30+ Takeaways from PhoCusWright@ITB 2010

Josiah’s note: Although I was unable to be in Berlin this week to attend PhoCusWright@ITB 2010, Robert Cole of RockCheetah kindly agreed to share his top insights from the event in this guest post.

The PhoCusWright@ITB 2010 conference just concluded and, as always, provided a number of interesting points to consider within the travel industry marketing, distribution and technology landscape.

1)     PhoCusWright CEO Philip Wolf launched the conference with his keynote “Chaos Calls, Navigating the New” summarizing the disruptive forces at play that are complicating the travel industry landscape:

• Disparate Devices & Channels (new operating systems and platforms)
• Strains on Search (evolution of search changes search engine optimization)
• Tapping New Travelers (Look to the Asia Pacific region)
• See Me, Hear Me, Touch Me (new interfaces are predominantly visual)
• Significant Surprise (unexpected new player emerging)

2)     Gene Quinn, Chairman of PhoCusWright then hosted a group of analysts/investors to characterize the investment environment for travel technology companies:

• Investors are looking for recurring revenues, strong EBITDA (earnings before interest, taxes, depreciation and amortization), company growth, long term contracts, differentiated product, and especially, strong management
• Travelport’s failure to float its initial public offering was not about travel, it was about debt – the company was severely overleveraged. Investors are suspicious of big debt.

3)     Krista Pappas of Microsoft’s Bing search engine provided five lessons for travel media:

• Be Authentic (Million dollar homepage worked only once)
• Relentless Measurement & Optimization (TripAdvisor set the standard)
• Be Social (Starbucks deepening already strong relationships with their community)
• Be Opportunistic & Responsive (Ashton Kutcher’s growth to 1 Million – now 4.5 Million – followers)
• Ads are Content (Burger King’s sacrifice a Facebook friend campaign)

4)     David Roche, President of Hotels.com and Venere.com provided a number of interesting points:

• From a financial perspective, Expedia is basically a hotel selling company
• When comparing the commission model to the merchant model, the company discovered it does not confuse the public when selling both models together.
• Roche was also very complimentary of Priceline’s Booking.com, especially how they used Google as a demand source & a method measuring performance.

5)     Rick Seany, airfare guru and CEO of FareCompare.com provided the best statistical factoids, including:

• Ajax based search results pages convert 10-20% better on click-throughs to the checkout page.
• Speed is critical. A 1/2 second improvement in response time generates a 2-4%  improvement in conversion.
• The best time for US Consumers to book is at 3pm on Tuesday afternoon.  Airlines file a large number of fare changes on Monday evening and it takes 1/2 day for the competition to react.  After that, inventory begins to close out as the pricing drives sales volume.

6)     Javier González-Soria, Managing Director of Google Travel Spain spoke on behalf of the organization that starts the vast majority of consumer travel searches:

• YouTube is not only the #2 search engine, but is now also the #2 global web site based on minutes spent on site.
• He also stressed the importance of: always putting the client first, having a consistent global strategy, consider the client as a whole (encompassing all travel personas); base decisions on metrics; and that technology is a means, not an end objective.

7)     Daniel Krisch, Director of Client Services for h2 consulting discussed hotel distribution strategy:

• When comparing US to European hotel distribution channels, he identified a direct inverse relationship between Online Travel Agency market share and the penetration of the market by major hotel chains.

8)     Jean-Louis Richard of Millennium Foundation introduces MASSIVEGOOD. A global, travel centric charity fighting HIV/AIDS, Malaria, Tuberculosis and supporting maternal/child health improvement.

• Providing optional $2 donation opportunity within travel booking process.
• Supported by the World Travel & Tourism Council; Amadeus, Sabre, Travelport, American Express Business Travel, Carlson Wagonlit Travel, Travelocity, Accor Hotels, Delta Airlines, American Society of Travel Agents, Club Med, Travel Corporation, and BCD Travel.
• Launched by Bill Clinton, Ban Ki-moon, Spike Lee, will.i.am, Samuel L. Jackson, Susan Sarandon, Paul Auster, Mary J. Blige, and Dr. Brian Greene.
• For more information, click: http://www.massivegood.org

9)     Norm Rose, PhoCusWright’s mobile technology expert (and I normally don’t use that word often) provided an informative overview of the monumental changes on the mobile horizon.

• Two major forces are driving mobile technology growth: Smart Phone Adoption & 3G network expansion. 4G networks (true broadband on a handheld mobile device) are also coming.  There will be huge travel implications.
• A mobile device is not a phone, it is a converged device (phone, camera, GPS, music player, wallet)
• Benefits of mobile computing: Empower mobile travelers, improve travel efficiency, Build ancillary revenues
• Many emerging mobile trends: a) Point based (geo) search, b) mobile alerts / sensors, c) crowd sourcing, d) augmented reality, e) trust & verification, f) auto update of apps & content.

10)  Lonely Planet CEO Matthew Goldberg defended the resilience of a five centuries old platform – the printed book, and the changes that were in store regarding content:

• Future of the book is about evolving form factors.
• Last year, Lonely Planet ran “hack days” for developers and staff to collaborate & innovate product enhancements.
• Core strategy is to leverage its trusted brand, premium content & relationship with a smart customer community.

In conclusion, my two favorite sound-bites were related to the talkback session following the Lonely Planet presentation.  After TripAdvisor’s Severine Philardeau fired off an opening salvo asking about a divisional £7 Million annual loss in 2009.  (Goldberg politely explained that the loss was not solely attributable to Lonely Planet although the year was challenging.)  The individual sitting next to me leaned over and said “This is awkward, but someone needs to tell Ms. Philardeau that her agenda is showing…”

Mr. Goldberg however, got the last laugh with his off the cuff comment that “batteries never run out on printed guidebooks.”

For more insights from Robert Cole, read his blog: Views from the Corner Suite