Friday, January 29, 2010

Kayak/Lost Partnership? Try this search...

Thanks to a Facebook posting from our good friend (and recovering airline/OTA exec) Ellen Lee, we found a curious flight display on Kayak this morning...

Try a search for a one-way ticket from SYD to LAX departing on 09/22/2010. The results display a rather expensive flight from "Oceanic Airlines" as below

We won't spoil the fun, but try to book this flight and see where you end up.

Good fun from Kayak (maybe a little morbid given it is a travel site?) and a really interesting viral marketing play.

Wednesday, January 20, 2010

OTAs Win on Taxes in Texas

A trial court in Houston today dismissed a case brought by the City of Houston against the major online travel agencies for nonpayment of occupancy taxes. The court issued a summary judgement indicating that the judge found the evidence supporting the plaintiffs' case insufficient to even proceed to trial.

This ruling is a big win for the OTAs as the court looked at the same language in which a San Antonio jury concluded that the OTAs (somehow) control hotels. We took a look at this ruling back in November and concluded that ruling was a draw. Based on today's ruling, we are going to give it to the OTAs, minus legal fees and the overall distraction factor, of course. San Antonio, see you on appeal as they say...

TripIt Gets Serious About Business Travel: New Blackberry App

TripIt has announced a new application for Blackberry, allowing BB users to view all their travel plans just like iPhone and Android users have been able to for some time. All of the regular TripIt functionality has been adapted for the 'berry including flight status inquiries, directions and, of course, the Tripit Pro features.

As TripIt continues to move closer to the business travel world, supporting the Blackberry has become more critical given the device's deep penetration into corporate IT platforms.

Obviously, TripIt (and founder Gregg Brockway's itineraries are not the sample screen shots. As Gregg would no doubt agree, the likelihood of him splurging on the George V in Paris is about as likely as pigs flying.

Priceline's New TV Ad Brings Revenue Management 101 to the People

Today, launched a new TV ad campaign featuring a new Shatner side-kick known as "Big Deal." Not only is the Big Deal big, but he also appears to have a deep understanding of hotel revenue management (in addition to some really nice tats.)

In the spot, Shatner calls in Big Deal to help negotiate with a hapless front desk clerk who initially refuses the $65 price Shatner suggests. Big Deal intones "is it wise to allow a perishable item to spoil?" Shatner follows with "Is it wise to leave a room empty" to which Big Deal adds "The additional revenue easily covers operating costs." Shatner closes the negotiation with "$65 is better than no dollars." As you would expect, the clerk relents.

A rather high-brow discussion (lead by a decidedly low-brow, knuckle-cracking, meat head, no less) of the principles on which Priceline operates is an interesting advertising ploy. Educating consumers of the intricacies of the model is a first - some hoteliers are still trying to figure it out, let alone consumers. But it may expand the market if more consumers can get comfortable with how Priceline actually gets such good pricing.

And how will hoteliers react? Given the revenue they are seeing from Priceline these days, they will probably just take a deep breath and keep offering those $65 rates...

Watch the ad:

Friday, January 15, 2010

"Hiltonizing:" A New Verb in Continuing Starwood/Hilton Fight

We've been watching this lawsuit go forward with interest for some time now. As you'll recall, Starwood sued Hilton over two senior executives (Ross Kline and Amar Lalvani) who departed and managed to show up at Hilton with seemingly truckloads of confidential documents relating to Starwood's luxury brands. Hilton fired Ross and Amar and sent the documents back to Starwood but claimed they didn't really appear to be confidential documents. Denizen, Hilton's new luxury brand, bit the dust soon after the first lawsuit was filed. The suit even contains a quote from this blog describing the similarity of Denizen to W at the brand launch - what foresight!

As first reported in today's WSJ, Starwood filed an amended complaint today in New York District Court alledging further wrong-doing by Hilton. Most shocking in the new complaint is the seemingly personal attacks against Hilton CEO Nassetta. Starwood is going for the jugular by attacking the senior management team at Hilton.

We've pulled the document (all 130+ pages of it) and posted it here for your weekend reading pleasure.

But in case you don't have time or inclination, we'll post a few of the best parts of this spectacle below:

It appears that the sheer amount of documents (and copies thereof) were truly enormous. Starwood (with just a touch of drama-queen) writes in the amended complaint:

"Hilton has delivered to Starwood hundreds of thousands of pages of documents and computer files retrieved from Hilton offices and the homes of Hilton employees around the world, and there is no end in sight. Deliveries of documents pursuant to the Preliminary Injunction continue, and documents were received as recently as yesterday, nearly a year later. This mountain of undisputed evidence...."

And many of the documents were sent by "Starwood employees used as corporate spies" recruited by Klien using personal email accounts with cute notes attached to the files like: “fyi, I do not ck this email from work so it is ok to send stuff on.” Obviously, the computer science major who wrote these words didn't quite understand how nothing is really ever "ok to send stuff on"

And here is a great quote from an email from Lalvani regarding a potential W in Thailand: “Here’s an interesting one. . . . I have good connections with the owner. Lets discuss protocol during my transition on deals like this so we don’t miss them but also dealing with the fact we don’t have a lifestyle offering yet. This is going to be fun!!” Fun indeed.

And Hilton allegedly made it easy for all of the team to use the Starwood documents by uploading them onto Hilton's common drive:

“[W]ere you able to retrieve that strategic development list of cities/countries from Amar’s discs? Maybe you sent it and I missed it? We now need it urgently. Could you send to me or show me where to search?”

In response, Swierk informed Mani:
“I asked Joy to put all of those documents on the s: drive so they are all located in s:HPP/HPP Development/W docs.”

And "Hiltonizing" the stolen documents was a top priority:

"Further to our discussions earlier today, I think we need to have your team work with you ASAP on Hiltonizing this and sharing it with the Exec Group ASAP."

Starwood's asks of the Court in response to Hilton's actions are unprecedented; the best of which include:
  • Court appointment of one or more “monitors” to assure Hilton’s compliance with all injunctions and Hilton’s non-use, directly, indirectly or derivatively of any Starwood Confidential Information or information derived therefrom;
  • Euthanizing Hilton’s terminally infected Denizen Hotels brand;
  • Imposing a “penalty box” or “time out” enjoining for an appropriate time period any further development of Hilton’s luxury and lifestyle brands to compensate Starwood for Hilton’s unjust enrichment from its wrongful use of Starwood Confidential Information across all of Hilton’s luxury and lifestyle brands
Starwood is asking for a baby sitter to watch over Hilton and is even suggesting a "time out" - obviously the drafting lawyer has children.

Still, our favorite has to be the request to "euthanize" the "terminally infected" Denizen brand. Again, spectacular drama.

As we mentioned, Starwood is clearly going in for the kill with this - but at what cost we wonder? Lawsuits are not Starwood's core business - hospitality is. If the allegations are true, Starwood is clearly entitled to relief but one wonders if such a nasty public feud is in the best interests of anyone.

Thursday, January 14, 2010 Updates Loyalty Program welcomerewards today announced a re-tooling of their loyalty program, welcomerewards. Welcome Rewards was announced in October 2008 and was (or is) the first robust frequency program offered by an online travel agency. Maybe it was a little too robust.

welcomerewards offered a simple proposition: Stay 10 nights, get one free. Each stay had to be $40 or higher and you could use your free night for up to a $400 hotel stay. In other words, a really good deal.

Today, some enhancements were announced such as extending the expiration of credits and a removal of the $40 minimum rate requirement. (Handy for those $18 rooms in Vegas)
However, the big change was on the redemption side - no longer will members be able to claim a room valued at up to $400.

Instead, will average the room the room rates over the ten stays and offer that amount as a credit towards a future booking. For example, if a customer buys five room nights at $75, two at $200 and three at $100, they would now be eligible for a free night valued at up to $107.50 rather than the previous $400.

We are not totally surprised by this change - the program seemed almost too good to be true when launched - Welcomerewards was a better offering than anything the chain hotels offered through their loyalty programs and certainly the broadest redemption possibilities. Compared to Starwood Preferred Guest, for example, the same spending levels in the example above (for a non-elite member) would have earned 2150 StarPoints - yes, enough for a free weekend night at the lowest of the low redemption categories - but certainly not a $400 value. I doubt that any of the Starwood SPG Category One hotels ever see an ADR of $400!

United Air Feels the Hyatt Touch: Tom O'Toole Named CMO

United Airlines (UAUA) has named travel industry veteran Tom O'Toole as their new Chief Marketing Officer. Tom was previously CMO and CIO (yes, he actually wore both hats!) for Global Hyatt Corporation(H) until his departure last at the end of 2009.

Tom's appointment marks the first move we can think of from Hyatt to United - most industry talent has flowed the other direction.

Appointing a non-airline (albeit a very well versed) expert to the marketing helm at United may be just what United needs to help drive a new course. The challenge, as always, will be in delivering at the operational level what has been promised - we bet Tom's unique blend of operational and marketing experience will be a great help in making that happen.

And here's hoping that Tom doesn't break any guitars.

Wednesday, January 13, 2010

Haiti Needs YOUR Help

A somber moment from our usual glib. The pictures and news reports coming from Haiti are shocking to say the least. North America's poorest country (indeed, one of the world's poorest countries) has been rocked by a brutal earthquake of epic proportions.

I encourage all of our readers to take a brief moment to assess their position in life and consider donating to the Red Cross in order to help the relief efforts in Haiti.

American Airlines has announced a mileage bonus tomorrow for all donations to the Red Cross tomorrow at If that makes the difference, go for it.

I hope that all of us in the travel industry will take a moment to help. Haiti is hardly a glamorous destination of 5 star hotels and private jets - far from it. But the people of Haiti are in their darkest hour - now is our time to shine.

Tuesday, January 12, 2010

Micros Acquires TIG: Now What?

Micros Systems, an information technology provider for both the retail and hospitality businesses just announced the acquisition of TIG Global, a leading interactive marketing company focused on travel. Though Micros has been in the hospitality business for several decades with its Micros hotel CRS and Opera hotel CRS/PMS, their real focus has always been in retail POS systems, leading many to believe hospitality distribution was an ancillary product line. This acquisition may signal a change in that orientation as they follow in the footsteps of SynXis and TravelCLICK in acquiring an interactive services group.

Theoretically, a hotel distribution player with strong interactive services can provide a more complete solution to its customers. While all major, and many minor, CRS providers have internet booking engines (IBEs) that allow hotels and chains to distribute directly to consumers, the quality of a ‘standard’ CRS booking engine varies widely. Further, the number of configuration options required for a generic IBE makes enhancement a slower and more complex proposition. The result is a lot of IBEs that, aside from cosmetics, provide no differentiation for the hotel brands. At the same time, the IBE channel is extremely important to hotels because it is very inexpensive and can theoretically enable the property to really emphasize its brand and USP—assuming the technology and content are there to do it. Having an in-house interactive service means the CRS provider can offer more highly customized standard IBEs as well as the promise of faster and cheaper development of custom IBEs. Customized IBEs that differentiate the brand were in recent years a luxury, but are now becoming a requirement for many hotels.

Another holy grail of hotel marketers (to be potentially deliverable via this union) would be the ability to track SEO/SEM programs from first click through booking and, via the integrated Opera CRS/PMS, down to the folio level. This would give hotel marketers a highly detailed view into the results of their campaigns covering not only the booking but also the spend at the hotel. Ah, but we’ll believe it when we see it.

The pace of innovation on the hospitality side has never been blindingly fast at Micros. We recall the many, many years that elapsed between their announcement of Opera and its first commercial implementation. Still, the acquisition of such a strong player in the interactive community may indicate Micros no longer sees the market for retail POS as its dominant focus. It may be truly setting its sights on the CRS space which, despite a few major players, is still largely up for grabs.

Guest Posted by George Roukas

Monday, January 11, 2010

United Matches Southwest's (and Frontier's) Promo for Colorado Residents

Let the Denver airline wars continue. As we predicted last week, both United and Frontier have matched (and in United, case, upped) the offer that Southwest initiated.

Southwest is offering a free ticket for each ticket purchased. United is similarly offering Colorado residents who purchase a ticket by February 14th a free additional ticket to any North American destination. For customers who purchase a ticket to a trans-Atlantic/Pacific or South American destination, United will offer a ticket anywhere in the world United flies.

Clearly, United is looking to leverage their global heft in the "Denver Wars" - clearly a free ticket to Sydney or Cancun is a lot more exciting than Amarillo. (No offense to Amarillo, of course.)

New Travelocity Deals Pages: Not Your Father's Travelocity

With apologies to Oldsmobile and hoping that our readers can even remember that nameplate, Travelocity has quietly (so far) launched a new deals section that is radically different from the current site. Building off the long dormant and under-utilized Experience Finder, the new Travel Deals "tool kit" section is pretty slick. A far cry from some aspects of the current user experience, these new tools put the consumer in the driver's seat with easy and well thought out features and functionality. However, the integration with the Travelocity mother-ship is nicely done so that the overall integrity of the site is maintained.

Travelocity has done a great job reinventing the age-old flight deals map. I'm an admitted map-geek so new mapping features are always fun to play with, especially when they are done well, which this is.

The new "Deals on a Map" page allows users to easily display recent airfare deals from their home city (which, in a first for Travelocity, actually uses auto-complete to help you input the city name!) to various clumps of destinations such as Ski, Florida, Hawaii, Europe or U.S. domestic.
Each destination is clearly shown with recent flight deals as well as, not surprisingly, the latest air+hotel package deals that Travelocity has put together. I say not surprisingly because, unlike stand-alone air, packages are highly profitable to Travelocity (and all OTAs.) As such, there are plenty of gentle hints to move users towards a package purchase such as only displaying the air+hotel pricing prior to zooming down to the hotel level.

The zoom feature (above) is great which allows users to drill down into a specific region and then into a city to see the latest pricing at the hotel level. Clicking on a specific hotel yields hotel-only pricing as well as a "community rating" (not quite sure what that means unless it is the standard Travelocity user rating) as well as the Travelocity star rating. Also included is a teeny, tiny photo that anyone who remembers driving an Oldsmobile Toronado will not be able to actually see.

Also part of the tool kit is a revamp of the deals page which is now easily reached from multiple places off the Travelocity home page. Given how price sensitive consumers have become these days, this is a great improvement in both functionality and placement.
Best of all, the new deals page finally puts the consumer in control of how they search and define what a deal is. Consumers today are constantly blasted with a bevy of "deals" many of which are not relevant to an individual consumer or, worse yet, not really even that much of a deal.

Travelocity's new page serves up some teaser deals but then allows the user to dive deep into various other promotions and sales that Travelocity has catalogued. Slick tool bars allow users to change destinations, dates and pricing. And, to keep us from going insane comparing all the different deals, there is a cool drag and drop feature that allows users to tag the deal while they look at other possibilities. Not to be left out of social media, Travelocity also allows these deals to be shared on Facebook and Twitter right from this page.

These new features go a long way to improving the consumer experience by exposing deals and then allowing users to make up their own minds about what constitutes a deal. We'd still like to see deals and flights searched in real time so I can input actual travel dates and then explore what options are out there for a specific time period. This would help answer the age-old problem of "I have a three day weekend coming up, I'm cheap and don't know where to go." Oh wait, wasn't that Site59?

Friday, January 8, 2010

Virgin America Really is American Says DOT

The AP is reporting (even before Virgin America has put out a press release themselves) that the DOT has ruled that VA is, in fact, controlled by U.S. interests. Per U.S. law, foreign entities are limited to 25% of the voting rights of any U.S. carrier. (Heaven forbid that Singapore Airlines bought a good chunk of United and actually tried to bring it up to SQ's level!)

This whole ownership issue arose when Alaska Airlines requested the DOT review Virgin America's status as a US carrier early in 2009. Since then, both Alaska and Virgin America have gone back and forth in public regarding this issue.

While Alaska has claimed they are simply trying to ensure that all carriers in the US are on a level playing field (which is fair) one has to wonder how much happier Alaska (and the other majors, for that matter) would be without Virgin America around - not only for the inherent capacity reduction but to raise the flying bar. (Yes, there is a pun there!)

After all, brand new aircraft, great in-flight entertainment and happy flight attendants are something all U.S. passengers should have the opportunity to enjoy - no matter who controls the airline! Cheers to Virgin America.

Tuesday, January 5, 2010

First Airline Bankruptcy of 2010: Mesa Airlines

Yesterday, we discussed the first airline mileage promotion of 2010. Today, we bring you news of the first airline bankruptcy filing of 2010: Mesa Airlines.

Never heard of Mesa? You are not alone, but chances are pretty good you've flown on them at one point or another. Mesa operates ~130 aircraft under the codeshare colors of United, Delta and USAirways from coast to coast. Mesa also operates a small operation in Hawaii linking the major airports there under the go! brand.

Mesa has fallen victim to falling demand and rising fuel costs which have caused the major airlines to cancel contracts with Mesa for codeshare flying.

In November, United announced that they would cancel contracts covering 26 CRJ-200s currently operated by Mesa no later than April of this year. With fuel prices back up and airline yield softness continuing, these 50 seat aircraft have become some of the least desirable aircraft in the skies. Mesa also is scheduled to terminate a similar contract with United for 10 Dash-8 props at the same time.

Mesa is also embroiled in a contract dispute with Delta whereby Delta is attempting to return another 22 regional jets to Mesa.

There are no homes for these aircraft with the majors right now in the current climate. With over 40% of the Mesa Air fleet potentially side-lined in the coming months, one can understand the need for a reorganization.

Will Republic Airways ride in as the white knight to offer DIP financing as they did with Frontier in attempt to further consolidate the regional industry? Republic and Mesa already have a joint venture in Hawaii with go! and Mokulele.

We doubt it, but we know Southwest will NOT be at the table this time...

Monday, January 4, 2010

Southwest Announces the First Bonus Mileage Incentive for 2010

Remember how good business travelers (those that were still flying, that is) had it in 2009? The falloff in business travel brought dogfights to the skies as airlines showered travelers with miles to try and stimulate business and steal market share.

American, United and Continental all offered double status points for not just one period during 2009 but for two separate multi-month periods.

Delta offered double miles to on all flights for American Express card holders and American offered double miles to everyone living in the New York area.

Delta offered 50,000 miles flights to London and the list goes on...

Southwest has fired the first shot in 2010 by offering Colorado residents a free ticket for every ticket purchased. Yes, you have to buy one of the more expensive (for Southwest, anyway) Business Select tickets but then you earn a free one anywhere they fly.

Look for United to match with something similar in the Denver market shortly. And we bet Frontier, not wanting to be left out in the 3-way Denver fight will also offer an incentive as well.

So far, only Colorado residents are benefiting from the continued slump in business travel but we bet more incentives are on the way soon....