thought Leadership Conference and I mentioned the now famous YouTube video which has received over 8 million viewings. A question from the audience was simply whether people would change their flying preferences because of this type of video. As evidenced by this blog entry, it has changed some people's attitudes.
Social media has been so hyped it is easy to forget that it is in some ways an extension of the most effective type of advertising, word-of-mouth but on steroids.
In a recent article, Travel Weekly columnist Richard Turen stated that United now uses Dave Carroll's video as a training device. Another recent story mentioned that David's bag was lost on a recent UA trip. (I guess he returned to United after all). So though the songwriter seemed to have forgiven UA, his video legacy lives on and continues to influence the blogosphere. Of course David's next song may be, "United lost my bag" considering his most recent experience.

The Splinternet

2010-03-05T09:08:00.000-08:00

Forrester analyst Josh Bernoff recently posted a blog regarding the end of the golden age of the Web and the rise of the Splinternet. As it name implies, the new environment consists of multiple devices with content and audiences fragmented across these platforms.
What does this mean for the future of travel distribution? This represents both a challenge and opportunity for travel marketers. The splintering of platforms and content means that a travel supplier or intermediary can no longer expect their single Web presence to be enough to communicate with their customers. The opportunity comes in the ability to personalize the experience based on the customer segment and platform capabilities. We've seen this already where unique iPhone apps have functionality such as augmented reality that only applies to a smartphone device. The whole downloadable app phenomenon provides the delivery mechanism to enhance this personal relationship with the customer.
New platforms such as the iPad and other tablets coming to the market will continue to cause the need for multiple development paths but providing unique experiences that are only possible based on the nature of the device is also a new opportunity. In a talk this week at Stanford University, Chris Anderson, Editor and Chief of Wired Magazine predicted that the tablet would eventually replace the lap top as the primary mobile computing device. As part of the Conde Nast publishing group, Chris was very bullish on how the tablet provides the immersive experience of a magazine while the flexibility and endless content of the Web. The true power of these devices will come in new applications that have yet to be developed.
The traditional travel industry players has always been slow to embrace new technology allowing new entries to capitalize on it and build solid businesses. One just needs to look at the dominance of the four major OTAs to see how this has happened on the Web. Why didn't American Express become one of these major OTAs? A similar phenomenon is happening in the mobile world with new entries such as TripIt gaining momentum (and investment) offering itinerary management and mobile travel services. With the advent of the Splinternet, the travel industry must embrace this new multi-platform and multi-content world and drive innovation or be a victim of losing control of the the customer to new market entries that understand this opportunity.

IPhone Hits the Enterprise

2010-01-26T14:11:00.000-08:00

With eWeek reporting that 70% of the Fortune 500 are evaluating iPhone for the enterprise, the corporate travel industry needs to take note. From my view the debate is over regarding download verses mobile Web. Transcoding your Web page for the mobile browser is still important, but the value of a downloadable app for a company's brand and the ability to personalize the interaction with the customer is unmatched. The phone is becoming more and more of a sensor (accelerometer, compass, temperature, etc..) . The penetration of the iPhone in the corporate market is making a downloadable iPhone app for travel companies a priority. Apple has announced record profits and the iPhone is a big part of this. Apple's success in the corporate market is directly due to the consumer acceptance of the device.

Social Media - Understanding the Community

2010-01-12T13:21:00.000-08:00

With the growth of Facebook, LinkedIn and Twitter, social media monitoring and promotion have become a major activity for most travel companies. The goal is to listen to the social networks and respond to issues around a company's brand. The other major effort is to use fan pages and Twitter feeds to offer limited-timed promotions. Both these activities are essential social media 1.0 tasks, but there is a lot more analysis that can be implemented to identify connectivity among community members, key influencers within the community and overall community trends. To achieve this next level of analysis BI tools that examine social networking are required.
As mentioned in a previous blog, one such tool is NodeXL. This is an open source Microsoft Excel plug-in that can be used to create a visual community map of everything from your Outlook contacts to your Twitter feed. The visualization allows you to understand relationships between community members. Are there individuals who everyone connects to, but who connect to few? If so , these people may be key community influencers, but how do you influence them? As you can see this only touches the surface of social networking analysis.
I am pleased to announce a new strategic alliance, with Marc A. Smith, PhD of Connected Action Consulting Group. Not only is Dr. Smith the creator of NodeXL, but he is an experienced social scientist who uses his sociology training to offer clients a deep understanding of their online communities with specific recommendations on how to implement strategies to protect and grow a company's brand within their community. Travel Tech Consulting is pleased to offer Dr. Smith's services in conjunction with our travel technology and online expertise to offer clients the next level of analysis of social networks.

Travel Innovation

2009-12-02T12:58:00.000-08:00

As most of you know I was intimately involved with this year's PhoCusWright's Travel Innovation Summit. I have been tracking both new media and traditional coverage of the event. I wanted to provide you some feedback from the inside as well as some comments on the overall subject of innovation.
First let me acknowledge the hard work of my colleague Bob Offutt in being the creative force behind TIS and for managing the entire process. Bob and I interviewed over 50 applicants for the TIS. Our criteria was pretty straight forward- we were looking for true technology innovation. Often the applicant offered a business innovation, but lacked the technology component and thus were rejected. We heard from traditional as well as start-up companies. TIS is not a start-up - "get funded" event. It is designed to provide a forum for all industry segments to present their technology innovation.
The underlying themes from the TIS finalists are clear: (1) A better Web air shopping experience is needed (e.g. Amadeus IT), (2) Globalization of the Web is a complex process and requires some advanced technology (Translations.com), (3) Consumers continue to shop multiple Websites for a given trip and a social shopping tool can simplify the information gathering and sharing (Gliider) (4) Mobile technology is changing the way people experience travel (Global Motion). There were also presenters who demonstrated innovation in social media monitoring, leisure travel planning and integration between cable TV and the Web experience.

I have seen a few blog posts which criticizes the event as not being very innovative. Other comments have focused on the fact that the winner of the TIS 2009 event was Amadeus, IT certainly a major existing player, not an innovative start-up. Expressing one's views is certainly part of the fabric of the Web, but often bloggers or journalists miss the underlying process that goes into building an event such as TIS and are quick to criticize.
Let me comment on two particular articles:
1) Arnie Weissmann- Editor in Chief for Travel Weekly - " The Travel Technology Gong Show"
Arnie voiced his view that the show lacked true innovation. As I look at my in box at the pile of unread Travel Weeklys (I pretty much only read the online version), I find it ironic that this traditional bastion of status quo thinking would provide such a negative spin on the TIS. Much of the work as a consultant I done over the last 14 years has been with traditional travel players both in the leisure and corporate market. Often these traditional travel companies lack an understanding of online trends and rarely demonstrate true innovation (at least not without our help). In discussions with traditional travel agents as part of various projects, I am always dumbfounded at their lack of Web savviness. Many have poor Web presence and still take the majoirty of reservations offline. Since Web travel took off we've lost about 50% of traditional travel agents. Considering the rapid pace of technology innovation whether it it is improved air shopping , globalization, consumer shopping tools or the mobile revolution, traditional travel companies continue to lag. Rather than being critical of the event, Travel Weekly needs to better verbalize the underlying trends demonstrated at the TIS and educate their readers on how to deal with these technological changes.

Contrasting this with UpTake's Travel Industry Blog " PhoCusWright 2009 Travel Innovation Summit" . In this blog entry Elliott Ng's one of the founders of UpTake goes into great detail about many of the presenters highlighting their innovation and value to the industry. Granted UpTake is truly a Travel 2.0 star pioneering semantic search and adding value to the planning process. But both Elliott and Yen Lee the other founder of UpTake have spent many frustrating years at traditional companies trying to drive innovation in their travel offering, and founded UpTake to truly implement their vision of a better travel search approach.

In my career I have worked at large and small companies. Innovation at large companies often require a "skunk" project. This is an initiative not necessarily supported by senior management but driven by individual groups who drive the innovation. This was truly the case with Amadeus IT and thus end product results were very impressive. I do agree that small companies often innovate at a faster pace than traditional players, but often lack the funds and management experience to execute. Innovation is the key in driving improved interfaces and processes in the travel industry. The PhoCusWright Travel Innovation Summit is an essential place to monitor and track this innovation.

Ancillary Airline Revenue and Fare Families

2009-10-22T12:25:00.001-07:00

Over the last few weeks I have given a number of keynote presentations to a variety of airline groups. These audiences covered the entire spectrum of airline types: legacy, LCCs , and 2nd & 3rd tier airlines with speeches in the US and Europe. The airline executives were a mix of e-commerce, revenue managers and IT executives dependent on the conference sponsor. I spoke about emerging technology trends including mobile, semantic search, personalization, social networking and meta-search.
I began each presentation with a discussion of ancillary revenue showing how the carriers have profited greatly by charging fees for baggage, meals, and other services. I used this cartoon to emphasis that from a customer viewpoint these are fees for formerly free services. I have no doubt that the airline executives are well aware of this fact, but with the fever pitch around the value of ancillary revenue particularly in this tough market, the perspective of the customer is often lost.
I received a more surprising reaction regarding the subject of fare families (branded fares). Online search whether through an OTA or Meta-search company, yields a logo and price worsening the move towards commoditization. Every airline is concerned that their product is perceived as a commodity, but few are embracing fare families.
I am old enough to remember earlier LCCs attempts at market dominance with carriers such as People's Express and Texas Air disappearing after a few years of heavy fare matching by the legacy carriers. Of course today's success of LCCs is powered by direct distribution through the Internet and thus is flourishing in every corner of the world. The simple fact is that LCCs are not going away and are actually increasing in numbers and market share. It is my opinion that fare families are the best means for traditional carriers as well as high value LCCs (e.g. JetBlue, Virgin America) to compete beyond price. As I pointed out in my presentation, every part of the distribution travel value chain will be impacted by the introduction of fare families, but despite these challenges, I am hopeful the concept will take hold. One important aspect of the shopping process that would need to change for both OTAs and Meta-search, is the ability through mouse-overs or other similar UI techniques, to provide the fare family advantage to the customer at the point of sale. See Frontierairlines.com as an example. What I envision is that a customer goes on an OTA or Meta-search site, gets back the same fare from both a LCC and a legacy or high value LCC and when the consumer mouses over that quote, the option of paying a bit more to include services such as baggage, seat assignments, access to on board entertainment systems, meals, on board Wi-Fi, and other emerging services at different family price points. It is my belief this will be the only way airlines can truly compete against the LCCs by promoting a differentiated product fighting the trend towards commoditization.

Global View

2009-10-01T07:39:00.000-07:00

I am writing from Cannes, France where I gave a speech this morning on emerging technology trends that impact airline e-commerce. I represented PhoCusWright at the conference and I was able to draw on some great stats and trends from a number of PhoCusWright research pieces. This speech was for the Amadeus' airline e-commerce conference. Last week I was in Los Cabos, Mexico giving another speech for the Amadeus' LATM corporate travel leaders symposium. Tomorrow through Monday I am taking some time off and my wife who traveled with me to Southern France and I will explore the French Riviera.

I wanted to write briefly about the global perspective I have gained over the last 12 months. My work in Kuwait had me traveling to the Middle East once a month for the last year. Often I stopped in Europe on the return trip to either attend a conference or meet with a client. I have worked in Europe with different travel IT and software companies many who deal with airline customers. The Kuwaiti engagement tapped my corporate travel technology and leisure distribution experience.

There are a couple of points which all markets have in common:
1) Every segment of the travel value chain worldwide is under pressure from low cost competition. Whether its LCCs for the airlines, alternative or direct distribution for the GDS, or online competition for the TMCs, every sector needs to drive greater efficiency to lower costs.
2) Mobile technology is beginning to emerge as a major new battleground where traditional suppliers and distributors are being challenged by innovation from new market entries.
3) Airline Fare Families and the airline focus on ancillary revenue is here to stay. This is good news for the airlines who are really suffering. Fare families creates a more logical relationship between services and price.
4) Local Carries are a global phenomenon that is driving consumers in emerging markets online
5) Corporate travel trends are the same globally, the differences are around the level of maturity in the market. Latin America is a particular challenge as major airlines have pulled inventory out of the GDS in markets such as Brazil.
6) The global economy is beginning to rebound with travel increasing, but premium travel is still not near the levels from 2007.

I feel blessed that I have the opportunity to travel to such diverse places in the world and help a variety of customers market, build or purchase travel technology.

Convergence

2009-09-09T13:31:00.000-07:00

The pace of mobile convergence continues to accelerate. A camera is now a common feature on mobile phones. Smartphones have gone further with integration of PDA and MP3 player functionality. Tom Tom is now available as an downloadable application on the iPhone signaling the convergence of Personal Navigation Devices (PNDs) with smartphones. Gaming is already immensely popular on smartphones cutting into the portable gaming market. Mobile payments are still limited to specific regions of the world. In Japan, mobile payments have been a standard feature for some time and mobile micro payments for public transportation is emerging especially in developing countries.

"Accord ing to Inside Facebook, the social network is working with mobile payments provider Zong on a test allowing a small number of users to sample the mobile payment option in its virtual gift shop". Social networking is already a major activity on smartphones so Facebook's test with Zong is a significant development towards the mobile wallet.

So what does this all mean for the travel industry? The bottom line is this: labeling the device in the frequent travelers' pocket as a phone is not only naive but misses the true opportunity for innovation that can enhance the travel experience.
If you want to learn more, please join me next week for a Webinar through PhoCusWright. Details are below.

Smartphone Market Share Influences Download versus Mobile Web Debate

2009-08-18T03:03:00.000-07:00

In a recent article from Media Post a software application developer from Istanbul, Turkey attending a conference in San Jose, California, voiced his opinion that the US does not understand the importance of the Mobile Web. This article reminded me of the panel discussion I moderated at the PhoCusWright @ITB conference in Berlin earlier this year where the subject of downloadable applications was debated against the advantage of the Mobile Web with a panel of European mobile travel experts. During that discussion a common argument in favor of the Mobile Web approach was the ability to have the application available on all devices with a mobile Web browser. On the side of downloadable apps, the ability to use the GPS location capability and ability to balance the processing load between the network and device were common arguments for the downloadable app approach. Given the explosion of app stores from device manufactures and wireless network providers , it is clear that the downloadable approach has been recognized as an important channel for application delivery. So given this debate, what is the right approach for travel companies who want to build and deploy mobile apps?

The answer lies in the recent 2nd quarter market share numbers published by Canalys. Here is the worldwide smartphone adoption numbers:
From a global perspective the growth of Apple's iPhone is phenomenal. But the true insight comes from the individual regional market share.

Clearly in the US market RIM and Apple dominate the smartphone market.

Contrast this with the EMEA market share

Now compare this with the numbers for Asia Pacific:

As you see Apple and RIM do not even qualify for their own category and are grouped into Other.
The simple conclusion is this:
1) Clearly smartphones are a growing category.
2) Areas of the world dominated by Nokia have not felt the true impact of the smartphone adoption.
3) Travel companies need to understand the specific smartphone adoption market share percentages for their clients when planning a mobile strategy.
On a long term basis as recently voiced by Google, browser-based applications may dominant, but for the short term (3-5 years), downloadable apps will be the most logical path. Keep in mind that smartphone penetration is much greater for frequent travelers who are early adopters of smartphones. Developing applications for the leading smartphone devices: RIM, iPhone and perhaps Windows Mobile is the most logical path to follow. Nokia's recent announcement concerning their new relationship with Microsoft is an obvious attempt by both companies to fight the growth of RIM and iPhone.

Innovation in Online Travel

2009-08-10T12:54:00.001-07:00

The general media is a buzz with stories about the lack of innovation of the major OTAs. A recent Forrester Report which shows consumers' frustration with online travel planning and booking is cited. The report stated that many consumers are fed up with the complicated process of planning and booking travel online. Part of this frustration concerns added fees, what we like to label in the travel industry as ancillary revenue. The article points to a resurgence of bookings through traditional travel agents.
From a different angle a recent VentureWire report states that VCs are funding start-up travel sites such as Oyster and LeiusreLink. This article further reinforced the concept that there is a lack of innovation from the four large OTAs (Expedia, Travelocity, Orbitz and Priceline).
Both media articles site lack of innovation, but both draw different conclusions. The Forrester research is being cast in the light of a return to traditional travel agents while the VentureWire WSJ blog points to an opportunity of new start-ups. So what is happening with online travel? Are the OTAs on a path to their own demise? Is online travel going to die based on the resurgence of traditional travel agencies?
In this era of sensational news reporting, dramatic statements forewarning the death of popular OTAs through renewed competition from traditional travel agents or new travel niche brands help sell papers (or in this day and ag, electronic articles). A key point missing in both these articles is a realization that the online travel market is at a mature level. Traditional, Crossing the Chasm analysis, points to multiple adopter segments.
By definition the late majority are conservatives. This market is naturally skeptical and thus resistant to change. The online travel market has reached the mainstream and thus includes many infrequent travelers who are not comfortable with booking travel online. Even the cliche quote by Henry Harteveldt " Could your mother-in-law use your Web site without having to call you for help?’ The answer is always no" is somewhat blind to the fact that my mother-in-law is an infrequent traveler, part of the late majority (actually she is more of a laggard) and thus has characteristics that are different from frequent travelers (who are often innovators, early adopters, and early pragmatists) who have grown accustomed to the online travel process.
Despite the generalities of these articles I do believe that greater innovation is needed from the OTAs to maintain their market position. Most of the start-up competition comes from niche plays such as Oyster (hotel reviews) or LeiusreLink (vacation rental). Innovation in travel planning is the focus of sites such as Uptake and Triporati. Whether it is true technology innovation or business innovation, carving out pieces of the all encompassing OTAs is a natural market evolution. OTAs will react to these niche start-ups if and when they see a direct correlation to revenue loss. For example when Expedia, Inc. recognized the importance of user generated hotel reviews it purchased TripAdvisor. Movement to traditional travel agents may be occurring, but it may be limited to specific segments and does not mean the death of OTAs. In various research I have conducted over the past few years interviewing traditional travel agents, all agents recognize that the OTAs are their direct competitors and customers often quote OTA prices during the selling conversation. As a result, agents use tools such as Agentware to search the Web for competitive fares.
I agree that OTAs are not a replacement for human beings (that is why each has deployed a call center for support), but for routine trips they do perform well. Quoting the appropriate ancillary fees is an industry problem that is being worked on by ARC, the GDS and the airlines to simplify the online quote process. No the OTAs are not in danger of extinction by niche players or traditional travel agents as all will co-exist with the consumer making the ultimate decision based on their comfort with technology and experience with the online process.

How a Single Vacation Experience Can Impact Loyalty

2009-07-30T14:41:00.000-07:00

I generally do not blog about my own personal travel experiences, but I felt compelled to do so after my family's recent trip to Hawaii. To validate that I am indeed a frequent traveler, I am currently a UA Global Services member, a SPG Platinum and a Marriott Silver Elite. I have made 11 trips to the Middle East in the last 12 months and traveled to Amsterdam, Berlin and Dublin on the way back from some of these business trips.

In order to use free tickets on UA for my family, we extended our stay a few days before and one day after. We exchanged our Marriott timeshare in Lake Tahoe for a timeshare on Kauai. We stayed at the Sheraton Kauai for three nights and the Kauai Marriott for one night.

When I checked-in at a separate line for SPG members at the Sheraton Kauai, I was pleasantly surprised to learn that we had been upgraded to a corner suite which were three connecting rooms and three balconies. This is a picture from one of the balconies. This was a great start to our vacation and reinforced the Starwood brand.

Our Marriott Lake Tahoe timeshare is one of the most desirable timeshares on the market at the foot of Heavenly Ski resort overlooking Lake Tahoe. We were sold on the timeshare a few years back based on the superior level of the property and its value in exchange through Interval International. When we arrived at the Pono Kai we received no recognition (the property is managed by Blue Green) and though I had requested an ocean view, called two weeks prior to the property (on the advice of the property) to request it again, we were given a garden view. Overall the property was fine and we enjoyed our stay, but the lack of recognition and the lower quality of the property has made me question the value of our Lake Tahoe Marriott timeshare investment.

At the end of our trip we stayed at the Kauai Marriott. There was no special line for Elite member check-in. In addition, I had requested an upgrade and I was not aware that having done so, we would have to pay an additional $150 per room for the ocean view. An email came to me the day before checking in stating the $150 charge. I was disconnected during entire trip so I never saw this email. We were using points for the two rooms for a one night stay. When I asked to downgrade, I was told that no garden view rooms were available. We had to wait approximately 3 1/2 hours to check in and the room though newly renovated was only a partial ocean view and did not have any furniture on the patio to allow us to enjoy the expensive upgrade. The property is beautiful and the renovated room was very nice, but the lack of recognition and overall treatment has influenced my future travel booking behavior.

As a frequent unmanaged business traveler, I generally have complete choice on where I stay. I am currently working on two projects for the US Government which will involve lots of trips to the DC area over the next 2-3 years and I have consciously chosen to stay at Starwood properties as a direct result of my Kauai experiences. As a Global Services member, UA treats me great. The three nights in the luxury suite at the Sheraton Kauai has increased my loyalty to Starwood. Given the money we've invested in the timeshare and the number of nights I've stayed at Marriott this year, the lack of recognition and surprise charges dilutes any positive feeling I've had towards the brand. Overall it was a great vacation, but proved first hand how loyalty can be impacted by a single trip.

The Dark Side of UGC - The Cleveland Video

2009-07-12T09:34:00.000-07:00

1,206,632 views. The second version to the left has attracted 994,291 views. When searching Cleveland on YouTube this video comes up 1st!
The lesson here is an important one. Travel companies can try to use UGC to enhance their online offering, but beware as the Internet user population may take this opportunity to do exactly the opposite from your intended goal. The sad part of this video is that though it is obviously a farce, it does show our country's declining "rust belt" and the toll the Recession has taken on the area.

Augmented Reality to Enhance the Travel Experience

2009-07-08T11:10:00.000-07:00

One of the future trends identified in the PhoCusWright mobile research was the use of mobile devices to augment reality. Layar a browser available on the Google Android platform has announced the opening of its API to a select group of developers. As mentioned in the TechCrunch article other AR browser players include:" Tonchidot ’s Sekai Camera and Mobilizy ’s Wiki Tude. Even IBM is playing around with mobile AR apps." The Layar video uses a real estate example, but the value to the traveler should be very obvious.
In recent speeches to airline and hotel executives I have been emphasizing how mobile is a new platform for developing appplications that never existed before. Developing AR browser based applications for travel is a great example of this opportunity. The ability for the traveler to view a real world structure and augment that with various types of data such as historical information, services (e.g. restaurant reviews) and special interest subjects (e.g. architectural design) are just a few examples on how AR browsing can enhance the travel experience.
The mobile platform is much more than a phone as it is truly a sensor of the physical world. Already it is common place for travelers to tweet, blog or upload pictures about their current destination. AR browsing takes this one step further by enhancing your surroundings with data that you find relevant.

Is the Finger Print Reader on the IPhone the Solution for M-commerce and Security?

2009-07-02T18:47:00.000-07:00

Apple has filled patents for fingerprint recognition system for the iPhone. This may have major implications for m-commerce and security as well as mobile user interfaces. Fingerprint reader technology has long been used for computer security. The interesting thing about Apple's research is that involves the use of fingerprint patterns to actually identify distinct fingers. The idea is to match specific functions to specific fingers. This table shoes how an index finger press might perform on action (PLAY/STOP) while a middle finger press could fast forward.
Clearly fingerprint reading is coming to mobile phones. When implemented consumers could become comfortable with storing personal information on their mobile phone provided no one can access it due to the fingerprint lock. There has been a great deal of discussion on the concept of a portable profile that could be used across sites to provide more personalized interaction. Given the personal nature of the mobile device, fingerprint controls may provide the needed security to make a portable profile a reality. Travel apps could use specific fingers for targeted tasks such as purchase or rebook. Clearly fingerprintf identification and interaction is something to watch over the next few years.

The Demise of Clear

2009-06-30T10:25:00.000-07:00

As a frequent traveler I am quite frustrated with the demise of Clear, the registered traveler program. I just signed up for Clear a few months ago and I only got to use it a few times. I believe the concept was good, but the execution was very inconsistent. For example, in San Francisco, the Clear lane merged into the normal security line rather than the FC priority line. So though you were a priority traveler, you had to wait while families and their strollers navigated through the security process. In addition, rather than being a self-service, the Clear personnel basically took my card and put it into the machine. I am sure this was designed to assist first time users, but definitely added to the cost of their service. The best experience I had with Clear was at Dulles Airport in Northern VA. In fact with all my work with the DTMO and GSA, I intentionally signed up for Clear knowing that it would be of value at Dulles. The Clear check-in line was downstairs and saved me at least 30 minutes fighting the mobs on the normal security lines. The way Clear simply shut down without notice will make me very reluctant to every sign up for a registered travel program again. In addition, as a Global Service member of UA, I am able to bypass the security line and allowed to cut into the FC line (though I always feel guilty when I do so!).
As mobile boarding passes become the norm over the next few years, the airport security process should set up dedicated lines for mobile boarding passes as the TSA staff at the various airports will need to be trained to accept the mobile bar code. Considering the fact the TSA process is not standardized across all US airports (for example some require you hold your boarding pass in your hand, others don't and some look at boarding pass while others don't), the implementation of the mobile bar code boarding pass is bound to have some problems.

Travdex

2009-06-23T16:16:00.000-07:00

I am pleased to be helping my colleagues at PhoCusWright with the launch of the brand new technology tradeshow Travdex, May 5-7 2010 in Atlanta . Some may simply say, why does the travel industry need yet another tradeshow? Each of the segments- airlines, hospitality, corporate, cruise, traditional travel agencies, online travel companies, all have conferences and tradeshows. The question, in these tough times, are these traditional conferences worth the investment for the buyer and the seller? What makes Travdex different is the fact that it is solely an appointment driven buyer/seller marketplace for every aspect of technology covering all sectors of the travel industry. No matter the economic climate, businesses still need to sell their products and buyers need to source and select systems.

As part of my consulting practice over the last 14 years, I have led many procurement efforts for new reservation, customer management and infrastructure systems. These efforts have been for many different sectors including: resorts, travel management companies, wholesalers, online travel companies and the US Federal Government. The first step in procuring anything is to source suppliers. Sourcing is now a global exercise as the right solution may be from a company outside your geographic area. Tradeshows can be an important element in the sourcing process, but from a buyer viewpoint trying to get some time at a crowded tradeshow with the right vendor can be a frustrating experience. From a technology supplier perspective a recurrent problem at most tradeshows is sorting through the foot traffic to uncover the real buyer. Technology companies can spend days at tradeshows giving demos, but often have trouble equating the traffic with concrete sales. The goal of Travdex is to change the tradeshow experience. How do I know it will be successful? Travdex is being put on by PhoCusWright, a company that has reinvented the concept of a travel conference. If you ask anyone in the travel industry they will tell you that the PhoCusWright Conference in November, is a must do event bringing together the innovators and leaders in the travel industry. This is why I know Travdex will be like no other tradeshow before it, bringing technology buyers and sellers together for an intense two days where deals will be made. I encourage all travel suppliers to sign up now to take advantage of early bid discounts.

Datalex Users Conference

2009-06-17T12:30:00.001-07:00

Last week I was in Dublin Ireland to participate in the Datalex Users Conference. Datalex is a long time client of Travel Tech Consulting. The conference has a small number of attendees (50-60) consisting of Datalex customers and prospects, but the quality of the attendees and depth of the sessions was very impressive. I had the pleasure of siting next to Jim Young who opened the conference with some provocative observations about industry trends. Jim, most recently of Frontier Airlines can truly be called an industry pioneer. At Frontier he was instrumental in implementing fare families, at IHG he was the executive that pulled inventory from Expedia and then renegotiated a new agreement which included a mix of content and advertising benefits and while at Continental he pioneered the direct distribution model during the turbulent 2005 period. Also in attendance was Mark Rosenberg who recently left Air Canada, where he redefined the distribution landscape with the idea of a fare family and pushed the GDS to accommodate this new model.
Day 1 was all about ancillary revenue. Jay Sorensen, President of IdeaWorks presented the results from a new Ancillary Revenue Guide that he just published. The discussion was lively with different airline executives from American, Continental and Frontier debating the various approaches to ancillary revenue. As an observer, I had to comment that all these ancillary revenue strategies often result in a single customer reaction, paying for services formally free (baggage, meals and in the case of Ryan Air on board toilets!). There is no question in my mind that this current focus on ancillary revenue represents a permanent change in the way all airlines market their product. Fare families (also known as branded fares) breaks the long held practice of yield management by associating services with different fare categories regardless of seat class availability. This will likely impact all sectors from distribution (how GDS and intermediaries display these fare groupings) to corporate travelers (will corporate travel negotiations now center around services as much as discounts?) and even meta-search as the Kayak and Fly.coms of the world struggle with showing airfare comparisons when branded fares associate price with service characteristics.
On Day 2 I gave a talk on mobile. By the response of the audience I realized that the airline executives still do not get the impact of mobile. The main response was about how difficult it would be to sell a mobile project to airline senior management. This was an odd discussion from my vantage point as the prior day's focus on ancillary revenue ties directly in to the opportunity with mobile. It looks like the major carriers will have to catch up on the mobile revolution and risk the possibility that a new intermediary will emerge on the mobile platform adding additional distribution costs and separating the end traveler from the supplier once again.

Update

2009-06-17T11:51:00.001-07:00

I just completed an exhausting two week trip to the Middle East (Kuwait and Saudi Arabia), Dublin, Ireland and Washington DC. I thought I would create some short blog entries about each of these trips.

First up, my first visit to the Kingdom of Saudi Arabia (KSA). My client Al-Tayyar is one of the largest travel companies in the KSA, the GCC and througout Africa. I was hired by Al-Tayyar to evaluate their internally developed ERP system and to comment on their soon to be launched IBE. Obviously, there is a level of confidentiality that prevents me from talking about their systems in any great detail, but in general I found the systems to be very impressive. The main point here is that Al-Tayyar has embraced the concept of dynamic pricing based on customer value. This is approach maximizes agency profitablity while recognizing the value of different customer types and forms of payment they use. This relates directly to the agency's bottom line and is a type of customer management which is ahead of much of the global travel industry. The IBE system they have built has a multi-source structure and allows customization of packages dynamically. I was very impressed with both these systems, but I did realize they were built around requirements that were very specific to the KSA market. The sytems were built in partnership with Interglobe Technologies a very experieinced Indian travel software company.

Sabre's new Tripcase a TripIt Competitor

2009-05-19T14:40:00.000-07:00

Sabre has introduced a downloadable iPhone app that competes with TripIt.
It has some similar features but unlike the email parsing capability of TripIt, TripCase automatically imports the PNR information provided it was booked in Sabre. It is currently only available on the iPhone, but additional platforms will be introduced later this year. So is this a TripIt killer? Maybe at some point, but certainly not immediately.
What I find fascinating is the fact that Sabre participated as one of the investors in TripIt's 5.1 million in Series B financing. It looks like Sabre is hedging its bets!

What is a bit ironic is Sabre's market behavior which reminds me a lot of Microsoft back in the 1990s. Back then, Sabre joined other tech companies in challenging Microsoft's ability to control the development of applications because of its ownership of the OS and browser. In those days Microsoft had a solid reputation of partnering with smaller software entities and then coming out with a competitive product. It is unlikely that Sabre Studios who developed TripCase had any connection with the Sabre group that invested in TripIt, but the fact that TripCase is a clear TripIt competitor at least gives one the impression of a one time partner who is now a competitor.

From my perspective I am happy to see a major travel brand embracing the downloadable app store approach to distribution as these types of apps can take advantage of the location awareness of the smartphone delivering new services not available on the Web.

Illegal iPhone Clones are Here

2009-05-15T16:20:00.001-07:00

This image is an iPhone, right? Look again. This is an illegal iPhone copy made in China that I found was being sold in Dubai. A client of mine bought this from a vendor in Dubai about a week ago while I was there. Apart from the obvious legal ramifications of this device (I'll leave that to Apple), the impact on the market will be significant. My client bought this iPhone copy for 300 Dirhams (about $82 USD).
In our report for PhoCusWright, we predicted a flood of smartphone copies in 2009. This clear ripoff of the iPhone is characteristic of what will be common phenomenon throughout Asia. As long as the wireless carriers go along, illegal copies like these will flourish and significantly increase the penetration of smartphones in the market. It is unclear if this phone would access an app store. BTW if you didn't notice, the key difference between a real iPhone and this illegal copy is that it only has four rows versus five on the main screen.

American Airlines Arpey Interview

2009-04-20T12:17:00.000-07:00

On a conference call discussing 1st quarter results with analysts, Gerard Arpey, CEO of American Airlines was asked" What kind of distribution cost savings might there be out there?" His response was very unnerving for travel agents and the GDS:" We're still paying much higher levels of commission and booking fees, and a lot that hinges on the use of technology and the competitive environment, because of lot of those commissions or overrides or booking fees are paid in order to stimulate traffic. If we can as an industry do a better job keeping the supply of seats in line with the demand, then that will help us on those fronts." The line that triggered a strong reaction from travel agents was this " I can see a day, and maybe I'm dreaming here, where those folks who are the intermediary between us and our customer have to pay for access to our product rather than us paying them to distribute our product." This brings to mind a number of points.

First, for the airlines to truly manage their capacity and fares based on demand they need to move away from a focus on an individual flight's profitability and better understand who is truly their customers and how to better forecast their demand. Overrides emerged in the 1980s during an era when the airlines still owned the GDS and used display bias to allow a travel agencies to earn override commissions if they switched GDS systems. This was an age before direct airline corporate discounts and the major airlines continued to rely on travel agents for corporate account management. In 1992, Robert Crandell, Mr. Arpey's predecessor, introduced"Value Pricing" The plan was designed to make fares simple, sensible and fair. It offered customers travel flexibility, and was a major revision to American's fare structure. The aspect of Value Pricing that the general media missed was that it essentially canceled all existing corporate agreements. At that time, corporations did not receive a direct discount based on overall volume, but creatively used available meeting fare discounts to provide broad discounts for their company's travelers. About a year later with the failure of Value Pricing, the major airlines began negotiating corporate direct discounts. Since this has been the norm since the mid 1990s, one might believe AA and the other major carriers have amassed a vast knowledge of corporate travel patterns and thus could project demand more accurately. Sounds good, but this true demand analysis seems not to be in airlines' DNA as most still look at the profitability of a given flight not overall customer performance when calculating overall demand. I don't believe that things today are quite as bad as when I was in sales at UA back in the late 1980s and I was told that the company had created their forecast for the next year, but forgot to include the sales force estimates. That's right UA as a major carrier would forecast demand without incorporating the forecasts from their sales force. I am not sure if we could find another industry where this type of absurdity could exist. No doubt in today's world, carriers such as AA do take into account corporate account volumes and measure closely their performance against contracts, but I doubt that this analysis is used to forecast demand as the airlines continue to be ruled by yield management goals for a given flight.

The second point concerns ineffective incentives to distributors. Overrides are paid to large corporate TMCs and large online players. The absurdity of the distribution discussion is that time and time again the airlines have missed platform shifts, such as the emergence of the Web in the mid-1990s. This has in turn allowed new entities to emerge such as the Expedia and Travelocity as major online distributors. The airline's effort which formed Orbitz was a strategy to limit the OTAs' power, but as everyone knows ended up being sold to what became Travelport and thus reinforced the hand of the online distributor. I agree that ineffective incentives should not be in place, but the reality is that the market strength of the leading TMCs and OTAs forces the airline to play the override game and if not, could result a negative selling campaign against non-preferred carriers; a situation which has happened many times over the years.

My third point comes back to my favorite subject, mobile technology. It is my strong belief that mobile technology represents a new platform for travel distribution. Most carriers have simply extracted their current Web booking platform and transferred it to the mobile Web. This misses the broad opportunity to create location-based, contextualy relevant and personalized information delivered to the airline's best customers through a network enabled, downloadable app. Will the mobile platform create new powerful intermediaries who will demand higher compensation? This is possible considering the overall travel industry's view of mobile as a customer touch point rather than a new distribution platform. The major airlines' aspirations to lower distribution costs and reverse the flow of money back to the airlines is a legitimate goal, but unlikely in the near term, though Lufthansa continues to pursue this effort in Europe. What is more significant is how the airlines again may miss a major technological shift, and thus allow new intermediaries to emerge who will continue to demand compensation.

Top Apple Travel Downloads

2009-04-11T23:31:00.000-07:00

With Apple approaching 1 billion in downloaded apps, I thought it would be good time to take a look at the top 5 most popular free and paid travel apps on iTunes

PAID.
1. Flight Track - this application from Mobiata is similar to Web based applications such as Flight Stats, but produced by a small mobile app vendor. - Question why doesn't Flight Track have the top position here?

2. Tipulator - Allows you to calculate the appropriate tip for service. Question: Isn't that essentially a calculator?

3. Where The Locals Eat - was created by the dining guide company of the same name. The popularity of this paid app reinforces the demand for local dining advise

4. iFare Finder - is a Kayak like meta-search application. The interesting aspect of iFare Finder is that it is only a mobile app. I could not even find a Website for RIV Creations the creator of iFare Finder, only a blog. Having helped a client last year create a mega-search engine, simple screen scraping will not work as a long term solution. Time will tell the quality of the engine behind iFare Finder.

5. Zagat to Go - At last a familiar brand name!

FREE
1. Google Earth - shows how Google is already dominating the mobile space

2. Urbanspoon - a slot machine that allows the user to chose a type of restaurant randomly

3. YELP - the UGC local restaurant and services

4. WiFi Finder - locate free and paid Wi-Fi networks

5. Choice Hotels Locator - At last a familiar travel brand!

So what does this all mean? Though brands such as Kayak, Hotels.com and Disney do appear in the top 20, a vast number of travel brands are missing. Now multiply this by 1000 and you can start to see how the explosion of app stores from Google, RIM Blackberry, T-Mobile and Nokia will further lead to missed branding opportunities unless the travel industry major players recognize that mobile downloads are here to stay and that they need to be part of every travel company's strategy.

Innovation in Online Travel

2009-03-31T12:55:00.000-07:00

I am working with Bob Offutt this year screening applicants for the PhoCusWright Innovation Summit in November. This effort has triggered some thoughts about how innovation comes to the market as well as the danger to companies that lack innovation.

From 1989-1995 I worked at Sun Microsystems. Part of management training at Sun was reading the book The Paradigm-Shift-Promise-Information-Technology . While I was at Sun I was able to secure funds to implement an early corporate booking tool from a now defunct company called TravelNet. Why not look internally to develop this application? Even though at that time Sun was far ahead of other companies in talking about "the Network is the Computer" foretelling the current hype around Cloud Computing, I could not get any internal IT support for this self-booking effort. I even had a Senior VP of Purchasing tell me that "we do not like to be early adopters of new technology". Yes this was a Sun VP acting as a Luddite about emerging technology. Despite the paradigm shift training, Sun's demise can be traced to its slow reaction to open source software. Hopefully, IBM will purchase Sun and put it our of its misery.

Another interesting paradox regarding innovation concerns online travel. Conventional wisdom may make you believe the current online travel heavyweights came from venture funding. Though each of the major OTAs has received venture funding over the years, Microsoft birthed Expedia, Sabre created Travelocity, the major airlines created Orbitz. Only Priceline has true venture capital roots, but was literally reborn under Jeffrey Boyd's leadership after the company went bust trying to promote "the name your own price" strategy to other non travel segments. Jeffrey successfully transformed Priceline from a opaque distribution channel to a full blown OTA and expanded the company's global reach with acquisition of Booking.com. The point here is that Venture Capital is often not the source of new innovation.

So where is tomorrow's innovation in the travel space? We need not look any farther than the emerging mobile platform. Our sponsors for the PhoCusWright Mobile Special Report represented some of the travel industry's largest companies (Starwood, Hilton, Carlson Hotels, Travelport, Amadeus and Abacus, IBM and Teradata to name just a few), but few showed true mobile innovation. Many sponsors are simply taking their Web content and reformatting for the mobile browser. This strategy misses the value of the new mobile platform and cannot access location a key component of succesful mobile applicaitons.

True innovation in the mobile space is likely to come from small companies such as Intelligent Spacial Technologies who have a unique point and click application that takes advantage of location, context and broadband wireless communication. Last year's winner of the Innovation Award was another small mobile advertising comany called Interactive Mobile @dvertising,

Can innovation continue in a down economy? Absolutely, though funding is tight, true innovation is a game changer and will continue to emerge from small companies. Even though hugely successful, the four major OTAs may miss the next "paradigm shift"(which I believe is mobile) and a new small entity may emerge with disruptive technology for travel applications on the mobile platform. No company of any size can simply ignore emerging technology trends such as mobile or risk becoming victims of shifts in market dynamics caused by innovation.

Mobile Panel at PhoCusWright

2009-03-23T12:32:00.000-07:00

I had the pleasure of moderating the panel entitled : Best Practices in Mobile Applications at the PhoCusWright@ITB conference earlier this month. We had a good cross-section of panelists that included Pablo Alvarez, Group Innovation Manager, Lastminute.com, Stefano Galastri, President and CEO SIA Internet, Marina Hegemann, Managing Director, TouristMobile GmBH, Michael Lacy CEO the Handy Group, and Gerry Samuels, Founder and Executive Director Mobile Travel Technologies. We had quite a spirited discussion on a number of topics. The biggest disagreement was around the development strategy and ultimate distribution approach to mobile travel applications. I promoted the vision of multiple app stores (e.g. Apple, Google, Nokia, RIM Blackberry, T-Mobile) and my belief that was voiced in our recent publication "Mobile The Next Platform for Travel" (a summary of our special report "The Future of Mobile Travel") which recommended downloadable Web-enabled applications (versus solely browser based) as the best strategy going forward. Our panelists voiced different views, from a firm commitment to downloadable applications (Marina Hegemann) to a belief that browser based mobile applications are the future (Michael Lacy). Time will tell whose strategy is correct, but all agreed that mobile travel apps are still in their infancy and that dramatic change is ahead over the next 12 to 18 months.

How Twitter has changed the conference experience

2009-03-12T08:22:00.001-07:00

At the PhoCusWright@ITB Bloggers Summit, Twitter was the hot technology talked about at length as a new window into social networking. Something that has not been covered is the impact of Twitter on the conference experience itself. This was very true the second day of the conference. I sat at the PhoCusWright table behind all the bloggers. Without an exception each had their TweetDeck (or equivalent) on their desktop providing immediate commentary on the show. I participated as well. While Dale Moss spoke on onstage on how Open Skies (BA subsidiary with all BC cabins) will succeed in the market, I questioned his sales pitch with a number of tweets. No longer can a presenter expect to contain the audience feedback to the conference attendees. Twitter has enabled real-time conversation which has changed the rules of a conference and opens up everything said to criticism. Yes there is lot's of hype around Twitter, but one thing is certain, at any public forum a speaker must be sensitive to how his or her presentation is being perceived by the audience which is no longer restricted to attendees but now encompasses all the followers of the twitter user's tweets.

PhoCusWright @ ITB - Day One

2009-03-11T06:42:00.000-07:00

I am blogging from the PhoCusWright@ITB. The day began with a BloggerSummit, clearly the leaders in new media from around the world with representatives from Europe, North and South America. We exchanged best practices in blogging and tweeting. This was followed by an early look at the five minute of fame innovators who will present tomorrow. Philip Wolf then addressed the bloggers on his views on major trends for 2009. Philip announced the theme for PhoCusWright Conference 09 - Money, Media Mobile, & Moxey. More on themes as we get closer to the conference in Orlando in November.
After lunch, the first panel of bloggers who were asked the top trends they see in 2009. A lot of discussion about Twitter. The online poll had the 1) Shift in philosophy on social media, 2) hire a social media guy, and 3)PR firms will use social media. Unfortunately the panel missed mobile. That was further evidence that the travel industry still has not recognized the impact of the mobile tidal wave approaching.
The second session first reviewed these three top trends. Then a discussion on ROI of social media was discussed. In my view it is about reputation and identifying who in a social network has that influence. Tools are coming to the market to help easily identify this, such as NodeXL

Full Content

2009-03-05T01:18:00.000-08:00

Dennis Schaal, technology editor for Travel Weekly has written some very insightful articles regarding the lack of full content in the GDS (despite the full content agreement signed in 2005) and more recently the termination of the agreement between Farelogix and Sabre. (links requires a subscription). This is a complex problem that is both an issue of technology and business strategy. From the travel agent perspective full content is essential particularly given the transparency of fares triggered by the Web. With the economic conditions worsening suppliers will continue to put downward pressure on segment fees and implement all possible opportunities for ancillary revenue. The GDS are working hard to add capabilities to accommodate new airline add-0n fees as well as continuing to move key processes off the mainframe on to more modern technology. The question is whether these initiatives are moving fast enough and whether 3rd party providers such as Farelogix are a viable alternative. Unlike the other so called "GNEs" (GDS New Entrants), Farelogix never positioned itself as a replacement for the GDS but instead as a new aggregation layer needed in a multi-source world. In that role they have been successful working with major airlines such as American and Emirates. Though understandable from a competitive viewpoint, Sabre's termination of the Farelogix is a bit short sighted. Now that Travelport has embraced a multi-source front-end (developed by G2 Switchworks) the concept of multi-source content will be permanently ingrained as a competitive advantage. I have no doubt the management of Sabre is well aware of this and that their current solution with Agentware (private labeled as NetCheck) is most likely a temporary fix to meet this multi-source reality. Unfortunately with economic pressure on corporate accounts the use of alternative LCCs will likely increase and legacy carriers will continue to implement strategies to drive business directly to their Website. Web-based tools such as Agentware have become a common way for agents to sell inventory not in the GDS, but end up causing additional steps that decrease productivity. The travel industry needs to continue to push the GDS to provide more flexible integrated tools. Projects such as Farelogix's open source POS Hawkeye should be embraced by the industry so we can move beyond issues of bypass and instead have all agents be able to embrace an integrated multi-source point of sale.

An intelligent travel assistant

2009-02-25T10:31:00.001-08:00

It was way back in 1985 I first began exploring the use of AI expert systems to automate the travel process. At that time a close friend worked for Mad Intelligent Systems in Santa Clara California. I was at United Airlines and I already had a thirst for emerging technology. I believed that automating the travel process would be made easier. This belief was reinforced when I viewed the Knowledge Navigator video that was presented by John Scully of Apple at MacWorld in 1989. I also have spoke about intelligent agents for travel in my blog post from October 2006

Technology Review (published by MIT) cites Intelligent Software Assistants being one of the major trends to watch in 2009. In that article it mentions a new Silicon Valley startup named Siri which is a spin off of research done at SRI International for the DOD.

When online travel was first introduced, the theme promoted by many OTAs was an automated travel agent. Of course this was nothing more than marketing spin as no OTA uses expert systems to enhance the travel planning and booking process. In addition firms such as Rearden Commerce, Trip Chiill and Manticpoint all have used the marketing theme of an intelligent travel assistant. I applaud their efforts, but I still believe the ultimate travel assistant that can act like the Knowledge Navigator is still unrealized and I am hopeful with firms such as Siri, true intelligent travel assistants will emerge over the next few years.

Yelp deleting negative reviews for a fee?

2009-02-24T14:08:00.000-08:00

Some reports have surfaced from local media about complaints from local merchants that Yelp is willing to remove negative reviews for a fee. I do not know whether these reports are accurate and reflect an overall Yelp strategy or whether there are rogue Yelp! sales reps offering this service to boost their own volumes. It should be noted that Yelp denies these allegation and states that their reps don't even have the ability to edit reviews.

There is a challenge at any Web 2.0 site to balance the open submission of user reviews with the need to police the reviews to avoid companies from trashing their competitors. As user feedback volumes increase and become more instantaneous with consumers s reading or leaving reviews through their mobile devices, managing review contact will become even more challenging. Location based services will continue to expand and promoting discounts at local restaurants is a key service desired by frequent travelers per our recent PhoCusWright research:

How will Twitter impact the Travel Industry?

2009-02-17T10:21:00.000-08:00

In spite of tough economic times, the microblogging site Twitter continues to receive funding. I have to admit that even though I have a passion around all things related to emerging technologies, I have had some trouble understanding how Twitter fits into the mix and how it can impact the travel industry. That recently became much clearer.

The concept of microblogging began in March of 2006 when Facebook introduced status updates. Twitter came along in July of 2006. In May of 2008, Twitter raised 15 million and another $35 million in February 2009. Considering current economic conditions, many VCs still see an opportunity.

In an article on Techcrunch Erik Schonfeld begins with this question. " What if you could peer into the thoughts of millions of people as they were thinking those thoughts or shortly thereafter?" He goes on to state that Twitter is the "crude beginnings of the "now" search engine."

Mining twitter feeds may provide some insight, but from my perspective the interesting thing about Twitter is not so much the content but the influence the individual can have on any given subject provided enough people follow the person's tweets. To me the main issue is around reputation within a social network.

Twitter's impact was felt in a big way in late 2007 when Mark Zuckerberg, CEO of Facebook was being interviewed by Sarah Lacy of Business Week at the South by Southwest Interactive conference. The audience did not like the way Ms. Lacy was treating Mr. Zuckerberg and they immediately let the world know through Twitter.

The relationship between Twitter and blogging is also important. A blog allows a subject to be discussed in detail. A tweet can point to a blog article. Also I believe Twitter on mobile devices is a great match between device and application. Even with the most advanced smartphones, writing a blog entry on a mobile device is challenging. Writing a tweet on a smartphone is easy.

So what impact will Twitter and its corporate enterprise siblings, such as Yammer, have on the travel industry? The bottom line is that if a given individual has a strong opinion about something, the world soon learns this view provided the person has established themselves as a thought leader in the an industry sector or within the company. This has obvious implications for both suppliers and intermediaries in the travel industry. Long gone are the days of responding to customer complaints through standard form letters. People will voice their opinion immediately on Twitter and if they have a strong following, a given travel vendor's product or service may be impacted by this influential person. As Twitter style applications come to the enterprise, influential tweets from key corporate players can also have a significant impact provided the person has a significant following within the company.

I have just begun to tweet myself and I hope to use the effort to provide some more instantaneous feedback on industry events.

It all about the App Stores

2009-02-09T13:29:00.000-08:00

Apple launched its App store in March of 2008 permanently changing the way mobile applications are distributed. Today there are over 15,000 apps in the iPhone store, but there's a lot more to come....

New app stores have been announced from RIM Blackberry, T-Mobile and Google. There has also been some speculation that both Microsoft and Nokia may be launching apps stores.
So what does this mean to the travel industry? Sometime in the not to distant future we may be looking at over 100,000 downloadable applications available from a variety of sources. The percentage of applications that fall into the travel, location based services and navigation categories will likely be high. The travel industry needs to create applications today for the current app stores from Apple, RIM Blackberry and T-Mobile. These apps should not simply be retreads of their current Website but include innovative ways to combine location, context and personalization into delivering unique value to the business and leisure traveler.

Travel and Tourism - Largest Industry - Small Number of Specialists

2009-01-25T07:29:00.000-08:00

I have been working in the travel industry since 1982. It never ceases to amaze me how in such a huge industry, the largest in the world, people are so interconnected. This really hit home recently while I was working in Kuwait.

During the reception after this year's PhoCusWright in Hollywood, my friend and colleague Philip Wolf commented that I was the person he had known the longest at the conference with the exception of one individual. A few weeks later I was back in Kuwait assisting my client and interviewing a candidate for the CFO position. It turned out this candidate was on the board of PhoCusWright and was that other individual Philip mentioned. Talk about a small world.

Tomorrow evening I leave Kuwait for Amsterdam to attend the IFITT's ENTER 09. I have not attended ENTER since 2002, but I do see some familiar names. When I first attended the ENTER 2002 back in Finland I felt both a feeling that I was with my peers and that I was somewhat a "fish out of water". The conference is normally attended by academics and government tourism officials. The research from the PHD candidates is always fascinating and the discussions are on topics that are very close to my heart such as mobile travel technology and personalization. This is what makes me feel comfortable. What was a bit unerving back in 2002, was that I just did not know anyone at the conference and I was one of a handful of US attendees. With all the work I have done in Europe, Asia and recently the Middle East, I certainly feel more globally connected. I am looking to learning the latest in travel research and interacting with my peers in Amsterdam this week.

TMC as Consultants - Are We There Yet?

2009-01-19T05:57:00.001-08:00

For years a familiar theme heard throughout the business travel industry concerns the evolution of TMCs from order takers to true consultants for their corporate clients. I often classify TMCs into three groups- mega (Amex, CWT, BCD & HRG), 2nd tier and third tier. This is based on size of the company and their regional or global reach.
Late last year I gave a presentation to a group of TMCs who were part of a business travel consortium. The group was comprised mostly of 2nd tier and 3rd tier TMCs. As is my nature I talked about how technology was driving new business practices in the corporate travel market. This included my passion around mobile technology and its approaching impact on the business travel experience. I have given many talks over my 31 year business career and I pride myself on being able to read my audience. There I was prognosticating on how advanced technology would change the role of the TMC, when I looked out at the audience and I suddenly realized they were not getting it! So I paused and asked a simple question, how many of the TMC executives had at least 50% of their reservations being done online. No one raised their hands. Ok I said how about 25% of their volume online? Again only one agency owner raised their hand. Then it hit me. This group represented the famous "laggards" segment of the technology adoption curve.

Let's face it, corporate booking tools have been around for over 10 years. The cost savings of these tools have been well documented, but here I was talking to a group that could not see their value. One of the more progressive agency owners (the one with 25% adoption) whispered in my ear that the current economic downturn might actually thin the herd eliminating those who don't embrace technology. The bottom line is simple. If you don't adopt productivity tools such as CBTs or BI dashboards, you will be left behind. More importantly, if you embrace these tools, the opportunity to move from a transaction processor to truly a consultant that helps corporate clients identify areas to reduce their T & E spend is significant. During 2005-2006, I worked with one of the mega-TMCs on overall technology and service strategy, recommending that they build a comprehensive dashboard for their clients and that they expand their consulting offer beyond the consulting unit within the company to make a part of the account manager's core offering. I was pleased to see this mega embrace my advice, too bad this group of laggards is still clinging to the old way of doing business.

Middle East Travel Market

2009-01-15T01:09:00.000-08:00

I am currently back in Middle East. This is my sixth trip since July 08. Rapid growth is still the norm here despite the economic downturn, though the market is showing some signs of a slowing down. Even hot markets such as Dubai are showing signs of a slowdown as many construction projects have been slowed or put on hold.

The following chart describes the maturity of global market based on travel technology adoption:

The Middle East is an emerging market where online travel itself has not yet taken off. Corporate travel agencies are still primarily transaction processors rather travel management consultants.

There are both structural and cultural barriers to adoption of corporate booking tools. Most of the agency staff is actually Indian. Rates for agency staff are still much lower than in Europe or the US. Service is viewed as an essential component of corporate travel.

Despite these obstacles I do believe we are on the cusp of a major change in corporate/agency relationships here in the Middle East. High net worth individuals will continue to demand personal service, but many Middle East residents in my age group (baby boomers) were actually educated in the US or Europe and thus are implementing Western business techniques. With places such as Dubai now facing a drop in occupancy, online travel companies such as Expedia are poised to launch Middle East operations in 2009.

As this chart (developed in conjunction with Market Designs) indicates the evolution of a market first begins with basic infrastructure and online activity. Travel search follows with the adoption of online booking. Corporate booking tools are at the last stage of market development.

I believe the current economic downturn combined with the rapid growth of online travel will dramatically change the lansdcape for corporate travel mangement in the region over the next 12 months.

Mobile Travel apps for 2009

2009-01-06T08:45:00.000-08:00

A major New Years resolution for me this year is to blog at minimum once a week! During the last two months of 2008 I did not blog at all and I am determined not to repeat this long absence. My apologies.

A recent post by Tim Hughes of the BOOT (and VP of Orbitz in Australia) predicted that 2009 will NOT be the year where the travel industry embraces mobile.

I could not disagree more! Having now completed the PhoCuWright "The Future of Mobile Travel" special report, I strongly believe mobile travel applications will flourish in 2009 despite the global economic crisis. The two primary drivers of this mobile trend are the adoption of smartphones and the implementation of next generation networks (3G, LTE & WiMAX). The research clearly showed a correlation between frequent business travelers and smartphone adoption. Take a look at these two slides from our Special Report:

The key statistic here is that as of November 3, 2008 18.9% of consumers are now carrying a smartphone.

Compare that with our research results which found that 71% of Frequent Business Travelers own a smartphone. Additional research showed that 90% of frequent business travelers have owned their smartphones for less than 2 years, showing that smartphone adoption is a recent trend. You combine this with the explosive growth of 3rd party apps stores from not only Apple, but RIM Blackberry, Google and T-Mobile and it is clear that 2009 will see tremendous growth in downloadable travel specific applications.

These applications will be location and contextually relevant. The affinity between emerging mobile technology and frequent travelers will change the business and leisure travel experience 2009.

An approaching "Storm" of smartphone competition

2008-10-08T16:01:00.000-07:00

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

2008-09-24T13:37:00.000-07:00

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

2008-08-13T18:16:00.001-07:00

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

2008-08-05T12:15:00.000-07:00

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

2008-08-05T11:11:00.000-07:00

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

2008-07-16T08:04:00.000-07:00

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

2008-06-17T23:17:00.000-07:00

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

2008-06-12T09:56:00.000-07:00

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?

2008-05-25T01:56:00.000-07:00

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

2008-04-28T17:19:00.000-07:00

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

2008-04-18T12:57:00.000-07:00

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

2008-04-07T08:04:00.000-07:00

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

2008-03-26T17:18:00.000-07:00

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

2008-03-26T14:42:00.000-07:00

,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

2008-03-24T15:17:00.000-07:00

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

2008-03-07T14:27:00.000-08:00

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

2008-03-07T13:39:00.001-08:00

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

2008-03-05T11:00:00.000-08:00

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

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.
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.
Flexibility to Control Distribution - In 2006, Farelogix released its Distribution Manage r 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
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

2008-03-04T10:08:00.000-08:00

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

2008-03-03T15:31:00.000-08:00

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, Farecas t 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

2008-02-21T12:33:00.000-08:00

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

2008-02-20T09:03:00.000-08:00

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

2008-02-12T11:30:00.000-08:00

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

2008-02-08T16:55:00.000-08:00

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

2008-02-01T14:11:00.001-08:00

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

2008-01-31T13:10:00.000-08:00

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

2008-01-29T09:10:00.001-08:00

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

2008-01-28T11:25:00.000-08:00

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?

2008-01-23T10:47:00.000-08:00

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.

Conversation with Aircell Senior Management

2007-12-20T12:37:00.000-08:00

For some time I have been talking about ubiquitous computing and the always connected traveler. I just received a briefing from the senior management of Aircell about their plans to implement Wi-Fi connectivity on commercial aircraft. Back in 2001 the buzz about this subject concerned the Boeing Connexion roll out with Lufthansa airlines. Last August Boeing announced that it would be discontinuing the Connexion service. So why will Aircell succeed where Boeing failed? It is all about the technology and business model. Boeing's Connexion equipment was expensive and heavy (1,000 lbs) and needed to be installed when the aircraft was taken out of service. Aircell's technology is lighter and can be installed while the plane sites at a gate overnight. Apart from this advantage, Aircell also has a business model where the airlines share in the revenue (the cost for consumers will be equivalent to Wi-Fi connections in hotel rooms). American Airlines and Virgin America are the two launch customers. In the case of Virgin America the technology will be integrated with the seat back screens allowing all customers to browse the Internet even if they don't have a laptop or PDA. This always connected environment fits well with the airlines' need to sell ancillary services on board for additional revenue sources. In addition, the opportunity to communicate with their best travelers on the aircraft provides some unique CRM capabilities which will likely surface as the Aircell connectivity becomes common place.

Backlash from the Facebook Beacon advertising program

2007-11-28T10:49:00.000-08:00

Facebook's attempt to exploit its social network for advertising purposes has raised some major concerns from their users. The Beacon advertising platform is designed to broadcast purchases made by users to their social network. The issue has been taken up by the progressive political organization, MoveOn.org claiming the program violates privacy. Over 50,000 Facebook users have signed the MoveOn.org petition complaining about the privacy issue. The primary problem seems to be in the opt-out strategy taken by Facebook. There is no question that social networks are here to stay and they do influence purchases, especially for travel. The "Where I've Been" application (now owned by Trip Advisor) has been one of the most successful applications on Facebook. Behavioural targeting is also becoming a mainstream advertising strategy that is designed to deliver specific content based on the implicit and explicit behavior of the user. Earlier this year one of the largest players in the behavioral targeting space, Tacoda, was purchased by AOL demonstrating the importance of this emerging advertising trend. Mobile advertising is beginning to become major force as well. Whether planning a complex vacation or buying a HDTV, the opinions of my friends and colleagues do make a difference. The key lesson here is that no matter what the platform (social networks, behavioural targeting or mobile advertising) the user must be in control. Opt-in is the key, not opt-out.

Verizon tears down their walled garden

2007-11-28T09:37:00.000-08:00

The announcement this week by Verizon that they are opening up their wireless network has significant importance for the development of new mobile travel applications here in the US. Unlike the rest of the word that operates using GSM technology, Verizon's network is based on CDMA technology developed by Qualcomm. This makes cross networks application development problematic. Despite this limitation, the fact that Verizon has recognized that consumers want to be in control of the applications on their phone is a tremendous step towards a more Internet based model for mobile applications. Details of Verizon's plan are still a bit sketchy but the basic thrust of the announcement is to allow third party developers to create applications that work with the Verizon network without the need to work through the Verizon deck (the deck refers to the allowed mobile applications controlled by the Verizon). Frequent travelers are often the first to embrace next generation wireless technology. In an open environment where 3rd party development is no longer tightly controlled by Verizon, travel specific mobile applications can be created that drive personalized, location based services to the mobile traveler.

Mobile Technology

2007-11-21T11:00:00.000-08:00

In his classic book, Smart Mobs, Howard Rheingold described two possible futures for mobile technology. The first is a highly personalized smartphone that filters content based on personal preferences. In this vision the smartphone becomes an electronic personal assist that provides specific content that matches the user's situation, preferences and location. The other vision is an advertising platform that delivers unsolicited offers to the user based on behavioral information collected both explicitly and implicitly. The iPhone certainly represents the first real handheld computer with strong emphasis on browser based search. In a way the iPhone is delivering on the Knowledge Navigator video vision first presented at Mac World in 1988 by then Apple CEO John Scully. Google's Android mobile platform is an effort to both open up the traditional walled-garden created by telecommunication companies as well as an obvious mobile advertising play. I am beginning to believe that both the visions outlined by Howard back in 2002 are being driven by these two tech giants. I am hopeful that privacy concerns (such as the recent backlash regarding the Facebook Beacon advertising platform) will help reign in the trend towards unsolicited advertising. For 2008 I will be working with PhoCusWright on a new special report on mobile technology. As I dive into the mobile research for this project, I hope to identify how the travel industry can profit by implementing mobile apps for the leisure and business traveler. If you are interested in becoming a sponsor for the mobile special report please contact me at norm@traveltechnology.com.

PhoCusWright - Expedia CEO part II

2007-11-15T12:01:00.000-08:00

During his closing speech at PhoCusWright, Dara mentioned briefly an effort at Expedia to re-platform their technology infrastructure. So what does re-platform mean? Often the plumbing aspects of travel technology are not a common topic at any show including PhoCusWright, but here the re-platform initiative has a direct bearing on how Expedia works with suppliers. It concerns re-engineering their middleware to better match customer needs with supplier content. In today's online world, OTAs need to provide more flexibility to all their suppliers to manage the delivery of dynamic pricing based on different customer segments. Dara talked about this in relationship to hotels, but airlines are also are demanding a better way to showcase and target their services to specific travelers. This includes selling premium seat assignment or other amenities that can help differentiate their products. A great example is Virgin Atlantic's upper class which provides unique seating and amenities at a lower price point. Traditionally Expedia will show Virgin Atlantic the same as other airlines. Expedia's re-platforming initiative will help suppliers better target customers and use differentiated services to influence the sale at the time of booking.

PhoCusWright - Expedia CEO

2007-11-15T10:22:00.001-08:00

Dara began with a nod to the new media based deal with IHG. He said Expedia's focus is to change the traditional impersonal relationship with consumers to be more individualized. Three areas of focus: (1) email (2) Segmentation (3) Search experience - lodging search experience to the next level.
(1) Email - described Amazon's email follow-up after search. Booking window, length of stay, impacting next visit at Expedia. Email as upsell opportunity. Purchase behavior impacts the type of email message generated. Occasion or event triggers for emails are more effect - 20X as effective. Air search with permission send email - 30X conversion rates
(2) Segmentation - demographic mailings. Unique content based on segmentation - Expedia Elite Group - premium service levels - no cancellation or change fees and other services
(3) Personalization - Optimization of lodging sort. Previously anyone would get the same sort. Built an algorithm sorting hotels with goal sending hotel partners more likely to convert and enjoy that hotel. Personalized predictions based on conversion - 30 attributes - kids, which site, length of stay, adding factors for partners inventory levels. Customer reviews

Summary - Long Tail - world is flat. One to one relationship with every traveler.

My comments - All this is not new, but does show a new level of maturity for Expedia in order to better target customer segments verses a vanilla approach traditionally followed by Expedia.

Second Life Discussion-PhoCusWright Day 2

2007-11-15T07:02:00.000-08:00

Cathy Schetzina led a discussion of Second Life with STA, Carnival Cruises and Starwood. The primary benefits of launching a Second Life site was described by the panel are PR and gaining experience in a virtual world. The panel agreed that the initial buzz regarding Second Life has faded somewhat lessening the value of free PR that was prevalent earlier this year. Starwood created a new hotel brand in Second Life. The company gained valuable feedback on design and received lots of press. Starwood was prominently featured in Business Week and other general press outlets providing good PR. Starwood has since shut down their Second Life initiative showing that the value was not sustainable. STA emphasized the importance of sponsoring activities such as concerts or dance parties. With STA's primary market being students the fit with Second Life was a natural as a way to each their core campus audience. When Cathy asked whether Second Life is a passing trend or the sign of something in the future, the panel felt that this was only the beginning of trend toward marketing in the virtual world. The bottom line is that Second Life should be viewed as a game and the true impact of online gaming in a virtual world is just beginning.

Live from PhoCuswright - Michelle Peluso CEO Travelocity

2007-11-14T07:26:00.001-08:00

Michelle talked about general travel industry themes such as the need for better customer service, air schedule reform and economic indicators pointing to a downturn in the economy. She admitted that OTA interfaces have been stale for some time. She pointed to Travelocity's Experience Finder as a different way to approach travel verses the traditional linear method. She emphasized the data gained from transactions as a valuable tools for suppliers. Talk backers including Randy Peterson from WebFlyer. Randy asked about fare filing problems such as the $59 Tahiti fare mistake asked. Steve Kafner asked about the role of travel search and touted the new relationship with Travelocity. One theme discussed was relevance verses personalization Michelle emphasized that at each stage of the travel process relevance is the key. Travelocity's experience finder works on this model of relevance. Travelocity research conflicts with PCWI research staying that people stay with an OTA despite the desire to shop multiple sites.

Live from PhoCusWright Private Equity - Karl Peterson TPG

2007-11-14T07:02:00.000-08:00

The PhoCuswright conference kicked off with discussion of private equity investment in the travel industry with Karl Peterson. Karl emphasized that PE is in for the long run. He disputed the theme of the recent Business Week article which used the term of "strip and flip" referring to the process where PE buys public company, extract profits and then splits up the company into pieces. Philip's questioned Karl's assertion that they are in it for the long haul, as no doubt many in the audience agreed, as a spin rather than a fact. The Business Week article went on to say that the recent credit crunch due to the collapse of the sub prime market has tightened available financing for PE. I believe we have not yet seen the true impact of PE on our industry. Blackstone now owns two GDS brands and three mainframe reservation systems (Apollo, Galileo, and now Worldspan). Sabre is owned by PE. Though all the GDS have offloaded a lot of their content to more inexpensive server based technology, the primary customer information is still tightly bound to the transaction residing on the mainframe. With PE owners now controlling Travelport and Sabre, the true impact of cutbacks and technology overhaul is still not known.

Kango

2007-10-25T11:08:00.000-07:00

Yesterday I had the pleasure of meeting with Yen Lee, president of the new travel search company Kango. For those who do not know Yen, he has an extensive background in online travel most recently as the head of Yahoo! Travel. So what is unique about Kango? The company is building a semantic travel search engine. Rather than simply displaying results of a key word search by PageRank (the method used by Google) , Kango delivers results that are more personalized based on specific attributes entered into the search criteria. Kango is creating an ontology of global travel content that includes ranking of superlatives within review sites. This enables the search engine to rate a given hotel, for example, putting greater value on adjectives such as "This is the best hotel for kids in Monterey California". Kango allows users to search hotels, activities and other travel related content filtered to meet their own specific preferences. In other words, rather than simply searching for a four star hotel in Monterey, Kango users can use specific descriptive words such as "romantic" to identify the most appropriate hotel to meet their needs. Though the idea of segmenting travel search has been introduced by sites such as the Travelocity Experience Finder or Home and Abroad, Kango's backend semantic catalogue represents a different approach. These other experience oriented sites have created a taxonomy of their content enabling an experience oriented search limited to their traditional content. Rather than simply putting content into categories, Kango's ontology defines travel content in terms of superlatives delivering a numeric ranking of search results that integrates mutiple user generated content. This includes review sites such as Trip Advisor and travel blog sites such as Gusto!. This is not simply a repurposing of ratings from these sites. The Kango engine evaluates reviews and blogs of a specific hotel property for example, across multiple sites to deliver a consolidated rating that reflects the descriptive needs of the user. Kango is adding this semantic interperation of travel content not only to traditional hotel information, but also by embracing the Long Tail concept, Kango is including content options such as campgrounds and other disenfranchised elements of travel industry that normally are not included in standard OTA content. Kango's focus is on the planning phase of travel and will refer their users to booking sites for reservations. This is truly an innovative approach to travel planning that has the potential to truly change the way consumers search travel content.

Why Social Networking Matters for the Corporate Travel Market

2007-10-15T10:26:00.000-07:00

The BEAT recently covered my NBTA presentation on Web 2.0 and the release of my new study "Corporate Travel Technologies: Today and Tomorrow". In the article Jay projects a somewhat skeptical view on whether social networking apps will ever appear in the corporate travel industry. I understand Jay's skepticism. Throughout my 25 years in the corporate travel industry, I have seen many so-called revolutionary apps announced at trade shows, but never implemented. When it comes to social networking, this trend transcends any specific industry, and thus is a phenomenon that will impact all travel industry segments, even corporate travel! I was talking this morning with the CEO of a new European based social networking platform, Dopplr, that allows individuals to identify other people in their network who are traveling to the same destination. Dopplr's focus is primarily on business travel. With recent PhoCusWright research that shows that 1/2 of all business trips include an extension for leisure activity, identifying other social networking contacts who are at the destination becomes important. Even from a pure business enterprise perspective, identifying other corporate employees who are at the same destination could have additional value for the traveler. Social Networking is here to stay. Still not convinced? Then perhaps it's an age thing! PhoCusWright research also shows that people under 35 are much more familiar with social networking apps than those over 35. This generational gap will be most prominent when the current college age Facebook users enter the workforce.

Why Travel Mash-Ups are Important

2007-10-09T11:56:00.001-07:00

As much as the OTAs may position themselves as a one-stop shops for travel planning and booking, the reality is that no single site can make this claim. With the introduction of over 30+ travel sites over the past 2 years, travel content on the Web has never been more fragmented. Sites that provide travel blogs, itinerary sharing and rating systems abound. The future of destination content should include a mash-up of multiple sites such as the recent by American Express regarding their travel mash-up of Travel & Leisure, American Express Publishing and Lonely Planet. In my view consumers would flock to mash-up sites that combine multiple reviews from Trip Advisor, IGOUGO and others, organized around a single hotel search. Obviously copyright issues may be an obstacle, but if the review sites benefit financially through referral income, they may be willing to provide the individual ratings. The same needs to be true for itinerary sharing sites, multiple samples from Realtravel and Gusto! would be beneficial. Mash-ups are here to stay and will continue to play a major role in online travel.

BBC buys Lonely Planet - The Future of Guidbook content

2007-10-05T11:28:00.000-07:00

Some may be surprised by the acquisition of Lonely Planet by the BBC. Why would a traditional media giant want travel destination content? What does this mean for the future of guidebooks? There are a number of ways to look at this purchase. Combining Lonely Planet content with BBC video such as Michael Palin's travel series seems an obvious step, but I believe there is more to this transaction. Large media giants such as BBC are challenged by the growth of the Web which is clearly steeling viewers from the traditional broadcast television medium. The BBC is not blind to this trend and has created some interesting user interfaces on the Web. In specific, the BBC has a very creative interactive time line that allows users to drill down to find out information about specific time periods in British History. Rather than offering the user simple historical text, the BBC history time line allows the user to select information that is of particular interest to fit their needs and drill down to the appropriate detail. Applying this approach to Lonely Planet information would be very logical and enable better navigation of the content. With the growth of user generated content and BBC's control over massive libraries of video content, the BBC could use the Lonely Planet acquisition to drive a new model in the market that combines all three of these sources into an interactive display allowing users more flexibility. The integration of multiple sources of content is a natural evolutionary step in destination information and I am hopeful the BBC will use this opportunity to drive a new model in the market.

Corporate Travel Technology: Today and Tomorrow

2007-09-24T12:27:00.000-07:00

I am pleased to announce the release of my new study: "Corporate Travel Technology: Today and Tomorrow". The study is now available for immediate download at the Travel Tech Consulting online store: http://traveltechnology.stores.yahoo.net/cotrtetoandt.html

Are Airlines a Commodity?

2007-09-18T13:30:00.001-07:00

I am writing from Houston Texas where I attended a consultant's forum sponsored by Continental Airlines. The session was primarily focused on the corporate market , but did include a review of some very impressive stats, including some slides which showed that CO is the best US network carrier for on-time performance and lowest baggage loss.

Part of the session included a meeting with Continental's Chairman & CEO, Larry Kellner and Jeff Smisek, Continental's president. Though I still doubt whether Continental can break the commodity label, these two executives did represent a breath of fresh air. Both gentleman were very open and candid about their plans for expansion, relationship with customers and respect for their employees. I left the meeting wishing Continental had a bigger presence in the San Fransisco Bay Area.

WiMax verses 3G, 4G and Beyond

2007-09-05T08:44:00.000-07:00

The Tech industry has been talking about ubiquitous computing for some time. Any observer would agree that it has become common place for business people to multi-task - e.g. listening to a speaker while reading one's email, but the fact is that this only the beginning of our always connected future. An interesting battle has emerged between the traditional telecom players who are offering 3G (Third generation) wireless networks with some now talking about 4G capabilities. An alternative trend is the emergence of WiMax, a broadband technology that could be thought of as Wi-Fi on steroids. With telecom and tech companies such as Sprint and Intel embracing WiMax, many perceive the wireless roadmap as a "fork in the road". Rather than 3G verses WiMax, a blending of the two technologies seems to be more likely. Devices such as the Apple I-Phone with built in WiFi point to a hybrid future where both traditional telecom and WiMax networks co-exist is more likely. The wild card in this game is Google. For many months the blogosphere has been chasing rumors that Google is building their own mobile device that will compete head to head with traditional offerings from Nokia, LG and Motorola as well as the Apple iPhone. No matter which network becomes dominant the days of the always connected traveler are here to stay and all travel companies must develop m-commerce strategies to reflect this fact.

Call Center Point of Sale

2007-08-20T17:01:00.000-07:00

Over the last 20 years I have been involved with a number projects involving point of sale UIs for call center agents. Going back to my days with United Airlines when Casto Travel was the first installation on the West Coast for the, at that time new Apollo Focalpoint UI, to recent projects with Alaska.org, Vegas.com and Vail Resorts, I have continued to be disappointed that call center travel technology still lags behind both online UIs and non-travel call center apps. Too often, common wisdom has pushed any call center development effort to the back burner in favor of direct consumer online efforts. The problem with this approach, is a lack of understanding of off-line's role in support of complex online transactions. Another inhibiting factor is the traditional limitations of Web-based interfaces verses robust Windows-based desktop tools. Now that we've seen the formal introduction of AJAX or FLASH in the consumer online travel arena, let's hope similar use of these Web 2.0 tools makes it way to the agent's desktop.

Observations from the NBTA convention

2007-07-31T15:03:00.000-07:00

Last week's NBTA's annual convention was billed as the biggest and most successful travel management conference ever. A common question I was asked while roaming the tradeshow floor, "What do you believe was the hot topic at this year's conference?". My response was simplly stated "nothing really new here". In reality I believe more was left unsaid then presented in any particular seminar or general session. For example, Sam Gilliland, CEO of Sabre, presented a panel of ex-airline execs who chatted with Peter Greenberg. I really wanted to know what the private equity buyout of Sabre means to the industry not to mention the Travelport acquition by Blackstone and the recent IPO by Orbitz. Instead the two airline executives talked about the need for high speed rail for the NorthEast corridor (DOH!). A familiar theme in Sam's introduction speech was "you the corporate travel manager, really controls the industry", but is this really true?

Perhaps the problem with this conference is that the position of corporate travel manager is a moving target. This week, I have been updating my NBTA database from 2004 and I immediately noticed about a 70% turnover in names just for the letters A and B! Could it be that the coveted target of the suppliers at the conference is a moving one? Is the position of travel manager a long term career? My apologies to my friends and colleagues who have been in their role for many years, but the reality of the market is that at an average company a new travel manager emerges after about 4-5 years. Why is this? Corporate travel management is not a core competency of any organization (except TMCs that is). There is little room to advance in the position other than adding more commodities to the role if the the CTM is in procurement (as many are moving towards) or moving to other positions in the company. So if I were to conservatively estimate that 50% of all travel managers turnover in a 5 year period, marketing to these individuals becomes a constant re-education effort. No wonder the conference lacks innovation, there are so many newcomers to the position every year, it is nearly impossible to move to start a more forward thinking dialogue.

CorporateTravel Technology Today and Tomorrow

2007-07-20T12:33:00.001-07:00

I am pleased to announce that my most recent corporate travel study: Corporate Travel Technology: Today and Tomorrow is now available for a pre-published order with a discount of $100 (purchase price is normally $600, pre-publication price of $499). In addition if you are attending the NBTA show next week you can receive an additional $100 discount if you order the study by August 31, 2007. The study will be released in mid- late August 2007. This research is the result of intensive review of products and services offered in the corporate travel space. You can check out the table of contents here and purchase the study through the TTCI or PhoCusWright stores.

Here is a link to the flyer we are distributing at next week's NBTA conference.

I'm Back....

2007-07-16T13:22:00.000-07:00

My apologies to my loyal blog readers. I was on vacation in Israel for most of June and I have been on the run finishing up various projects since I returned. A couple words of advice concerning travel to Israel. My family and I felt extremely safe during our stay. Don't let the US media make you believe otherwise. As the birth place of three of the world's major religions, visiting Israel is like no other experience. That being said we did have a slight mishap while enjoying the Dead Sea. My cousin's rent-a-car was broken into and about 1/2 our luggage (all the luggage we had with us) was stolen. This included our passports. Though Israel is very safe, personal property is not, especially in remote areas where Bedouin's live. I am sorry to report, per the Israeli police, that the Bedouin's main source of income is theft. So if you do travel to Israel and see a Bedouin wearing a Steely Dan t-shirt, wearing my wife's skirt listing to my son's IPOD, let me know! In reality personal possessions can be replaced. BTW if you ever do lose your passport in Israel I would recommend the consulate in Jerusalem rather than the Embassy in Tel Aviv. They were extremely helpful in getting us temporary passports.

I realize a lot has been happening over the last month in both travel and technology. I hope to make up for lost time this week with a number of entries.

Working with 3rd party software developers

2007-05-31T16:46:00.000-07:00

I found it interesting that two prominent software companies (if you can call a GDS a software company) one within the travel industry, Sabre, the other the poster child for social computing, Myspace, have both recently come out with rules (or lack of) regarding 3rd party software developers that hook into their systems. In the case of Sabre, there has been a lot recent press around the new fees Sabre is now charging 3rd party applications such as Booking Builder. For Myspace the issue is one of widgets used by third parts to embed content inside their site. The most common example is Youtube whose growth as a company's was significantly driven by MySpace.

In a recent blog entry by Josh Kopelman, Managing Director of First Round Capital (which was also carried on the Always On Network ), Josh compared MySpace's lack of a clear "widget road map" to that of Prodigy. "This brings back memories from the early days of the Internet, when companies like Prodigy and AOL were the only online services in town. Despite the launch of the web browser (which unleashed the creation of millions of web sites), AOL and Prodigy initially focused on maintaining their proprietary online environment and controlling everything on their site." "Myspace does not have a formal development program and has blocked several widgets , (and) built their own widgets to compete in certain areas." In contrast, Facebook, Myspace's chief competitor has announced a new development platform encouraging 3rd party applications that work with their site.

Though I recognize that contrasting Sabre's actions to that of Myspace is a bit of an apples and oranges comparison, but the end result is similar with each company trying to protect what they perceive as their proprietary competitive advantage. Like Myspace, Sabre is blocking some third party development , while promoting their own alternative tools (based on Agentware). Hopefully one of the other GDS (Galileo, Amadeus are you listening?) will learn from the Myspace / Facebook battle and take an opposite stance from Sabre, promoting and supporting 3rd party development tools.

Digital Public Space Advertising

2007-05-18T10:13:00.000-07:00

I am fan of the 2002 sci-fi movie Minority Report. In the film Tom Cruise is bombarded by digital advertising as he walks through a crowded mall. The ads are triggered by a retina scan personalizing the offering to respond to the character's specific needs. (In the case of the film, Tom Cruise actually replaced his eyes with another character's so the ads reflect that person's preferences).

A recent article in Always On talked about the emergence of adverting in public spaces such as NYC taxi cabs. Combining that with the growth of Behavioral Targeting, the world described in Minority Report is rapidly emerging. Each generation has become more desensitized to the onslaught of media. My 16 year old son is perfectly happy doing his homework, responding to multiple IM messages all while listing to his favorite tunes. I have no doubt that his current ability to manage multiple media inputs will allow him to handle the coming onslaught of personalized advertising. The growth of public space advertising over the next 5 years will be dramatic.

Desktop tools

2007-05-14T08:58:00.000-07:00

I met some representatives from OTOlabs at the recent TravelCom conference in Las Vegas in April. Desktop tools such as the Southwest's DING! application have clearly proven their value in creating a more intimate relationship with customers. OTOlabs' is the developer of ThinkDesktop applications such as Vail Resorts' SnowMate. I worked with Vail Resorts (as part of a PhoCusWright engagement) back in 2005. The SnowMate application is a critical tool Vail has successfully used to bond with their best customers. The Southwest DING! application had over 1 million downloads the first six months. Southwest delivers daily messages on special promotions to the desktop of millions of customers reinforcing their image as a low fare leader and bonding the customer to the Southwest brand.

I am a strong believer that providing a small desktop application to deliver personalized information to your customer is an essential component of a Travel 2.0 strategy. To my surprise the OTOlabs folks indicated that other airlines have been very slow to embrace this concept. This is truly baffling considering the transparency of the Web and desire of airlines to develop a closer bond with their best customers.

Service Oriented Architectures

2007-05-11T11:54:00.000-07:00

A lot has been written over the last three years about the topic of a service oriented architectures (SOA). The concept refers to a more flexible way to create software using Web services. Rather than creating tightly coupled code that bounds specific functionality within the application, software written using SOA principles creates loosely coupled components that can easily be removed or altered without impacting the entire application. "SOA turns monolithic inflexible applications into hundreds, even thousands of small flexible applications" Gartner research estimates that by 2008, more than 60% of enterprises will use SOA as a “guiding principle” when creating mission-critical applications and processes.”

Understanding the underlying architecture of software has always been a difficult task for a variety of buyers in the travel value chain. Whether it is a corporate travel manager evaluating self-booking software or a leisure travel agency looking at reservation technology, the need to evaluate the underlying software architecture has never been greater.

Often vendors confuse the issue by stressing their use of Web services. Utilizing Web services to connect to disparate sources of content has become the norm in the last 3-4 years. Just because an application uses Web services for connectivity does not mean the software has been written using a SOA approach. As an example, a major hotel chain still uses a mainframe running TPF (an old operating system created by IBM for the GDS) as their central reservation platform. The company has created a Web services layer to aid in the communication with property based system and external channel distributors. This is obviously a good use of Web services but does not reflect a service-oriented architecture. If this chain wanted to do a complete revision of their rate structure, the antiquated mainframe approach would lead to a nightmare of programming tasks. If this application was built using SOA, an overall rate revision would be done with less pain, implemented faster and would not disrupt other modules of the reservation process. Unfortunately for this supplier, SOA theories were not around in the 1970's when the core reservation system was built.

Wireless Travel Applications

2007-05-08T17:28:00.000-07:00

Last week I was interviewed by USA Today Weekend regarding mobile technology for the traveler. The premise of the call was focused on the prevalence of IPODs among travelers. The reporter asked some specific questions about downloading audio blogs for use by leisure travelers. The obvious application would allow the provider to segment the traveler population into special interest groups. A guided city tour for a history buff may be quite different from a couple looking for gourmet restaurants. Our conversation went beyond this point to encompass all types of gadgets now carried by frequent leisure or corporate travelers. I mentioned that last year I wrote an article for the PhoCusWright GDX technology subscription service on the hotel room of tomorrow. A common theme within that article is the emergence of multi-media stations in hotel rooms where travelers could hook up their MP3, digital camera or laptop and view the content on new HDTV sets. As always I am interested in any new application being deployed by travel suppliers or intermediaries that enhances the travel experience. If you know of some interesting apps, please let me know.

Web 3.0

2007-04-27T08:02:00.000-07:00

First let me apologize to my blog readers for my long absense. I have been juggling a number of different client projects working long hours (which I know is the norm for today's 24/7 business environment). Fortunately three of the projects are closing out this week so I am back.

Lately I've been seeing a number of articles describing Web 3.0. Is Web 3.0 just another buzz word fueling the pundits and press or does it have some substance? One fallacy that is perpetuated by buzz words such as Web 2.0, 3.0 is the impression that the introduction of new technologies and approaches happens all at once negating prior technologies. In reality technology change is evolutionary. For example adding an improved consumer UI using AJAX or Flash to a Travel 1.0 platform may change aspects of the application to be more engaging, but it doesn't necessarily mean that the software is Travel 2.0 throughout its underlying code.

So what is Web 3.0? A common mantra expressed around Web 3.0 is that software will be more pervasive, faster and cheaper to deploy. Web 3.0 applications will understand the semantics of Web sites enabling new levels of machine-to-machine communication. Personalization will filter information to deliver information that is more relevant to the consumer delivered on the device of there choice. Information itself will be dynamically generated reflecting the needs of the supplier to sell perishable inventory. With the travel industry still struggling to integrate Web 2.0 features and functionality (e.g. user generated content, new UIs using AJAX or Flash) the arrival of Web 3.0 will likely take some time to manifest itself in travel applications.

O'Reilly ECT Day #2- Incantations for Muggles: The Role of Ubiquitous Web 2.0 Technologies in Everyday Life

2007-03-28T09:37:00.000-07:00

The talk began with this basic premise: How do you balance needs of the users with emerging technologies? The goal of the talk was to use different lens on emerging tech and end-users. The backside of technology development is people. How to segment people which are not like "you" - don't design for oneself or one size fits all. There are four life stages each with a different set of properties- stage one - friends, attention, play/leisure, sex, consumption; stage #2 - Sex, friends , money , play/leisure, labor; stage #3 - labor, family, money, power, property; stage #4 - family, health, religion, hobbies, friends. technology adoption and priorities reflect these four life stages. Corporations are currently driving technology. Corporations need to satisfy shareholders reflecting continuous growth. To monetize the interaction people the user must be passionate about the technology. Unhappy users don't make products stick. Four aspects of modern technology: persistence (never goes away) searchability (ability to find what you want), replicability (what is truth?, the ability to copy), Invisible audiences - (don't have a sense who is in the audience- you don't know who your are talking). All rules of privacy is changing. When things really go mobile will create a new shift in practice - combining location and technology.

O"Reilly ECT - The Coming Age of Magic -Mike Kuniavsky, Co-founder and Principal, ThingM

2007-03-28T08:58:00.000-07:00

Ubiquitous computing is moving away from traditional platforms (PC, PDA, smartphone) to include non traditional platforms such running shoes. In 1995 General Magic designed their wireless handheld interface as a desktop. This interface had limited functionality partially due to the desktop metaphor. Extending the desktop metaphor to a wireless device doesn't work with ubiquitous computing. Mike is advocating the use of existing cultural understanding (magic) to describe the behavior of ubiquitous computing objects. Design principles- every day objects (shoes, hammers, hats, plates), they are familiar, physical, no screen , not human, not superhuman, reinforcing the fact that we don't believe in magic. Ambient orb from Ambient Devices looks like a crystal ball. the Nokia medallion - allows communication. Wands (Nintendo Wii), Hitachi Magic wanted. Concept of wands already exists based on embedded technology. The move towards "magic" devices is already happening. The age of magic is coming. Using the magic metaphor should not be an excuse for poor design.

Jeff Hawkins

2007-03-27T12:17:00.000-07:00

Jeff is the original founder and designer of Palm. He described human function and how his new company Numenta is developing next generation for intelligent computing. Jeff stated that you can’t get computers to act as humans- visual perception, auditory perception, somatosensory perception, Languages, Adaptive behavior, planning, thinking etc….

What is preventing this? Common wisdom believes:

Computers are not powerful enough - no longer the case

Brains are too complex to understand

Brains work on quantum principles

Brains are magic

Reality is not too complex, don’t work on strange principles and we just didn’t understand how they work.

Hierarchical Temporal Memory (HTM) –

1) Creates a model of its worked

2) Recognizes new patterns

3) Predicts

Generates behavior Numenta Platform for Intelligent Computing (NuPIC)

Simple vision system –

HTM applications areas of focus:

Automotive
Gaming
Network modeling
Drug discovery
Vision systems
Market analysis
Business modeling
Nurture applications
Anything requiring prices timing or high order temporal data
Music
Language
Robotics

Werner Vogels, Vice President & Chief Technology Officer, Amazon.com

2007-03-27T09:39:00.000-07:00

Mr. Vogels is the VP and CTO of Amazon.com. His talk focused on how Amazon has created an the backbone which can enable small start-ups to reach scale by using the Amazon's infrastructure. The talk centered around how to build a business around ideas verses resources. Amazon services is designed to help a launch new businesses. Building an architecture to deal with peaks 3-4X the average daily transactions is difficult. The 70/30 switch 70% on heavy lifting (infrastructure) and only 30% time investing in actual product development. Amazon chart - service oriented - 150 services together to create a single page. Three parts of infrastructure = EC2 - Compute, S2- Storage - SQS which does Messaging= Web scale computing. Web-scale computing turns huge fixed costs into a variable cost. scalable-increase or decrease capacity impacts cost Effective - low rate pay-as you-go, Reliable and Simple- SOAP and REST based computing. Simple storage service 15 cents per Gigabyte per month and 20cents a GB data transfer. Why can't the GDS follow this model. Rather than owning the transaction, how about owning the infrastructure?
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VC Forum - Web 2.0 and Wall Street

2007-03-27T09:12:00.000-07:00

Panel with Tim O"Reilly and William H. Janeway, Vice Chairman, Warburg Pincus and
Peter Bloom, Managing Director, General Atlantic LLC. What can Web 2.0 learn from the financial markets and visa versa? Attributes of Web 2.0 demonstrated on Wall Street. Speed matters. e-Trade strived for a 9 second trade. Average trade on NYSE is now 30 milliseconds. A thousand transaction a second have become the norm. How does this compare with travel transactions which is measured by 2-3 second response time? Web 2.0 economy - network intelligence phenomenon. Focus on transactional efficiency. The pressure of Wall Street to push down the cost of transaction cost down to zero. Profits as "agents" was no longer possible (sound familiar?). Those who had been agents became traders. This is just like a GDS becoming a travel agent (e.g. Travelocity). Now promoting marketplace based on automated trading systems. Technology turning agents into principles. The interaction of computers and human beings. Now computers trade with each other but are shut off switching to human trading during a major drop.

Jeff Jonas - IBM Chief Scientist

2007-03-27T08:52:00.000-07:00

Using an story of a cheating Vegas dealer illegally working with a customer to illustrate how data silos don't interact, Jeff introduced the concept of "Enterprise Amnesia". In this story the dealer and customer share a common address - clearly a signal that something is wrong. "Enterprise Amnesia" is when marketing, HR an security departments don't share a common database. Enterprise Intelligence requires persistent context. Data and queries in a single data space. Federated search - just in time context.

Sequence neutrality - identifying the same customer in a database. Database drift is natural and the bigger the wearhouse the more this problem persists.

Live from the O"Reilly Emerging Technology Conference

2007-03-27T08:32:00.000-07:00

I am blogging today from the O'Reilly Emerging Technology Conference in San Diego. In 2006, my friend and colleague Philip Wolf coined the phrase Travel 2.0 to describe the new focus on user-generated content and improved user interfaces in online travel. To all deference to Philip, it was Tim O"Reilly who actually coined the original Web 2.0 phrase to describe the user generated and interface changes that is impacting the entire technology industry. Attending pure technology conferences such as this one, always reinforces the fact that the travel industry continues to lag behind the general tech curve. I will be blogging all day on each topic covered: The agenda can be found here.

After the opening remarks, the first speaker is Jeff Jonas, Distinguished Engineer and Chief Scientist, IBM Entity Analytic.