Nonstop Growth for Online Travel

According to a new report from JupiterResearch, "US Travel Forecast: 2006-2011," online travel revenues will reach $128 billion in the US in 2011 — 38% of all travel revenue for that year.

"Online travel revenue will continue to grow strongly from $85 billion in 2006," said Jupiter analyst Diane Clarkson. "Factors that will spur online spending are greater consumer wallet share, increasingly sophisticated products available online and improved online compliance in business travel."

For comparison, eMarketer's estimate of this year's US online travel sales is somewhat more conservative at $77.7 million.

comScore Networks put first-half 2006 online travel sales at $34.7 million, a year-over-year increase of 14.7%.

While the exact figures may not match, all the sources agree that online travel sales are continuing to fly higher.

Speaking of flying, looking at airline travel sales alone, Jupiter asserts that higher fares and an increase in the number of people flying are driving total air revenues to $138 billion in 2006, with $49 billion spent online, and forecasts that that figure will grow to $72 billion in 2011.

Hotels are also seeing — and will continue to see — a shift to online sales as more travelers migrate from making reservations by phone to online, particularly the hotels' own Web sites.

Security seal lifts Opodo sales

Online travel agent Opodo says its sales have risen 10 per cent in just one week after posting a VeriSign Secured Seal on the payment pages of its web site.

The seal is a small symbol put on transactional web pages to assure shoppers that the site has adequate security and their financial details are encrypted.

Warren Jonas, head of service management at Opodo, says the company has clearly seen that confidence is a crucial issue for online shoppers.

‘Completed sales rose by about 10 per cent when we posted the VeriSign Secured Seal, and we immediately realised the impact that trust can have on shopping basket abandonment,’ he said.

‘We have now published the seal on all the payment pages across our European network.’

A survey commissioned by VeriSign and conducted by TNS Research shows that security concerns have led to 54 per cent of online shoppers abandoning a transaction. And 72 per cent of those shoppers said they would have continued with the purchase had the site displayed a trusted seal or mark.

Online retail body the Interactive Media in Retail Group (IMRG) forecasts UK online sales of £7bn in the run-up to Christmas, but says this figure could be significantly lower if consumers bypass the web because of their security concerns.

As well as the pressure this puts on ecommerce, IMRG’s figures show that 57 per cent of UK online shoppers believe responsibility for protecting their personal information lies with the site they are shopping on.

Avivah Litan, vice president and research director at analyst Gartner, says she is surprised the seal made such a difference to consumer confidence in Opodo’s case. ‘I find that increase very unusual,’ she said.

‘Research shows that even when you put green borders around the edge of a site to show it is secure, consumers miss it about 40 per cent of the time.’

But most online retailers want to provide some kind of quality seal, says Litan.

‘Other internet retailers want to provide this option but it requires education for people to recognise the seals,’ she said.

Customer Intimacy Is King
11/22/2006
By Glenn Haussman

With all the brouhaha regarding the growing importance of customer relationship management (CRM), too many hotel companies are still vexed when it comes down to delivering on a service promise. For hotel companies looking to differentiate themselves from the competition, exceeding guest expectations is paramount since it leads to building loyalty.

In this complex era, it is crucial to truly understand and anticipate guest desires in order to fulfill that service promise. But just how to do it effectively has been an elusive and vague notion not fully grasped by many hoteliers.

Last week ,the HSMAI hosted an on online seminar (né, webinar) as part its continuing HSMAI University series that dug deep into this complex topic. The program, dubbed “Customer Intimacy: The Key to Profitability” demystified this issue and gave attendees some surefire tactics to turn customers into loyal clientele.

“I truly believe hotel companies need to be in the customer intimacy business. They have to focus on delivering what the customer wants,” said Caryl Helsel Partner, inspire resources, a Hospitality Consulting Firm. “You have to have some product leadership to deliver on customer intimacy but you have to focus on the relationship above all else. All goals should be focused on customers rather than the product or operations.”

And getting those loyal relationships are paramount to the property or brand’s success. Helsel said that 10 percent of all hotel guests account for 44 percent of all hotel nights.

To get those loyal customers, Helsel said it’s crucial a hotel employ a culture of managing the “total customer experience” and also embrace a culture of managing “moments of truth” when that experience is on the line. Also, property leadership should demand a culture that puts the customer at the “center of your world.”

Helsel believes that while a hotelier doesn’t have direct control over what someone says after they walk out, it’s very possible to control the guest experience in such a way that they leave with only positive thoughts. “Customer intimacy is essential for success in today’s world,” said Helsel. “If people don’t feel welcome and have an emotional connection, their loyalty will be in question.”

It’s also a matter of creating emotional loyalty rather than functional loyalty. Whereas functional loyalty comes into play if a hotel is conveniently located near an airport, for example, emotional loyalty transcends pure need and promotes frequent stays because the experience moves beyond the brand attributes to an attachment to the guest’s psyche.

To manage the customer relationship, it’s crucial to have deeper customer intelligence and then use that information to make each stay more memorable. For example, it is better to match up what your hotel does with each individual’s lifestyle and give them something unique based on that lifestyle to reinforce the relationship. One suggestion Helsel made was to give, for example, a customer who stays 20 times a year and uses the gym regularly, a gym membership in their home town. That way, every time they go to the gym they will think of that hotel. She said it is a much better way to build loyalty then just giving them more points on their loyalty program.

Also focus on what Helsel calls the Total Customer Experience. Customers want:

A positive, enjoyable and unique experience from the beginning until the end of their experience

They desire an emotional connection that, once made, often ensures long-term loyalty

They must be valued for a lifelong contribution versus a one-time contribution to revenues

Customers desire the perception that they are in control - ensure your customer-facing processes are engineered for how customers buy, when they buy and what they buy

Customers want choice

And they want this across all channels

In creating ways to build intimacy, Helsel said tenants include the customer’s desire to be known, confidence in service consistency, convenience, a feeling of welcoming and belonging and a comfort level where they know if there is a problem it will get handled right away.

Of course, true loyalty goes beyond the physical hotel. These days loyalty is built with every single customer communication as well.

One way hotel companies communicate to customers is via emails. However, many companies are not communicating to their guests based on established preferences. For example, hotel brands will still offer ski vacations to die hard sun worshippers

At the hotel, many hotels are at the point where they are collecting information but are simply not tapping into that information to improve a guest stay. This can actually disenfranchise the guest since they have gone tot her trouble of providing their desires which are not being executed. It’s better to not gather the information, or say when it will actually be used. “It is more harmful to ask for that information and then not use it,” said Helsel.

Pay-Per-Click Not-So-Easy

NOVEMBER 22, 2006

Pay-per-click advertising is not as simple as it might seem.

Online marketers have taken to pay-per-click (PPC), and many use it, but apparently not everyone understands it very well.

Although online marketers have been investing in PPC search marketing for a number of years, a new survey of marketers — all of whom have been using PPC for at least two years — conducted by the e-tailing group found that managing PPC programs poses a challenge.

The fact that marketers use PPC was clear from the survey. In fact, with 44% of e-commerce executives surveyed saying they allocate 20% of their entire advertising budgets to PPC search ads, it constitutes a significant portion of online marketing budgets.

They agree on where to spend PPC ad dollars, too. Of the marketers who invest in PPC campaigns:

• 100% use Google
• 90% use Yahoo!
• 76% use MSN
• 27% use Ask.com

The problem is that 40% of the respondents reported that they manage more than 5,000 keywords. To accomplish the task, 59% manage internally, 18% outsource and 24% use a combination of internal and outsourced solutions.

Somewhat amazingly, 99% of those that manage PPC campaigns in house have three or fewer people working on the job.

A third of the executives spend 21 or more hours a week managing PPC campaigns, and a third spend five or less hours a week.

"It is clear that merchants see value in this marketing method," Lauren Freedman, president of the e-tailing group, told Internet Retailer. "However, resource constraints plus limited time availability and skilled personnel to dedicate to PPC were frustrations."

Even though ROI is the primary measure of success for PPC campaigns, 27% of the marketing executives said they did not know how their cost of conversion compared with the total dollar value of each sale.

Over 50% of Vacations Now Planned Online

NOVEMBER 22, 2006

It's bad news for travel agents.

According to a survey from morefocus, a majority of travelers now plan their vacations using the Internet, while only a small percentage continue to use travel agents.

The survey found the 58% of respondents tend to plan their personal travel online. That compares to only 23% who said they usually use travel agents to plan their vacations.

In fact, the survey showed that more people, 30%, actually ask someone in their family or a friend for help planning a vacation than turn to a travel agent.

"As in a number of other industries, people are using the Internet to take control of things they used to have to rely on other people for," said Dr. Regan Carey, morefocus' research director. "Now, you can book your own hotel, plane ticket, rental car — all without leaving your home, and you probably save money, too."

He concluded, "It's a trend that will only continue to grow."

A majority of those surveyed, 55%, said they prefer to fly on vacation. Surprisingly, almost as many, 52%, said longer check-in lines at airports due to heightened security do not bother them. They view the additional wait as merely a nuisance, an unfortunate fact of life in today's world.

Mags, DVDs Offering Text-to-Buy Ads

The text-to-buy ads use a new technology from ShopText and eBay unit PayPal, allowing consumers the option of sampling and purchasing some products via their cell phones, writesvia MediaBuyerPlanner). Text-to-buy technology is in its early stages; but, according to Mark Kaplan, founder/CMO of ShopText, it will explode in 2007. Brandweek (

However, Dan Schatt, senior analyst with Boston-based research firm Celent, points out that some of the consumers targeted by the campaign may have trouble on the payment front. Teens, for example, are likely to not own a credit card, though they may have a prepaid card.

Kristine Welker, VP/publisher of CosmoGirl points to the Elizabeth Arden 2005 campaign for the Britney Spears perfume, Curious, which included mobile text messages from Spears. That was the inspiration for Arden's Hilary Duff campaign, she says, adding that the Spears campaign was great, "but it stopped short of the ability to buy on the phone."

Publishers are not the only ones implementing text-to-buy campaigns. National CineMedia used ShopText on a promo for DVDs of Al Gore's documentary An Inconvenient Truth, and club-owner The Knitting Factory intends to offer text-to-buy concert tickets for sale in 2007.

Other companies offering the ability to make purchases through mobile phones include PayPal Mobile, a new service that lets users buy CDs and DVDs from MTV and 20th Century Fox Home Entertainment.

Want to Buy That Shirt You Saw on 'Grey's Anatomy'?

Media Morph: SeenOn.com

By Abbey Klaassen

Published: November 20, 2006

NEW YORK (AdAge.com) -- Every week Ad Age Digital's Media Morph looks at how emerging technology is changing the way consumers get their information and media companies and advertisers present their messages. This week: SeenOn.com.

Clothing, phones, you name it. If you saw it on a favorite show, chances are you can order through SeenOn.com.

What it is: Think of SeenOn.com as an online shopping guide where TV fans can find and purchase many of the products they see on TV. The site is owned by Delivery Agent, which has made a business powering the online shopping environment for many broadcast and cable shows, such as "Desperate Housewives" and "Project Runway." On Seenon.com, visitors can check out the blue Orvis button down Dr. Preston Burke wore in the Nov. 9 episode of "Grey's Anatomy" and click the link to buy the product from ABC TV's online store. In addition to clothes, SeenOn features in-show music and props.

The marketing angle: An easy way to search for and buy the products seen on TV supercharges the value of product placement, argues Mike Fitzsimmons, CEO, Delivery Agent. Plus, because you can't yet buy Jennifer Aniston's sweater with your remote, said Mr. Fitsimmons, "this is the closest you can get today. Their emotional connection with the product and the entertainment medium is at its peak, resulting in higher conversion rates and a fuller exploitation of the association with the entertainment property."

The community aspect: It wouldn't be a proper Web 2.0 site without a community element, so SeenOn.com lets viewers spot and identify brands featured in shows and submit their own product-filled videos. So if you're watching, say, "Dancing with the Stars" and know who makes Emmett Smith's green shirt, you can tell SeenOn.com as part of a "spotters' program."

User-generated ready: And, of course, there's a user-generated content piece -- users can also submit their own videos featuring products in the Delivery Agent database; if the video leads to a sale, they get a cut of the revenue. There's also blogs from stylists, set creators and costume designers, such as Cate Adair of "Desperate Housewives," Tim Gunn from "Project Runway" and Mimi Melgaard of "Grey's Anatomy."