Are Hotels Being Stupid? Are Travel Agents?

When will the ever learn? When will they ever learn.... lines from that old Pete Seeger song we all learned in school.

When it comes to hotels and indeed a large number of other location owners such as convention halls and meeting rooms - it seems never. The number of companies who STILL charge for WiFi is appalling.

I know many organizations who are now insisting on it as a condition of a convention space and meeting hotels. At the ABTA conference this week this message was delivered loud and clear. In a post in e-Tid,  David Rowan, editor of Wired UK, told the ABTA Travel Convention that it was like charging for bath water to ask for basic wi-fi, then akin to charging more for hot water if the customer wanted to upgrade to a faster rate of wi-fi access.

‘It is foolish for a hotel to charge for basic wi-fi. It looks like a rip-off especially when you can get it for free in Starbucks or McDonalds,’ he told the event in Palma.

‘I have called for a boycott of hotels doing this. We expect to be online, we expect wi-fi.’We know that Gen Y people dont waste time complaining - they just move on elsewhere. In a post in  US Travel Weekly - the Luddites seem to be seizing on a DECLINE in internet usage.

Richard Turen thought it was one of the most interesting trends. However I think he is missing something. That the pool of conventional users of brick and mortar agents is shrinking and those that are left are now those who are less and less likely to use the web for Travel Planning.

I divide those who dont use the web for Travel planning and/or buying into two camps. Those that refuse and those that are (still) scared or unable to. The deciding factor is whether the behaviour is wilful or not.

For those who are waiting and holding onto this notion - please get over it. Sure there will be a niche for these people. But they (and those who depend on them) will die out.

Then we will be asking - where have all the Travel Agents gone? I sincerely hope this doesnt happen. But every year the number of agents falls.

Sadly

Now Will You Believe Me Social Media AD Revenues to top $10 Billion by 2013

Holy smokes Batman.

I was a late convert to Social Media. Mostly because in the early days I could not see the Media part of it. Now I do (OK - I am old so that's my excuse).

But now we are seeing dramatic rises in the total revenues from Advertising. With many of the Ad vehicles not yet fleshed out - this tells me we are going to have a hard time understanding how we interact with these tools and more importantly how we deal with them and integrate them.

eMarketer is reporting that global ad revenues for Social Media will top $10 Billion by 2013.

Today sadly it was reported that AC Nielsen JR has passed away. It is interesting to note that we see the world changed forever. A world where he presided as king - now we have a new world. Are we using the right metrics. Now that is a good question.

Cheers

iPad Browsers Killing Others Online

So while Android is doing a great job in working through the pack and like other Google powered monsters - its like PacMan it destroys everything in its path.

Not so in Browser shares on mobile devices. As you can see from the latest Browser share trends, the iPad is clearly a better device for browsers. We know its a better device for Apps based on App numbers and usage.

Sadly Opera Mini the little browser that could is being replaced in people's hearts and is headed south after blazing a trail of browsers on small aperture devices. So much for being first! And having used it vs the Safari browser I much prefer the simplicity of the Opera Browser.

So iOS5 is coming. Let's see what happens next.

And you all thought it would be a new iPhone (me included) although I did speculate that it would be kind of a ho hum release. Seems I was right

Cheers

Farewell Andy Rooney: "Just Let Me Eat My Dinner".

Andy Rooney has been a fixture on American TV for more than half a century. The last 33 years as a commentator on 60 Minutes. Last night he signed off for the last time with a memorable line.

So read about the old curmudgeon. He will however still be writing. And so we can still appreciate that from him

Go to the CBS website to learn more.

Farewell Andy - I will miss you.

cheers

Service Really Is A Differentiator - And Are You REALLY Surprised?

A great post today by Gerry McGovern. I love his posts because they cause me to think about how thing work and what makes things tick.

The really obvious thing to me - and it should be to everyone - is that service matters. Too bad service is such a nebulous concept.

I know many people who hate Ryanair. I like the airline. They fly places I want to go or at least they can fly there. Then their service is consistent. I know just what to expect for my average 100 Euro fare. Yes that is the amount on average I spend with Ryanair. Southwest is also an airline that I like. It gives me a consistency that I appreciate. However they dont fly enough places that I want to fly and therefore I need to rationalize my flying to be on airlines that give me something. So I am a point hound!

I have a very low opinion of service. I dont it expect it and I am rarely disappointed. However every now and then I get surprised by individual personalized service where someone will go that extra mile. I am talking about someone making a difference. There are many hotels who try to force this thought process on their customers via the staff who have not the faintest notion of why they do something. I recall staying at a hotel where they rolled out a corporate credo using a particular word. The word was "surprising". It was AWFUL I challenged a member of staff who( the operator) as to why she had used it 9 times with me and she spilled the beans. Sadly it made everyone uncomfortable. Fortunately within 2 weeks it had been abandoned. 

You cannot force service - you can enable it. And then it must be up to you and your fellow operativess to deliver against it. In online this is really important. Let me give you an example.

I am a member of the Global Entry system - I was an early adopter. This year it will roll out to high level frequent flyers in the elite classes of all US Carriers programs. The service structure is typical government. A system designed by a committee. However I was impressed that the agent at the border recommended - from her own volition what I could do to enhance my experience. That was someone who didnt need to do something going out of their way to help.

So humour me with my rant today. I do see that there are new customer service technologies that are improving the service proposition across the board. However sadly in my experience even in those organizations that adopt them - they are never used properly. What really kills me is that whoever is responsible for these implementations must never walk through their own process. This allows me to indulge in something where  I take a perverse pleasure in breaking systems and processes. It is SO freekin' easy.So what are you doing about


SHAME ON YOU!

So here is a request. GO and think hard about your service. Then WALK through your website. Call your call centre. And then see what I mean. Be difficult. I would be happy to provide anyone who is interested with some use cases to enable you to do this.

YES I MEAN YOU! Your service sucks and it doesnt have to.Please go and fix it

Thank you for your attention - now you can go back to reading your email and updating Facebook... that was what you were doing wasn't it?

Cheers

Twitter Misses Ad Targets - But Outlook Bullish

So Twitter is still struggling to get its revenue model off the ground but it is making headway. In the early days of Twitter I was highly critical of the value of the service. Now that it has matured and we have tools and processes to weed out the Twitterhea - I think the business is a useful tool.

eMarketer is reporting that their initial revenue projections for 2011 will be missed. However they remain upbeat on the future

Check out the article for a full analysis on where Twitter's revenue is going. Twitter has no where near the revenue potential of Facebook. And actually not getting spammed is one of the nice things about Twitter.

In my view - I believe that there is plenty of opportunity to MAKE money via the Twitter platform. Indeed way more than can be had through the restrictive practices of the big 3 F.A.G. gatekeepers.

That indeed counts for something

Cheers

Mobile Maturing - Are You really Ready?

Is 2011 the year of Mobile? This is a question that so many people ask. I have to say I am not quite convinced on either side. In fact I think the question has become rather irrelevant.

Mobile and Social are already here. We are however still struggling to get good at both of them. And good we must get. There is a nice series in WIT drawn from a series of discussions between Siew Hoon and Gerry Samuels Doing it "Bloody Well" and understand who wins - Supplier or Intermediary - are great discussion pieces. If WIT is not on your regular reading list - you are missing a treat.

Getting good at Mobile is not a trivial exercise. There is a lot of infrastructure that is frankly not in place to make it easy. Therefore early providers are having to bootstrap solutions to get the end to end services running. Regulatory and service level functions are scant and frankly the performance of the networks and devices together SUCK. Publishers are complaining that they dont find it easy. For sure they are not adopting fast enough.

One key issue that is decidedly a constraint on Mobile Commerce are the payment systems. There is a plethora of options and the market is just beginning to pick up.  The battle for the mobile wallet is a royal one.

There is the huge battle going on between the OS systems on the small aperture devices.  You have Android split into Pure and Honeycomb. You have the Apple with its iOS. You have a bunch of also ran players - Microsoft, Nokia (now moving with MS), RIM (About to exit the tablet space by slashing the price of the Playbook), HP (not sure if they are in or out at the moment). Let's not forget the App vs Browser battle.  An  astonishing statistic is from HP who projects there will be 25 million apps by 2020.

Underneath it all there is a multi-billion dollar battle over patents. This is enough to make ones head spin.

But allow me to put a little perspective on things. While I think it is a bit premature to declare victory for mobile, there is a very interesting trend. The Gen Y/Millenials are not worrying about the problems of infrastructure. It either works or it doesn't. Unlike the Baby Boomers (like me!) who struggle with the small apperture of the devices concerned - they are quite comfortable in using their mobiles to do a wide number of things concurrently.

My conclusion on this? Mobile is darn hard. The traditional gatekeepers in travel commerce are nowhere near prepared for mobile. The suppliers need to break free and stop using traditional processes to address mobile solutions. AND most importantly you have to use every trick in the book to get the consumers to start pulling through adoption. Traditional ways of pushing products into the marketplace and hoping for the best frankly are useless. If I hear one more person scream that their investment in mobile has been wasted - I think I will eat my hat. It's the adoption not the features stupid!!!

Airlines to DoT - You Can't Count

The US airlines in general think that the US Dept of Transportation's bean counters are not that good.

A cabal of them - representing the Big 4 Network Carriers - US, UA/CO, DL, AA have filed a complaint with the DoT over the issues of the reporting of the Ancillary Revenues.

As reported in the Wall Street Journal the airlines say that the $150,000 figure for the whole industry in extra admin costs are way off what the airlines calculate will cost the average airline $1,000,000 per regulation per average airline. That would be a whopping cost. I bet that some of that is going to be charged by the GDSs!!!

I have to say whether I agree with the DoT or the airlines on the actual numbers. I can assure you that the admin costs that will be spread across the industry in additional costs will be significant. it will hit all sectors of the supply and distribution chain.

Those who argued long and hard for this as a way to put a break on the Airlines revenue aspirations may be happy. But those who thought that this was a way for the GDSs to win a battle in their war with the airlines may rue the day. The legacy GDSs have now been handed a carte blanche ability to charge the airlines an extra set of fees for compliance. And poor travel agents will be picking up much of this tab in both extra costs (through lower incentives) and for sure extra work.

As I say frequently - be careful what you wish for... you just might get it.

Cheers

The Professor's 2300 Posts

Dear Readers - Just a BIG thank you for keeping us going. We have just passed 2300 posts and counting.

I had a wander through some of the prognostications and predictions I have made over the past 5 years. There is a heck of a lot of content here. So I encourage you to read through some of my thoughts. There is a lot of entertainment. Laugh, cry and be entertained but mostly be better informed. I have a lot of opinions on a lot of subjects but I hope that you will see that I try to do this with honesty and thought. If I fail let me know.

Every week hundreds of you come and visit this little site. Thank you and thank you again for doing that.

I know that I am not the world's best writer and also have a strong propensity to typos and some really bad grammar.

However I get loads of emails from you and comments. It takes a lot to keep this site going (no I am not appealing for money) but I will continue to do this as long as you come and read it.

Please do spread the word. And  again a very big...

Cheers

Don;t Be Blue At A Failed Relationship

Most breakups are lets face it less than amicable. People don't just wake up one morning and say "Rationalizing our relationship is not working let's just be friends"

I understand that breakups can now be handled by a wide variety of media. Text (there is even a lame website called TextBreakup), Tweets, and of course the true sign you have been ditched is when your paramour changes her/his status on facebook back to SINGLE AND LOOKING.

In business some of the best laid plans of a business relationship can just fall afoul of the realities of the business environment.


Germany's biggest airline, Deutsche Lufthansa AG, in December 2007 paid $300 million for a 19 percent stake in JetBlue Airways Corp. There were big plans for feeding via JFK and the other points where the 2 airlines intersect. For the smaller airline it was a precursor to a number of deals that have seen them also tie up with some time rival American Airlines who also is in a rival Alliance. 

But to be frank there has been little execution of the grand vision and Lufthansa seems to be pulling in its horns across the board. The German airline's plans for world domination included at the time expansion into the German speaking market and a bold run at different markets like USA (JetBlue), UK (British Midland) and the oft rumoured but never consummated take over of SAS.  With a few bad quarters under their belts - and a general softening of traffic in the markets where its most heavily vested - LH seems to be pulling back. Its put the for sale sign out at Castle Donnington (the English Chateau that doubles as the HQ for BD), now the The Wall Street Journal  is reporting that LH is looking to exit out of its relationship with JetBlue. 

JetBlue and Alaska are the largest unaligned airlines (Southwest should be excluded from this list). Both of them have resisted combining with other larger airlines. AS has a slew of partnerships and has a strong feed as a result while shoring up a fortress on the North South Routes. Effectively AS has conquered the West Coast markets and solved that perennial problem of Mexico vs Hawaii by straddling both effectively.  JutBlue has built a series of very nice hubs in Boston and JFK as well as a number of smaller ones across the country. 

Perhaps what we are seeing is the precursor to a merger between these two feisty and mostly profitable strong regional airlines.

Now there's a thought.

Cheers
 

What Happens When Exclusivity Clauses Collide. The Impact of Exclusivity Clauses on Competition and Consumers

This is a musing on the impact of the Air Asia and Malaysian Airlines agreement with an extension into the overall issue of exclusivity clauses and the impact on the consumer.

Air Asia and Malaysian Air System (MAS) have entered into a cross shareholding agreement. In this agreement - the two airlines will cooperate essentially to carve up the market for Malaysian based traffic. IE traffic INTO and OUT of Malaysia. Effectively the airlines will avoid direct competition where feasible. This will result in a certain reduction in competitive services for consumers. Thus prices will undoubtedly rise in certain thinner markets. 

This is to be expected and will cause a number of people to complain and moan about it. Fair enough. But there is ANOTHER agreement that has some serious impact on the consumer. That is the exclusive agreement between Expedia and the Air Asia Group. In this agreement Expedia and the JVs between Air Asia and Expedia are the EXCLUSIVE distributors of content from these two parent organizations.For intermediaries who may have happily been distributing MAS product in some cases for many many years and in others exclusively, all of a sudden their product has been pulled out from under them when MAS abandons routes in favour of Air Asia. And they will lose their rights.

I raise this issue because JVs and exclusivity has become a new staple of the airline and GDS worlds. Thus creating restrictions on open commercial agreements. So let's dive into that a bit deeper.

Full Content (FCA) GDS agreements are very restrictive. As such FCA contracts will have an overriding pressure to raise prices and reduce consumer choice. An airline who signs the standard FCA agreements will find that it cannot distribute its own content when and where it pleases. This is a relatively new consideration and that has only just started to dawn on the airlines who have signed these agreements. While the original intent of the FCA agreements was to prevent competitors from entering the market for GDS type services - what we are now seeing is an unintended consequence - at least from the airlines sides. The ultimate loser in all of this is the consumer. Less choice = less competition = higher prices. As the legacy GDSs love to trumpet to the vendor community -the highest yielding channels are the GDS based ones. Now perhaps it should dawn on everyone concerned that this results in higher prices for the consumer.

That normally should be positive for the airlines and hotels. However as they have seen the real end result is that they have not only delegated their pricing capability but now also delegated channel management control to the GDSs. And in whose interest do the GDS operate?

Think about it, I wonder if the regulators have been thinking about this problem. What started out as an equal agreement to reduce cost of distribution and ensure wide distribution of airline content has in fact has an opposite effect.

Good or Bad? that depends. Today it means that scaling the fortress tower is going to be that much harder. Believe me when I tell you that this is not a happy realization for a whole host of parties.

Cheers