Yet Another Hotel Metasearch - Hotelicopter

TechCrunch reports on the launch of the new metasearch, hotelicopter.com, noting that it is the first to provide "Facebook Connect integration, which it can use to power social hotel recommendations and to also let your friends know where you’re staying" as well as cool April Fool's day stunt to get attention.

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The site has a clean interface, allowing users to use sliding bars to narrow down their search results by price, star rating (based on reviews from TripAdvisor), and checkboxes for amenities you might want (internet access, included breakfast, etc). Prices are clearly noted next to rooms, and users can directly book their rooms without having to jump through other hoops.

All in all, it seems to work well, but there just doesn’t seem to be a whole lot distinguishing Hotelicopter from other sites like Kayak. That said, the people behind Hotelicopter clearly have a good sense of humor (and marketing), so they may be able to make a name for themselves in the crowded space.

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Microsoft Bought Farecast!

In my post earlier this week, I speculated that the secret buyer for Farecast might be:

Kayak/Sidestep (40% chance)
Google (30% chance)
NewsCorp (20% chance)
Others (10% chance)

Well according to the Seattle PI which broke the original news about the purchase, the confirmed buyer is Microsoft. There goes my predictive ability. According to them, a Microsoft spokesperson said:

"We are pleased to announce that we have acquired Farecast, a Seattle-based smart travel search engine, and we welcome them to the Microsoft family. Farecast has been a partner of ours on MSN Travel and we look forward to working closely with the Farecast team to incorporate and apply its technology in new and interesting ways."

There is also a blog post from Hugh Dean confirming this.

I should have seen this coming since Farecast and MSN have worked closely. See this press release last year:

MSN and Farecast.com Launch Free Airfare Predictions, Planning Tools

But I thought that after Microsoft sold off Expedia to InterActive Corp years ago, they were getting out of the travel biz. I guess that was before their OSG (Online Services Group) was re-energized by Ray Ozzie, Microsoft's Chief Software Architect.

So it looks like Microsoft is taking out its checkbook and getting into the consumer space even more. And purchases like this will certainly push Yahoo! shareholders into a loveless marriage with the Ultimate Geek!

The game just gets more interesting every day.....

Farecast sold to unknown buyer at USD75 million value

A) The only source of news for this (at the moment) is the Seattle Post Intelligencer. They seem to have gotten it first hand but no more info.

B) The CEO, Hugh Crean , declined to comment on Sunday.

C) Speculations - echoed by Hotelmarketing.com - is that the "one natural choice would be Expedia"

Well that was it for any "news", so let's spin up the rumor mill:

1) Expedia, Orbitz, and Travelocity all would love to get their grubby hands on this web property, but I think USD 75million is cheap. The FareCast founders would demand a higher price for their scruples. So I do not think anyone of them managed to charm this fair maiden.

2) Right on the FareCast website in the About Us section: "We Support Suppliers... We are committed to supporting airlines and hotels. We strive to help our suppliers lower distribution costs and build customer value." So going with an OTA is like "going to the Dark Side."

I think there are only two suitors that FareCast would not mind dancing with:

Firstly, the Kayak/Sidestep merged entity that I blogged about here and here. Together, they would make a potent force. What Kayak/Sidestep missed in their offering is what FareCast has: an algorithm and data to PREDICT fares. What a ménage à trois this would be. There is no inherent conflict of philosophy (be nice to suppliers). The three together would be a powerful meta search engine indeed. Powerful enough to demand ... say.. USD 1.5billion or so from the second possible suitor..... I'll give you a hint:

"Don't be evil."

Yep, if it's not Kayak/Sidestep, then it may very well be Google. FareCast's prediction engine is quite attractive and perfectly in line with Google's overall direction to foretell or create the future. The religious belief of "Don't be evil" can easily tie in with "We Support Suppliers" and wouldn't Google want to work directly with suppliers too? And what start-up would not want to join Google's work force and enjoy all the benefits that are tailored to this Gen-Y workforce?

Lastly, there is a "dark horse" that may be involved here. Remember bezurk.com? Remember that they "received investment from and sold a minority stake to News Digital Media, the digital media arm of Australia-based News Limited." And News Limited belongs to...

... you guessed it...

News Corp. Rupert Murdoch is gettin' in the game people. He can't let Barry Diller have ALL the fun with the travel industry. This charming, genteel old man may be able to convince the fair maiden that he supports her naïve belief of "We support suppliers", as New Corp does not have stake in any OTAs. We will have to see...

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Well that was a bit of fun speculation. I would say 40% chance that it is Kayak/Sidestep, 30% chance that it is Google and 20% chance that it is News Corp. The balance 10% are OTAs and whatever other flotsam and jetsam (i.e. vulture venture capitalists) out there.

Kayak Buys Sidestep (part 2)

So within a few hours of my last post in which I mentioned I thought the meta search market was small when you look at the revenue and the players, hotelmarketing.com puts out a positive spin on this news:

"The combined company will be profitable with $3.5 billion in transaction volumes and will be the fifth-largest online travel operator."

This echos Kayak's own release: "This transaction combines the two biggest brands in travel search, which would make Kayak.com and its affiliate sites the fifth largest travel brand, with more monthly unique visitors than Priceline, every airline except Southwest, and every hotel and rental car brand"

See full article here.

My first thought was "Wow! They do that much volume? I must really have misread this industry. I need to rethink what I said in my last post." But the more I thought about it, the more I stand by my initial opinion...

Yes the Kayak.com and Sidestep.com merged entity will have USD 3.5 billion in volume through their site per year. But their business model is primarily pay-per-click advertising plus some commission sharing deals with OTAs and travel suppliers. You can not compare that model to an "online travel operator". It is NOT an "apples-to-apples" comparison.

If you were to do that, then Google should also be an "online travel operator". Yes THE Google. The same Google that handles 60% of ALL searches worldwide.  So that would mean Google would have transaction volumes in the travel industry of something like USD 500 BILLION.   That's one hell of an online travel operator!

And consider the path of a user when making a booking via a metasearch:  Google to meta-search to OTA to supplier.  This same "volume" is counted two or three times.  Which is another problem.

We just need a reality check.  Meta-search engines are neither an OTA nor are they search engines.  They are just something in between.  So you can't throw out "Billion dollars in volume" and hope that people take that at face value.

Kayak Buys Sidestep!

Alright so this not new news but it did happen just before Christmas when most of us have "turned off" for the holidays. Quick summary: Kayak raised $196 million from a bunch of vulture caps then used the money to buy Sidestep for something like $180 million. See here on TechCrunch.

What's interesting to me is this:

Kayak's revenues is supposed to be around $50million a year and that of Sidestep is $35million. They are the two largest metasearch engines and are followed distantly by Mobissimo and Yahoo's Farecast. What does this tell you?

1) The meta search engine market is not that large. Right now it must be around $120million a year. Compare this to other OTAs like Expedia and Orbitz with billions of dollars in revenue each, this industry is but a small sliver of the pie.

2) And this sliver of a pie is actually consolidating with the two LARGEST players merging. So what is going to happen to the smaller players?

3) Get acquired or die is what it means. The smaller guys want to get bought. The larger guys also want to get bought. So Kayak-Sidestep's new investors are hoping that they can sell their $100million revenue beast to the likes of Expedia, Orbitz or InteractiveCorp for something like $1.5billion (15 times earnings). Or perhaps Google might decide to get in the game.

4) But these guys are google's clients as they buy a lot of PPC keyword ads. Google may not want to be seen as a monopoly if they own both the advertiser and the medium.

Anyhow, good luck to all the smaller travel meta search engines out there like bezurk.com and sprice.com and qunar.com....

Numbers of Online Travel Customers Are Declining

According to the NY Times, "Travel Sales Still Growing, but Numbers of Customers Are Declining". See here.

It certainly sounds alarming, but maybe because alarming sells newspapers. But let's check out the highlights....

1) According to a recent survey of more than 60,000 Internet users in the United States by Forrester Research, a technology consulting firm, 9 percent fewer people booked travel online this year than in 2005.
JOE> But outside the US, the trend is the other way around. Europe is not yet as mature as the US. The Asian (with 3 billion people) are still getting online and are just beginning their shift from offline to online.

2) PhoCusWright found that among travelers with access to the Internet, the percentage who usually book travel online dropped to 62 percent at the end of last year from 68 percent in 2005, while those who say they usually arrange travel offline increased to 31 percent from 25 percent during the same period.
JOE> Interestingly enough, PhocusWright also published a report showing that between 2005 and 2006, less % of people were Shopping & Buying Travel Online. Increasing were people who Shop& Buy Travel Offline and people who Shop Online & Buy Offline. See below.


3) Industry revenues are still strong, mostly because those consumers who book travel online are doing more of it. According to the Forrester survey, the average online booker said he or she would spend 50 percent more on travel this year than in 2005.
JOE> So what does this mean? People who are online savvy are booking more and people with lesser patience or lower attention span are booking less? Are older people dropping off and younger people staying on and booking more?

4) Online travel executives say part of the reason for the dearth of innovation is that the online travel reservation systems are largely extensions of technology built in the 1960s.
JOE> Are we talking the GDS, PMS and CRS? Some of that is true enough, but the consumers are filtered and do not see a lot of that technology any more with middleware and web applications in the middle. On the contrary, meta search engines, like bezurk.com, and sidestep.com are giving consumers a lot of insight that they never had before.

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But really, the marketplace is overcrowded with OTAs and their affiliates and their spam. Consumers are becoming disenchanted with the intermediaries who are not able to provide the level of customer service that a supplier can. For example, if you book with an OTA and your friend booked directly with the supplier, who do you think has an easier time change or amending a reservation?

It would be very interesting to see if brand direct bookings have increased because consumers find it easier and more reliable to book direct rather than with an online travel agent.

Also, how many of these people who stopped buying online still research online? Looking at the destination and then finding out what is a "good" rate. They may not book online, but it would be pretty stupid not to at least Research online...

Asiatravel.com partners with travel search engine Bezurk.com

Good news for the Asia travel meta search sector.

I had AsiaTravel's Boh Tuang Poh (Executive Chairman) and Bezurk's Craig Hewett (Chief Marketing Officer) on my HEDNA OTA panel two weeks ago (presentation here). Craig mentioned that they were working closely together and hinted at something further. So what was launched was (See Bezurk's press release here):

"Asiatravel.com, the pan-Asia total travel reservation service and Bezurk.com, Asia Pacific's leading travel search engine today announced a marketing partnership as part of which Asiatravel's hotel and flight prices will be integrated into the Bezurk travel search which will expose Asiatravel to a large new audience."

This will take advantage of Asia Travel's instant online confirmation for air tickets (see their PR piece here).

Bezurk also hinted that they would soon relaunch its brand into a "four-word" name. Something to compete with ... say... Zuji.com. Anytime now...

Shockwave Flash vs. Javascript

Always a fun debate to have... (for us geeks that is).

On wiwih.com, a guy from TVTrip.com - a meta search engine out of the EU - was saying that "I just dont get it: most of 'cool flash effects' can be made with Javacript."

So here's my reply:
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New Javascript apps needs to be tested thoroughly to make sure they are compatible with all browsers and don't break up the page. Flash is - for lack of a better phrase - "self contained".

Functionally, Flash can do as much as Javascript if you know how to use ActionScript well (which is kinda like Javascript in any case).

Javascript is AJAX; the buzz word for the last 2 years. I see that your site - TVtrip - uses that extensively, as a Web 2.0 should. :-) AJAX is a better way to handle large amount of data streaming in. I am planning to use that for our booking engine interface next year.

Flash is easier to develop. Yep, any web agency can whip up a flash anime in a ... flash (hehehe). But most of them have very limited Javascript expertise beyond select boxes.

I noted that you use Flash for your destination map on your homepage as well, so functional flash has its place. But obviously once you hit the Google Maps, it's Javascript and AJAX or the highway.
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For the new Millennium & Copthorne site, we use Flash for the promotion banners on the main country homepages. However, if you look at the bottom, there are 4 slider bars. When you click on them, they slide up and displays info relevant to that slider tab. This is done using javascript layers. Each layer is like a new page and can have any components including Flash and video.

.... and probably NOT very SEO friendly either. You just can't have your cake and eat it too.

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