Another One Bites The Dust

Finding a decent demo based system is something that is important for distance challenged people! The Professor is one of them.

So I have been using DimDim for about 2 years and its pretty good. I previously had used Webex and several others including GoToMeeting.

Unfortunately now DimDim has been purchased by SalesForce.com. And poof gone... no more freebie.

So I am looking for another one. This time - I am NOT TELLING anyone which tool I will use.

Revisiting Some Old Stories

Early on in the Professor's blogging career - I did a post on some myths.

http://t2impact.blogspot.com/2008/09/6-online-travel-myths-evaluated.html

Given the debate today - it might be worthwhile to revisit the post.

As I just received a comment on this - I re-read my post. I still hold true to the same answers that I gave then.

Have a read - interesting to see this more than 2 years on.

Cheers

Trying To Find Sane And Rational Arguments

I keep looking for good and sound rational arguments in the debate over the GDS vs Airline battle.

The invocation of the end of the world as we know it that the Open Allies forces seem to have made their rallying cry is clearly based on a number of questionable arguments. One of these arguments I made in my Bully In the Playground piece a few days ago, is based on size.

One of the more simple views came from Flightcaster that someone forwarded to me.

Have a read... its a good perspective - even if you don't agree - at least understand the rationale.

Cheers

Proving The Forces Of Evil Vs The Forces Of Evil

The PR hacks are having a field day.

Lined up on the debate over the GDS vs Airline model are the PR teams working overtime to put over their respective points of view.

One of the latest tools seems to be surveys. I have railed against the bad survey questioned data coming from BTC and it seems that Chris Elliott is also suffering from the same disease.

In his weekly survey he asks a selected group of questions without the benefit of considering all the possible options.

The abuse of surveys and data are not uncommon but we really should start to inject some level of responsibility into the debate.

On Jan 7th the BBC's Radio 4's program More or Less broadcast an interesting piece on "Proofiness" However hurry as this expires on Jan 13th. Here is the extract... (The whole program is only 30 mins).

Proofiness

You will have noticed that we think numbers can all-too-easily be used to confuse, or to mislead. We aren't the only ones who think so. Charles Seife is a professor of journalism at New York University and author of a new book - Proofiness - which exposes what he describes as "the dark arts of mathematical deception"

Having been trained in the fine art of statistics - I do hope that we will use good data wisely and CAREFULLY.

Cheers

Twitter Nation - Or Tweeting World

Are we Tweet mad?

I will re-iterate my oft opined view that I don't like the use of Twitter as a form of useless communication. It has its place.

The emergence of tools like Tweetdeck and Hootsuite can make it function in a useful manner. A study by eMarketer gives us some interesting insight.

So how has the profile of Twitter changed between 2009 and 2010? Actually a lot.

The first thing you notice is that the network of relationships has expanded significantly.



As well as this - we see that the use profile has changed. All those stupid Tweets are still there. But fortunately the content of tweets has matured so now I dont have to know if you spilled coffee on your trousers are mercifully now much less - or rather comparatively speaking.

One distrubing trend for me at least is the amount of personal data that people are willing to share.


This lack of understanding or value in privacy continues to weigh heavily on my fears for the way that marketers will take advantage of the consumer.

So Tweet World? yup we are getting there.

Still think this is all a world in flux.

Cheers

More Stupid Rhetoric Tricks

Back to being serious.

In the ongoing saga of the legacy lackeys vs the suppliers - I have pleasure in presenting more of the former's PR output.

I realize that the Professor by now has been labeled as a bad hack - I still need to assure you that I am not. I am firmly in favour of the truly independent and also truly low cost intermediary model. Itself quite a rarity these days. But on either side when I see untruths being spouted - it just annoys the heck out of me. This latest missive from BTC is full of a large number of well ... read on and you will get my point.

NOTE - the words in caps/bold are mine. The text and italics (which I put in) are right from Radnor PA (Population 31000 nearest airport PHL and largely a Republican stronghold).

TEXT BEGINS HERE:
Future of Low Cost Travel Distribution SO LET'S JUST IGNORE THE FACT THAT THE LEGACY GDSs HAVE BEEN RAISING RATES AND IMPOSING HIGHLY RESTRICTIVE CONTRACTS WITH EXCLUSIVITY CLAUSES ON BOTH SUPPLIERS AND USERS - INDEED WHY NOT HAVE THE LEGACY GDSs PUBLISH THEIR RATE SCHEDULES AND CONTRACTS IN THE OPEN SO WE CAN SEE HOW LOW COST THEY REALLY ARE - THEN LETS HAVE A LOOK AT THE INCENTIVE ARRANGEMENTS BEING PAID ON AVERAGE TO THE USERS TO KEEP THEM LOCKED IN - JUST A THOUGHT.... At Stake

Travel distribution system, customers in alignment THAT WILL BE A FIRST THEN!

January 5, 2011, RADNOR, PA - Business Travel Coalition (BTC) today commented on the latest development in the battle for the future of low-cost, consumer-centered travel distribution as global distribution system services provider Sabre took steps to protect the interests of an independent I GUESS 50% MARKET SHARE COULD STILL COUNT FOR INDEPENDENT BUT I THINK THAT IS NOT QUITE THE DEFINITION travel distribution system from American Airlines’ (AA) attempt to impose a new model that heaps huge new costs SO FAR NO ONE HAS COME OUT AND DEMONSTRATED THE PROOF OF THIS. IN FACT THE OPPOSITE IS LIKELY TO BE MORE TRUTHFUL - IE THAT THE LEGACY GDSs HAVE BEEN IMPOSING A TAX ON THE COST OF TRAVEL UNNECESSARILY. SO I SAY AT THIS POINT - SHOW ME (WHERE THIS EXTRA) MONEY (COST IS) ! on the travel industry and diminishes comparison shopping THIS ASSUMES THAT COMPARISON SHOPPING WITHOUT SOUTHWEST THE LARGEST DOMESTIC CARRIER WAS ALREADY A GOOD COMPARISON for consumers. According to its press statement, Sabre has downgraded AA’s offerings in most of its displays, eliminated booking fee discounts THE ELIMINATION OF A DISCOUNT WOULD BE LIKE RAISING PRICES RIGHT? and delivered notice of termination of its agreement with AA.

This development puts to rest that this battle, HUH? THIS IS JUST ANOTHER ESCALATION - THE BATTLE IS NOT EVEN GETTING WARMED UP AND IT'S OVER? HARDLY ME THINKS AND DOESN'T SCAN WITH THE FINAL SENTENCE IN THIS PARAGRAPH which began with AA’s unprovoked assault HARDLY UNPROVOKED BUT SINCE WE DON'T KNOW THE DETAILS OTHER THAN THE JUDGE SIDED WITH AA ON THIS ISSUE LETS AT LEAST AGREE THERE WAS A REAL ISSUE BETWEEN THE PLAYERS on Orbitz late last year, is not a skirmish between AA and online travel agencies, but rather an all out war for the future of both airline and all travel distribution in the U.S. and around the world. WELL THIS IS ACCURATE IT IS INDEED A WAR - IT SEEMS THAT TRAVELPORT AND SABRE WERE THE PARTIES WHO ESCALATED THIS INTO WAR WHICH STARTED OUT BETWEEN TWO PARTIES. REMEMBER THAT BOTH TRAVELPORT AND SABRE HAVE GREATER MARKET SHARE THAN AMERICAN INDIVIDUALLY.

At risk are important benefits generated by the current distribution system including:

(1) robust comparison shopping among airlines’ offerings for consumers as well as corporate travelers using online booking tools; SHHHH DONT TELL ITA THAT THE LEGACY GDSs ARE THE ONES DOING THE ONLINE COMPARISON SHOPPING ENGINE BIT. SMALL $700 MILLION DETAIL THAT GOOGLE DIDN'T OVERLOOK.

(2) efficiencies inherent in one integrated workflow process of shopping, purchasing, capturing data, assuring travel policy compliance and auditing for products and services from more that 100,000 airline, hotel, rental car, ferry and rail companies OK THIS IS HOGWASH - THIS IS AN AIRLINE BATTLE NOT ONE FOR THE OTHER COMPANIES SO LETS CUT THAT NUMBER DOWN JUST A TAD SHALL WE? as well as other suppliers; and

(3) transparency and pricing discipline that tens of thousands of independent online and offline travel agents bring to all offerings on suppliers’ own websites and other distribution channels. OK YOU GOT ME HERE THIS IS COMPLETE GOBBLEDY GOOK - I DON'T KNOW HOW THAT WORKS... SOMEONE CARE TO EXPLAIN?

“The stakes in this conflict are clear: either an improved SO I AM CONFUSED - YOU JUST FINISHED TELLING US HOW WONDERFUL IT IS NOW - AND THEN YOU INTRODUCE THE WORD "IMPROVED" airline industry and distribution marketplace centered around the consumer, or one that subordinates consumer interests to the self-serving motivations of individual airlines HMMM AGAIN THIS CHARACTERIZES THE BATTLE AS BETWEEN AIRLINES PLURAL. LAST TIME WE CHECKED THIS WAS BY OTAs AND LEGACY GDSs BOTH PLURAL AND A SINGLE AIRLINE - AMERICAN - OK SO THE FULL TITLE OF THE COMPANY IS AMERICAN AIRLINES - NICE PLAY ON WORDS THERE endeavoring to shift costs and impose their wills on consumers and the other participants in the travel industry,” stated BTC Chairman Kevin Mitchell. “Single-supplier direct connect proposals, like the one advanced by American Airlines, can YUP IF THAT WAS THE PROPOSITION THEN THAT COULD BE THE CASE - BUT ITS NOT significantly increase costs for all distribution participants AGAIN MORE FUD. THE ONLY PEOPLE INCREASING COSTS HERE ARE TRAVELPORT AND SABRE and cause massive fragmentation THIS ALREADY HAPPENED YEARS AGO. INDEED PREVIOUSLY BTC WAS VERY LOUD IN ITS SUPPORT OF THE RIGHT OF AIRLINES TO CHARGE FEES of airfares and ancillary fees depriving consumers of the ability to compare the total cost of air travel options across all airlines.” OK SO WHAT IS SOUTHWEST AIRLINES - CHOPPED LIVER - HARDLY - THEY ARE THE LARGEST SINGLE BRAND MAINLINE CARRIER IN THE USA.

Interim results from a currently open BTC survey of corporate travel managers point to an overwhelming rejection of AA’s attempts to change the distribution system model to its unique advantage while driving corporate travel departments’ costs up and undermining their ability to adequately service their travelers.

• 94% of surveyed travel managers indicate access to all airfare and ancillary fee information is either indispensably important or very important for their corporate managed travel programs. IN THE IMMORTAL WORDS (MISQUOTED HERE) OF MANDY RHYS-DAVIES - THEY WOULD SAY THAT NOW WOULDN'T THEY!

• 87% believe that in advocating its Direct Connect strategy AA is endeavoring to secure higher fares-paid by undermining the independent travel distribution system and corporate managed travel programs and by driving more consumers to aa.com where comparison-shopping, expert advice and corporate travel policies are non-existent.

• 88% of travel managers who oppose AA Direct Connect believe that the program will result in fragmentation of airfares and fees and that without access to all air travel options travelers will pay higher prices.

• 98% do not support American Airlines’ Direct Connect strategy.

“Since the U.S. global distribution system industry segment was deregulated in late 2003, the strategic interests among GDSs, travel agencies, travel management companies, corporate travel managers and consumers have evolved into near-perfect IF ITS NEAR PERFECT - WHY HAVE UNNATURAL ACTS LIKE PAYING YOUR CUSTOMERS? alignment,” said Mitchell. “Because the airline industry is one where competitors often follow one another, it is of paramount importance that corporate travel managers, individual supply chain participants, including the associations that represent them, stand up and very clearly communicate to the airlines what their distribution system requirements are.”

IT MIGHT BE INTERESTING TO ACTUALLY SEE THE SURVEY MONKEY QUESTIONS IN DETAIL BEFORE QUOTING THE RESULTS NOT EXACTLY IN COMPLETE CONTEXT.

END TEXT

So there you have it. The text can be found on some PR website because its not on the BTC website.

I think its worth just calling things for what they are. Fortunately on the web no one is going to notice the little old Professor here and his comments.

Have a nice day everyone. Time for me to go and smoke my pipe by the fire.

Cheers

Sabre "Your XXXXX Travel Solution”

After a rather heavy duty day - I thought it would be nice to try and spread a little humour into the air. So this is intended to be humorous.

Fill in the appropriate expression as necessary where XXXXX is equal to (I present some alternatives for you) one or more of the following - delete as inappropriate:

Incomplete
Partial
Occasional
Sometimes
Previous
Not Quite As Cheap As It Used to Be
Watch Out If I Decide I want To Change Your Contract Terms

And because it must be that Sabre has way more power than their name would seem to indicate - I present to you a shot of a Twitter signup screen that just confronted me...


Go figure... and no go home!

Cheers

Is There A Bully In The Playground?

or perhaps the statement should be - Bullies In The Playground.

My first encounter with Sabre was in 1979 when I was working for Western Airlines at McCann-Erickson. In those days the whole notion of the power of the CRS (as we called it) was just a convenience nobody thought of the possible power they would wield.

A year later I was in New York working for Mary Wells on the Pan Am account and for the first time saw the unbridled marketing information that Sabre gave to American Airlines. A copy of the sales reports that AA salesmen used to cut deals with Travel Agencies accidentally fell into my lap. It was mind boggling the information that a single airline had on its competitors.

From the other side of the fence - the power of an AMR owned Sabre became a thorn in my side when I ran automation for a large TWA focused travel agency which had PARS in the front and Sabre ADS as its back office. They really didn't like us messing with the system especially after I opened a back door to Sabre.

However I have always had a healthy respect for both AA and Sabre. They were so joined at the hip as to be inseparable even after various government probes into their somewhat dubious market behaviour. Yes they did believe in throwing their weight around.

AA/Sabre at this time was the undisputed market leader and acted as such. In April 1992, American Airlines launched "Value Pricing" -- a radical simplification of the complex pricing structure that had evolved over more than a decade following deregulation of the U.S. domestic airline industry. American expected that the new pricing structure would benefit consumers and restore profitability to both American and the industry as a whole.

Did it work? Nope - within weeks the airline had back-tracked and was back offering normal complex fair structures. But the net impact was not that great and AA emerged unscathed and stronger for understanding the dynamics of the market.

AMR proceeded with the divestiture of Sabre in 2000 - the now named GDS player was the largest Data Processing facility in the world and produced 3 out of 5 airline tickets worldwide. (Source: Annals of Cases on Information Technology By Mehdi Khosrowpou).

However since then the emergence of the Internet and the fragmentation of the distribution system - the dominance of the GDS has declined. Share shifted directly for a lot of reasons.

The emergence of the large OTAs and the decline of the Mom and Pop agency were synonymous. The travel distribution pyramid narrowed. But other factors have emerged. The decline in functionality footprint of the GDS, the emergence of valuable third party applications that made the GDSs work better... I could go on but I think you get my point. The GDSs lost their position as technology leaders. And worse the customer base stopped drinking the CoolAid. But that was compensated by the GDSs shoveling cash at the travel agencies. The bigger the intermediary the more cash you got.

Now we have battle royal. But who is the bully boy(s) ?

It would seem that the numbers make American actually the small player here. With the approx numbers as follows:

50% of all travel is bought online
50% of all travel is bought via supplier direct. Mostly via Airline.com and call centres.

50% of travel distribution in USA via intermediaries is on Sabre. They are a little ahead of Travelport and Amadeus is a small player in the market with approx 10% market share with the various other players making up approx 1%. Note that these numbers are not public so I have to "normalize" them.

In the space of a few weeks in the latter half of 2009 American walked out of Sabre's PSS business See my blog for that event. And then they started their noise about Direct Connect saying that they would make all connections go through their advanced functionality gateway.

AA CEO Gerald Arpey said at the time: "...maybe I'm dreaming here," he said envisioning a future "where those folks who are the intermediary between us and our customer have to pay for access to our product rather than us paying them to distribute our product." Arpey called that shift a "long-term vision," rather than a near-term reality. Within days Delta CEO Richard Anderson followed with a similar statement saying, "Over time, the industry has to evolve to the model of other industries, where people pay us for our content rather than us paying them to take our content."

I am not so sure that those words are coming back to haunt him. With AA controlling no more than 15% of the total air market - they are dwarfed by Sabre and the OTAs.

So who are the Bully Boys in the playground?

It would seem that Sabre (who is still under DoJ investigation for its treatment of Farelogix in 2009) might have now regained its stature as the big Kahuna in the playground. Or this could be the last gasp.

I will still say - be careful what you wish for - if it comes true you might not like the result. After all the Internet so far has become a Bully Free Zone (certain players excepted).



One thing is for certain - all those people who have been arguing for the GDS based neutral model - their bets are looking a good deal shaky right now. The GDS has been shown finally to be not neutral - ditto the agencies especially the OTA players. So the myth of neutrality in a web transparency world has finally been busted.

How smart with the intermediaries be? I think that will rest with the consumer. So far he is showing himself to be a very savvy player. If he feels that the value proposition of the intermediary has been eroded - which early indications seem to demonstrate - then the ease of switching will easily match the difficulty of searching in more than one place. Since the consumer looks in multiple places and buys where he is happiest - these days increasingly direct - then that becomes learned behaviour.

And over in the corner - Google is quietly rubbing his hands going - YES!


Cheers


Cheers

Aloha Goes To... Yucaipa

Aloha Airlines name sold to its former majority shareholder, Yucaipa Cos (US) following bankruptcy court approval, with included stipulation that it not resell name to Mesa Air Group (US), parent of go! Mokulele.

So there is a vestige of a chance that the airline might yet be revived.

Let's hope that the Aloha name doesn't join those other perennial names such as Pan Am and Braniff.

cheers

The War From The Side Lines

A pretty good post from Douglas Quimby over at PCW.

Well worth reading.

And thanks to i-Italy for the image.

Cheers

Strange Bedfellows

I have wanted to do a story that used an image from this movie for absolutely AGES... so here it is.

So here we have Fairsearch.org. Whose spokescartoon is Bob (that was the clue). FS.org has the following members:

Expedia.com, Hotwire and TripAdvisor; Farelogix Inc.; Foundem; KAYAK, SideStep; Level...com; Microsoft; and Sabre Holdings, and its brands Travelocity and ZUJI.

At the same time Expedia and Orbitz together with Sabre and Travelport are aligned against American Airlines who is using the services of Farelogix.

At the same time who is a founder member with several airlines ARC, and ATPCo and a broad section of players in OpenAxis Group.

Who in turn have a lot of common members in Open Travel.

Now here is the key question.

Which of all the organizations and companies on the front lines are actually not members of any of these groups?

if you can guess... then send me an email.

Cheers

Amadeus Continues Shedding Of Non-Core

Amadeus has completed the sale of another of it's non-core businesses with the offload of Vacation.com to Travel Leaders the off-shoot from Carlson run now by Mike Batt.

The sale brings a concentration of market power from the independent agents of Travel Leaders, Vacation.com and Nexion. While the numbers are impressive for the three businesses, it really doesn't make a lot of disfference. Given the concentration of the larger online and offline businesses - there is pretty much no place any more for the small mom and pop shop.

For Amadeus this continues the trend of its offloading of non-core businesses. This leaves only one sore thumb outstanding to dispose of - Opodo - fire sale anyone for say Expedia who needs a market share boost or possibly Priceline? It also positions the company for a major purchase of a different line of business. With only 2 planks to its core - Airline IT and GDS - the company needs a third leg to balance out the company.

Clearly the bets it made earlier in Hotels, OTA and Travel Agency networks have failed to ignite a dominant position that it commands in its other traditional business segments.

A new CEO at the helm is coming from the CFO position will likely signal a period of fiscal conservancy in the company. But with a solid balance sheet and a pile of cash sitting there - not to mention an accelerating revenue stream in an oligopoly market with no real clouds on the horizon for at least another year - the company has many options in front of it.

But which way will they go?


Inquiring minds want to know... send me a post card of an email with some of your suggestions. I will then put it up as a poll.






With thanks to Zazzle for the image.

Google In For Another Banner Year

The Googleplex must be cheering the latest news from the team at eMarketer. According to their latest report:

"The more granular quarter-by-quarter picture shows a record spend of $6.42 billion in Q3 2010, as reported by the Interactive Advertising Bureau and PricewaterhouseCoopers (IAB-PwC), followed by a new record of $7.25 billion in Q4, according to eMarketer projections."

This is bad news for the traditional media. Travel sounds like it is going to take a bigger chunk of this set of numbers as the customer wakes up and starts to think of travelling again.

However there are dark clouds on the horizon for the Supplier/Intermediary market. Supply will be tight in 2011 especially if oil retains its high price.

Cheers

Survey Said ? (AA vs OWW et al)

In the ongoing saga of AA vs Orbitz et al - I thought I would check and see what the stock markets think of the battle. True there are a number of factors affecting their performance but let's take a peak anyway.

I compared - 4 stocks with the S&P500 as being representative of the total market.

OWW = Orbitz Worldwide DARK BLUE
EXPE = Expedia GREEN
PCLN = Priceline PURPLE
AMR = AMR Corp owner of American Airlines RED
S&P = Standard and Poors 500 ORANGE

I looked back 3 months to when the story first broke concerning AA's battle with Orbitz and Travelport. As you can see Expedia and Orbitz both underperformed the S&P whereas AMR (parent of AA) and Priceline both exceeded it.

You can draw what conclusions you like - I merely present this for information purposes.

Cheers

Worldspan Drops to Just 25 Markets

The decline of Worldspan on the world stage has been fairly sharp over the past few years. As part of the disclosure of the AA vs Travelport battle - I looked at the number of markets where Travelport was going to charge AA the premium fee. AS part of that disclosure we are able to see which markets have which GDS.

Here is the list:

BELGIUM
CANADA
DENMARK
FINLAND
FRANCE
GERMANY
GREAT BRITAIN
GREECE
HONG KONG
HUNGARY
INDIA
IRELAND
ISRAEL
ITALY
LEBANON
MEXICO
NETHERLANDS
NORWAY
PAKISTAN
POLAND
ROMANIA
SAUDI ARABIA
SOUTH KOREA
SWEDEN
SWITZERLAND

While Worldspan was never that large on the International Stage - the number of markets where they were present has dropped by more than 50% in a few years.

Cheers

Fuel WILL Have Major Impact in 2011

First up out of the gate to report this as a problem was a company who really will feel this.

Nike. Took a hit on the Stock Market at the end of 2010.

This will affect passenger traffic.

Watch for a round of fuel surcharges now that oil has breached $90 a barrel. Further this means that the added capacity of cheap older aircraft will not be returned to the fleet for summer 2011. Voila - lower than expected capacity and higher costs.

For hoteliers in difficult markets dependent on air - this could have a knock on effect where air capacity does not increase to fill up those rooms. And don't count on car traffic.

Watch out Vegas.

Cheers