Tourism Tide

February 26, 2008

Germany embraces travel industry communities.

Communities are powering the internet, collaboration is the new norm, and Germany is the new Hotspot for Travel Industry internet communities. They will be hosting 2 grass roots events in a one month time period, Tourismus Camp and the PhoCusWright Bloggers Summit@ITB.

On February 9th, the first TourismusCamp (think Barcamp meets tourism) was hosted in Eichstaett. This meet up was organized by my associate, Jens Oellrich who will also join the me at ITB. Here is a link to the event wiki, translated into English.

I have had the pleasure of coordinating the first international bloggers summit; the PhoCusWright@ITB bloggers summit is bringing a group of over 30 bloggers from more then a 12 different countries together. This event is combining a Tips From The T-List workshop that is open to the public, exclusive blogger interviews with travel industry executives, access to the great PhoCusWright conference information and some good times.

We have brought the bloggers together into one place for everyone to stay up to date on the latest blogger content, go to itb2008.tipsfromthetlist.com for photos, videos and the latest blog posts from an international group of bloggers on this amazing event!

February 8, 2008

Were do GDS' fit in? - The strength of the Middle Man

What does a GDS do?
Well to sum up a bloated technological legacy system, they connect travel suppliers with those that want to buy the travel products; an electronic travel product catalog or marketplace if you will. The primary users of GDS' are travel/internal agents (through a CRS) and consumers (through an Internet portal/OTA).

Why are they needed?
GDS' work well with the traditional distribution system thinking, clients or customers can go to one centralized location to find their travel requirements. This relationship is controlled by the GDS and the reservation is processed through their distribution system. This simplifies the booking process for most of the stakeholders.

What are the challenges?
Consumers, resellers and suppliers are charged a premium for using this 'travel catalog'; a premium that is not cheap. As online technology becomes more accessible, suppliers are opting to offer online sales capabilities through their own websites, thus cutting off the GDS completely.

What does the future look like?
Travel Suppliers are finding that they are able to cut out the GDS and Travel agent, offer similar sales functionality to their customers, and increase thier bottom line. That is a danger for the GDS.

One area that holds promise for the GDS' is the amalgmation of online communities with a travel retail component. As online sites develop into niche communities, travel products will find a natural integration. Sabre has recently launched a business travel social network named 'Cubeless' (sounds like a way to order a drink..) that looks to unite business travelers as they globe trot for their company. My friend Norm Rose was interviewed for BTN Online about social networking for business travelers:

"Most corporate travel managers think about broadcasting out," he said. "The idea of getting feedback and having the visibility to that is not yet on the radar of many travel managers, but can serve a valuable purpose of cultivating the natural tendencies of travelers wanting to talk to each other."

Cubless will be launched with American Express travel. I am curious to see if business travelers are the most effective market for this social community as they may already have a number of other programs, meetings and platforms they deal with. What do you think, are GDS' evolving fast enough? What do you see as the next steps?

ReadSpeaker AudioFeed - Podcast of this blog

January 31, 2008

Mobile Booking Hype?

Is mobile travel technology bringing the next wave of travel e-commerce?

The numbers look convincing. The International Telecommunication Union (ICT) states that in 2008, 50% of all (over 3.4 billion!) people will use a mobile phone. Compare that to 10% of the world with Internet access, and it would seem wise to back a technology with 5 times the number of users. However, there are several factors that mobile technologies need to overcome in order to facilitate large ticket e-commerce.

The booking technologies that companies are proposing are relatively straight forward. Soren Langelund, Asia regional director for Mobile Travel Technologies shed some light into this area:

"Asia's airlines, hotel groups and travel intermediaries can enable their customers to make new bookings and self-manage existing reservations via SMS, via the browsers on their mobile phones or via a downloadable mobile application. This provides a highly convenient service when users are on-the-go or have no access to an Internet-connected PC. "Online" travel is no longer just for PC Internet users."

Now this sounds very promising, and I am fully supporting the advancement of mobile technology (I have an N95 to prove it), however, finding what is needed for a consumer to perform all of these tasks, not just technologically, but psychologically and economically as well, will shed some light into the viability of these new technologies.

Firstly there has to be a willingness to book travel tickets via electronic means. The current trends for online booking are showing a decline in the number of users that are willing to book online. The decline was cited by PhoCusWright, which found that online travel booking by Internet-using travelers had fallen to 62% in 2006 from 68% in 2005. Bookings among those who usually arranged travel offline increased to 31% in 2006 from 25% in 2005. Henry Harteveldt from Forrester summed it up in the Times when he said,

“Customers are tired of spending two or three hours trying to find the airline or hotel or vacation package that meets their needs,"

There will be great advances in semantic Internet booking technology that will bring lost customers back to online booking, but the point is, there are few great interfaces that will continue to retain customers and force growth. Can you see a mobile device with the capabilities for powerful online booking if there are still major issues surrounding booking through PCs?

Secondly, there has to be trust in the medium. The publics trust in online bookings and reservations has taken quite some time to develop. Every time my Mom hears a story on the news about a computer virus, she will give me a call and warn me that my information is not safe. This conception is common. Can you see the public willing to shell out thousands of dollars though a mobile device? News stories like this one do not help.

Thirdly, there must be usage of a mobile Internet connection, that is if the program/app is to book live inventory. The fact is, most people use their mobile phone for talking, based on ComScores Oct 2006 research, U.S. mobile Internet usage is at 19% and Europe averages 29.2%. I am sure that these numbers are slightly higher in recent months, however, average people are not using their phones for complex operations. I was only able to find research on the G8 countries as the mobile Internet penetration rates are lower elsewhere. So I am curious as to how we will see killer mobile apps for travelers without a large mobile Internet user base.

I got the opinion of Fred Ghahramani, founder of airG, owners of the worlds largest mobile community. Here are his thoughts on mobile travel bookings,

"It's possible that I'm completely missing the point, but for most people purchasing an airline ticket is an expensive out-of-pocket investment - something that the average person does maybe once a year. So they'll probably take their time, do their research, shop around, and these are all things that are done on a PC or in person at a travel agent. In contrast, most transactions generated on a mobile phone are impulse buys, a ringtone here, a small video there etc. Now there's definitely going to be really busy people out there that travel in high frequencies for business that are not spending their own money, but most people like this already have in place a support network of secretaries, assistants, and corporate travel agents. For these reasons, I can't really see buying airline tickets on your mobile phone to become a mass market practice. Now there will always be other applications, perhaps skytrain tickets, movie tickets, etc, so it should be interesting to see the market develop."

As devices become more robust, and as data access rates lower, mobile computing will be ubiquitous with travelers. In the immediate future I can see apps for directions, local tours and attractions, recommendations, destination information etc, but I have difficulties seeing mobile bookings for large ticket items. You can see some examples on the iPhone app site. Apple currently has 42 apps dedicated to travel, one by Travelocity. Am I wrong? Do you book large ticket items over your phone? Let me know what you think.

January 24, 2008

Tourism Meatball Sundae?

Yesterday I attended Seth Godin's webinar "Meatball Sundae", thanks to Darren Cronian for the invite! Seth has the gift of making metaphors that people can really bite into, and this one was no exception ;). His main point is that "it is not sufficient to do what you used to do (meatballs) and dress it up (sundae)". He covered 14 current trends that are revolutionizing marketing and the internet, so I thought of how these trends could be used within the Tourism Industry. Please let me know if you have any ideas as well.

So here they are, the 14 (he actually gave 15) trends that are revolutionizing marketing, with a tourism cherry on top:

Direct Communication - Gone are the days of "if you make it, they will come" people want involvement and feedback, they want to connect and have relationships. If your company doesn't have a way to connect with their customers, you better start!
Amplification of Consumers - "You might as well assume that everyone you meet works for the New York Times" That is a challenging thought, you have to expect customers to write about you, and give them something to write about (good hopefully)
Authentic Stories - People most often don't buy based on stats and figures (I try to) but rather buy on stories. Your brand needs to have a consistent story that it is sharing from multiple angles. Your frontline staff has to be consistent with your advertising media.
Speed - This current generation is used to instant gratification. We want to see results now! If your company takes 3 days to go over a reservation or booking and your competitor can guarantee a booking or reservation instantly, well then your company will loose. Online reservations are a first step!
Long Tail - Unique is cool, in the travel world doing the same tour as everyone else is passé. Customers want to have options that cater to their own desires and needs as opposed to a generic bulk package that is fine for the norm or average. The travel industry needs to look for ways to tap into the long tail of Tourism.
Outsourcing - If you can lower the operations cost by outsourcing components of your business, you will then have the energy to focus on the marketing of your service / product. This goes beyond developing world call-centres, the opportunities are endless.
The Dicing of Everything - The internet has broke everything into pieces. Customers access your information from multiple avenues, your main page is only one of the doors. This reminds me of my friend Norm Rose's article on Service Oriented Architecture.
Infinite Choices - How will you stand out? Really, in the last year there are more then 30 new travel sites, what are you doing to get talked about? The internet is really a social buzz network, and if you don't have bees (unique 'wow' point), then you don't have buzz.
Consumer To Consumer - Again, people want to connect and share experiences and stories, a very successful model is to build the platform and then get out of the way. Can you imagine platform that brings suppliers together with resellers online, connecting that long tail content! (Keep tuning in for more updates...)
Scarce and Abundant - We used to have abundant spare time, now we don't. Things that were scarce are now abundant (access to information). You again have to really work to differentiate your brand to make it clear that you have a unique selling position, that isn't a common message.
Big Ideas - Products are now the big ideas, think iPhone, pod hotels, and other industry shakers that are pushing industries in new directions.
Connect With People - Gone are the days of mass 'dumb' marketing, sending flyers and spam to unsuspecting victims. People want value and if you can shape your marketing to deliver value, then you get 'permission marketing'. This can be a witty informative newsletter with customized information, or really anything that you feel your customer will want to have.
The New Rich - Well, this on is catered to a particular segment of our society that I am personally sick of seeing on the front of newspapers and magazines, but Seth is talking about it, so we best pay attention.... If your product is targeted at the next Paris or Britney, they you better be ready for customization and appealing to strange and unique desires.
The New Gatekeepers - Being a gatekeeper isn't as important as it used to be. It is more important to be a leader as opposed to being a leader. People will follow those that they look up to, and not wait for traditional channel to grant him/her access to mass media (think Mr Scobble).
Ubiquity or Scarcity - You need to choose, if your product or service is in between, then you will not profit. You need to have a set position to either drive demand, or make yourself a household name.

Well that is it, a little long, but let me know if you have used any of these trends, or you are planning on implementing some in the future.

Update: Video Now Available