You’re going to book travel online this year

by Tom Johansmeyer on

Business travel isn’t the only category on the rise these days: everyone else seems to be spending more on travel too.

I ran into an article on eMarketer’s blog this morning that shows leisure and unmanaged business travel is on the mend, after what’s been a tough couple of years. After falling in 2009, the sector ticked upward in 2010.

Leisure and unmanaged business travel spending are expected hit $107.4 billion this year, according to eMarketer’s estimates. That would be a gain of 8.5 percent over last year’s $99 billion.

People are traveling more, it seems. But, there’s more to it than that. We’re also spending more for the privilege of being bumped with the beverage cart and scolded for not turning off our Kindles and iPhones.

And, we’re increasingly likely to do our homework online. This year, more than 114 million would-be travelers will research their options on the web, says eMarketer, and 93.9 million will pull the trigger and actually book online. The average online travel buyer is likely to spend $1,213 this year, up from $1,145 in 2010.

Google to dominate online travel selling, we hope

by Chris Owen on

Late last week, Google won government clearance on its $700 million bid for ITA Software in a deal that opens the door for the innovative Internet search powerhouse to dominate online travel selling.

ITA Software, who’s latest innovations include include ITA PSS, a next-generation passenger services system, Needle, a smarter way to organize and publish data on the web, and OnTheFly, an airfare shopping mobile application will make a nice addition to Googles stable of brands. ITA already powers the reservation systems of most US airlines and several online fare-comparison brands like Kayak, TripAdvisor and Hotwire. It looks like a match made in heaven as tech-savvy Google gets an infusion of travel sense from a leader in that game.

But there is a catch. Make that possible bump in the road that we hope they get over smoothly.

While Google is buying and hiring to solidify the top position in all it does, it’s competitors and the government are looking very closely at what they are up to. They fear Google could use it’s substantial Internet search engine clout to monopolize the online travel business.

Would that be the same fear Yahoo might have had about Google’s search engine capability? Perhaps a natural order of things will play out here too.

To win approval, Google agreed to ongoing federal monitoring of its behavior. Google also agreed that ITA will continue to provide service to existing customers for five years in a “reasonable and nondiscriminatory way”. That should satisfy the Federal Trade Commission and Justice Department for a while but they both have Google in their sights, ready to pull the trigger on a full-scale investigation, given the chance.

In his blog, Google’s Senior Vice President Jeff Huber writes:

“How cool would it be if you could type “flights to somewhere sunny for under $500 in May” into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily? Well that’s exactly why we announced our intention to buy ITA Software, a Cambridge, Mass.-based company that specializes in organizing airline data last July-and we’re excited that the U.S. Department of Justice today approved our acquisition.”


Last July, Gadling’s Darren Murph called the ITA buy “a huge win for consumers who are tired of crawling three different airline search engines to get a somewhat comprehensive look at their options.” adding “we personally can’t wait for this marriage to officially bear fruit.”

Now that the sale has been approved and Google has agreed play nice, we should start seeing something pretty quickly. Until then, there’s always Google maps:


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Flickr photo by brionv

Not knowing wife’s name gets her stuck in China

by Tom Johansmeyer on

When you take the SAT, you get 200 points for spelling your name right. Ever wonder why? Well, you should ask Wen Ling Lian and her husband, Robert Schlund. Lian left Wayne, Michigan for China, on a trip to visit her family. While in flight, she saw that her name had an “e” stuck on the end of it. Though not a problem in the United States, she knew it would be when she tried to leave China later. Fortunately, a resolution was found in blaming a company that hadn’t done anything wrong.

So, here’s the deal. Lian was on the ground in China and running out of time. Her name was wrong on her ticket, the result of an error made by her husband when making the ticket purchase with online travel agency CheapOair. By the time Lian and Schlund realized what had happened, of course, nothing could be done … except to buy another ticket. CheapOair could not change the name on the ticket, as it’s a matter of airline policy that tickets are non-transferable after purchase – meaning that the name can’t be changed. The online travel agency can’t make the change without the airline’s consent.

But, this didn’t stop Schlund from trying. Rather than spring for the new ticket to get his wife home, which would have cost him a few hundred dollars – or even contact the airline, China Eastern Air – he decided to pass the buck. After claiming that the online travel agency wouldn’t help him – an absurd notion given the fact that it does not have access or ability to do so without airline consent – and never even bothering to contact the airline, he decided to turn to a consumer advocate the media. Schlund shared his sob story with WDIV – Detroit’s “Ruth to the Rescue,” still refusing to take responsibility for not knowing his wife’s name … and to think I used to catch hell for not remembering anniversaries!

%Gallery-76818%Well, this is where a new problem arises: the broadcast isn’t accurate. CheapOair, which got Lian a new ticket at its own expense even though her husband had made the mistake (eating
$200, according to a spokesperson for the online travel agency, despite making a mere $4 on the original transaction), had no obligation to do anything at all. Nonetheless, in a moment of chest-thumping, “Ruth to the Rescue” claims to have affected a remedy because she got involved. Really, she was an accomplice to injustice, as a company was compelled to pay for the obvious mistakes of a customer. Also, the loaded report emphasizes that the ticket was purchased in October, which is wholly irrelevant since the passenger didn’t notice the problem until the plane was in the sky.

So, the net effect was that the only party that could have made the change wasn’t contacted by the passenger. The party that could not do anything to help – the online travel agency – was put in the hot seat publicly and forced to assume an expense unnecessarily.

Is corporate greed the culprit? I doubt it. I’ve spent $4 on a cup of coffee for a colleague and didn’t ask for a dime in return. So, I don’t see CheapOair risking its brand for that amount. And, the company had earned the cash, a sum insufficient to bear Abraham Lincoln’s likeness. Instead, it’s a case of inattention and irresponsibility on the part of a customer.

When I reached out to CheapOair about this, I learned not only about the net $196 loss it sustained in order to cope with the effects of a customer who had made a mistake and found a platform but also that the company expended several man-hours across several departments to address media inquiries (including mine), a fact that any business mind could identify immediately. Schlund’s mistake caused a cost of several thousand dollars to be assumed by a company that hadn’t done anything wrong.

“Our hands were tied on the original issue,” said the spokesperson, after explaining the technical process by which data is captured from the website and sent to the airlines (explained at a high level, not in technical-ese, for my benefit, I confess). “We literally could not do anything – we physically aren’t able to change the customer’s name in the system,” she continued, “without a code supplied by the airline. We have an entire department that tries to secure these and other waivers for our customers, but it’s ultimately up to the carrier.” She added, “We sympathize with Mr. Schlund; we really do. But, we can’t change what we can’t access. It really is that simple.”

Now, I’m not a fan of the airline industry – anyone who has read my work knows that. I routinely bemoan the paucity of customer service in the space. But, we have to be realistic. Asking these businesses do the impossible for us just isn’t an option. And, as customers, we do have to be ready to take responsibility for our own buying decisions. We have enough to complain about already – there’s no need to invent more.

[photo by autumn_bliss via Flickr]

Judge blocks Sabre, gives American Airlines a break

by Tom Johansmeyer on

I guess it would make sense for American Airlines to turn to litigation. After all, this approach worked well against Orbitz.

Here’s the situation: the battle between airlines and online travel agencies escalated from the beginning of November – with American’s announcement that it would pull out of Orbitz – through the new year. The latest move was by global distribution system Sabre, which has made it more difficult for American’s fares to be found. Along the way, Expedia dropped American in a defensive move, and Delta pulled out of three smaller booking sites: CheapOair, OneTravel and BookIt.

The decision by Sabre to “demote” American Airlines had obvious business implications for the carrier, which is likely why it sought relief in the courts. As a result of a hearing held yesterday, Sabre has been blocked from limiting the visibility of American Airline flights, but there’s clearly more to come.

In addition to making it more difficult for customers to find American’s flights, Sabre also increased the fees it charges American, which would lead to an annual cost of $157 million for the airline.

Sabre maintains that it was within its contractual rights, according to an Associated Press report, while American believes the move was anti-competitive.

Five reasons why you’re wrong about American Airlines and the booking battle

by Tom Johansmeyer on

Everyone seems to think this is about the passengers. It’s not. In true airline industry fashion, nobody cares about the customer.

Okay, now that I have your attention, an analyst note from Avondale Partners was sent to me last night. While most people don’t get excited about this sort of thing, I have to admit that I still do. Nerdy, maybe. Insightful … in this case, it definitely is.

The analyst note gets to the heart of the matter pretty quickly. What’s the deal with American Airlines and the online travel agencies (e.g., Orbitz and Expedia)? Well, here it is in five straightforward points:

1. It’s the economy, stupid: remember that saying? Well, it holds true here. According to Avondale Partners, many press accounts of the dispute “confuse the relationships of the players and miss the underlying economics driving the dispute.” Stop thinking about people and start thinking about how American can save up to $9 per ticket in fees.

2. American will lose before it wins: according to Avondale Partners, “AMR [the airline’s parent company] eventually prevails.” But, it’s going to take some time. Along the way, the analyst note explains, the airline will lose some of its online travel agency customers to its competitors. However, it continues, “should pick up the spilled traffic, given current loads.”3. Ultimately, it’s a break-even: AMR will wind up with the same amount of traffic it has now, Avondale believes, but it will come at lower net costs. Translation: for the same amount of passengers, American will make more money. For a business, that’s never a bad thing.

4. “I like to watch”: that seems to be what the other airlines are thinking. Avondale Partners believes they’ll jump on the bandwagon. As it is, Delta has already pulled out of three smaller online travel agencies – CheapOair, OneTravel and BookIt – though for slightly different reasons. When big, bold moves like this happen, you better believe that everybody’s thinking about it.

5. And, the folks with the most risk are …: it isn’t American Airlines, apparently. Rather, Avondale believes that Travelport and Sabre “have the most to lose,” though stock prices for online travel agencies, according to Avondale, “should continue to suffer from the press.” Translation: this won’t be fun for any of the parties involved for quite a while.

Here’s the full report:

Analyst Note From Avondale Partners Re AA Distribution, 1-6-11