World’s Tallest Hotel • Booking.com most Profitable • Airfare Transparency • ICANN is Broken • Room Key • Expedia Pay-at-Checkout Controversy • OTAs Must Pay Retail Taxes • HotelTonight Acqui-hires PrimaTable • More Hotel Lock Hacking • Travel Wikis • Remote Presence Avatar • Travel Briefs • Travel Aspirations
World’s Tallest Hotel Scheduled to Open in Dubai
I recently reported on the opening of the highest altitude Marriott hotel, located at 11,200 feet in Cusco, Peru. Now along comes the world’s tallest hotel. At 355 meters (1,164 feet), the JW Marriott Marquis Dubai will be the world’s tallest dedicated hotel building when it opens in Q4 2012.
Cool looking place, so I figured why not see how much it would cost to stay there? Sure enough, you can book a room at Marriott.com (but not through Expedia or Priceline sites). Rooms start at about $327 (US) and top out at about $6,807 per night for a 4 night stay in February 2013… On second thought, perhaps I’ll stay at the 4/5 rated Premier Inn for $52 instead.
Priceline’s Booking.com Purchase: Most Profitable Travel Deal of the 2000s
Tnooz’s Sean O’Neill delivers an excellent report on how Priceline’s acquisition of Booking.com moved Priceline profits from $10 million in 2003 to $1.1 billion in 2011.
Airfare Distribution Transparency
Writing in Skift, Dennis Schaal editorializes on a proposal from the group Open Allies for Airfare Transparency, which includes GDSs and OTAs among others. The group wants the U.S. Department of Transportation to require that airlines distribute all their seat and bag-fee information through GDSs. The article correctly points out that GDSs have been slow to innovate and modernize their data interchange technologies. Schaal says that airlines shouldn’t be forced by a government mandate to share information.
This issue could be resolved by convening a group to set data interchange standards. Standards organizations are widespread and effective in other technology sectors. The reason you can read this equally well on a Mac, PC or Linux computer is that internet and world-wide web standards have been agreed upon by groups made up of representatives from many firms and organizations.
The past failings of the GDSs are no excuse to allow airlines to realize excess rents by obscuring information from consumers. Airlines should compete and prosper on the quality of their product, not on their prowess in hindering comparison shoppers.
Covering the same story, Tnooz writer Nick Vivion argues for transparency. It’s great that we have two quality travel-tech news sites to shed light on stories from different perspectives.
Meanwhile, Google and others are demonstrating ways to include baggage fees in travel search results even without the cooperation of the airlines.
In a related story, the DOT fines British Airways $250,000 for not fully disclosing fees and surcharges.
ICANN is Broken: Booking.com the only Applicant for .Hotels Top Level Domain
I was taken aback to read that Booking.com was the only applicant for the .Hotels top level domain (TLD) and thus will likely get it. Several other companies have similarly been the only applicants for other new TLDs (e.g., Google for .Fly). ICANN’s process for allocating the new top level domains should not take namespaces that could have been shared for the benefit of thousands of public and private organizations. Instead ICANN is giving monopolies to a few favored rich applicants. Contrast the outcome of having a single private owner of the .Hotels TLD with that of the 6 year old .Travel domain. As I recently wrote, lots of great .Travel names are are available that could be used by thousands of different organizations. By contrast, .Hotels will be fully controlled by Booking.com and its parent Priceline. It’s as if we sold our national parks to private bidders who were then free to put fences around them.
Room Key Hotel Site is Convoluted
Writing at travel news site Skift, Dennis Shaal says that hotel-chain-owned booking site Room Key has a convoluted marketing and booking strategy. Its primary marketing channel is pop-under ads on each hotel chain’s website. If a customer actually engages with the pop-under and navigates to Roomkey.com, the customer will interact with Room Key for a while. If the customer then clicks on a “book direct” button, the customer is taken back to a hotel chain website (which could be a different site than the first site). So customers potentially have to navigate three different user experiences. I presume that proportion of people who start the experience, go through three different sites and then buy (i.e., the conversion rate) can’t be nearly as good as for a single site.
I decided to try the experience out for myself. I started at the Marriott.com site, entered a location and dates and clicked the Find button. Sure enough, a Room Key pop-under launched under my main browser page. I switched to the Room Key pop-under and viewed several hotel rooms and prices. I then opened another browser window and searched the same location and dates using Hotels.com.
A statement on Roomkey.com says “You should feel uber-confident that the rates you’re looking at are the best ones out there.” My advice is: if you want to maintain a feeling of über -confidence that Room Key has the best prices, don’t look at online travel agency (OTA) sites. It didn’t take me long to find a lower price. Hotels.com listed an identical room in the same hotel as Room Key for $75 instead of $85.
Other than price, one of Room Key’s arguments is that unlike OTAs, Room Key bookings let you earn hotel loyalty program rewards. The problem with that argument is that the entire raison d’être for Room Key, from the customer standpoint, is to help you find a room somewhere other than your first-choice hotel chain. You would have to participate in every Room Key partner’s loyalty program frequently enough to earn significant rewards to make it a real advantage.
The real reason for Room Key’s existence is that the participating hotels would like to avoid paying OTA commissions wherever possible. As I’ve argued before, the hotels do get something for those commissions. Expedia and Priceline combined paid about $1.4 billion dollars on Google advertising last year. The hotels aren’t likely to do that. Expedia Inc. operates in more than 60 countries using over 100 branded points of sale that usually accept the local currency. Few if any hotels are marketing their rooms in that many places and currencies. The key for hotels is to manage a mix of distribution channels. It’s simplistic to paint OTAs as the enemy. Room Key may recapture some revenue for hotels, but it will never replace everything OTAs offer.
The Skift Article on Room Key’s convoluted strategy:
In a piece that appeared a few days later in response to the Skift article, Tnooz write Nick Vivion casts Room Key in a more positive light and includes an interview with Room Key CEO John F. Davis III.
Meanwhile, HotelNewsNow calls Room Key’s success into question, reporting that shifts from hotel chain direct bookings to OTAs have increased since Roomkey.com came online. At least one of the founding partners is not impressed, and hotel marketing expert Larry Mogelonsky, who I greatly respect, says “If you have an inferior product, you can’t hope to win.”
Hotel Management Group Claims Expedia Pay-at-Checkout is Costlier for Hotels. However, the Analysis is Incomplete
Hotel Asset Value Enhancement (hotelAVE) says that Expedia’s Traveler Preference program shifts credit card fees from Expedia to hotels and imposes higher royalties on hotels. hotelAVE claims this could result in about $20 million in collective annual profits being moved from hotels to Expedia. However, hotelAVE is hardly an impartial analyst and discounts the fact that many of the bookings made through the Traveler Preference program represent incremental revenue from new customers. By delivering a bigger pie, Expedia is able to take a bigger piece for itself and possibly for hotels too. The hotel analyst says the incremental demand is “hard to forecast.” Expedia says it has observed the incremental revenue and respected travel research firm PhoCusWright agrees that there is some validity to Expedia’s claims. Hotel interests frequently raise the canard that OTAs are greedy organizations that hurt hotels. Their claims and analyses too often lack rigor.
HotelNewsNow has an article with more depth on hotelAVE’s analysis. Naturally it’s from a hotelier’s point of view, but it fairly points out some weaknesses in the analysis.
D.C. Judge: OTAs Must Pay Taxes on Retail Room Rates
At odds with precedents set in earlier cases, a District of Columbia judge has ruled that online travel agencies must pay taxes on the retail sales price of a hotel room rather than then wholesale price.
HotelTonight Acqui-hires PrimaTable
In an “acqui-hire” move HotelTonight has purchased restaurant booking app company PrimaTable. There has been a lot of criticism of acqui-hires, but in this case I think HotelTonight was pretty smart. Their objective was to bring PrimaTable’s lead data scientists on board and they seem to have thoroughly vetted the transaction to ensure that the new talent will be happy.
New Development in Onity Hotel Lock Hacking
I previously covered vulnerabilities in Onity electronic hotel locks and Onity’s half-hearted fixes. Now comes news that the hacking community has upped the game by building the lock hacking hardware into an inconspicuous dry erase marker. [Thanks to Frank Ho for the tip!]
Travel Wiki Content begins move to Wikimedia, via Wikivoyage
I previously reported on the drama and legal shenanigans around the movement of Wikitravel volunteers and content from for-profit Internet Brands’ Wikitravel to the non-profit Wikimedia Foundation. Lawsuits or not, the preparations for the move are going ahead. As allowed by the Wikitravel Creative Commons license, travel wiki content has been copied to the Wikivoyage site in Germany and is being cleaned up in anticipation of a final migration to Wikimedia. An interesting background FAQ is here and the Wikivoyage English page is here:
Meanwhile, one of the defendants named in Internet Brands’ original suit has filed a motion against Internet Brands.
Remote Presence Avatar Set to Ship This November
Instead of just videoconferencing to remote offices, how would you like to use a robotic avatar that can move around the far office? Now your remote co-workers can’t hide from you! Unfortunately, the experience as seen in the promotional video is downright creepy.
Travel Briefs: Recent News Items of Significance
- American Airlines has found improper clamp installation to be the cause of loose seats on 3 flights. APEX Editor’s Blog
- Fly Spirit Air and pay $20 in advance for your carry-on or $100 at the gate. Skift
- This is cool: new airline tray table design holds and charges smartphones and tablets. APEX Editor’s Blog
- Despite some environmentally-correct rhetoric to the contrary, flying is generally better for the environment than driving. Smithsonian Magazine Blogs
- Strict Aviation Regulations Limit Competition and Traveler Options in China. Skift
- D.O.T Inspector General reports that airline consolidation and ancillary fees have decreased consumer choice and increased prices. It’s a two-edged sword: today’s airline industry is healthier but less motivated to meet customers’ needs. Skift
- European governments, realizing that restrictions on ownership have resulted in an unhealthy and unsustainable local air travel industry, are set to relax their rules. Skift
- United Airlines takes delivery of first North American 787 Dreamliner. However, as I tweeted, original UAL pilots are not thrilled. Only former Continental pilots will get the composite birds until the pilot list is integrated. Fox Travel News
- IATA says airline profit expectations improving. Fox Travel News
- EasyJet launches inspiration-based flight search sight. Our take is that it looks pretty good. Tnooz
- New Marriot suite offering includes a small group workspace with meeting room, personal work spaces and stocked kitchen area. The concept is being piloted at Redmond (WA) Marriot Town Center. Lodging Magazine
- Condé Nast’s annual “Best Airlines and Hotels for Business.” Condé Nast Traveler
- Business Insider on “futuristic” luggage. Some of the pieces are kind of cool looking. Others, not so much. Business Insider
- Hotels.com Hotel Price Index shows that U.S. hotel room prices rose in the first half of 2012. Hotel News Resource
- Hotel revenue managers’ perspectives on last minute booking. Tnooz
- The hidden power of Apple’s PassBook for travel companies: PassBook integration is a lot easier than full-blown iOS app development. BoardingArea
- TripAdvisor acquires travel inspiration site WanderFly. Skift
- AirBNB looking to mobile to increase revenue and host responsiveness. Skift
- Google launches location-aware ‘Field Trip’ guidebook app. Tnooz
- Google Flight Search newly optimized for tablets. TechCrunch
- In a change that’s pertinent to travel sites, Google AuthorRank may impact SEO processes. Tnooz
- While others are busy mapping all the streets in the world, startup Block Avenue is seeking to describe the qualities of every block, every neighborhood along many dimensions, including crime, transit options, demographics, amenities school data and social activity. Tnooz
- Foursquare now take restaurant bookings. Tnooz
All the rest…
- Segways have never lived up to their initial hype, but they have found some strong niches. The latest is as touring vehicles. Skift
- Australia’s National Tourism campaign can serve as a model for other countries, including the U.S. to emulate. As a former Australian resident, all I can say is Aussie! Aussie! Aussie! Oy! Oy! Oy! Tnooz
- Hotwire President Clem Bason offers up tips on saving money by traveling outside peak travel seasons. Fox Travel News
- In an otherwise downbeat article on online travel planning, the author speaks positively of Seattle startup Utrip. Tnooz
- The Top 50 Travel Blogs. (Opt-in list, ranked by unique visitors as measured by Google Analytics.) The Expeditioner
Travel Aspirations: Expedia Sends Travel Writer on Alaskan Cruise
Spencer Spellman, the Traveling Philosopher, shares an Alaskan cruise experience. His pictures and straightforward writing almost make me feel like I was along for the trip.