Loyalty Is Key to Online Travel Market

FEBRUARY 12, 2007

Travel suppliers use loyalty programs to stay competitive online.

Many travelers know the trick to getting the best price online: They shop at online travel agencies, then book rooms or flights on a supplier's site.

Yet online travel agencies are still fierce competitors. Although a head-to-head matchup favors suppliers, many consumers still say "It depends" when it comes to their purchase preferences, according to a survey conducted by market research firm eVOC Insights and RelevantView.

eMarketer senior analyst and travel specialist Jeffrey Grau thinks the "It depends" crowd has good reasons for using both online travel agencies (OTAs) and suppliers.

"For many people, it's not a black-and-white choice. Each channel has a different set of attributes. The agencies give you a broad selection, and make it easy to book multiple travel segments at the same time, such as hotels, airlines and car rentals. For details about a lodging facility, however, the supplier wins out. More importantly, supplier loyalty program points are easier to get directly from the supplier," said Mr. Grau.

The eVOC study backs up this statement. For hotel price and selection, and for adding flights, rooms or vehicles, travelers prefer online travel agencies. Suppliers win on rewards programs and ease of cancellation, and are favored by travelers who hate cancellation fees.

Besides reward programs, suppliers can compete with OTAs on price, according to a new study by eVOC Insights and Hospitality eBusiness Strategies. Visitors to a major hotel brand site said that having a best Internet rate guarantee would get them to book directly on the brand site instead of sites like Expedia or Travelocity. Special prices and promotions also got travelers' attention.

Warning! Outlook 2007 Might Trash HTML Again

Stefan Pollard - Feb 5, 2007 - EmailLabs

So, you think you have ironed out all the kinks in your HTML formatting, now that you've had it tested and validated and checked and rechecked for spam content, bad code and email-client incompatibility?

Sorry, it's time to go back to the drawing board again. Outlook 2007, the newest version of Microsoft's business-leading email client, will make your HTML formatting either disappear or look extremely ugly. If you haven't spoken with your email designer lately, you'd better email them this article and look at our suggestions for getting around this new challenge to proper email rendering.

Essentially, what's happening is that Outlook 2007 will no longer use Microsoft's Internet Explorer engine to render HTML. Outlook now uses IE to read content in HTML messages and switches over to its sister Office program Word to compose messages. Outlook 2007 no longer uses IE, apparently because some layman users were finding inconsistencies between IE and Word.

Instead, it will use an updated version of Word to both render and compose. The issue is that designers are finding problems with the way Word handles, or more accurately doesn't handle, high-function design element such as Cascading Style Sheets (CSS), background images, and rich media.

The Real Outlook 2007 Challenge: Creative or Marketing?

Because the Outlook email client is used by 50% to 80% of business email users, any changes to it makes email designers, marketers and publishers nervous, especially those in business-to-business marketing.

When Microsoft announced quietly late in 2006 (via developer articles) that it was replacing IE with Word, email designers flooded industry blogs with protests over the loss of HTML functionality. The greatest howls came from email designers who had evolved attractive, functional messages using CSS. Outlook 2007 will have limited support for CSS.

However, email-marketing specialists have been more temperate. They argue that Outlook 2003, which expanded default image blocking and link disabling, was far more damaging to marketing efforts and forced marketers to adapt to the kind of streamlined HTML design that will perform acceptably in Outlook 2007.

A Critical Change: Loss of 'Alt' Tags

Whether Outlook 2007 is truly a game-changing event or merely puts a crimp in creative email design is about to be seen, but it will affect even HTML-light email messages and make it more important either to streamline your HTML design or to offer an attractive text alternative.

The most critical loss, however, is something that appears relatively minor: Outlook 2007 will no longer support the use of "alt" tags, which provide a few words of text to describe an image and which appear when the image is disabled.

Although it appears minor, this is actually a pretty serious loss of function. Alt tags help give meaning in an email where images are disabled, because you can use the few words of text in the alt tag to either describe the image, the offer it represents or the action you want the reader to take when the image itself doesn't render.

Losing that function combined with images disabled by default will hurt email design that relies heavily on images. If that describes your email templates, you will need to rework your templates again.

Here are the other functions Outlook 2007 will no longer support:

• Forms
• Background images
• Animated GIFs
• Flash
• CSS Float or position commands

Unless your ROI reports show conclusively that your program success depends on either having a form embedded in each email message or that an animated image really does drive response or conversions, you should consider lightening up your HTML use to accommodate Outlook 2007 users.

Doing this may give you an unexpected bonus as well: Your delivery, open and response rates may go up as well because you'll have fewer elements that will either break in an email client or trigger a spam filter.

How to Respond to Outlook 2007 Changes

First, don't push the panic button or order a wholesale revision of your HTML templates.

The new Outlook is scheduled to be released this month (February 2007). It will take time for the new version to migrate from early adopters to the broader audience of general users.

Second, if you have already had your HTML formatting audited or validated, or if you have streamlined the design in the last year, you might not have to worry. The Word rendering engine will either read your message just fine or alter it so little as to have almost no impact.

And, if you have already reworked your templates to accommodate default image blocking and link disabling as well as preview-pane use (see the resource list at the bottom of this article), you've done most of the work to manage any damage Outlook 2007 could inflict.

How to Counteract Outlook 2007 Changes

If you have already reworked your email templates to create a lighter, faster HTML format, you've already done much of the heavy lifting.

Here are five steps you can take to accommodate the reduced functionality expected in Outlook 2007:

1. Create a text version or rework and streamline your current text edition.

Your email program should create a text version of your HTML message automatically, but you should review it for readability and appearance. Some text creators merely dump all the text into a document. While you don't have the same graphic devices that make HTML so attractive and easy to read, you can still use white space and typography to create an easy-to-read text message.

2. Test rendering in Outlook 2007.

Test all email templates, including HTML, text, newsletters, stand-along mailings and transactional emails, by opening a test email message in Outlook 2007 to see how it will render.

3. Review your use of HTML across all mailings: reduce your reliance on CSS and other high-function elements or create an HTML-light version that does not use them.

This is a key part of any email design program regardless of Outlook 2007's expected impact. Validate your HTML code using the free WC3.org validator service, which you'll find in our Resource Center.

4. Reduce reliance on large images to display products or drive response.

Large images have become problematic anyway since they take up most of the space in an HTML message and leave relatively little room for text. And, with the greater use of image disabling, putting all your information into one big image means your readers won't see a thing if they view it with images blocked or in the email client's preview pane.

5. Use EmailLabs’ “Complete Guide for Creating HTML Emails: Technical and Design Best Practices” to examine and rework HTML formatting.

This free downloadable guide, which you can access on our site, explains the technical side of HTML formatting in easy-to-understand language and will give your designers the tools they need to craft a compelling yet rendering-savvy message template. Find it here: http://www.emaillabs.com/reports/emaillabs_html_email_guide.html

In Summary

The changes coming in Outlook 2007 will affect designers primarily, with the email community divided over just how much of a negative impact it will have on email-marketing messages. If you have already revised your email templates to cope with the more far-reaching changes imposed in Outlook 2003 and other updated email clients, including preview panes and default image blocking and link disabling, your HTML design might need only some minor tweaks. If you have not updated your HTML formatting for a year, or if you do not offer an HTML-light or text version messages, now is the time to go back to the drawing board and streamline your format.

U.S. groups and meetings market sees online revenue growth slow
January 30, 2007

Revenues generated for the hospitality industry by meetings and conventions are expected to grow to $175 billion by 2008, compared with $164.1 billion in 2006, according to “Groups and Meetings: Market Opportunity Redefined,” a study by HSMAI and PhoCusWright.

Travel revenues (including air, hotel, car rental, ground transportation, cruise and tour expenses) represent 54 percent of the total revenue. Non-travel expenses (including meeting rooms, catering and audio/visual equipment) represent 46 percent of the total.

Corporate meeting revenues are expected to grow to $75.8 billion by 2008, up from $73.4 billion in 2005. PhoCusWright predicts the online corporate travel market to hit $24 billion by 2008, or 60 percent penetration, up from $19.8 billion in 2005.

Association meeting revenues represented only 5 percent of the market, or $8.5 billion, in 2005. While the number corporate meetings per organization increased 11.2 percent from 2005 to 2006, association meetings declined 2.1 percent. However, this sector is forecasted to reach $10.4 billion in 2008, or 5.9 percent of the market.

Online revenues in the U.S. groups and meetings market are expected to grow to $39.1 billion, or 41 percent of the total market. The online sector accounted for only 33.7 percent of the market in 2005 and 37 percent in 2006. Online travel revenues are expected to grow from $33 billion in 2006 to $39 billion in 2008, with $18 billion of the total coming from air travel and $15.4 billion from hotel bookings.

The No. 1 factor inhibiting online booking is the lack of personal contact. Forty-four percent of survey respondents prefer to talk to someone in person while booking.

Other findings include:

- Hoteliers are working to centralize their groups and meetings inventories and rates to enhance offerings and optimize resources.

- Large meeting components continue to move online to achieve efficiency and offload tasks to planners and attendees.

- The rise in new market entrants and efforts by established players to automate aspects of groups and meetings will draw attention to technology tools, educate the marketplace and encourage people to book online.

The study was conducted between August and October 2006. PhoCusWright contacted more than 35 executives from 24 supply companies, 2,000 meeting professionals and corporate meeting decision-makers, executives from 17 technology providers and more than 1,100 consumers. Responses were collected via e-mail and telephone.

Microsoft takes email design back five years


Microsoft Outlook 2007, released next month, will stop using Internet Explorer to render HTML emails and instead use the crippled Microsoft Word rendering engine. Outlook enjoys a 75-80% share of the corporate email market, which is similar to Internet Explorer’s share of the browser market - they make the rules.

E-Mail Marketing company Campaign Monitor has been doing some early testing, as have a few other brave souls, and come February, here’s just a taste of what won’t be supported:

- No background images - Background images in divs and table cells are gone, meaning Mark’s image replacement technique is out the window.

- Poor background color support - Give a div or table cell a background color, add some text to it and the background color displays fine. Nest another table or div inside though and the background color vanishes.

- No support for float or position - Completely breaking any CSS based layouts right from the word go. Tables only.

- Shocking box model support - Very poor support for padding and margin, and you thought IE5 was bad!

Microsoft have released a full run down of what is and isn’t supported, including a downloadable validator that helps you validate your HTML for their engine. Word of warning though, it only works with Microsoft software and Dreamweaver.

E-mail should be smaller: EmailLabs

E-mail marketing firm EmailLabs, a subsidiary of J.L. Halsey Corporation, is advising business-to-consumer marketers to reduce template size to account for the trend in smaller viewing areas in Web-based e-mail clients.

The recently released Yahoo Mail Beta and Microsoft's Window Live Mail Beta, now enable preview panes by default. These smaller reading spaces enable consumers to quickly scan their messages before opening them, forcing marketers to get to the point.

“Marketers need to rethink how their e-mail templates are designed so that the top left corner of the message includes the core call to action,” said Lena Waters, director of marketing at EmailLabs, Menlo Park, CA. “It is important to have a full understanding of what the clients are going to see.”

Due to widespread adoption of Microsoft Outlook’s preview-pane function in corporate settings, business-to-business marketers have been dealing with this design challenge for some time. But this is not true for business-to-consumer marketers, who for the most part always have designed e-mails under the assumption that consumers would see the entire e-mails as designed.

Ms. Waters said that even when messages are viewed in a full window, shrinking real estate can still be a factor. Many e-mail clients now serve display ads on the right-hand side of the screen, taking that space away from the message window. Also, many e-mail programs automatically disable all images in the preview pane, leaving a big red X or an empty space where the main idea should be.

So she recommended adding text-based e-mail navigation in case images are automatically blocked, as well as color backgrounds as opposed to images.

“Designing with these new viewing habits in mind is important to communicating with your customer,” Ms. Waters said.

Travel providers go beyond the browser
January 12, 2007

by John Bray, PhoCusWright

While realizing that search has been a great vehicle for increasing travel planning (seven in ten trips begin with search), most travel providers would agree that search has done little to instill consumer loyalty. Sensing that consumers are perhaps a bit too easily distracted in all their shopping and browsing, travel providers have invented numerous ways to get between the consumer and their browser in hopes of opening a more direct channel of communication, stimulating more demand and hopefully encouraging more loyalty.

Online travel started by leveraging the power of the Web browser to enable travel booking. However, if you look closely at today’s leading travel sites (e.g., Expedia, Southwest, Hilton) you see that most of the emphasis is on the so-called “booking button” – the little window that allows consumers to price a travel product – and further, you see that there’s not a really a fundamental difference, in the user experience for the booking portion of these sites.

Essentially, consumers have launched their browsers expecting inspiring travel planning, only to be disappointed by seeing largely the same thing that they’ve had online for four or five years now. Given this remarkable sameness (i.e., the lack of originality in this travel planning process), a convenient circumstance for the emergence of search and metasearch occurred.

Certainly, search is a great thing, simplifying the travel planning experience in many respects. However, the side effect of all this searching is a lot of churn. Of course, consumers shop intermediaries like agencies and then ultimately buy from suppliers. But what is not as often known is that they also shop suppliers in great numbers and then end up going to intermediaries.

In fact, there’s little loyalty in online travel buying, even though the online travel industry is now over seven years young. Three in ten online travelers don’t even have a single site that they prefer for travel purchase, and a vast majority, 68%, have numerous preferred sites.

Sensing this and eager to create loyalty, suppliers and travel distributors have gotten smart. Realizing that the browser may not be the ideal medium to derive consumer loyalty, they’ve built tools to go beyond it.

Several examples of this movement have occurred across the industry. The first one, probably the ‘poster child’ for this movement is a product called “Ding” from Southwest Airlines. In the first three years since launch, Southwest now has over one million users that actively have the product open and are using it on their desktop everyday. They have over five million downloads. And what the Ding product provides is a pervasive way for Southwest to advertise to their loyal customers, those who would download a piece of software and put it on their desktop, when their best fares are available. Through Ding, they open up this channel and offer fares that are not available anywhere else to this selected group in the local market where they reside or where they choose their preferences.

In my case I live in Denver, Colorado. With Ding, I can only see the special fares that they want to promote to me in this market on an irregular basis. How do I know those fares are there? I don’t even have to go and look for them. I don’t have to open up a browser and search for them. I am literally dinged – ding, doorbell sound – whenever these fares are promoted or available in the market. And they’re only available for a very limited amount of time. So like Pavlov’s dog, if you will, the consumer is being trained – ding, ding, ding – come to this special fare.

Ding belongs to a category known as branded desktop applications (BDAs), and there are others from folks like Travel Alberta, Vail Resorts, and most recently Expedia. But there are other examples of going beyond the browser. One is AOL Instant Messenger (AIM). With AIM, by selecting “kayakbuddy” (provided by Kayak) as a chat buddy, you can search for flight and hotel prices, right from your IM window without even opening the browser.

The Google Earth product is truly a great mapping application, but one of the ways to enhance it is for distributors and suppliers to provide “skins” for Google Earth that consumers can overlay on top of the mapping for preferred hotels, properties and travel destinations. With a skin provide by Earth Booker, I can fly in, choose the hotel that I want, and very quickly buy that hotel directly.

The next example will be very familiar to those who used so-called push-technology tools like Point Cast when the Internet was just becoming popular. With the forthcoming launch of Microsoft’s new operating system (Vista), the desktop will be transformed from a static canvas, where the most you can do is place a picture, to a dynamic workspace where rich fidelity applications that act like purpose-built travel planning tools will reside. One can gain a glimpse of this by visiting start.com (requires Windows Internet Explorer 7.0). What start.com allows you to do is select numerous snippets of travel shopping applications (in Microsoft parlance they’re called “Gadgets"), there is one from Kayak as well as one from Orbitz already. I can keep any number of these Gadgets local, essentially taking all the extraneous stuff out of the travel site and say “just give me that booking window”, if that’s all I want to have. Similar to Gadgets, is a product from Yahoo! called Widgets, including travel-specific tools from Octopus Travel, and Flight Compare as well as several other metasearch engines.

In addition to these tools, very soon you’ll see where you can buy travel from your car. In the United States, General Motors now has the OnStar dashboard in over 1.5 million cars with a portal for GPS two-way communication installed in it. Very soon we’ll see travel applications brought locally, the ability to buy hotel rooms on the road, make hotel and dinner reservations, and make this travel buying, if you will, from a map and a browser. In fact, not even a browser, but rather from a dashboard – the dashboard of your car.

Through these new applications, travel providers have seen that they can get between the browser and the consumer; because in the browser, consumers can get lost or misled or just lose attention. By trying to get between the browser and consumers, suppliers and distributors seek to get closer, get more personal, and become more intimate.

3,637 Marketers Reveal Which Email Tests Worked Best

By Anne Holland, President, Marketing Sherpa

If your email marketing budget -- or allocated staff time -- is tighter than you'd like, how can you figure out which tests are worth conducting … and which won't move the needle?

Last month MarketingSherpa's research team conducted the largest-ever survey of email marketers in the world -- with 3,637 respondents. One of our critical questions was: Which creative email tests give the best ROI (return on investment)?

Here's one of the many results charts for you to review (see link at the end of this article for more):


Chart: Email Tests – B-to-C Marketers Evaluate ROI



Source: MarketingSherpa, Email Marketing Benchmark Survey, November 2006

Methodology: This fifth annual survey was opened to selected MarketingSherpa reader lists on Oct. 26 and closed on Nov. 1, 2006. 3,637 total responses were collected from email marketers (2,492) and employees at agencies/ESPs working with email (1,145).


We chose the six most-common creative tests to ask about. The biggest result -- testing in and of itself increases ROI. In every case more than 50% of marketers improved ROI (even if only moderately) by testing.

My favorite result -- copy writing really, really matters. The top three best ROI tests were more to do with words (copy, offer, subject line) than they were with design or graphics.

Your Web design team (or IT department) and Web analytics departments also have to be put on notice. As this chart proves, the landing page (where clicks land) is critical. Which means your email department may in the end *drive* Web site development, instead of just linking to already-created Web pages. The email department has to have a heavy hand in the Web design team's ongoing tests and decisions. Email can't be an isolated department down the hall anymore.

This also means your email analytics are not complete at just open and click, you have to include Web data after the click. Luckily many email vendors have anticipated this and are either merging with or allying with Web analytics firms. The "single dashboard" movement -- wherein marketing results from multiple online channels are all shown in a single report -- is off to a flying start, even for smaller marketing organizations.

The only problem moving forward that I can see is how to integrate offline campaigns -- which ultimately must be included. But that's a battle that we’ll be in for the next five years or more.

As for 2007, if you're having a hard time getting a budget for the personnel or technology you need to conduct email tests, I hope the above chart is helpful. Too often senior management are prone to considering email something that's nearly "free and easy" instead of a marketing tactic you should invest in for significant improvements.

Perhaps that's the biggest goal of all for 2007 and email. Just test something, anything. Even a dinky test is worthwhile if you can use results to create a powerful chart for the next senior management meeting. Your goal: to prove email tests are worth investing more in.

We've known for a decade that email is a profitable marketing medium. Now it's time to start taking email seriously by dedicating more copywriting, staffing and technology to the medium.

Email Sign Up (free)