April 30, 2010 | Online Travel

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American Express has entered the private-sale travel market with a new website aimed at luxury travelers. The new Vacationist.com is an invitation-only website along the same lines as Gilt Group's Jetsetter website, featuring private sales and exclusive rates to members only.

The site launched on April 26 and is a partnership between Travel + Leisure magazine, an American Express publication, and Luxury Link, a luxury hotel website.

The first sales are “a mix of exotic and urban destinations,” including the all-inclusive Turtle Island resort in Fiji, top-end hotel The Surrey in New York City, and boutique property The James Hotel in Chicago.

American Express says that the site will offer between 25 to 40 percent off published room rates for limited periods of time, accompanied by reports from Travel + Leisure magazine editors.

Invitees to Vacationist will initially be limited to Travel + Leisure customers and Luxury Link members.

Get the full story at The Independent

Read also “Online luxury travel flash sales” at Experian Hitwise

April 30, 2010 | Online Travel

Expedia's gross bookings for Q1 increased 27% for the first quarter of 2010 compared with the first quarter of 2009, driven primarily by 18% growth in transactions and a 9% increase in average airfares. Domestic bookings increased 20% and international bookings increased 43%.

Expedia Inc.‘s first-quarter profit rose 51% as bookings increased for both hotels and airfare, leading to increased overall revenue even as each transaction brought in slightly less revenue.

Shares rose 4.6% to $25.64 in late trading as earnings topped analysts’ expectations and Chairman Barry Diller called the company a “consistently delivering cash machine.”

A recovery in the hotel and airline industries could help companies like Expedia, which allows customers to book hotels and flights at discount rates through its sites. The company gave up a valuable revenue source in return for more bookings last year by dropping booking fees, prompting the rest of the industry to follow suit.

That helped lead to a surge in tickets being booked on its site, leading to increased revenue and helping Expedia top expectations.

Get the full story at The Wall Street Journal (free content)

Read also an interview with Expedia CEO Dara Khosrowshahi on the Q1 results at Bloomberg Businessweek

Download Expedia’s full Q1 report at Expedia.com

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April 28, 2010 | Online Travel

Leisure travel spending is bouncing back in 2010 as U.S. consumer sentiment gradually repairs, but prices are beginning to firm again from recession lows, according to travel agents.

Travel specialists said momentum started building in the fourth quarter, and first-quarter travel bookings are well outpacing those of 2009. Per-trip spending is rising, especially on airfare, though lodging perks like free nights and meals are sticking around for now. Recession-era trends like shorter stays are still in place, but travelers are booking further in advance than they were last year.

The unprecedented six-day flight ban across much of Europe in the third week of April, prompted by the ash fallout from an erupting Icelandic volcano, impacted travel to and from the UK as well as the continent and complicated global air transport. The unwinding process has begun but could continue into May, travel agents said.

Michelle Morgan, president of Signature Travel Network, a Los Angeles-based cooperative of 190 travel agencies with 330 U.S. retail locations, said travel spending has increased alongside bookings.

“Consumer confidence is vitally important, and the strength of the stock market has translated into confidence to spend today and commit to travel in 2011,” Morgan said. Broad-based recovery may wait till next year or 2012, but “business has been consistently strong over the past several months,” she added.

She said sales for third- and fourth-quarter 2010 travel are healthy and up over 2009.

Get the full story at iMarketNews.com

April 28, 2010 | Online Travel

Apple filed a patent this month for a future iPhone app called iTravel that like the Google/ITA rumors has the potential to become a game changer for the travel industry, or how Steve Jobs would put it “revolutionize travel.”

By Markus Busch

The folks at Patently Apple fan website did a great job going through an Apple patent filed this month, uncovering drawings for an Apple iPhone app called iTravel, which would basically app-ify the entire travel process.

Unlike with most OTAs, travel for Apple is not just searching and booking. In the true fashion of an innovator with a track record of getting things right (mostly), Apple is looking at travel as a whole, planning to create value by turning a once frustrating shopping experience into an easy, intuitive, and enjoyable one.

Based on a combination of iPhone hardware and apps, Apple iTravel wants to manage your entire travel process, from planning, searching, reviewing and booking flights, hotels, car rentals, trains and bus journeys, including identifying yourself at airports for baggage handling and boarding passes - technically in a similar fashion as the iPhone-based payment system adopted by Starbucks.

While electronic ticketing and check-in via mobile devices are already available in many countries, putting the whole travel experience in one slick application is the innovation here and a huge business opportunity, especially coming from a travel outsider like Apple, who already successfully disrupted industries like music and phones.

Who will deliver the travel content?

That’s the big question, that nobody can answer today, as iTravel is currently only at patent stage.

But unlike Google, who regularly states that it does not want to get into the transaction side of the travel business (read: not directly compete with its AdWords travel customers), it is likely that Apple will want to own the transaction, as the travel shop will become a central part of the whole iTravel experience, very much like Apple’s iTunes and iBooks (on iPad) store.

And if iTunes and iBooks serve as a hint in which direction supply partnerships may go, Apple will work with a few selected certified aggregators to provide content for iTravel. Like the GDS, Pegasus, hotel chains and hotel bed banks, and travel fulfillment service providers like TRX . But most likely not individual hotels, the same way as musicians and writers have no direct access to iTunes or iBooks.

Still, for hotel marketers Apple iTravel could simply mean another, highly potential distribution channel, creating more competition and thereby options in a hotel distribution environment currently marked by concentration and steady increases in cost of sale.

And how about OTAs as content provider? Not very likely, as Apple’s iTravel will be in direct competition with companies like Expedia and Co. In fact, OTAs have all reason to be worried, as the patent Apple is proposing is a very timely one, and would certainly be welcomed by many travelers around the globe.

But for now, the only thing we know is that Apple plans to get into travel - the question is just when and how.

And one more thing ... starting this Summer, Apple will be busy revolutionizing online advertising with iAds. What a great fit for travel, one of the biggest online advertisers.

Read also “iTravel: Apple’s Future Travel Centric App for the iPhone” at Patently Apple

Markus Busch is the Editor/Publisher of Hotelmarketing.com and can be reached at markus.busch ‘at’ hotelmarketing.com.

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Why Google and ITA are meant for each other

April 23, 2010 |

There are myriad reasons why Google and ITA would be a tight fit in the travel world, but forget about flights. When it comes to hiring talent, both Google and ITA seem to have the same thing on their minds.

Consider, if you would, a theoretical lonely hearts ad. Peripatetic puzzle fanatic seeks similar. Must be rolling in Benjamins, like primary colors, travel, the eternal quest for knowledge, and free food, including the stuff in trays found on airplanes. Is this perhaps the secret message that ITA, the company that creates the software underlying almost every online travel transaction, sent out as it looked for a buyer for its $1 billion business?

There are myriad reasons why Google and ITA would be a tight fit in the travel world, but forget about flights. When it comes to hiring talent, both Google and ITA seem to have the same thing on their minds: the ability of their future employees to solve puzzles that would cause the brains of most people bestowed with a higher-than-average IQ to start emitting smoke and a funny smell.

April 23, 2010 | Online Travel

The eruption of an Icelandic volcano last week has caused unprecedented travel chaos, leaving thousands of British travellers stranded abroad and costing the economy an estimated £500 million.

The eruption of an Icelandic volcano last week has caused unprecedented travel chaos, leaving thousands of British travellers stranded abroad and costing the economy an estimated £500 million.

This will add to the travel industry’s woes, following difficult times in 2009, which saw British travellers reduce their spending by -8.4% from £43.8bn in 2008 to £40.2bn last year. The news comes at a time when recovery was in sight, and UK spend was forecast to see a modest uplift of 2.4% (£1bn) in 2010 to £41.1bn, according to Kelkoo’s European Travel Index.

The “European Travel Index”, commissioned by Kelkoo and carried out by the Centre for Economics and Business Research, provides a comprehensive review of travel trends in Europe over the past five years.

The new report issued today by Kelkoo reveals that the online travel sector is better equipped to deal with the financial impact of the disruption and will continue to buck industry growth trends this year. According to the study, the UK has the highest online travel expenditure in Europe and the sector is solidly on course to sustain its recession-busting performance throughout 2010, with spending projected to rise by £2bn this year from £15.6bn to £17.6bn compared to £13.2bn in 2008 - a 33% increase over the past two years. Over the same period, overall travel sales will have decreased by -6.4% from £43.9bn in 2008 to an estimated £41.1bn by the end of 2010.

UK online spending will account for 42.8% of total UK travel sales or 25% of the European online travel market by the end of 2010 - the largest share of any EU member country. British consumers are among the most web-savvy in terms of holiday planning, with 69% using the internet to research and buy holidays compared to the European average of 54%.

2009 was the ‘annus horribilis’ for the European travel industry, and the UK was no exception. Travel expenditure is traditionally volatile and never more so than during times of economic hardship when consumers tend to cut back on discretionary spending. According to the study, almost every European country reduced their travel spending last year as the global recession took hold, and the economic meltdown combined with high unemployment undermined consumer confidence and eroded consumer demand. The UK travel sector endured a £3.7bn or -8.4% year-on-year decline in sales from 2008 to 2009, the second largest decline in Europe behind Poland(-19%). The advent of the ‘staycation’ in the UK also had an impact, resulting in a -8.5% cut to individual travel budgets from an average £717 in 2008 to £656 last year.

In 2009, British holidaymakers accounted for 12.6% of total European travel expenditure, with Spain, (including the Balearic Islands) ranking as the most popular destination for UK tourists - accounting for 20% of British holidays. The research also shows that British holidaymakers are more likely to travel abroad than their French counterparts. Last year, British tourists spent 9.6 days abroad which is three times more than French tourists. In total 66% of British holidays were spent on trips outside the UK, compared to the French who spent just 21% of their holidays abroad.

The Kelkoo Travel Index predicts a more positive outlook for the European travel sector in 2010, although forecasts could be affected by the volcanic ash disruption which could cost the airline industry £164 million in losses worldwide for each day of lost business. Although UK sales are anticipated to remain sluggish, spending is forecast to stabilise as the impact of the economic recovery feeds through. 2010 should see the annual rate of decline in travel sales improve significantly from -8.4% in 2009 to 2.4% this year, as consumers make up for recessionary cut-backs. In spite of this, with the sterling exchange at a record low and having lost -7.5% of its value against the euro in the past year, the UK will experience the lowest growth rate in percentage terms out of any European country.

Overall, France (£82.3), Germany (£76.8) and the UK (£41.1) will remain the countries with the highest travel spend during 2010, accounting for 58% (£200.2bn) of total European sales. However, while the UK has the third largest overall expenditure, it also appears to have one of the tightest budgets while on holiday. In 2010, it is anticipated that British tourists will spend £669 per person on travel, less than half as much as the Norwegians (£1,578), the French (£1,272) or the Danes (£1,254) – Europe’s biggest spenders. Whilst on holiday travellers from Denmark are expected to splash out the most per day (£107) on accommodation, food, and attractions. Those from Norway (£91) and Switzerland (£77) hold second and third place. The tourists that spend the least per day are the Poles (£20), the Spanish (£33) and the British (£51). These differences in travel expenditure stem from key factors such as local income levels, the price of domestic holidays, and the general state of each country’s economy.

Bruce Fair, Managing Director of Kelkoo UK, comments: “The recession cost the UK travel industry £3.7bn in 2009 and it looks like the sector will need to buckle its seat belt for another bumpy ride in 2010. Just as forecasts were indicating a modest financial recovery, with sales set to increase by 2.4% (£1bn) this year, the Icelandic eruption threatens to throw cinders on the travel industry’s recovery. Meanwhile, the online travel sector has proved resilient during the downturn, and is expected to continue to thrive in the post–recession era with a record turnover of £17.6bn forecast for 2010, the highest online travel expenditure in Europe.

“The good news is that travel operators have reacted positively to the situation offering substantial discounts and driving down the cost of travel for UK and European consumers. We expect this trend to continue in 2010 as travel companies and airlines aggressively compete with one another and the online sector to entice new customers. The internet offers consumers lower prices and greater choice. The web is also an invaluable research library offering travellers instant access to information such as independent reviews, recommendations, guides, travel tips and advice.”