Travel 2.0 vs Search Engines – Where is your Travel traffic going to come from?

With the emergence of Travel 2.0 services and the current reliance on Search Engines for traffic it is becoming interesting on where a Travel Seller should focus their effort and whether Travel 2.0 services are going to be more effective than the generic Search Engine.

There have been recently some interesting articles relating to this topic which emphasise the interest in this area and most are saying that the Travel 2.0 applications are and are going to be more effective than a generic search engine.

Hotel Marketing: UK searches favor travel 19th September 2007
Britons online are most likely to be searching for travel deals, social networks or reference information through sites like Wikipedia and Yahoo! Answers, says Nielsen//NetRatings.

Hotel Marketing: The role of search engines in a Travel 2.0 world 17th September 2007
Will online travel consumers abandon Google as a travel planning and research tool and shift their attention to Web 2.0 sites such as TripAdvisor.com and social networks like YouTube.com?

Travolution: Consumers of all ages seeking advice and tips from review websites 20th September 2007
The power of independent travel review websites is finally being realised as consumers increasingly turn to them for advice and tips about products and services.

I have tried to work out whether the generic Search Engine is more effective than a Travel 2.0 service. The actual effectiveness is quite hard to measure as most travel companies keep conversion ratios and cost per acquisition under wraps, however there is a way using Hitwise to work out the where the main traffic each of the top travel websites comes from.

The view that I gained from Hitwise was that on average across the Top 50 Travel Sellers in the UK the source of website traffic 40% come from Search Engines and 6.9% from Travel 2.0 services. This across the Top 50 Travel Sellers has been relatively consistent over the past 12 months. For all definitions see bottom of page.

Based on the average across the Top 50 Travel Sellers and consistency of the sources of traffic 40% and the growth of the Travel 2.0 services such as Travelsupermarket it would suggest that these services are not at the moment going to overtake the Search Engine.

When I look into the detail of some of the larger Travel Sellers mostly the percentages are exactly the same, but in a few it is very different and those Travel Sellers must be adopting an alternative approach.

The first being Expedia which on their Hitwise Clickstream is seeing a steady decline in Search Engine traffic and an increase in Travel 2.0, so for the month of August 2007 the percentages were 31% Search Engines and 10% Travel 2.0.

The second is Opodo.co.uk which has over the past 12 months had a decline and increase in the Search Engine to end up back at 25% and a huge increase in Travel 2.0 from 16% to 14%.

The sources between Expedia and Opodo’s Travel 2.0 traffic are different, Expedia relying on Trip Advisor and Opodo on Cheapflights and Travelsupermarket. Interestingly Expedia own Trip Advisor.

It could be said that it was a real clever move that Expedia Inc. bought Trip Advisor I guess as security for future distribution and probably more cost effective distribution. Opodo on the other hand are probably trying to buy market share which will cost them or that they know something that all the other Top 50 Travel Sellers don't know about.

Which Travel Seller will buy which Travel 2.0 next!

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Definitions:

The Top 50 Travel Sellers are defined by Hitwise traffic rankings and include Travel Agents, Online Travel Agents, Tour Operators and Flight Consolidators.

To define a Search Engine, I am going on the base of a generic sector independent search such as Google, Yahoo, Windows Live, AOL, Dogpile, Orange and Ask. There are 40 Search Engines used to gain the % figures above.

To define a Travel 2.0 service, I am categorising travel specific media, travel social, aggregator services and meta search services. Examples include Trip Advisor, Teletext, Cheapflights, Travelsupermarket, Kelkoo Travel, Yahoo Travel, Travel Mail and Holiday Watchdog. There are 26 Travel 2.0 services in total.

Both the Search Engine and Travel 2.0 categorises used cover the most of the traffic which a top 50 Travel Seller is getting.

What type of Travel Company Creates Holidays / Vacations?

Tour Operators - Yes
Low Cost Carriers (LCC) - Yes
Scheduled Airlines - Yes
Travel Agents - Yes
Online Travel Agents - Yes
Flight Consolidators - Yes
Bed Banks - Yes

This hasn’t always been the case…. 10 years ago it would have been only Tour Operators.

We can confirm that the LCC are now firmly in the game of selling holidays with EasyJet recently launching their online dynamic packaging system and Jet2 launching Jet2Holidays with a joint venture with Steve Endicott. Other Examples: XL.com

British Airways as a Scheduled Airline has been providing holidays for quite some time as a separate brand BA Holidays, however it seems now that most airlines offer the ability to sell holidays. Other Examples: Qantas, Air NZ, American Airlines, Emirates Airlines

We can confirm that there are many Travel Agents with and ATOL licence and are putting together their own holidays. Examples: Thomas Cook, Hays Travel, Direct Line Holidays, Global Travel, TravelRepublic

We can confirm that Online Travel Agents are providing holidays with Expedia, Travelocity and eBookers all providing the facility to build your own holiday online and also all hold an ATOL licence. Other Examples: Lastminute.com, Orbitz, Opodo

We can confirm traditional Flight Consolidators such as Airline Network, aka Gold Medal sell holidays and hold an ATOL licence. Other Examples: Dialaflight, Trailfinders, Travelmood

We can confirm that most Bed Banks have been acquired by travel businesses that sell holidays or have been already part of a business that sells holidays. Examples: Med Hotels/Lastminute.com, Somewhere2Stay/Cosmos, LateRooms/FirstChoice,

Does this mean now that we could categorise Tour Operators, Airlines, Travel Agents, Online Travel Agents, Flight Consolidators, Bed Banks into one thing a Travel Seller?

This is a true confirmation of the travel industry change. This is taken from a UK slant but I know is not far off a global picture, especially where air travel is a component of the holiday.

There are underneath differences between each Travel Seller, as some companies own the airlines, some have their own hotels or commitment and some purely virtual based on no commitment and commercial deals.

The one thing that you can be sure of though is that the consumer won’t know this, so when they are looking to go on holiday / vacation it may be confusing, but "boy, do they have a choice!"

Travel Technology Systems - Are they really all the same?

As you can imagine being the eCommerce Director of Comtec (a leading travel technology company) that we keep an eye on the competition, and that is exactly what I do. But what is interesting if you look at the product of the key top travel technology providers, you will see that they on a quick glance they say they do the same thing.

All say they integrate into multiple external suppliers, hold inventory, multi-channel etc…. and have good diagrams on their websites to highlight this.

I know though that underneath the covers they don’t, all are slightly different with functionality moulded over the years by their customers.

There is one common trait through them all though, and that is that the architecture structure of every system looks the same (well similar).

The common parts of the architecture consist of the following 3 layers…..

• Selling System Layer


• Business Rules Layer


• Aggregation Layer

All call their layers something different, but they all do the same thing as described above, so don’t get too confused when looking at the various products diagrams and say they haven’t got an “Business Rules Layer”

It is encouraging in some way that all the major providers are doing something similar and I would say technically logical.

Some examples….

Datalex OpenJawComtecAnite

The key thing though as I mentioned above, is that under the bonnet, deep in the engine functionality they definitely don’t all do the same thing, and so when looking for a technology product/partner you need to make sure you do lift the bonnet and do a full MOT.

Second Look @ Second Life

Recently I noticed that the number of people subscribed to Second Life had grown enormously in the last 5 months and I thought it was time that I had another look.



As it happends, it is not all that it seems....and thus why I thought that it would be good to write this up for anyone that is looking to use Second Life as an eCommerce distribution channel for the Travel industry.



Published Figures:





Our Travel.co.uk Second Life presence does not at the moment drive traffic to the main website Travel.co.uk and the major brands that have have invested in Second Life such as STA Travel, IBM, Microsoft, Playboy, The Weather Channel, Nisson are only clocking up 10,000 weekly visits between them all - see Tateru's Mixed Reality Headcount for more details.



This is supported in articles that I have read in .Net (Sep Issue) titled "Lonely Planet" and Wired (Aug Issue) "Second Life - don't believe the hype".



Frank Rose from Wired based on published figures in June said, "According to Linden Lab, the company behind Second Life, the numbers of avatars created by distinct individuals was closer to 4million. Of those 1 million had logged on in the last 30 days, and barely a third of that total had bothered to drop by in the previous week."



If I have got my figures right, in July 2007 there was 12.5m Linden$ = 46K US$ traded/spent in Second Life. (Linden $ is the local currency in Second Life and the exchange rate is 266L$ to 1 US$). Since 2006 there have been $7m US dollars worth of transactions. These numbers are not huge, compared with the millions that are spent online every day online.


IBM still seems upbeat with a press release on the 23rd August 2007 stating that they are going to invest more; "IBM sales representatives in Singapore, Malaysia and Australia will from Thursday staff the company's virtual Business Center in Second Life".




There are now other online virtual worlds emerging such as Entropia Universe which I have tried, however still much in its infancy, with the download size and clunky software probably will stay in it's infancy.


Second Life accounced at the beginning of the year that is going to make it's technology open source with continued commitment to building the Second Life Grid as an open, extensible platform for development, rather than a closed proprietary system. This I guess is trying to follow the Facebook trend of allowing developers to create many applications that can be used with Facebook and thus embedding itself into ever user.


All in all, I think that Second Life is a very interesting medium, it has some really interactive 3D meeting/communication methods which I'm sure will used/copied by some of the 2D social market applications such as Facebook, MySpace or LinkedIn. I think that time will tell, but I have a feeling that probably Second Life will in time become Second Best.