Brand Wars: The Airline Booking Battle Will Be Televised

by Tom Johansmeyer on

Online travel agencies have had a solid run over the past two years. They picked up some market share as would-be travelers were willing to poke around a little more to score cheap tickets. High rates of unemployment and under-employment and general economic uncertainty, of course, were enough to make consumers value every dollar a little more. This opened an opportunity for online travel agencies to advance in the marketplace, and chip away at the dominance of their suppliers (i.e., the airlines) on the web.

Yet, the market is turning. Next year is expected to be a strong one for the air travel industry relative to 2010, and 2010 was a vast improvement over 2009. For online travel agencies, this provides some benefit as a rising tide, but it’s likely to favor their suppliers, as customers are more likely to go with what they know over putting in some effort to find the largest discounts.

Online travel agencies will have to overcome this tendency by investing smartly and substantially in their own brands. This is what we’re seeing in the latest move by CheapOair, the one of the 10 largest online travel agencies in the sector, in its recent announcement of a marketing mix change, which teases a broader strategic shift given changing market conditions.


A Changing Travel Market
From 2008 to 2010, online travel agencies were able to chip away at the online market share of their suppliers, reducing the suppliers from owning 62 percent of the online business in 2008 to 59 percent in 2010, according to travel industry research firm PhoCusWright. Bargain hunters drove the market, which eroded the importance of brand loyalty.

From 2009 to 2010, PhoCusWright notes a “strong countercyclical performance for the OTA category.” In 2009, sales fell only 1 percent for the sector, compared to 5 percent for the total online leisure/unmanaged business travel market. And, online travel agencies have posted double-digit gains in 2010.

Stronger industry conditions, however, are better for the suppliers, and PhoCusWright observes, “With the rebound continuing, supplier websites will likely regain momentum as the OTA fight to hold on to their share gains.”

In regards to the actual travel experience, ostensibly, the airline’s brand matters most. When a passenger books through an online travel agency, the brand associated with the transaction lasts for a few minutes – or a few hours, depending on the diligence of the buyer’s search. Meanwhile, interaction with the airline’s brand starts during the search for a ticket, persists through the flight and ends sometime after the passenger hops into a town car to get to his ultimate destination. To register in the customer consciousness, online travel agencies need to develop the sort of presences that will keep them top of mind.

This runs counter to the traditional online customer acquisition models associated with the online travel agency business, which involve a combination of search engine optimization, online ads, affiliate programs and social media. These are transaction-oriented tactics, which speak directly to the brand-barrenness of big discounting.

More Than the Transaction
The largest online travel agencies have already moved past transaction myopia: everybody knows the Travelocity gnome, Priceline‘s William Shatner and the likes of “Cooper” from Expedia. For all but the top players, however, investments in mass media brand development (such as television) have generally been eschewed in favor of what’s been known to work. Speaking at Business Insider’s IGNITION conference last week, Buddy Media CEO Michael Lazerow noted that Travelocity grew to $4 billion in revenue through online means before it moved to television to get to the next level.

Yet, for the online travel agency sector to hold its ground – and even grow – in 2011, brand has to matter more, and this means casting a wider media net. This, plus the size of CheapOair relative to its competitors, is what caught my attention about its recent media diversification. The company is launching its first television ad campaign, “Get More for Less,” in an aggressive move to get out in front of the imminent online travel market shift.

The move to television is an aggressive one, and it comes a bit ahead of “schedule” for CheapOair, if you use the Travelocity number as a reference point. Expedia pulled in close to $3 billion in revenue last year, for example, and Priceline at $2.3 billion. Travelong/CheapOair generated $825 million in revenue in 2009 and has grown at a year-over-year rate of 45 percent this year, resulting in forecasted 2010 revenues of $1.2 billion.

The company’s CEO, Sam Jain, says, “TV is a new strategy for CheapOair and as we head into our 6th year we believe this is the right time to expand our marketing efforts. TV is a natural evolution from our current digital marketing and will help build awareness among a larger audience and introduce more people to the brand.” The countercyclical tendencies of the online travel agency market relative to travel as a whole reinforce this point.

Pointing to the potential for a virtuous cycle, CheapOair’s Sr. Vice President of Strategic Partnerships, Bill Miller, adds, “This new TV campaign should draw in more customers for us which in turn will bring more value to our supplier partners. Our suppliers — airlines, hotels, car rentals —- want valuable and efficient distribution partners. I believe we are all that and more and this TV campaign is just another example of how we can extend our marketing reach on the behalf of our supplier partners.”

Fashion versus Reality
It’s been fashionable among the digerati to claim the death of other forms of media, and I’m as guilty as the rest. But, the reality is that SEO and online ads (a la Google’s pay-per-click model) are becoming increasingly crowded and competitive. Since they are focused on the transaction rather than the brand, they don’t provide for a relationship with the customer that results in a gradual reduction in cost per revenue over time. It’s strictly “pay by the drink,” and that can get pricey.

With the travel market starting to tip in favor of the travel suppliers over the online travel agencies, the costs associated with traditional online marketing will become even higher, as brand brings customers back to the suppliers and online travel agencies chase a shrinking share of bargain hunters. For online travel agencies to compete effectively, they have to make their own investments in branding – a commitment that lacks the predictability of other forms of marketing.

Strangely, television may become the key to winning on the web in the travel industry in 2011. A better market translates to the amplification of the importance of brand, and commercials are still a critical aspect of this in the consumer world.

A battle of the brands is about to break out. The good news is that it’s for your benefit … and you’ll get to watch it on TV!

[photo by Do u remember via Flickr]

Cheap Vacation Ideas for New York City

by Jeremy Kressmann on

New York can be crazy expensive. $8 for a bottle of beer. $300/night for a hotel room. $400 for dinner at famed Japanese restaurant Masa. As someone who spent most of 2008-09 writing about the Big Apple for Gadling and who’s lived here over 7 years, it’s a sad fact I’ve come to know all too well. But here’s another shocking fact I’ve discovered about my adopted hometown: if you know the right places to eat, where to stay and what to do, New York City budget travel can also be a surprisingly rewarding experience.

Best of all, budget travel in New York doesn’t mean you have to give up on all the good stuff. Still want to eat like a king? Stay in a trendy new hotel? Experience New York’s legendary activities and nightlife? It’s all yours for the taking. It simply requires an adjustment in your approach.

We’ve scoured New York high and low and come up with the following ten budget travel suggestions. Want to learn how to visit New York on the cheap? Keep reading below!Three Tips on Where to Stay
Tracking down reasonably-priced accommodations is arguably the most daunting part of any New York budget travel experience. Visitors who so much as sneeze near popular hotel spots like Times Square can expect to pay upwards of $300/night for lodging. Budget travelers, fear not: if you want to avoid the sky-high prices (and the crowds) check out some of these wallet-friendly options:

  • The Jane (doubles from $99/night) – The Jane, a hotel that effortlessly blends old and new inside a beautifully renovated building from 1908, oozes New York cool. Best of all, you’re just steps away from free attractions like the High Line.
  • The Harlem Flophouse (doubles from $125/night) – don’t let the name fool you; this “flophouse” is part of an emerging crop of intriguing Harlem lodgings that are easy on the wallet. Part B&B, part art gallery, guests can immerse themselves in the home’s one-of-a-kind decorations. All rooms have shared bathrooms.
  • The Gershwin Hotel (doubles from $109/night) – you can’t miss The Gershwin hotel from outside. This distinctive hotel is adorned with a one-of-a-kind facade of curvy glass lanterns. The intriguing interior decoration (and the prices) don’t disappoint either. Especially thrifty travelers should check out the Gershwin’s $40/night hostel-style “Bunker.”

Three Tips on Where to Eat
You probably already know New York is one of the best places in the world for eating. Did you also know it’s one of the best for cheap eats too? Thankfully, eating well and eating cheap in New York are not mutually exclusive. Here’s three of our favorites:

  • Xi’an Famous Foods – Xi’an Famous Foods, which first found fame on Anthony Bourdain’s No Reservations, recently opened an outlet of its famous Flushing noodle shop in New York’s East Village. Spice-lovers can grab a plate of the shop’s hand-pulled Cumin Lamb Noodles for under $10 bucks.
  • Super Tacos Sobre Ruedas – this unassuming taco truck, parked on Manhattan’s 96th Street, doesn’t look like much. Yet it’s one of an increasing number of under-the-radar New York spots to get outstandingly good (and cheap) Mexican food. Grab a cup of milky Horchata rice milk with cinammon and a couple Carnitas Tacos for just a few bucks.
  • Pies ‘N’ Thighs – think New York is all “fusion” cooking and snooty French cuisine? The down-home Southern cooking at Brooklyn’s Pies ‘N’ Thighs will prove you wrong. Enjoy Fried Chicken, biscuits, and apple pie at (nearly) Southern-level prices.

Three Tips on What to Do
Having fun and free are not opposites in New York. In fact, the city is filled with surprisingly fun activities and freebies for budget travelers looking to save a couple bucks:

  • Free Friday museums – even the city’s most famous cultural centers aren’t always expensive, particularly on “Free Fridays.” Venerable institutions like the Museum of Modern Art (Free Fridays from 4-8pm) and the Whitney Museum of American Art (pay-what-you-wish, Fridays 6-9pm) help art lovers enjoy these great institutions at low or no cost.
  • Wander Grand Central Station – It’s free to enter this gorgeously restored New York landmark. Gaze in awe at the vaulted ceilings in the Main Concourse, stop by the great food court and share a secret with friends in the Whisper Gallery. Here’s a few more Gadling Grand Central tips to help you out.
  • The High Line – New York’s High Line, the city’s newest and greatest park is built atop the ruins of an old elevated railway line. In its place is a beautifully designed park, complete with wild grasses, art exhibits and plenty of great people-watching.

One Wild Card
One of the most intriguing and cheap ways to spend a Saturday or Sunday in New York is at the Brooklyn Flea. This one-of-a-kind swap meet meets artisanal food tasting meets art show is one Brooklyn’s more intriguing weekend activities. Pick up inexpensive jewelry and handcrafted clothing and art from Brooklyn artists while enjoying cheap eats from local food vendors.

Just another surprising example of New York’s refreshing range of cheap accommodations, inexpensive eats and budget-friendly activities.

[Photos courtesy of Flickr users b0r0da, DanDeChiaro and albany_tim]

Weekending: Veliko Tarnovo

by Meg Nesterov on


The best part of expat life for me are the travel opportunities, especially when living in Turkey, conveniently located where Europe meets Asia. Expat travel takes on a new twist as you seek out the new and unfamiliar as in any new destination, the newly familiar of your adopted home city, and the old and familiar of your original home city. You luxuriate in the things your expat home lacks, compare versions of similar foods and drink, and wonder where you’d hang out, what you’d cook, and where you’d buy groceries in this foreign place. I recently took a week-long trip to Bulgaria (read about Sofia here, and I’ll finish up with the Black Sea town Varna) and fell in love with the country’s old architecture, young creativity, and most of all, the prices.

The place: Veliko Tarnovo, Bulgaria

Veliko Tarnovo (also called Veliko Turnovo, so I’ll simplify as VT) is smack dab in the middle of the country, dominated by a 12th-century fortress, hills aplenty, and the Yantra River (a Danube tributary). Once the Medieval capital of Bulgaria, VT boats a bevy of sights and lots of daytrip possibilities. After the country was liberated from the Ottoman Empire, Sofia became the capital, but VT remains a popular tourist destination and a point of pride for many Bulgarians. Other than the spectacularly Soviet Interhotel (don’t be fooled by glam interior photos, the exterior is an eyesore from another era – see above on right), VT escaped much of the communist architecture of Sofia and retains a historic small-town feel.

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  • While I found Sofia to have the best prices of any European capital thus far, VT is even more budget. I stayed in the boutique Studio Hotel for 45 Euros a night, and ordered local wine in restaurants for 2 leva a glass (and that’s for a 250 ml pour, a third of a bottle!). Two people can hit the town with 40 leva (under $30 USD) in their pockets and come home with change to spare. Real estate signs advertise houses in nearby towns for 10,000 Euros, making you contemplate a rural Bulgarian life.
  • Endless people-watching fun. For a hill town of 70,000 people, the ladies sure know how to dress. On any given weekday afternoon, you may see women in 5-inch stilettos, miniskirts, skin tight jeans, or revealing dresses. The girls may look like they are on their way to a Jersey Shore nightclub, but more likely destinations are a university class or their grandmother’s house. Additionally, ’80s fashion is alive and well in Bulgaria – I spotted mullets (for women), big hair (for men), neon colors, high-top sneakers, and vests everywhere. An entertaining afternoon can be spent at a sidewalk cafe marveling “Did you SEE what she was wearing?!” with your travel mates.

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  • While VT is a charming place, it feels like a one-horse town after a few days of wandering the same streets up and down. The historical sights are lovely to see but small and a tad overpriced (6 leva for a quick tour of a church feels a bit extortionate when you realize it could buy you a meal or get you nice and tipsy). One upside to the tiny museums is few crowds, even in the height of the tourist season. Visiting the weirdly wonderful State Art Museum as the only patron while little old ladies followed me around, turning on and off lights, was a highlight of the trip. The (almost) nightly Tsarevets fortress sound and lights show is fun to see at least once, though I thought it could be improved with more lasers and the Beverly Hills Cop theme song; visiting the fortress by day is a little disappointing and best enjoyed as a scenic view.
  • Another downside to the small-town feel of VT is limited food options. More cosmopolitan Sofia offers sushi, Indian food, and modern Bulgarian; coastal Bulgaria boats seafood galore; VT has traditional and not-terribly-exciting Bulgarian food (which can be a good or bad thing) and pizza. This means a LOT of meat and after a few days, I was literally dreaming of salad. Also: be careful with drinking tap water. Although, opinions are divided on whether or not it is safe to drink, I was sick every day I drank tap water in VT until I discovered the CDC advises against it, and was much improved after switching to bottled water. One favorite place to eat and drink: the Malkiya Inter cafe is eclectically decorated with antiques and musical instruments, buzzing with locals celebrating birthdays or watching football, and serves tasty and cheap drinks and, of course, meat.

Getting there

Centrally located, travelers can fly into Sofia or Varna and bus or drive from there, about 3.5 to 4.5 hours. Bulgarian buses are cheap, comfortable, and clean, and have the added feature (not sure if its a good one) of playing raunchy Canadian comedies with Bulgarian subtitles; I saw the dreadful National Lampoon’s Going the Distance and the “Dan Ackroyd needs a paycheck” White Coats. Trains are available as well but slower and less reliable, though they can connect you to Istanbul and Bucharest.

Make it a week

After a few days in VT proper, rent a car and explore the central Balkans, stopping at Arbanassi for architecture (you can even hike from VT) and multiple monasteries. VT can easily be combined with trips to other major Bulgarian towns, small villages, or even neighboring countries like Romania. If the weather is good, head out to the beach for my next Bulgarian stop, Varna on the Black Sea.

Read my previous Weekending trips from Istanbul here.

10 ways Gadling readers save money when they travel

by Annie Scott on


Sometimes, when you travel, it can feel like you’re bleeding money. Often, the problem starts even before you go, as you stock up on the right gear for the trip and make sure you have all your (expensive, not-covered-by-insurance) shots.

There are endless ways you can thwart this problem, and we wanted to know what readers like you do to save money. We asked our Facebook fans to give us their tips, and the tips we got were, as we expected, totally freaking awesome.

Here are our top 10 ways Gadling readers save money when they travel:

1. “We try to find a hotel that offers breakfast, Then we split our main meal of the day!” — Shelby

2. “I don’t stay at $300+/night hotels. Unless its a resort vacation, I’m not going to be in the hotel other than to shower and sleep. As long as its a nice stay with good reviews and good location, I’m all set.” — Saadia

3. “By spending more time in fewer places!” — Craig4. “I try to find an affordable place with a kitchenette, or, at the very least, a mini fridge. You can save a lot of money when you don’t have to pay $10/glass for a decent wine, and when you can make a simple lunch with what you pick up at the grocery instead of buying a $15 salad at a sit-down restaurant!” — Kristen

5. “We leave the kids with the grandparents!” — Karen

6. “Ask for ‘Tap’ water (when in countries with decent water systems) at restaurants.” — Dale

7. “Do your homework – the more advance research, the better. Local innkeepers, merchants and restaurateurs seem to be more appreciative and more candid with recommendations when they see you took the trouble to learn something about them/their town beforehand.”

8. ” I do tons of research before leaving and order tourist information packets. Usually we end up with a few coupons and talking to the tourist office workers garners a few tips. I also check out igougo.com to see what others have found in the area.” — Megan

9. “Dress respectfully but not too touristy. It’s hard to get a response to “what’s not too expensive?” while carrying a fancy camera, purse, bags of souvenirs, or otherwise look like the tourist with money to spend.” — Lillian (again)

10. “Walk as much as you can, keeps you fit as well … public transport makes you feel like a local … but the MAIN TIP i can give is NOT SPENDING when I’m at home … SAVE, SAVE, SAVE … I’d rather have one great holiday a year, or once every couple of years, so I can enjoy it and do the things I like and want.” — Yvonne

Got a better tip? Want to join in the conversation? Visit the Gadling Facebook page!

[Photo by Annie Scott.]

Dine from the Menu del Dia in Spain – Dining out tip

by Gadling Staff on

The Menu del Dia (menu of the day) in Spain will not only keep some extra Euros in your pocket, it will introduce you to authentic Spanish dishes and local fare.

This dining-on-the-cheap option is offered by many restaurants throughout Spain and is a great, penny-pinching way to fill up on a big lunch, then send you right into a proper afternoon siesta!

A typical ‘menu’ is three to four courses showcasing fresh, local specialties and comes with a glass or a bottle of “house” wine. Suggested use for the cash you save: a shopping spree along Las Ramblas.