Some travel agents are not going to like this idea at all. Those would be the ones that are just in it for the commission. Others, the ones you want, the good ones, won’t have a problem with this and will pass the test with flying colors.
“Finding a good travel agent who will work with you to select the best cruise possible is sometimes as difficult as finding a good doctor, dentist or other service professional.” says cruise travel expert Linda Garrison from About.com.
A big advantage you have with travel agents is that you can test them. Other than seeing diplomas hanging on the wall or Googling a prospective doctor or dentist online, you really can’t test them much before using them.
The test: Fake-book a sample cruise. Pick an easy one using the following variables:
4 to 6 nights
2 guests, both under 55, residents of New York, not in the military
You want to sail sometime during the month of August 2011
Least expensive mid-ship Balcony cabin.
Try that online at the Carnival website then at Expedia.com and send it via email to your cruise travel agent or potential agent if you don’t have one. You’ll have to go all the way through the process online, stopping short of providing a credit card, to get the final price. Your good travel agent will take some time to get back to you but it should be reasonable.
How long did it take to complete the process with the cruise line, Expedia.com and your travel agent?
Which source offered you the most options?
Which source had the best price?
Which source offered a human being that could look beyond the numbers and facts like humans do, offering me the best alternatives?
OK, so the last one was a slightly loaded question but the point is well taken: A good travel agent will be the one that takes a personal interest in you, your plans and can look beyond just the numbers, fees and facts with a focus on not just price but the experience itself.
According to a statement by the Business Travel Coalition, this could erode American Airlines‘ standing in the market further. In addition to losing visibility on a major booking site, the airline will lose the additional sales that come when a visitor to an online travel agency leaves the site to book directly with the airline.
Says Kevin Mitchell, chairman of the Business Travel Coalition, said, “American is making a reckless rodeo bet that it can rope its best customers like calves and then push and pull and kick them toward aa.com and Direct Connect.” He continued, “Online consumers may not even know American’s flights are missing. The ones who will gain the most here are American’s competitors United, Southwest and others. They should be thankful for this early Christmas present.”
Striking a somewhat alarmist tone, Mitchell noted that American Airlines Direct Connect “takes the consumer problem of hidden airline fees to a much darker and dangerous place for consumers.”
While this may be a bit extreme, there are clear implications of the shakeup, especially for bargain-shoppers and occasional leisure travelers.
The fact that Expedia appears to have come to the defense of its competitor, as Mitchell stated – “Expedia’s decision to support the consumer and its competitor Orbitz underscores the enormity of the economic damage American Airlines’ Direct Connect plans could have on consumers due to lessoned [sic] price transparency and impeded comparison shopping” – should be taken within the context of what could happen to Expedia’s business if it didn’t implement this defensive measure.
The real impact of this is pretty simple: customers loyal to the American Airlines brand will continue to buy from American Airlines. Those who are searching for the cheapest fares will balance their behavior between visiting online travel agencies and airline websites.
American Airlines may not have made a “reckless rodeo” bet, but is making a statement about the future of its business. The airline is betting on its own brand, and the online travel agency community is responding.
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.
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!
I guess Expedia is watching the market. The online travel agency just snapped up mobile travel application developer Mobiata. Mobiata’s claim to fame is FlightTrack, and the other apps in its portfolio include TripDeck, HotelPal, FlightBoard and FareCompare. For Expedia, it was a no-brainer, as 4 percent of its traffic is coming from devices, a number the company would like to kick a bit higher, according to TechCrunch.
Beyond the fact that it gets more reach and better footing in the mobile space, Expedia’s Mobiata acquisition is interesting in light of a recent Deloitte survey. Business travelers are increasingly turning to their smartphones to research and book travel. The global professional services firm reported that 63 percent of business travelers earning more than $150,000 a year have web-enabled smartphones. Twenty-six percent of survey respondents, Deloitte said, have even downloaded hotel apps to these devices.
Given this trend in business travel, an important market for the travel industry, Expedia’s pickup makes good sense. The big question: who’s next?
A new travel-planning website and booking engine is launching this month in beta, and I was excited to give it a test run, having first heard about the site this spring at a EuroCheapo travel happy hour. Wanderfly.com is a “personalized recommendation engine” that takes your interests, budget, and even social network connections to give you inspiration and help you plan your next vacation. Flights and hotels are pulled from Expedia, with restaurant recommendations, activities, and sightseeing descriptions culled from Lonely Planet, FourSquare, NileGuide, and Yelp.
Let’s say you have a week to travel in early September for Labor Day. Budget is under $1,000 per person for flights and hotels, and you’re interested in culture, beaches, and food. Plug all those into the search engine and you’ll get a series of destinations to review, refine, share, and book. While the site still has a few bugs (budget busters would sneak through the filters, the help feature is not fully enabled), the interface is slick and user-friendly, the features are thoughtful, and the content is reliable.
What’s cool about the site:
Since I’m currently based in Turkey, I loved that your point of origin could be pretty much anywhere in the world so I could run searches from New York and Istanbul to get a wide variety of places convenient for different parts of the world.
A wide (1,200 and growing) network of destinations gave me some ideas I’d never considered or even heard of (Kalingrad, Russia; Azemmour, Morocco; Krabi, Thailand), as well as some more tried-and-true vacation spots(Sunny Isles Beach, Florida; Mykonos, Greece; Split, Croatia).
Weather and news tabs give you an idea of the current climate (could be too hot on that Egyptian beach) and happenings, though you might come up with nothing for more obscure destinations. I also love that many of the news feeds are through Twitter accounts like @visitbritain, giving up-to-the-minute quickie items.
What will be cool about the site:
Ability to share trip ideas and plans with friends via email or Facebook is great for planning a trip with multiple people or getting feedback on a destination. Currently, Facebook Connect will tell you who you know in a given place, but I’d probably remember if I had a friend in Lutsk, Ukraine.
Festivals and special events come up via Eventful, but on the beta site event dates will pop up well after your search range so don’t plan around that blues festival just yet. There are also plans to add destination reviews, currency converters, and travel tips.
After all the searching, sorting, and sharing, you can actually book through the site, though only if you have a US credit card. The booking interface is also easy to use and gives options for frequent flier numbers, seat and meal preferences, and room types.
All in all, Wanderfly is a nifty new tool for dreaming and planning your next trip. If they could find a way to integrate time-sensitive deals, local blogs, and multiple-destination trips, this could be the only travel site you need.