Travolution board – Roundtable meeting February 2006

The second meeting of the Travolution executive advisory board welcomed some new faces when it gathered in London in February. Kevin May chaired the meeting and reports back.


Assemble a collection of senior figures from the online travel industry around a board table for an hour or so, fire a few questions in their general direction, and see what happens.


And so welcome to the second meeting of the Travolution advisory board. It started with a broad discussion on the state of the industry so far during 2006 – and ended with an explanation on the benefits of targeting Robbie Williams fans. In the middle the group also managed to debate price-comparison sites, hotels, mobile technology and – tapping into the experience of newcomer Cendant’s Mike Nelson – what the UK market can expect to arrive from the across the Atlantic.


However, as the second edition of Travolution demonstrated with its cover story on the topic of search marketing, the industry is bordering on the obsessive when it comes to role of search engines.


Thankfully, Tim Davis, Hilton’s new board representative, summed up the reality of the situation in one exchange: “I welcome competition and choice; I welcome 15 different flavours of search. But, ultimately, it’s about reaching clients.”



Who’s who:


Tim Davis, senior vice president, commercial development and information services, Hilton International


Tim Frankcom, general manager, Yahoo! Travel Europe


Brent Hoberman, chief executive, Lastminute.com and Travelocity Europe


Mike Nelson, UK chief operating officer Cendant TDS global markets


Patrik Öqvist, director of marketing, Hotels.com (on behalf of Expedia)


Esteban Walther, head of travel, Google Europe


Kevin May, editor, Travolution


Simon Ferguson, publisher, Travolution



Current state of play


FRANKCOM: In terms of page impressions and unique users, we’ve seen large increases in all our markets. I think more established ones have shown slower growth, but that’s not unexpected.


HOBERMAN: We’ve focused on cutting off a lot of unprofitable traffic. We’ve found some other people are prepared to take unprofitable affiliates, so we’re happy with that. But otherwise for our core brand, Lastminute.com, there’s strong growth, and we’re rationalising behind fewer brands.


ÖQVIST: We’ve seen a strong start to the year in all our core markets, but some of the additional markets where we operate the Hotels.com brand – such as Scandinavia – have seen exceptional growth. Across our portfolio of countries and brands, it is strong but more of a steady growth.


WALTHER: January was a very good month. We don’t expect the growth rate to pick up as in previous years. We’re seeing important growth for tour operators and airlines.


DAVIS: We had a good strong opening to the year and some semblance of a recovery from North America into Europe, which is always encouraging to see for cities. Online we actually get a Christmas backlash, a massive kick-up as soon as people come back from the break. They never say a year is made by January, but it sure as hell can be broken by January – so I’m pleased we’re not in that category.



Personalisation of travel websites


HOBERMAN: Most travel websites will almost always boast about how their clients have reviewed stuff. Now, I think it is much more about the quality of the reviews and how you find people like you, rather than just random people who think something is totally different to the way you think it is.


WALTHER: What I think will have an impact on the travel sector are the products such as [Google] Local or [Google] Earth or Google Video. They will drive more traffic into sites and have a big impact. Hopefully, we will get them out of the labs and make them proper market products.


FRANKCOM: A business is completely driven by the return on investment it gives to its advertisers. But in terms of users it’s got to move forward. If you help them, you are in a better position and further down the purchase chain when they go and click through to the advertiser’s website.



US-European markets


NELSON: If you went to the US and looked at Orbitz, Expedia and Travelocity, you would see the almost the same air fares and hotel deals, because a lot of it is dominated by chains. The user experience and the technology platforms – there is a lot more variation across the businesses here.


DAVIS: We are between 18 months and two years behind in terms of the rates of growth and adoption of critical mass, but that two-year gap is starting to close.


WALTHER: The comparison for the US with the UK, in terms of where clicks are coming from or going to for aggregators and suppliers, is changing – and suppliers are increasing plenty of the clicks.


ÖQVIST: In Europe there is plenty of space for aggregators to provide a genuine service for users to find hotels. The independents don’t have the muscle to reach those kinds of audience that others can provide.



Price-comparison sites


DAVIS: What concerns me is where companies adopt bad practices that will limit our ability to compete in the market and communicate to consumers. It is then that we will take quite a hostile approach to a company.


NELSON: There are a lot of games to be played right now and if meta search is going to be dominated by someone it’s going to be Google and Yahoo!, and we spend a lot of money Google and Yahoo! as do Expedia, Travelocity and everyone else. It’s another one of these things where we are competitors a little bit, or partners a little bit, and we have to strike the right balance.


FRANKCOM: It’s about how we want to drive traffic to our sites and how we do it, so of course we compete. Where I don’t think we compete with the online travel agents is in the sense that we don’t carry a booking. We are not looking to own that customer relationship.



Search engines


WALTHER: We have a tremendous focus on improving natural search all the time. We make improvements on the algorithms, and that is there for the long term. The other thing we are doing is trying to improve the relevancy of the all the advertising and sponsored links that we have.


FRANKCOM: We can help advertisers manage their expectations about what they can do and if they see a decrease we can find out why. You have to work as a partnership. No-one wants to see an advertiser getting burnt by spending a few thousand pounds and getting no return.


DAVIS: The way you innovate your product [Google and Yahoo!] is fabulous because it encourages competition. But where it twists is where it encourages people to raise the costs in order to get better placement – that’s the conflict that is difficult to manage. The initial growth of both companies came on the back of objective search, providing a service to consumers. But the natural search is getting a lot smaller.


ÖQVIST: I think the issue here is that natural search isn’t working well, in my view.



Hotels


ÖQVIST: The challenge, particularly in hotels, is if you do a check online you get 10 times more the number of results for a hotel than for flights. That’s because there is margin to be made. The issue is that you get any kind of affiliate piling into that space.


HOBERMAN: You get a lot of low-quality affiliates and you do find low-quality sites at the top of Google. That’s not a good consumer proposition.


ÖQVIST: There is so much work going in but it’s an ongoing war. You have all these poor-quality sites and affiliates with lacklustre stuff.


WALTHER: On sponsored links, the combination of the price paid and the relevance of the site gives an extra quality and reassurance to what comes up. But the fragmentation of the European hotel market makes it difficult.


DAVIS: I think people know Hilton as a hotel brand and not a travel brand. Destination packaging is something different, where someone is coming to a particular location. There, a hotel has the opportunity to sell a package of things together. Our competitors who have played with that space haven’t achieved any noticeable success.



What does the future hold?


NELSON: While I am putting my energies into what could be big in three to five years, I think there are still a lot things that need to be solved in the search world. Certainly some mediums, such as iTV [interactive TV], will become very big at some point but my view is that I’ll wait. I’ll let some of these guys figure it out and I’ll follow.


WALTHER: The key is getting more content online – that’s a big chunk of information that can be made available to all users.


DAVIS: As much as these new technologies enable a lot to happen, at the end of the day we are not Coca-Cola and we’re not trying to reach every consumer. Our marketplace, as a percentage of the total, is small. So, from our point of view, we look at these new technologies but we’ve got to get a degree of critical mass, a degree of utilisation, before investment in creative future becomes a sensible investment.


HOBERMAN: The undercurrent of this is first-mover advantage and whether it’s worth being first or just copying. If you look at Google Earth, that’s a great example where being first is pretty good. It’s the 20th most-visited travel website in the world. Whoever copies won’t get that traction. I think it’ll be same in who can work out how these new technologies combine to create really great travel applications. Whoever just copies or follows will have to spend 50 times the marketing investment of the first player to get even close.


ÖQVIST: The broader digital home as an entertainment player for the next few years – that’s where it’s happening. It’s just not convenient to sit in front of your TV and surf. It just doesn’t work.


HOBERMAN: The key thing about mobile is that there will be a switch in when it’s really useful. That’s going to happen very quickly.



Full transcript of the meeting:


TRAVOLUTION: How is the market performing in general since you all last met, prior to the launch edition of Travolution last year?


FRANKCOM: The market varies according to which pert of Europe you are looking at, but European growth remains exceptionally strong, at least on the Yahoo! Travel search side. Also in terms of page impressions and unique users we’ve seen large increases in all our markets. I think more established ones have shown slower growth, but that’s not unexpected.


HOBERMAN: We’ve focussed on cutting off a lot of unprofitable traffic. We’ve found that some other people are prepared to take unprofitable affiliates, so we’re happy with that. But otherwise for our core brand, Lastminute.com, strong growth, so we’re happy with that and we’re just rationalising behind fewer brands as we have a lot of brands. January is a traditional tour operator month for summer, which is not our core business as we’re still last-minute. July and August are miles bigger for us than January.


FERGUSON: There seems to be a view that the traditional tour operators are fighting back online. Thomson, in particular, is trying to shift distribution.


HOBERMAN: Well they’ve shut a lot of shops and they’ve lost a lot of trade through other people’s shops so they have to try and make up for it somewhere – I think it’s a sensible strategy to try and do it online at the moment.


FERGUSON: Do you regard them more as competitors now?


HOBERMAN: More evil than Expedia? [laughs] I think what is interesting are the business models, in that it is about risk – and taking inventory risk, which obviously is one of the big things that the big tour operators traditionally have always done. As they take less and less risk the open question is will people like us and Expedia take more and more. To date that hasn’t really happened. We take minimal risk, mainly through acquisitions. This year is also going to be very interesting with the World Cup – what’s that going to do to business. We believe that it is actually a very good for the late market. The late market got tighter last year but it will get a lot more open again this year.


ÖQVIST: We’ve seen a strong start to the year in all our core markets, but some of the additional markets where we operate the Hotels.com brand – such as Scandinavia – have seen exceptional growth. Again we are mainly a short breaks player so the January peak is less pronounced. When we look at our portfolio of countries and brands, it is strong but more of a steady growth based on last year. Supply for World Cup is incredibly tight for the German cities, mainly because FIFA have taken such large slug of the rooms. We expect some of the rooms to come back onto the market as we approach the event. From a user or consumer point of view it is a Catch 22 because if you’ve got your tickets you are going to want to buy your hotels, but we expect prices to actually ease as we get closely. But how cool do you want play it? Our advice has been to take it easy.


WALTHER: January has been a very good month. We don’t expect the growth rate to pick up as previous years. We’re seeing important growth for tour operators and airlines.


DAVIS: We’ve had a particularly competitive January. We had a good strong opening to the year and some semblance of a recovery from North America into Europe, which is always encouraging to see for cities. Online we actually get a Christmas backlash, a massive kick-up as soon as people come back from Christmas. They never say a year is made by January, but it sure as hell can be broken by January – so I’m pleased we’re not in that category.


TRAVOLUTION: What is the difference between the US and European markets?


NELSON: There is more comparative parity in the US, would be my observation. If you went to the United States, and looked at Orbitz, Expedia and Travelocity, you would see the almost the same airfares out there; almost the same hotel deals out there because a lot of it is dominated by chains so the margins are very similar; and about the same for car rental deals. If you do a similar search in any of the markets here and you see something very different. If you go into the rest of the business…the user experience, the technology platforms, there is a lot more variation across the businesses here.


DAVIS: I would say that we are broadly between 18 months and two years behind in terms of the rates of growth and adoption of critical mass, although that two year gap is starting to close all the time. 11% of rooms were booked online last year; for the Holton brand in North America it was about 15% online, so that gap is closing. As both companies start to evolve we expect to get in the 25-30% neighbourhood by 2009. We are expecting a lot of growth out of Europe, albeit I don’t think that growth is unique across Europe. The UK is strong; the Nordic market is strong; Germany is starting to grow to the scale is should be given the scale of the business. The rest is fairly fragmented. From our point of view the real maturity has come from probably three or four markets.


FERGUSON: That growth, in terms of the distribution channels, is that going to come at the expense of some of your current channels?


DAVIS: Not really, in absolute terms of all the growth. Obviously we get a lot of consumers who historically picked up a phone and call a hotel direct. Keep in mind that two-thirds of our business is people that call directly still – and that was three-quarters three or four years ago. Most of that business has moved online. The issue then is that whether they have bought online through a third party. I would say that the main share has marginally grown by the direct proportion, but it’s not significant.


WALTHER: The comparison for the US with the UK, in terms of where are clicks are coming from or going to for aggregators and suppliers, is changing quarter by quarter – and suppliers are increasing plenty of the clicks. I can’t relate that to bookings but clearly it is happening. When we talk about the UK we say it is about a year behind the US, when we move into other countries it is at least two years.


ÖQVIST: The key structural difference is the dominance of the chains over in the US, which makes the presence of parity pricing much more common. In Europe there is still plenty of space for aggregators to provide a genuine service for users to find and locate hotels. The independent ones certainly don’t have the muscle themselves to reach those kind of audiences that others can provide to them.


HOBERMAN: I think within hotels there is a bit of a split between resort hotels contracting and city hotel contacting. There are different companies that do that better.


DAVIS: Plus quite a few of the resorts you can’t there by scheduled air service, so it is still a tour operator-dominated market.


TRAVOLUTION: What do you see as the next challenge for search engines and how are they going to change?


FRANKCOM: Search is clearly evolving. One of the things we have noted at Yahoo! and one of things we are developing is what is the next phase for search? There will be video search; social search; and, of course, knowledge search. Knowledge search is very interesting in the US. For Answers.Yahoo.com, the idea is that you use your community of users to pose a question and then your community of users come back with an answer. It is all about how you use that data and that information. One of things that is open to Yahoo! Travel is about integrating that source of information into our travel product, to give fresh, user-generated content.


WALTHER: In terms of what I think will have a good impact on the travel sector are the products like [Google] Local or [Google] Earth or Google Video. I think they will drive more traffic into sites and they will have a big impact. Hopefully we will get them out of the labs and make them proper market products.


TRAVOLUTION: But will Meta search engines make a big difference to companies that have a solitary product, like a supplier?


DAVIS: It is science and numbers. You can get totally lost in the various business models, algorithms, mechanisms and search models. At the moment we look at all of these and try to keep up with the mechanisms of search – just physically understanding ‘how does this work’. But then it comes down to straight numbers; how much do you get, and I’m not just talking about bookings. For me the big brand sites are as much a media platform and a way of communicating and marketing as they are a distribution channel. It is really is like direct mail and advertising in print used to be – I accept that there are multiple, different flavours but ultimately it’s about who do they reach, how much they reach, what does it cost, what is the return. We spend a lot of time trying to understand each of the different players from that perspective and then it’s a finite amount of dollars to where you think you think you will get the best return.


FERGUSON: The difference between a Meta search and traditional medium is that Meta search has the ability to fundamentally commoditise and change some of the dynamics of the market. The fascinating thing about search is the merging of media and distribution into one channel. But as a direct supplier do you welcome the fact that for Travelsupermarket.com and Sidestep the message to the consumer is that they are one source to compare and contrast different prices?


DAVIS: What concerns me is where companies adopt bad practices that will limit our ability to compete in the market and communicate to consumers – then we will take quite a hostile approach to a company. From our point of view, I welcome competition; I welcome lots of choice; I welcome fifteen different flavours of search. Before the internet came along their was a gazillion publications to reach the consumer and they all had different costs, different mechanisms. But ultimately it just about reaching customers.


NELSON: Meta search obviously is a topic that gets a lot of debate and there is a lot of debate internally. I don’t think you can argue that the model competes with an OTA as it clearly competes with the OTAs, but frankly there are a lot of us that compete with each other and also work together in some ways. I think it’s just a situation that we are going to have to monitor carefully. We have to be careful in terms of commitments we’ve made, how we participate and keep monitoring progress. There is a lot of game to be played right now and if Meta search is going to be dominated by someone it’s going to be Google and Yahoo! – and we spend a lot of money Google and Yahoo!, as does Expedia, Travelocity and everyone else. It’s another one of these things where we are competitors a little bit, or partners a little bit, and we have to strike the right balance.


FRANKCOM: In some ways we all compete against each other in terms of our traffic acquisition. It’s about how we want to drive traffic to our sites and how do we do it, so of course we compete. Where I don’t think we compete with the online travel agents is in the sense that we don’t carry a booking. We are not looking to own that customer relationship. Only the customer relationship opens up direct marketing opportunities for the OTA.


WALTHER: We know that our search provides good distribution opportunities for products but we are looking at what value our search has on the initial stages of purchase to see how much of a brand impact search has.


DAVIS: The initial growth of both your companies [Google and Yahoo!] came on the back of objective search, providing a service to consumers. But the natural search is getting a lot smaller. Do you see that always playing a role, or do you see a day where natural search disappears and it’s all paid-for advertising?


WALTHER: We have a tremendous focus on improving natural search all the time. We make improvements on the algorithms, and that is there for the long-term. The other thing we are doing is trying to improve the relevancy of the all the advertising and sponsored links that we have. But natural search is core to our business.


FRANKCOM: It’s absolutely the same. It’s about concentrating on what makes your business good and a search engine is key to that, so it’s a big focus for Yahoo! in 2006 as well.


HOBERMAN: That’s a good point about devaluing of the Google product – for example, in Italy, Expedia I’m told has taken out ten entire brands out of the pay-per-click and paid-search element. So there’s a strong view that that actually devalues the whole idea of even what those sponsored links are meant to be about. But Google hasn’t done anything about it yet!


WALTHER: We look into this very carefully. I wouldn’t want to comment on any specific cases but I know there have been lots of meeting with clients to find ways around that.


FRANKCOM: In some markets you monitor that quite carefully, don’t you?


WALTHER: We do monitor in all the markets. We have teams in Dublin, sitting there manually approving ads and looking at where ads are being displayed, so when they identify something….


HOBERMAN: ….you ban them globally!


WALTHER: It is all about the user experience, so when things are not working right it’s the right thing to do.


FERGUSON: I’m sure you guys are looking in the future, and do you protect natural search – of course you do. But back to the Meta searches, it is a question of whether the competitive environment changes for you. For instance, if these Meta search companies start to occupy a significant space then surely you would have to react against it. If those companies gatecrash and gain ground, you would have to then re-think, wouldn’t you?


WALTHER: A lot of these brands are working with us. We always connect users with websites – and if suppliers are keen for us to do that.


FRANKCOM: I think it is inevitable that new players come into the market – like Sidestep – so brand new companies are going to come over, whether they are travel search companies or whether they derive there revenue from a different business model. Our challenge doesn’t change. Our challenge is to continue to evolve; move our product forward and improve it; to obtain comprehensiveness of results, which is a key a part of our offer; and to be able to return investment for Lastminute.com, other companies and any other supplier site that works with us. A business is completely driven by the return on investment it gives to its advertisers. But in terms of users it’s got to move forward. The integration of Local is key. How do you integrate with Local to move your product forward, to help the customer find what they are looking for, because ultimately if you help them you are in a better position and further down the purchase chain when they go and click through to the advertising website.


DAVIS: The way you innovate your product is fabulous because that just encourages competition. But where it twists is where it encourages people to ratchet up the costs in order to get better placement – that’s the conflict where it is very difficult to manage.


FRANKCOM: Kelkoo and Yahoo! together, the business model is effectively what some might term a blind auction – the people that pay the most for their average cost-per-click will move to the top of the search. We also believe that this is a way of saying that this isn’t about price comparison, it’s about offering the consumer a whole host of opportunities in terms of searching, which is why we always refer to it as travel search. A search engine will help you find a shop; a travel search will help you find a product. It’s making an assumption, of course, that if you put things in price order then customers are only interested in price. Often you might have a frequent flyer card; you might be driven by schedule; you may have a loyalty to an online travel agency or you wish to book with them as they’ve retained some of your details or you look their website. It’s about providing comprehensive results, but the key for us is enabling the customers to find what they are looking or a sort by time of departure, direct or indirect flight, or price as well.


DAVIS: I think where we will typically spend a lot of our dollars is on the models that carry the good ROI and are also consumer friendly. Where you guys create things that drive relevance to consumers, we will applaud. Where there are things that allow us to really compete, we will applaud and will put a lot of money in those areas. I think it is return on investment and allowing brands to freely compete – those two things are the areas which will attract a lot of our dollars.


FRANKCOM: The return on investment for us is key. We don’t have access to people’s data, although some of the merchants work with us in a way that they share the data. We can help advertisers manage their expectations about what they can do and if they see a decrease we can find out why. You have to work as a partnership. No-one wants to see an advertiser getting burnt by spending a few thousand pounds and getting no return of investment.


WALTHER: Google analytics has been a key focus for us this year, offering it free to all the advertisers to find out the easiest to track return on investment. We have had major adoption from travel clients across Europe of the product and the advertising teams at Google are working with the advertisers to improve it and make it sufficient solution.


ÖQVIST: I think the issue here is that natural search isn’t working well, in my view. The challenge, particularly in hotels, is if you do a check online you get ten times more the number of results for a hotel than for flights. That’s because there is margin there to be made. The issue is that you get any kind of affiliate piling into that space. A lot of the search results are quite poor and part of the issue is how different countries are handled; how different languages are handled. The agencies have a lot of work to do to make that work. When we are talking about new features being added, that’s great, but actually there is a lot left to do in natural search itself.


HOBERMAN: You get a lot of low quality affiliates and you do find a lot of low quality sites in hotels at the top of Google. That’s not a particularly good consumer proposition.


The arbitrage is not worth that much. When people really start to analyse the price, as Travelocity did in the US that just said it’s not worth paying – I think Expedia in the US did the same thing. Orbitz was the only one in the belief that everyone else was overpaying… [laughs]


NELSON: …I think we know our metrics better than you. But maybe not!


HOBERMAN: It is actually interesting when you see one player participating and two others not participating, it poses some interesting questions about strategy. But it is getting better.


ÖQVIST: There is so much work going in but it is really like an ongoing war. You have all these poor quality sites and affiliates coming up with lacklustre stuff.


WALTHER: On the sponsored links side, the combination of the price paid and the relevance of the site gives an extra quality to and reassurance to what comes up there. But the fragmentation of the European hotel market makes it very difficult.


HOBERMAN: The problem is what you are doing is giving on natural search a real bias to people that bought some relevant words in their URL. They are the ones that get up to the top, just because they have that word. They were probably very savvy 18 year olds, ten years ago, who bought the domain name. It doesn’t mean they have a good website.


ÖQVIST: You also have Yahoo! doing things like paid inclusion where the argument is that it doesn’t reflect the ranking order but it…does. It allows people to feed websites via XML into the Yahoo! index. It influences the quality of the result but not the ordering, but clearly if you have a direct feed the quality of your information is going to be better than others. It doesn’t exactly help the position of natural being pure, when you start to mix up paid and non-paid aspects.


FERGUSON: Do you see yourselves becoming more of a travel brand in your own right, in a sense that their will be a temptation to move into offering flights and other components off the site?


DAVIS: I could be proven wrong in the future but I think consumers know Hilton as a hotel brand and not a travel brand. Destination packaging is something different, where someone is coming to a particular location. There I think a hotel has the opportunity to sell a package of things together. But for wider travel, I am not, if it is a viable thing. So far our competitors who have played with that space really haven’t achieved any noticeable success.


TRAVOLUTION: How much will the business model have to change to take in, for example, what Bill Gates has in mind for the digital home?


NELSON: While I am putting my energies in what could be big in three to five years, I think there is still a lot things that need to solve in the search world. Certainly some mediums, like iTV, will become very large at some point in time but my view is that I’ll wait. I’ll let some of these guys figure that stuff out and I’ll follow.


ÖQVIST: The key thing that is happening right now is the introduction of broadband. Research suggests that people who go on to broadband use search 60% more than people on a dial-up. That’s a paradigm shift for those people. The broader digital home is really as an entertainment player for the next few years – that’s where it’s happening. It’s just not very convenient to sit in front of your television and surf. It just doesn’t work.


TRAVOLUTION: Another part of Gates’ vision is an increased level of personalisation. How do you see websites moving forward in terms of being more personal with the customer?


WALTHER: The key is getting more content online and getting content that is now offline which is not on the net – that’s a big chunk of information that can still be made available to all users. And then five years away to serve this content is key. Starting with local products, Google Video. Users will still be able to search whatever they want.


FERGUSON: There is such a huge amount of user-generated content. From a travel point of view how is that going to impact?


HOBERMAN: Most travel websites will almost always boast about how their customers have reviewed stuff. I think it is much more now about the quality of the reviews and how you find people like you rather than just random people who think something is totally different to the way you think it is. I personally get very excited about mobile and what that will do.


DAVIS: The first area I suspect we will be most concerned with will be mobile technology. As much as these new technologies enable a lot to happen, at the end of the day we are not Coca-Cola and we’re not trying to reach every consumer. Our marketplace as a percentage of the total is relatively small, so from our point of view we look at these new technologies but we’ve got to get a degree of critical mass, of degree of utilisation, before significant investment in creative future becomes a sensible investment.


HOBERMAN: The undercurrent of this is first mover advantage and whether it’s worth being first or just copying. If you look at Google Earth, that’s a great example where being first is pretty good. It’s the 20th most visited travel website in the world. Whoever copies won’t get that traction. I think it’ll be same in who can work out how these new technologies combine to create really great travel applications. Whoever just copies or follows will have to spend fifty times the marketing investment of the first player to get even close. It’s reassuring to hear Cendant saying they are not that interested in looking forward to the future… [laughs]


NELSON: [laughs] I’d second what Tim [Davis] said. I really do feel that in the end certainly where Orbitz is focussed right now in using mobile and customer care is an area where we are putting a lot of focus on. If people’s flights are delayed or they have a problem with their hotel booking – how you service the customer and how to use mobile technology to make sure your customers have a good experience.


WALTHER: I’m interested in the i-mode launch with O2 and Lastminute.com.


HOBERMAN: We’ve got great exposure for it; O2 have put all sorts of ads out with our branding, which is always nice. The key thing about mobile is that there will be a switch in mobile when it’s really useful. That’s going to happen very quickly. We’ve been learning on mobile for five years, so we were maybe too early in it and because I like playing with gadgets! I think we are very well prepared now as it moves to be very useful.


TRAVOLUTION: What other areas can travel companies expand into?


HOBERMAN: For us it’s going away, going out and staying in. We position ourselves as a lifestyle brand, so that’s a different strategy. Others are more focused on being a travel brand and can work very well. Our view is that we need to differentiate and not go head-to-head. We power NME’s website for concerts and gigs, for example. We can get 10,000 customers in an hour or two if there’s a Robbie Williams gig. It’s a great way in. It’s about scale and how to get scale quickly. How valuable are those deals are depends on whether we own the customers or not.


NELSON: It’s a stronger strategy here and international markets. We power 75 different airlines sites with hotel content, so we’re very much in that game and that’s clearly a core part of our strategy.


FRANKCOM: It’s always been the same at Yahoo! and Kelkoo. It’s about offering reach to our advertisers. Kelkoo powers flights, hotels and car hire to sections of AOL in the UK. We share with Ebookers on the Wanadoo site and others, including Multimap. If you offer reach to your advertisers you will bring more advertisers onboard, which offers more and more choice to the consumer.

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