Saturday, 14 November 2009

Prelude to PhoCusWright 2009

I leave tomorrow for Orlando, Florida (my idea of hell, although it scarcely matters since all my time will be spent at the conference resort, the cheaper hotel where I'm staying, and in a rental car going back and forth between them on Orlando's miserable failure of a so-called transportation "system") for the annual PhoCusWright conference of travel executives. Then I'm on to Boston for a very different but equally high-profile and forward-looking travel event with an opposite noncommercial focus.

The PhoCusWright Conference is always fascinating. There's a barrage of spin, but what travel executives say to and in the company of an audience of their peers is often more honest, and certainly more revealing, than what they say directly to the travelling public. As an event that's been around since just a few years after I started writing about travel, it's also an excellent barometer of travel industry trends and buzzwords.

Before I head for this year's big event, however, it's time to catch up on some unfinished business from last year. Some of my most important stories from PhoCusWright 2008 couldn't be written at the time, because of lingering questions or products and services that weren't yet available. Where do they stand today, on the eve of PhoCusWright 2009?

Sabre's "Attribute Based Shopping"

By far the most promising presentation at the daylong "Travel Innovation Summit" last year was the demonstration of what the Sabre CRS calls Attribute Based Shopping . Sabre VP of Product Marketing Kyle Moore used mockups of Travelocity screenshots to show how Sabre planned to enable subscriber travel agencies -- online travel agencies like Sabre-owned Travelocity, or offline agencies -- to display prices for airline tickets that include supplemental charges for "unbundled" services like checked bags, preferential seating, eligibility for frequent flyer mileage.

To airlines, "A la carte pricing" is an opportunity for merchandising, upselling, and incremental revenue. But while business travellers might see it as nickel-and-diming, it can be a good thing for budget travellers who can get a slightly cheaper ticket if they are willing to forgo the frequent flyer mileage credit, brown-bag their inflight meal, and sit in the least desirable middle seat.

Like it or not, this sort of pricing pioneered by Air Canada is being adopted by increasing numbers of airlines, and makes price comparisons more and more difficult. If I know that I am going to be checking two bags, I want to tell my travel agent (online or offline) that fact, and have them tell me which ticket would be least expensive, including the charge (if any) for two checked bags.

That's not rocket science, and is an absolutely standard e-commerce model that's the norm in any other product or service category. Rank prices on eBay, and if you are signed in or specify your zip code the default display ranks offerings by price including the charge from each seller for shipping the item to your location.

Sabre's demonstration at PhoCusWright 2008 promised the most significant breakthrough in airline ticket price comparison and genuinely inclusive price displays in at least a decade. I've been talking about this since well before the publication of "The Practical Nomad Guide to the Online Travel Marketplace" in early 2001. But no CRS and no online travel agency yet offers this functionality.

While Sabre displayed only static images on stage, Moore told me that the Travelocity screenshots in his presentation represented "running code" that he expected would be deployed across "all channels" of access to Sabre in 2009.

A year later, has that happened? No. None of this has yet been deployed anywhere. When I check in with Moore last week, he said that, "We will release our Phase 1 of Attribute Based Shopping this month. This will create a calculator across the vast majority of airline reservations created through Sabre.... It is only a few weeks away."

If that's true, we should find out at PhoCusWright or very soon thereafter. But Moore also said that the level of functionality he demonstrated last year is no closer to delivery now than it was then: "The features that I showed in the working prototype based on Travelocity is likely a mid-2010 deliverable."

Moore attributes the delay to changing the system to rely on fees filed with ATPCO (Air Tariff Publishing Co.) in standard form, rather than entered into the system from separate sources: "Getting to the longer term vision -- fully incorporating fees into the shopping result set across all channels -- is still a few months away, as we have engineered it in a way to work for the longer term (inclusive of the fees from ATPCO OC filings in addition to what we gather ourselves), as opposed to something short term that doesn't address the ATPCO aspects."

That could mean a system that includes more airlines' fees, but it could also mean a more limited Sabre CRS toolkit for agencies that want to better optimize price comparisons for consumers by incorporating attributes and typies of fees that aren''t going to be filed with ATPCO.

Currently CRS's and travel agencies have tools that permit yes/no filtering. "Show only flights from SFO" or "Show flights from SFO or OAK"; "Show only AA" or "Show all airlines". As of now, there isn't a single airline ticket price comparison site that allows even the crudest sort of weighted rankings, which are what purchasers really want.

I'm willing to fly from OAK if it's at least $20 less than SFO, so why can't I just specify that once in my user profile, and thereafter have the default rankings of OAK flights incorporate that $20 negative weighting? I prefer frequent flyer mileage credits if, and only if, they are worth more than the price difference. Why can't I have AA flights ranked as though they were 2 cents per mile cheaper than other flights, to account for what I estimate as the value of the AAdvantage miles? And it would be much better to see this implemented at the CRS level, and available to all travel agencies as the new norm, than to see it developed as a proprietary feature of a single online travel agency.

Moore convinced me that this is (somewhat) more difficult technically than it seems at first glance. But it's still not rocket science, and I remain convinced that the reason it's not yet available is that it so clearly serves travellers' interests more than those of airlines. And, critically, online travel agencies -- who have a choice -- continue to choose to work primarily as agents of travel services providers rather than as agents of travellers.

Let's hope this isn't still vaporware at PhoCusWright 2010.

"Green" travel

PhoCusWright 2008 included a disappointing workshop on "Green Travel". It's an important issue, but as the table of contents from PhoCusWright's research report on the subject makes clear, it was conceptualized entirely as a marketing question: are travellers willing to pay more for travel services that they believe are more eco-friendly?

There was a little discussion at the workshop about environmental sustainability as an operational rather than marketing issue, but no consideration at all -- until I brought it up -- of environmental impacts and limits as part of the economic environment which travel industry managers, planners, and analysts ought to be taking into account.

It's one thing to recognize that peak oil and increased energy prices will make long-haul travel more costly. It's another thing to see that it's much harder and more costly to substitute renewal or low-impact energy source to propel aircraft than surface vehicles. But it's not a political but a pragmatic statement that air transport is going to get dramatically more expensive relative to other modes of travel, as a result of oil depletion, carbon taxes, and/or emissions trading charges. (The EU has already adopted an emissions trading scheme that includes aviation, for example.) The end game in green travel for industry executives and investors is to figure out how that will impact patterns of travel and travel spending, and which companies will be winners and losers.

PhoCusWright had difficulty finding corporate sponsors for a session on environmental issues for the travel industry at last year's conference, and this year "Green Travel" is entirely missing from the conference agenda. I take that to mean that the travel industry still isn't making rational economic plans for the future, or investment decisions that factor in peak oil production. PhoCusWright prides itself on its forward-looking statements and the accuracy of their crystal ball, so it will be interesting to see for how many more years they let the industry keep its head in the sand on this issue.

Blogging from within and without

Last year's conference, for the first time, included a workshop on blogging. Unfurtunately, it was sparsely attended other than by bloggers ourselves, leaving us mostly talking to each other about what we wanted to say to those who didn't show up -- especially the travel marketers who see blogs and other social media as part of their sales team and information distribution channel rather than as either journalists or sources of product and service feedback to their operations and support (rather than marketing) departments.

(For any publicists, marketers, or salespeople reading this, I've recently added a How to pitch me page to my Web site, which I recommend you read before you contact me. I'd welcome feedback from p.r. people as well as from bloggers and other journalists.)

The collective message of the assembled bloggers was that travel services providers would get more out of blogs and social media (and their relationships with bloggers) if they thought of these tools as an ear trumpet rather than a megaphone. You have plenty of other channels for broadcasting, few other channels for listening to what your customers are saying -- about you, about your competitors, about what is and isn't working, and about what they want.

There''s another bloggers' summit at PhCusWright this year. I'm eager, if not overly optimistic, to see if the industry's understanding of our role and how they can benefit from it has progressed.

See you in the Orlando!

Link | Posted by Edward on Saturday, 14 November 2009, 11:57 (11:57 AM) | TrackBack (0)
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