From Cell Phone to Mobile Sensor Platform

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

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

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

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

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

Circos debuts at Demo 2008 - a Kango competitor

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

According Tech Crunch:

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

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

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

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

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

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

Conversation with Aircell Senior Management

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

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

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

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

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

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

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

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

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

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

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

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

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

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?

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

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.