TravelBizBuzz

Travel companies are beefing up their online storefronts to attract self-bookers, but that doesn’t mean travel agents don’t play an important role in booking travel products.

“Travel agents are the experts on finding the best travel solution and presenting it to the consumer in a way that makes them want to buy,” says Lee Rosen, president of agent technology solutions provider TRAMS.

But agents can’t rely solely on in-demand products or sophisticated technology to lure travelers and remain important to suppliers — they must become marketing and sales dynamos, Rosen asserts. Here’s how.

Tap Into Travelers’ Histories

The greatest value that travel agents bring to the table is their past experiences with their customers, Rosen notes. Each time a traveler books a trip with an agent, the agent learns another piece of crucial information, such as where the traveler has been, what type of trips he prefers, what level of accommodation he seeks, how much he wants to spend and what his family is like.

Key: Agents must mine that information and promote travel products that make sense for the traveler. As agents make the best matches between travelers and products, they build loyalty into their client relationships, Rosen says.

That loyalty is very lucrative to travel suppliers who want a full house or sold-out flight — which means that by leveraging their own experiences with travelers, agents become the key intermediary between a supplier and the customers their businesses hinge on.

Use Web To Manage Sales

Where agencies used to need elaborate management systems, now they can rely on the Web for rapid, efficient customer management — whether they’re managing customers, suppliers or other agents.

Rosen suggests that agents “use the Internet to retrieve customer and product information, distribute and track that information as well as store it in a customer database.”

By using the Internet to manage their clients, agencies also open themselves up for incentives from suppliers who use the Web to promote their products. For example, a hotel may offer agents a steep discount for steering a client to its Web site over its competitors — or for booking that hotel over all other hotels when possible.

Lesson Learned: Though agents used to be used a basic transaction processing tool, their real value today is in knowing the customers, creating detailed databases and influencing how and where consumers purchase their travel products, Rosen claims.

For more information about how agents can remain relevant in the online travel landscape of the future, check out the current issue of Travel Distribution Report.

Posted by TDR at 12:51 PM | Permalink | Comments (0)

Internet distribution systems (IDSs) have the potential to replace traditional systems, but they have a few hurdles to overcome. Here are two specific limitations IDSs must address:

—Consumer Sites Need Consumer Speak. Almost every Internet booking system still hosts travel industry jargon — which is Greek to the average traveler. “Travelers have no idea what a Rule 25 restriction or a PNR is,” says Pawel Mastalerz, an industry analyst with T2Impact.

Hotel descriptions also suffer from antiquated, technical definitions that were written for travel agents and don’t enrich the customer’s experience.

However, this is one area where IDSs are starting to get it right. Hotel sites and distribution systems are creating virtual tours and consumer-friendly descriptions that leave out the industry jargon.

—IDSs Must Solve Complex Problems. In their most basic forms, IDSs quickly solve easy problems, but in order to become a stand-alone distribution source, the systems must be able to solve complex problems, Mastalerz says.

Example: A complex problem might be a traveler who wants to fly to Chicago for three days, then to Europe to meet with a client, then to China for five days before returning to Denver.

IDSs aren’t capable of solving this problem yet, but the systems’ developers are working on the type of functionality necessary to solve not only this problem, but unforeseen issues down the road.

Want more information about IDSs? Check out the July 31 issue of Travel Distribution Report.

Posted by TDR at 04:12 PM | Permalink | Comments (117)

Today’s guest blogger is John Burns, president of Hospitality Technology Consulting. With the increasing popularity of user-generated content and community sites, Burns outlines four top strategies to help travel companies to make the most of their social networking efforts:

Launching a user-generated content site is a small portion of the Web marketing battle. The real work comes after users populate your community. Here’s what you can do:

1. Monitor the community regularly. You don’t need to station an employee in front of the computer screen for days on end, but you should be paying attention to who is posting and what they’re saying.

2. Act on feedback. Most vendors and suppliers who host their own communities fail to actively respond to community users’ comments.

3. Take advantage of a captive audience. Social networks can and should serve a real business purpose. That means using your online connection with customers and potential customers to harvest valuable feedback.

4. Avoid blatant sales pitches. Hotels and other travel vendors will have a hard time developing a loyal following if marketing and advertising take center stage on their community sites.

For detailed ideas on how to complete these steps, check out the July 17 issue of Travel Distribution Report.

Posted by TDR at 04:08 PM | Permalink | Comments (0)

Today's guest blogger is Gregory Saks, director of market intelligence service Compete’s new Travel Practice. The new division analyzes consumer travel planning and reservation behaviors across more than 2,000 travel sites in more than 20 categories, using Compete’s extensive database of more than 2 million consumers. Here Saks presents Compete's analysis of supplier-OTA share shift in the first quarter of this year:

While online travel agencies (OTAs) remain the largest individual destinations for travel research, it is suppliers who are capturing the majority of online bookings.

An analysis of online transactions in the air and lodging categories during the first quarter of 2006 showed that:

— Hotel chains captured 52% of online hotel bookings versus 48% of hotel bookings transacted on OTAs.

— Airlines captured 29% of online flight bookings versus 71% of flight bookings transacted on OTAs.

In both of these categories it is clear that suppliers have been successful in marketing their Web sites. Programs such as best rate guarantees and no booking fees have siphoned interest away from agencies. While airlines have been more effective than hotels, that is partly due to the performance of one carrier.

In each month of Q106, there were about 4.2 million consumers who booked a flight online. More than 70% of these bookings took place at carrier sites directly (i.e., United.com, JetBlue.com); the remainder took place at OTAs.

Interesting: Southwest is one of the main drivers for the amount of carrier-direct bookings. Consumers can't book Southwest flights on OTAs, and the carrier’s site accounts for over 1 million bookings per month.

Essentially, Southwest is single-handedly increasing the market share of carrier-direct sites. If you took them out of the picture, the picture looks more balanced: The remaining carriers would capture 60% of online bookings directly with agencies handling the other 40%.

Posted by TDR at 03:42 PM | Permalink | Comments (2)

Today's guest blogger is Henry Harteveldt, VP of travel research for Forrester Research. Harteveldt took a few moments to share his thoughts on the Conference Board's report that claims online travel has reached a two-year low:

It seems the Conference Board’s study may have overlooked some points that the travel industry itself is aware of:

a) Women tend to do more of the travel planning than men, unlike the results of the Conference Board study which stated the opposite to be true.

b) Most people make their travel plans before the summer, not during it. It’s almost July, so it’s likely that many travelers have already completed their summer vacation research by now.

c) And, finally, travel has not been thwarted by rising fuel costs. In fact, many flights are already sold out.

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Posted by TDR at 02:04 PM | Permalink | Comments (0)

Today's guest blogger is Chris Kroeger, senior VP of North America for Sabre Travel Network. Sabre recently announced its new solution geared toward combating content fragmentation. Here Kroeger shares his thoughts on the industry's reaction to the Efficient Access Solution:

Some have described Sabre Travel Network’s launch of the Efficient Access Solution -- the voluntary program to assure full content and service fee protection for participating travel agents using Sabre’s Global Distribution System (GDS) -- as “stirring up a hornet’s nest.” Those are certainly strong words; however, I think they are off base.

Generally speaking when you stir up a hornet’s nest you do it accidentally, and suddenly, and without cause or justification. And the chain of events you set in place creates havoc, chaos, fear and pain. This is hardly the descriptor for a program that tackles the travel industry’s challenges head on while carefully balancing the needs of all parties -- airlines, travel agencies, the GDS and travelers alike.

We have taken a thoughtful and thorough approach over the past three years to help our customers avoid the inefficiencies and costs of a fragmented travel marketplace. Those who claim these are not real issues are a bit out of touch. Fragmentation is real. The airlines have been very vocal and pretty specific about their plans to withhold content and implement fees, and some have even suggested charging for content.

The real hornet’s nest is a travel industry that returns to an era of inefficiency and redundancy -- where all players are forced to swarm about and create a buzz, but where very little productivity results -- to meet the needs of a select few. Consider these possibilities:

• Airlines managing fare and schedule distribution among dozens, if not hundreds of systems designed to handle some, but not all of their flights.

• Travel agents having to install and search multiple computer systems, Web sites and other sources to be able to shop and book the best trips at the right prices.

• The ultimate end user -- the travel consumer -- once again becoming the victim of the inefficiencies of splintered and fragmented travel content -- paying more for fewer choices and running the risk of missing out on the very best travel options for their needs.

This disaggregated world would cost the industry an estimated $1.5 billion in annual costs, even with just a small amount of fragmentation. Absorbing those costs is the true hornet’s nest for an industry where all players are already focused on controlling costs and improving earnings.

Instead of stirring a hornet’s nest, our solution helps avoid the hornet’s nest by carefully balancing the needs of all the players in the industry -- preserving and enhancing an already efficient marketplace.

Posted by TDR at 10:27 AM | Permalink | Comments (27)

TRB's first guest blogger is Ankur Bhatia, executive director of The Bird Group, an IT and travel services provider for India. Bhatia took the time to share his thoughts on the challenges online travel agencies will face as they move more deeply into online travel in India:
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Online travel players are quickly swooping into the Indian travel space, but don’t think they have an easy journey ahead.

India is being touted as the world’s fastest growing aviation market in the world. Its thriving economy and investment in aviation are contributors to India's thriving travel market, but the country can also thank its geographic size, population, lack of road infrastructure and increased consumer spending.

Bonus: The Indian online travel space has huge potential for growth. It is projected to be one of the fastest growing travel and tourism markets (behind Montenegro and China) between 2006 and 2015. And, currently only 2 percent of India’s local population travels by air, but the middle class is 10 percent of that population — which means local travel will pick up, as well.

But, online agencies have their work cut out for them. They will have to find and aggregate the content that travelers need and want. They’ll also need to invest in the technology necessary to provide high quality service. Passengers want more convenience and less cost.

Most important: To reap the benefits of India’s travel boom, online agencies must focus on innovating online travel so that they can offer the travel-related information and services that consumers need for a unique travel experience.
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For more information about online travel agencies’ expansion into India, check out the June 19 issue of Travel Distribution Report, which features a one-on-one interview with Scott Blume, CEO of ZUJI, the company spear heading Travelocity’s move into the Indian travel market with Travelocity.co.in.

Want to be a guest blogger? Simply send us an e-mail with your thoughts and we'll take it from there.

Posted by TDR at 04:31 PM | Permalink | Comments (0)