April 19, 2004: Online Travel Part 3: Is Bigger Better?

There's a reason millions of people visit general travel sites -- one-stop shopping (last of three parts).

As you read in parts one and two of this series, airline and hotel Web sites provide a lot of loyalty-building, value-added features to encourage customers to book directly through their sites. But what do the all-in-one travel sites do to encourage users to bypass the hotel and airline sites?

Sabre Holdings launched Travelocity in March 1996, and it now is the nation's sixth largest travel agency. On an average day, the site has 13.8 million page views. Travelocity has sold more than 40 million airline tickets since launch, and booked almost $4 billion in travel in 2003. But despite all that traffic, the site still operates in the red -- although Travelocity expects to finally turn a profit later this year.

The key advantage to using a general travel site, says Susan McLaughlin, Travelocity's vice president of marketing, is the ability to comparison-shop a multitude of air fares, hotel room rates, car rentals, cruises and vacations across a wide variety of suppliers.

"Consumers know all of their options in the marketplace via a single source, saving them time in the planning process," McLaughlin says. "We also alert consumers to alternate travel dates and airports that might afford them savings."

Travelocity uses a lot of interactive bells and whistles to snare customers and get recurring business and revenue (all of the online travel sites charge a nominal service fee -- at Travelocity, it's $5 per ticket). Some of these include:

TotalPrice for Cars: consumers get car rental rates that include all taxes and fees, to minimize sticker shock at the car rental counter.
TotalCruise: consumers purchase flights at the time of their cruise purchase, rather than being assigned flights later by the cruise supplier.
Farewatcher: consumers pick five destinations they want to travel to when prices drop below a certain threshold. Travelocity alerts them via email -- and sends roughly 414,000 of these emails daily.
• Intelli-Deck™: displays views of specific ship features, clickable deck plans and cruise reviews by fellow travelers.
Consumer traveler reviews: Travelocity claims it's the only online travel site that posts unbiased hotel and cruise reviews directly from consumers. It also uses the American Automobile Association (AAA) for reviews. McLaughlin says other online travel sites do their own reviews.

Several U.S. airlines formed Travelocity's chief competitor, Orbitz, in June 2001 to gain more control over the rapidly-growing online travel industry. Orbitz says it is one of the top three online travel companies (Forbes.com ranked it the number one travel site in August 2003). Its online inventory comprises 455 airlines, 45,000 lodging properties and 23 rental car companies, as well as vacation packagers and cruise lines.

Maryellen Thielen, corporate and financial communications director for Orbitz, says its search engine is one of the most important features that have contributed to her company's growth. It enables travelers to search more than 2 billion fares and flights in seconds, using search algorithm technology.

"Other online travel sites might offer 10 to 30 fare and flight choices. We can show literally hundreds of options to the same destination, because we rely on inexpensive commodity servers instead of mainframe computers, which enable us to cost-effectively handle a massive volume of data," Thielen says.

Last year, Orbitz enhanced its search engine with three new features:

Flex Search: consumers search flight and fare combinations in a single click that would require dozens of searches on competitive sites. Flex Search is targeted at consumers who have flexibility in their travel dates and want to save money by flying when fares are lowest.
Dynamic packaging: users compare multiple flight-and-hotel combinations at a glance, facilitating the creation of customized packages of air, hotel and other products in one transaction at one bundled price.
Deal Detector: a personalized search tool that regularly checks all flights and fare availability until it finds a match with a traveler's previously specified criteria, then sends an alert to the traveler.

But whether it's an airline site, a hotel site or a general travel site, the ultimate objective is to make the experience as frictionless for the traveler as possible.

Neal Leavitt is president of Fallbrook, CA-based Leavitt Communications, an international marketing communications company with affiliates in Paris, France; Hamburg, Germany; Hong Kong; Bangalore, India; and Sao Paulo, Brazil. He writes frequently on Internet and high technology topics. Contact him at neal@leavcom.com, 760/639-2900.

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