The Online Travel business. By : Bhaskar-Jyoti Baruah Mathieu Dubé Laurent Lebard Ricardo Moretti. The Airline Industry-A Little History. The structure - simplified. Airlines. Intermediaries Travel agents. Customers. The 70s’ an era of deregulations
The structure - simplified
Government orders to list other airlines - at a fee of course
“the act of purposely positioning information on-screen to influence specific purchase behaviours that are beneficial to the vendor, but unfair to other airline suppliers.”
expropriation of value
expropriation of value
The result of CRS, GDS, Halo effect & screen biases
OTA (includes alliances)
The new structure
process is key !!!
Or trough a process that tries to
imitate an agent speech
in a travel agency
lot of tips available
that all products are high quality!
compensation if problems arise
during holidays ???
What about complaints?
Who are they ?
It is the exclusive travel booking provider for American on line services and for several US and Canadian Yahoo sites.
They are boosting their online presence through search engine marketing. Range online is specially carrying out a campaign by resorting to advertising in Google.
Travelocity offers five prime services.
Average service fee for Travelocity business is $20/ booking against industry average of $31/booking
The average price of air ticket for Travelocity business travel was $393 against industry average of $542.
Customers can purchase web fares that can be as much as 20% lower than published rate OR they can negotiate on their own.
The customers can find a fit between their requirements and the wide number of travel policies thrown to them. They can strike the best bargain easily.
The costs saved by integrating the technology with the service are passed on to the customers. Their alliances with the suppliers coupled with the technology enable them to compute the most attractive packages for customers belonging to any income bracket.
Initial Mission Statement: “Develop a travel website that would serve people better.”
Forbes"Best of the Web" for online travel in 2002; "Best Cruise Site" for 2003
Business Traveler Magazine"Best Business Travel Website 2002“
Massachusetts Institute of Technology Sloan eBusiness Award2002 Rookie of the Year Award (Web Site)
Wired MagazineFinalist, 2001 Readers RAVE Awards, Best Service Site
Nielsen Net RatingsLargest e-commerce launch on record
PC MagazineEditors' Choice Award, April 20, 2004
Forbes.com#1 Travel Site, August 2003
Customer Respect Group#1 in online customer experience, 2004 and 2003 Online Customer Respect Study of Airline, Travel and Hotel/Resort Casino Companies
Time MagazineOne of the top 50 sites of 2002
PC MagazineOne of the top 100 sites of 2004, 2003, 2002 and 2001
Functionalities similar to competitors
Their online travel buyer
32% 18-34 years of age
23% have incomes over $100,000
33% have children
80% use Internet daily
Orbitz Target Population
Median age = 39
Median household income = $60,000
51% have a college or post college degree
Average 3 leisure trips per year
Purchasers of family vacations, romantic getaways, guided tours, cruises, etc.
Over 2.5 years of online experience
First to launch its gay microsite (2002)
Gay travel-rewards programs
Ads on Bravo's “Queer Eye for the Straight Guy”
Reach = % of surfers visiting travel sites
Unique audience from home grew by 27% to 60.4 million in November 2003 over 2002
Source: How do people Evaluate a Web Site’s Credibility? Fogg et al, Stanford university, updated Nov. 11, 2002
Source: www.clickz.com/stats/markets/travel/print.php/3304691 & 149551
Source: On the Depth and Dynamics of Online Search Behaviour, Johnson, Moe,, Fader et al, Columbia Business School, Aug. 2001
ONLINE TRAVEL ADVERTISING…ACCORDING TO NIELSEN//NETRATINGS, November 19, 2002
Top 10 Travel AdvertisersNielsen//NetRatings’ Week in Review (04/11/04)
Top 10 Online Travel DestinationsNielsen//NetRatings’ Week in Review (04/11/04)