Friday, November 30, 2012

Don't like hidden fees? Let the White House know. They don't have anything else to do.....


Dear Airline Consumer,

I am writing to you because you were among the 50,000 consumers who in September 2010 signed a petition to U.S. Secretary of Transportation (DOT) Ray LaHood urging him to put a stop to hidden airline fees. This continued airline practice is unfair, deceptive and costing consumers dearly. I promised to update you from time to time on our progress. (This is the second update since 2010.) There is promising news and an opportunity to finally solve this problem.

In early 2013, DOT will send a proposed rule to address this problem to the White House Office of Management and Budget for review. To ensure the Administration supports the strongest rule possible, we have launched an official White House “WE the PEOPLE” petition requesting that DOT require airlines to provide fee information to sales channels where they offer base fares so that consumers can see, compare and buy the complete air travel product.

Today, if you call your travel agency or use an online agency you will not be able to quickly comparison shop among competing airline offers and purchase a complete trip without your travel agent or you having to go to different airline websites to search for service fees and pay for them separately. This maddening process exists because airlines refuse to provide agencies with fee information that enables side-by-side comparison-shopping and purchasing. As we know all too well, there is great profit in consumer confusion!

If we can secure 25,000 signatures to the petition by December 25, then the White House is committed to formally reviewing this request and providing a public response. Having the White House aware of the infuriating experience consumers must endure when buying air travel, and having them encourage a strong DOT rule, would be very helpful. 
I hope that you will consider reviewing and signing the petition at

Much more information on this issue is available at Please tell your friends and family members about this opportunity to end consumer abuse in air travel.

Thank you and Happy Holidays!

Kevin Mitchell
Business Travel Coalition

Friday, November 16, 2012

Ask me how I feel about ancillary fees

I'm really beginning to hate the term "ancillary".  It is an innocuous word really.  It means extra or supplementary. 

As most of you know, it has been at the center of the war between the GDS and the airlines, with the airlines complaining about the GDS not being able to adequately "merchandise" their ancillary products and services.

I find it interesting that the antonyms for ancillary are "necessary and needed". 

I am flying from Tampa to Miami today.  I found an amazing fare on Spirit (albeit to FLL), so it made more sense to fly than drive the 279 miles.  Gas would have cost $65.  Ticket price $68.79. 

Save 4.5 hour drive each way and fly?  No brainer.  Right?  Wrong.

Staying 2 nights, so taking my normal carry on and my backpack for my computer.  Yes, I can put my purse in my suitcase when the TSA person gives me the evil eye.  Done and done.

Arrive at airport.  Check in at kiosk to get boarding pass.  Wait a minute. 

1.  Sign on top says that if you take your bag to the airplane and check at the gate, they will charge you $100. 
2.  I can pay $50 for priority boarding and that gets me one carry on.
3.  Or I can pay $45 and check the bag.  

What I can't do is carry on my carry on. 

So you can travel for $68.79, but you can't carry on a bag.  So, unless I want to buy everything I need at the other end, the ticket price is really now $103.79.  If the antonym of ancillary is necessary and needed, they must not believe that my carry on is something that I need.

Never mind that Spirit doesn't fly to Miami (my ultimate destination).  It was worth it to get the low price, even if I did have to rent a car.  $41.99 for a day for AVIS - oh wait, plus $14.95 taxes and fees.  I couldn't do the cheaper car companies, because I have to have a one way rental, since my husband is meeting me in Miami for our anniversary (and we're driving back together on Sunday).

My trip is now $160.63, not counting Avis refueling fee.
@copyright Charles Schultz

So how do I feel?   A little like Charlie Brown in the classic Schutz cartoon. 

And I know better.  That is what adds insult to injury. 

Imagine how the average traveler feels?

AARRGH!!  That just about sums it up.

Thursday, November 15, 2012

IRM trumps CRM and it will require BIG Data

Replacing flawed CRM, is Individual Relationship Management.

IRM is the new black and it trumps Customer Relationship Management.

Whether or not you buy our arguments in the two previous blogs on this topic, I will first say that neither IRM or CRM can deliver relevant data without what is now being called BIG Data.

One of the last sessions at this year's PhoCusWright conference was on Big Data with Christopher Lynch. 

Lynch said "We are in the midst of a data tsunami" and in short, he believes that BIG data is the savior (or at the very least, the Coast Guard).  

I learned today that a petabyte = one quadrillion bytes. 

An Economist video reports that the quantity of global data is forecast to be a staggering 7,910 exabytes by 2015, over 60 times greater than 2005. In this future, says The Economist, people will live in a world of sensors and software in which their “every move is instantly digitized and added to the flood of public data.”

OK, according to Wikipedia, an exabyte is equal to one quintillion bytes.  This led me to write my last post about the new lingo we'll need to understand the enormity of Big Data. 

Back to my point, I should start by giving you the short answer of why is CRM flawed.  It is pretty simple. 

If I fill out a profile and transact on your site, you gather a lot of information about me.  You may even think that you can predict what I want, based on what I bought last week, last month, last year.  Or perhaps conjecture what I would like by knitting in the kind of car I drive, where I live or how many children I reported when I responded to the last census.

In business travel, or anytime I am traveling alone, you may actually be right - some of the time. But if I am traveling with others, or under different circumstances than my last trip (even for business), you may be dead wrong.  If my last trip was a business development trip with a big potential client, I may have stayed at the Four Seasons and if this trip is for training, there is likely a Fairfield Inn in my future.  Even if I'm traveling alone, if my last trip was to visit my parents in the nursing home in Heyburn Idaho, just because I stayed in the Super 8 motel, doesn't mean that I want another budget hotel this trip.   

In short, the past is not prologue on travel.

If you have graduated to more sophisticated CRM, you may have tagged each customer in your client database with a persona that represents the likely segmentation.  And some of you may have even changed how you serve up content or products, or changed how your call center interacts with your clients.  Bravo.

But the minute I travel for a different reason (e.g. Intent) or with someone else (e.g. Situation), traditional CRM breaks down.   When a person that fits into one persona, travels with someone that fits into another, compromise happens.  It is very difficult to predict the outcome of the "combination" of two or more personas.  

I am excited about Big Data for one reason.  Correlation.  The correlation that is possible by looking at a broad range of sources for transactional and demographic information, combined with transactional data, like search habits and purchases, gives us the basis for parlaying that information into a multi-dimensional perspective.

In order to produce true relevance, which everyone agrees is the holy grail, we must shift from single dimensional profiles, which record preferences for a variety of types of travel, to a multi-dimensional profile.  Then big data can be deployed and can indeed come to our rescue.

Stay tuned. 

The new lingo of BIG DATA - multiples of bytes

Today I listened to the PhoCusWright session on Big Data and discovered a new vocabulary that had previously escaped me.  Christopher Lynch of Atlas Ventures was throwing around the term petabye like we all knew what it was. 

So I was compelled to look it up and summarily tweeted it for anyone else in the audience that was curious or needed new cocktail reception conversation for the next industry conference.  Done and done.

So then I proceeded to write a blog on why the travel industry is NOT ready for primetime when it comes to Big Data and came across an Economist video that  reports that the quantity of global data is forecast to be a staggering 7,910 exabytes by 2015, over 60 times greater than 2005.

OK, now my single tweet was wholly insufficient.  Now we need to know what an exabyte is.

So here we are.  Courtesy of Wikipedia, I present to you - multiples of bytes.

I am oddly frightened by this whole thing.  I'm sure I'll get over it once my MacBook Air has 100 yottabyes.  I like that one!

Stay tuned for why IRM (the replacement for CRM) will need yottabytes and yottabyes of data!

Wednesday, November 14, 2012

Dear Delta - This is what we get for $100 million? Really?

In a tongue in check headline in July of 2011, I told Delta that I would have built them a new website for $80 million (after they announced that they were spending $100 million).  By the way, that story is still my top read story of all time on my well-read blog.

And yes Delta, it is beautiful, but honestly, I didn't really have any problem with the old one.

And to add insult to injury, Kelly Yamanouchi of the Atlanta Journal-Constitution wrote today that Delta "launched a dramatic overhaul of its website on Saturday, but the redesign led to some technical problems and customer frustration."

According to Delta "In the airline’s first major website redesign since 2010, the aim was to give travelers “a highly personalized online experience that makes travel with Delta easier and more enjoyable than ever”.

New features include a personal dashboard, a private Delta profile, a trip map and an online “wallet” with itemized receipts from trips.  Yamanouchi wrote that some Delta customers have complained in online discussions and elsewhere about glitches in the new website, including problems logging in. Delta said it is making “continuous progress” on fixing problems with the website.

I hate to say I told you so, but putting so much energy and money into a channel that consistently brings you lower yields just doesn't make sense to me.

For those that have been in the industry for awhile and remember when airlines used to court the travel agents, you'll appreciate this. 

$100 million would have bought you 124 million pounds of shrimp.....

 That is a lot of travel agent goodwill.  And since selling through the agent gets you $104.04 more per ticket on average... seems like that could have financed the website. 

Just sayin......

Monday, November 12, 2012

Dear Department of Justice: Never mind......

Today, the Beat reported "As part of an out-of-court settlement reached last month, American Airlines agreed to withdraw the antitrust complaints against Sabre that it had lodged with the U.S. Justice Department. DOJ in May 2011 confirmed that it had launched a probe into the "possibility of anticompetitive practices in the global distribution systems industry."

I find it curious that a company can file an antitrust suit with the DOJ and then summarily dismiss it when an out of court settlement is accomplished.

The slow moving train wreck has now been cleared.

Friday, November 09, 2012

The Shifting Distribution Landscape - Kayak gets bigger value than Worldspan

To set the stage, we don't have a lot of billion dollar transactions in the travel space.  So before you chide me for comparing the Kayak acquisition to the Worldspan acquisition in 2007, hear me out.

Just six years ago, Travelport announced its intention to purchase Worldspan for $1.4bn.  Yesterday Priceline acquired eight-year old Kayak for $1.8bn. 

I haven't done a net present value analysis taking into consideration inflation, but anyway you look at this transaction, it is an interesting commentary on the shifting distribution landscape.

The Global Distribution System (GDS) business is one of aggregating buyers and sellers, through the provision of technology to both constituents to facilitate the electronic sale of travel globally. 

Travelport's purchase of Worldspan in 2007 acknowledged the value of that aggregation with its investment.   They paid not just for the technology and the people, but the distribution reach.  At the time, Worldspan powered Expedia, Orbitz, Priceline and tens of thousands of travel agencies worldwide, as well as providing airline hosting and IT outsourcing for a number of airlines, including Delta.  

Priceline's purchase of Kayak was also about reach.  In September of 2012, Kayak had over 7.4 million unique visitors utilizing their metasearch site and countless others utilizing their mobile platform.

The metasearch model is one that also brings together buyers and sellers, but rather than bringing them together to transact (as is done on Priceline and its other brands - including and, it brings them together to show the consumer their options and to get them to that site to transact.  Kayak does a masterful job of that and has one of the best mobile applications that I've seen in our industry.

My point here is not that metasearch is better than traditional distribution for suppliers, but only to point out that the value of these two companies adjusted for inflation is very similar.

Distribution is not an EITHER/OR mandate.  It is about AND.

Consumers are multi-dimensional and they are definitely multi-channel.

Some are questioning the wisdom of Priceline's investment in Kayak, saying that the metasearch model is actually at war with the Online Travel Agent model.

I say to Priceline's leadership - bravo.

And one can only wonder....... would a GDS acquisition as a next move make sense??  ;)

Stay tuned.

Monday, November 05, 2012

US Travel Association reaches out to educate voters and legislators

Generated $1.9 trillion in economic output in 2011
Directly generated $124 billion in tax revenue for local, state and federal governments

Generated $153 billion in travel exports. Combined with $110 billion in travel imports creates...
$43 billion in balance of travel trade surplus for the U.S.

Supported 14.4 million jobs that means 1 out of every 8 jobs in the U.S. depends on travel
$195 billion in travel-generated payroll for those directly in the U.S. travel industry

Here are the questions that they suggest you ask your legislators:

The travel industry supports 1 in every 8 American jobs. Not just that, it’s an engine for job
growth: just last year the travel industry added 119,000 jobs to the economy. More travel
means more well-paying jobs for more Americans!

2. EASING Travel for Americans and Families?
Whether you’re traveling for vacation, business, or the holidays, no one likes to get snarled
down by hassles and delays. From streamlining airport security to decreasing wait times,
there are many ways to make travel easier for all Americans.

3. MOVING Businesses Forward?
Conferences, conventions, trade shows, and corporate meetings are all integral parts of
doing business in America. Every dollar invested in business travel delivers nearly $4 in
profits. It also supports 2.1 million jobs and generates $36 billion in tax revenue annually.

4. LOWERING Energy Costs?
Volatile gas prices discourage travel, hamper business, and slow economic growth.
Lowering gas prices will make travel more affordable and accessible to Americans.

5. WELCOMING More Tourists to the United States?
International tourists generate billions of dollars for our businesses, hotels, restaurants
and communities. But because it is so difficult to actually get here, America’s economy is
losing out on billions of dollars of travel-related spending—a good form of economic
stimulus. From Washington DC, to our states, to our local towns, the benefits of travel
trickle down. Politicians at all levels can and should be our advocates.

To let your local legislators/candidates know the power of travel, go to this link.

Friday, November 02, 2012

Other Agency category losing steam in their lead the sale of international air tickets

According to the Airline Reporting Corporation, 52% of all international airline ticket sales ($3.9b) is done by the "other travel agent" category.  This is down from 57% the beginning of the year.

Mega agencies come in 2nd with 30% ($2.2b) of all agency sales.  This is up from 25% in the 1st quarter.

The Online Travel Agency (OTA) category comes in last on international sales with just 18% of total, at $1.3b in sales in the 3rd quarter.  They had a momentary lift in the 2nd quarter to 20%, but dropped back down in the 3rd quarter.  This is down from 35% in 1Q2012.  This is a powerful category, since it includes just four agencies -- Expedia, Priceline, Travelocity and Orbitz (and its sub-brands).

The international transaction numbers follow a similar pattern, with the Mega Agencies picking up volume at the expense of both the other brick and mortar agencies and the OTAs.  

Thursday, November 01, 2012

Brick and Mortar Agencies sales of domestic air tickets are higher than OTAs and Megas

According to the Airline Reporting Corporation, 36% of all domestic airline ticket sales ($3.1b) is done by the "other travel agent" category.  This is down 1% from the beginning of the year.
With 13,709 agencies left in the US, this means that the bulk of sales are produced by just under 13,700 of them.

The Online Travel Agency (OTA) category comes in next, producing 33% of all domestic airline tickets ($2.9b) sold by the agency community.   This is down from 35% in 1Q2012.  This is a powerful category, since it includes just four agencies -- Expedia, Priceline, Travelocity and Orbitz (and its sub-brands).

Mega Agencies come in last at 31% of total, selling $2.7b in domestic air tickets.  Mega has seen the greatest growth since the first of the year, jumping 3 basis points from 28%.   The Mega category includes American Express, CWT, BCD, HRG, Maritz, Omega, CWT/SATO and SATO.

Tomorrow we will look at the corresponding split in sales for domestic air tickets issued by these three constituents.

Stay tuned.

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