Greetings from the Happy Booker!

It may be the dog days of August, but the travel industry is certainly not taking a summer holiday.

The past 10 days have seen two major strategic initiatives: InterContinental Hotels Group's third-party certification program and Northwest Airlines' new service fee policy.

I haven't seen this much drama since I saw two people wearing the same dress at a San Francisco charity event. Of course, this being San Francisco, one of them was a guy in drag!

Clearly, suppliers are aggressively moving to gain more control of their distribution destinies. Make no mistake: This is the dawn of a new era in travel distribution, one in which end users -- both travelers and intermediaries -- more directly bear these costs, rather than the suppliers.

What's behind this? Margins, of course. But also the Internet. The Web's nearly ubiquitous presence in North American and European businesses means that third-party travel intermediaries have more viable options to GDSs to access travel content, such as availability, rates, and information. Right now, no alternative distribution solution is as extensive or comprehensive as a GDS. But 40 years ago, the GDSs weren't the powerhouses they are today, either.

With the industry increasingly operating across channels, we recently published a report that divides travelers into eight segments, based on income, trip frequency, and interest in using the Web to research and buy travel. The segments are illustrated in the graphic in the right column. What else did we learn?

• Nearly half -- 49% -- of all US leisure travelers are Web-oriented. But they account for 55% of leisure travel spending.

• All eight segments contain online travel buyers -- Bookers -- but the extent of their online booking behavior varies widely.

• In seven of the eight segments, one-third or fewer are brand loyal when buying travel. Sky Kings are the most brand loyal.

• Self-service technologies like IVR are critical to serving low-margin segments like Housebounds, while customer information management is critical for upmarket segments like Estate Sitters.

To deliver an outstanding multichannel experience, what else must travel marketers do?

Build a good foundation. To segment customers, do CRM the right way and successfully offer a good experience across channels. This requires solid marketing platforms. My colleague Eric Schmitt has published an outstanding overview of the best firms to consider as a marketing automation partner.

Make travelers confident. Six in 10 consumers say their concerns about online privacy and security inhibit them from sharing credit card information online. My colleague Elana Anderson recently published an excellent report that will guide you through the necessary strategies to build consumer confidence.

Don't expect advertising to be the hero. My first "real job" was at Bozell & Jacobs Advertising working its American Airlines account. Back then, the solution to many marketing challenges was "We need more advertising!" Not so today. The message and the medium must be relevant and compelling enough to reach cynical, overwhelmed, and suspicious consumers. Campaigns must also facilitate travelers' search for information across channels, such as print ads, email, and the Web. An example of a company that did this is United Air Lines, which is supporting its new "premium service" US transcontinental flights with direct mail, a special Web site, and an interactive CD-ROM.

Be sure the contact center supports marketing objectives. OK, first, drop the term "call center" -- it's so 1996. Contact center agents -- who may work in a traditional facility or consist of home-based agents -- must be empowered with inbound and outbound email, IM/chat, and Web page-sharing technologies, among others, to both help the interaction and deepen the customer relationship. Responsibility for this must belong to a marketing exec charged with owning the total customer experience.

That's it for now. Thanks for your time. As always, please email me at henryharteveldt@forrester.com with your suggestions for future research topics.

With kind regards,



Henry H. Harteveldt
Vice President, Travel Research

Research Referenced In This Issue Airlines: Start Charging Service Fees (34764) Benchmark 2004 Data Overview (34278)    Consumers Need Education About Privacy And Security (34441) FareChase Boosts Yahoo! Travel's Search Strength (35179) Hotels To Merchant Players: Do It Our Way, or Else (35236) How To Segment Leisure Travelers In A Multichannel World (35177) IAC Travel Scales The Great Wall With Its Purchase Of Chinese Travel Site eLong.net (35087) Market Landscape: Consumer Marketing Platforms (33339) The Consumer Advertising Backlash (33834) Where Can I Find A Cheap Ticket? (34207) Why Marketing Should Own The Contact Center (34134)

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