US View – June 2008

When it rains… it pours

With the US economy threatening to sink as low as the Grand Canyon, airlines treating customer service as an unaffordable frill and petrol prices making many travellers consider opting out of their summer self-drive holidays, online retailers have created dozens of marketing ploys to get people travelling that range from the clever to the uninspired.

From its Name Your Own Price bidding feature to spokesman William Shatner’s rants about Travelocity’s Roaming Gnome on MySpace, has traditionally displayed much marketing acumen.

Still, its new ‘Sunshine Guaranteed’ holiday packages to more than 100 destinations in the US, Canada, the Caribbean and Europe is a bright way to entice travellers who may fear hurricanes, soggy fairways and impassable, muddy country roads on their holiday getaways.

For holidays to these locales that are booked by July 17 for travel between July 1 and September 7, Priceline pledges to refund the cost of the trip if the holiday is “rained out”.

The online agency’s definition of a washed-out holiday is one where it rains more than half an inch per day for half or more of the holiday duration, and travellers are sent a customised link to track the precipitation on their holiday through a Priceline partnership with

The daily amount of rainfall is measured at the destination airport and provided by the National Weather Service or other impartial agencies.

On the business side of things, Priceline disclosed that it entered into a pact in which an undisclosed third party makes payments to Priceline to cover the full cost of Sunshine Guaranteed refunds, and that Priceline makes certain fixed payments to that company, as well.

Presumably, Priceline will make some incremental revenue on the promotion, and the payment arrangement with the unnamed partner won’t be, well, a washout.

Meanwhile, with US consumers subject to increasing airline delays and fees, including the new policy by American Airlines and other carriers to charge consumers $15 for their first checked bag, Travelocity conducted a focus group with a handful of its most-frequent, frequent fliers to gather some input and to give them, as one participant characterised it, according to the New York Times, “a shoulder to cry on”.

In the article, ‘Believe It or Not, Someone’s Listening,’ Travelocity chief executive Michelle Peluso, speaking about hotels dropping bookings and airlines making the travel experience ever-more challenging, outlines the multiple steps the online agency is taking to cushion the inconveniences and says: “When consumers have a bad experience they blame both of us [Travelocity and suppliers].”

She adds: “We are taking accountability for things we otherwise wouldn’t take accountability for.”

Nothing wrong with that marketing message.

On a less-inspired note, unveiled a website feature at that offers consumers holidays for up to $600.

This is hoped to be a way to entice consumers to spend the $600 tax rebates that the federal government has issued to many taxpayers as a means to stimulate the sluggish US economy.

Expedia said it is “adding a bit more stimuli to the US economic stimulus package…”

A nice try, but used repeatedly and annually at tax-refund time, and not very stimulating in
a marketing sense.

Europe is strong for Orbitz Worldwide

Orbitz Worldwide didn’t grow in the first quarter of 2008, according to recent results, but its gross bookings climbed in Europe and fell in the US.

The company’s $2.9 billion in gross bookings were the same as they were in the same quarter of 2007, but in 2008 Orbitz Worldwide’s international bookings climbed 41% to $488 million, largely on the strength of Ebookers, which showed muscle in both air and non-air.

“More than half of Ebookers’ markets achieved growth of over 50% in gross bookings in the quarter,” Orbitz Worldwide states.

The robust growth in Europe and Asia came as Orbitz’s much larger US businesses, and CheapTickets, saw gross bookings fall 6% to $2.4 billion in the first quarter of 2008.

Orbitz upped its marketing spend in continental Europe during the quarter, and had slightly lower online marketing spend in the US, but Orbitz Worldwide doesn’t believe that its US doldrums will persist.

The company said it plans to launch features on its US sites and will unveil a new advertising campaign, with the two initiatives forecast to boost top-line and bottom-line growth domestically for the rest of 2008.

Among Expedia Inc, Travelocity and Orbitz, the latter has been the weakest in Europe and Asia and was the slowest to build its non-air business. Orbitz Worldwide hopes to correct some of that disparity without sacrificing prospects at home.

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