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at our September 21-23 Consumer Forum. Attendees will hear from multichannel leaders including Barry Diller, chairman of InterActiveCorp, and execs from Amazon.com, Starbucks, and JetBlue Airways. To register or for more information, click on the link above.
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HSMAI-Los Angeles, "Web site Internet Marketing," August 20.
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ATME Executive ThinkTank, San Francisco, September 4-5.
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SITA Horizon conference, Miami, October 13-15. |
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When money is no issue, why not wager your dignity instead? Virgin Group Chairman Richard Branson challenged Qantas CEO Geoff Dixon to wear a female flight attendant's uniform on Virgin's inaugural flight from London to Australia if it launches the route by 2005. If Virgin fails, Branson will work a Qantas flight on the same route and in similar attire.
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Is comfort going to the dogs? It is at the Westin St. Francis in San Francisco, which recently introduced a "Heavenly Bed For Dogs." What are cats, chopped tuna? |
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Q2 2003 Travel Data Overview
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Hotel Marketing And Distribution Technologies That Matter
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How Travel Must Approach CRM
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Direct Connect Update |
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Appealing to mercenary travelers
The travel industry paved the way for businesses of all stripes to recognize customers based on their loyalty. Yet, more than 20 years since loyalty programs were created and are now accepted globally as alternate currencies, the travel industry faces a massive jolt -- nearly two in 10 people who buy travel online don't care about brand or loyalty. We call this group mercenary travelers, and you need to pay attention to them. Why? They travel regularly and favor simple trips that suit last-minute purchases. But they don't belong to loyalty programs, and they don't view themselves as brand-loyal travelers. Fortunately, this group likes to use the Web to research and buy. So what to do?
Force them to use sites that provide the desired value but are isolated in a way that reduces your risk of cannibalization.
Sell packages -- traditional or dynamic -- on discrete sites to reduce revenue dilution from travelers who would otherwise pay more for individual tickets, rooms, etc.
Use Web consolidators like Hotwire and priceline.com to sell individual components, but work with them to target customers based on shopping and buying behavior.
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Time for hotels to refurbish their Web strategies
The hotel industry is seeing a massive boom in online bookings. This year, US leisure travel Web bookings will produce 10.2% of its revenues, and next year it will reach nearly 12%. But hotels must reexamine who is buying hotel rooms online. Today's US online hotel Booker earns and travels more than those who booked hotels online three years ago -- yet they're able to pay less by shifting from the chains' sites to merchant-rate deals on sites like Hotels.com or Orbitz.
Hotel executives are taking action. A Forrester survey of 13 global hotel chains that represent nearly 60% of the world's hotel capacity shows that the chains are taking steps to limit merchant-rate operators' control. Even though typical chains participate in seven programs of this type, they're planning to trim both the amount of inventory and the number of third-party net-rate operators they work with. The winners will be those that provide the optimal mix of reach, value, and technology -- sites like Expedia and Travelweb.
To ensure it maximizes revenue from every sale, the hotel industry must embrace the distribution approach Forrester calls "right-channeling": A straightforward strategy based on offering the right rates through the right channels based on shared benefits to both the traveler and hotel. In right-channeling, a hotel's Web site -- its least expensive sales outlet -- must always have its best rates, reflecting both price and restrictions. Its other rates must reflect its cost to sell through those other channels. Why is this important? Because it can boost a hotel's margins by several percentage points. How much can it help you? We've created a customizable model in which you can enter and adjust everything, including room rate, distribution mix, and selling costs. And while it was designed for the hotel sector, executives from across the industry can use it, too.
Online sales hit critical mass
No industry was as swift to recognize the power and potential of the Web to drive sales as the travel industry -- especially airlines. In 2003, the travel industry will capture nearly 13% of its revenues from US online leisure bookings. By 2008, this will reach about 21%. Are you prepared for a critical mass of your business being generated online? This growth surge will not only force travel companies to continually upgrade the experience their Web sites offer, but it also has massive implications for everything from product development to CRM to customer service to fulfillment. For example, right now only one GDS -- Worldspan -- supports full online changes and refunds to airline tickets, few travel sites have interactive customer service capabilities, and no sites adjust their availability displays to reflect a customer's persona. 2008 will be here before you know it. Travel firms must invest in online self-service or risk seeing their customers become mercenary travelers or shift their business to competitors that do a better job.
Bom Viajo,
Henry H. Harteveldt
P.S. Have your Web site reviewed and learn the tools of the trade at one of Forrester's Web Site Review Boot Camps. Due to the overwhelming popularity of these events, three more workshops have been added in the near future: September 3-4 in Cambridge, September 10-11 in London, and October 1-2 in San Francisco. Is this the hottest craze since the Hula-Hoop? Come find out for yourself.
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Entire contents © 1997-2003, Forrester Research, Inc. All rights reserved. Forrester, Forrester eResearch, Forrester Oval Program, Forrester Wave, WholeView, Technographics, TechStrategy, and TechRankings are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. |
