Friday, November 26, 2010
Thursday, November 18, 2010
PhoCusWright: HomeAway boss Brian Sharples talks acquisitions and how far we are from instant conf in online vacation rental
Last night I tweeted my top four picks. Two of them made the final four. My picks were all transportation search companies. I chose air search companies Everbread and Vayant, meta-search innovator Hipmunk and online rail company SilverRail. The two runners up I chose were Facebook trip planner Gogobot and social media monitoring company Revinate (competitor to finalist TrustYou). Democracy at PhoCusWright had a different view and the attendees have chosen 2010 innovation finalists up SilverRail, Hipmunk, Goby Technologies and Kony Solutions as the finalists for the 2010 Travel Innovation Summit. Runners up were TrustYou, Cruiselabs and Groundlink.
Wednesday, November 17, 2010
Innovation Summit: Everbread - air search change that sounds good but need to see more before I can be sure it is revoultionary
Rail is well overdue for online travel innovation. We are into the third decade of online travel yet it is still almost impossible to book online train tickets through the traditional online travel channels of OTAs and meta-search. [ side not - At least in the west it is. In India online rail is a booming sector]
At the PhoCusWright Innovation Summit Aaron Gowell Founder and CEO of SilverRail used the of billions and billions of dollars in annual rail ticket sales to convince the audience of the potential for online rail.
He claimed that rail was a $300bb a year global market and the fastest growing sector in travel. Maps filled the power point slides showing high speed lines being built across Europe and China. Billions and billions in infrastructure spend. There are clear examples of long distance rail beating the airline business. The channel tunnel has stolen 80% of the market share in the Paris to London route. Hundred's of billions in investment and sales of rail tickets yet still 60% of the tickets are booked at the station.
Gowell told us that the only agency channel making progress in selling rail was corporate agencies. But most of those agencies have to transfer the call to separate call centres. As a result of this and complexity Gowell claims that corporate agencies are only able to do 4 bookings per hour vs 20 per hour for flights.
SilverRail also convinced us that they are well placed as a company to take advantage. They have some big name backers who contributed to a $9.5million series A round including Sutter Hill Ventures, Accel Partners, GrandBanks Capital and Brook Ventures. Gowell told me after the presentation that he has about 8 months of money left but is not worried as the potential is so great that he is confident that a new round of raising was not a problem. On revenue SilverRail are taking a transaction clip from the supplier - much like a GDS or switch.
Within 2 minutes of his presentation I was convinced of the potential for online rail. Unfortunately Gowell used nine of his twelve minutes to convince us of the market potential. This was more time than needed and cut short the time available for him to show us the SilverRail Product. What we saw of the product was impressive but I was left feeling like I needed to see more to be certain they would not end up like Wandrian.
On the critics circle (American Idol style panel at the Summit) Jim Hornthal of Triporati put a number of very important challenges/questions to SilverRail which I then had a chance to ask Gallow during an interview after his presentation.
Jim said: I am not sure what we need rail sold through OTA people are comfortable booking through the supplier direct (like the Low Cost Carrier model).
Aaron responded: model has changed dramatically in the last two years. Suppliers now need and are asking for distribution. For example you can now get a train from Germany to the UK. This is not a product that can only be sold on the Deutchebahn website. 2 years ago it was a hard sell to suppliers but now they are looking for us.
Jim said: There is not commission in rail so not attractive to OTAs
Aaron responded: packaging. With so much of the air spend shifting to rail (ie London to Paris route) the OTAs need to add more transport options to facilitate their packaging sales. Make their money out of the hotel.
I am a believer on the timing and potential for online rail. SilverRail put on a great show and have a very impressive list of staff and backers but (as like many at the Summit) I was left wanting to see more of the product and less of the power point.
update - here is what Bootsnall had to say about SilverRail
From the 12 minute presentation at the Summit it was hard to see how good a job Movitas is doing at meeting challenge as the presentation was delivered very quickly - too quickly. Lots of screen shots streamed a lightening speed. I would have preferred to have seen one or two examples of the product displayed slowly rather than the half a dozen or more screen shots and moving images flashing left, right, up and down. I am also not convinced that a hotel can persuade busy mobile road warrior customers to come to the hotel's own mobile platform when apps from Google, TripAdvisor, Orbitz, Kayak and more provide the vast majority of the functionality that Movitas was describing without the need for a new download or functionality learning curve.
The hotel guest is on the move and is connected - no doubt about it. They are hungry for information and content - absolutely. But they already have lots of apps and tools downloaded. I am not convinced that Movitas will be able to persuade hoteliers to persuade customers to add one more.
Tuesday, November 16, 2010
Friday, November 12, 2010
A lot of market share is advertising-driven, it's all about exposure: if you start to see a lot of marketing spend from competitors like Zuji, it could [affect] both Webjet and Wotif. Hotels.com is another new entrant . . . It's a sign that the high margins that Wotif and Webjet have been used to experiencing, there are now other people after their lunch."
Hopkins says Wotif is a different business model from the other four web-based stocks, in that what goes online is distressed inventory and short-term bookings. "Wotif is suffering from, one, a quite strong rebound in hotel accommodations, which means the hotels aren't putting as much inventory on Wotif; and, two, it is not strong on the international side of things, so the strong Australian dollar, with a lot of people going offshore for holidays, has hurt them quite a bit.
"The short-term earnings outlook is pretty flat, but in the long term we think Wotif is still a strong business; it's still very dominant in its sector."
At the Q3 earnings release (see seeking:alpha transcript here) Priceline CEO Jeff Boyd had a lot more to say about the performance of Agoda. He told the meeting the the combined turnover of Booking.com and Agoda in AsiaPacifc was ~U$780m for the 12 months to 30 September. His exact quote was
I want to provide on a one-time basis some data on our progress in new markets to help size their contribution to our international results. Booking.com and Agoda have made excellent progress in building the Group’s business in the Asia Pacific region. The combined business of Agoda plus Booking.com’s business for APAC destinations was approximately $780 million for the 12 months ended September 30, and the third quarter gross rate for that business was just shy of a 150%.
Agoda continues to build its business in the Asian region and again reported triple digit year-over-year growth in gross bookings, contributing to the overall international and merchant growth we are reporting. The business has performed well following civil unrest in Thailand and is well positioned for its seasonally important fourth quarter
the point-of-sales businesses [for APAC] is a comparable size and growing in impressive rates. And when you think about the Asian business to the extent that includes business for Agoda, that’s it’s whole business which is point-of-sale Agoda business. Most of that is Asian but it’s the whole business.
Wednesday, November 10, 2010
Tuesday, November 09, 2010
I had a chance last week to talk with OurExplorer founder and CEO Dave Cunningham about the sale process and what he learned as the boss of an online travel start-up. [for more background on the company see my 2008 interview with Dave]
BOOT: How was the sales process?
BOOT: What did you learn from the sale process that would benefit other start-ups?
- Build the platform an website
- Establish the supplier base (guides); and
- Build demand
BOOT: What are the integration plans with Viator?
- integrate product – select the top 1000 or so guides (out of 2,400) and add them into the Viator product set; or
- keep the OurExplorer brand and dedicate effort to grow the business and brand
Monday, November 08, 2010
Friday, November 05, 2010
Getting on Board
Qantas has an advantage over other carriers in all instances of boarding as my top tier Platinum status grants me access to their first class lounges regardless of the class I am flying. Something that I miss on VS (though gain on BA). This advantage was particularly acute in Tokyo as I knew to head for the JAL first class Sokura lounge rather than take the monorail to the less impressive and more crowded Qantas Tokyo Business Class lounge. A general tip for you when flying Qantas in Tokyo is take advantage of the JAL lounge and avoid the Qantas one (ditto for CX lounge in HK). Getting on Board itself was a mixed experience. The dual queue set up (one for premium passengers and one for economy) fell apart resulting a huge crowd of pushers and shovers. Once on board the Premium Economy seats are very nicely located just to the left of the middle door. This speeds the boarding process (and the exit process- see BOOT Factor)
Qantas clearly have the largest of the Premium Economy seats. Equally it is clear that have spent a lot of time looking at and avoiding the mistakes make by British Airways and Virgin Atlantic.
Qantas service is unfortunately hit or miss depending on the mood of the crew. On this flight service was fine and attentive. Nothing to complain about, nothing to sing about.
An unfortunate gap in my review. In accordance with my tips for flying economy - which you can extend to flying Premium Economy - I ate my meals on the ground. A very enjoyable meal in the JAL lounge. I did not eat in the air. That said, I will give them a score of 0.5 because there is no way the QF food could be as bland as BA.
I am long term critic of the QF entertainment system. Thankfully from the peak of those criticisms in 2008, they have made improvements. As against their competition in this class (BA and VS) are providing noise cancellation headsets (whereas BA and VS don't). This makes a big difference in the enjoyment of the movie and in the general noise in the cabin. As per the seat comments above, the location of the controls is another plus. A further step up against VS is that QF has placed the headphone jack in an out of the way location. The VS jack jammed into my left thigh causing discomfort. The selection is good - and finally you are able to start movies before take off. Only downside is (like VS) the screen is too reflecting - especially during the well lit meal times. Makes watching a movie with lots of dark or night time scenes (such as Predators) very difficult.
The BOOT factor
I like the proximity of the seat to the exit. I am a sprinter when it comes to getting of a long-haul flight. Especially at an airport like Sydney where dozens of large long haul aircraft land the second curfew is lifted (6am) there are huge advantages in getting off the plane, through immigration and into a taxi as soon as possible. The first step in that sprint is getting of the plane. The Premium Economy is in a great spot for getting off the plane fast. I also like the size of the cabin. On the plane I flew the Premium Economy seating area was just two rows of 2 x4x2. Means each seat is only one step from the aisle and there are only 16 people in the cabin. Very quiet, very relaxed, even with children.
4.5 – Great Seat
Note this is the second review of Qantas Premium Economy on the BOOT – but my first. My wife did the first one.
Tuesday, November 02, 2010
First up at the conference is the Travel Innovation Summit. The full list of companies presenting is here. A couple have already caught my eye including:
- SilverRail - rail is long overdue for online innovation and Cameron Jones has recently joined them as their VP Commercial;
- Everbread - I have seen a demo of this product already and the buzz behind them is super strong;
- Vayant - though they have stood me up for interviews a few times they are also trying to change the way air searches are conducted;
- Hipmunk - best name in online travel ever (maybe 2nd best to Appolicious). Can the product live up to the hype? Will consumers adapt to new ways to search?; and
- Gekko.com - trying to turn review writers into affiliate businesses.
One of my favourite parts of PhoCusWright is the "PhoCusWright Surprise" which occurs when I meet an online travel start up(s) at PhoCusWright that I have never heard of but is (are) number one in their category by some reasonable measure. See stories on last year's surprises Localyte and geckogo.
If you are going to be there and are interested in setting up a meeting or an interview please email me.
If you are interested in attending you can register here but hurry. Ram Bandrinathan of PhoCusWright tells me that already the primary and secondary hotels are sold out and there are only a very limited number of conference tickets left.