Looking for someone to blame for a miserable year? Try Robert L. Crandall, Leo F. Mullin or John A. Edwardson. You may not know these men, but you know their airlines. As the executives calling the shots at American, Delta and United, respectively, they’re the most influential personalities in their business.
1997
This has been the year of the laptop accessory, no doubt about it. You don’t need to make a pilgrimage to the Comdex trade show in Las Vegas to know that. Just board any flight and wait until the “Fasten Seat Belt” sign clicks off. High-tech add-ons are everywhere, and road warriors are using them for everything from guarding data to improving their posture and productivity. Most of the latest innovations, such as the CheeseHeadphones, figure somewhere between pet rocks and lava lamps in terms of usefulness and overall appeal. But some, I admit, seem to be more than just marketing gimmicks-there are even a few you might want to consider when you’re shopping for holiday gifts for your favorite business traveler.
Next time your travel agent asks if you prefer one aircraft type over another, consider your answer carefully. Especially if you have to fly coach. Not all planes are created equal-or equally comfortable-according to a new survey by San Diego, Calif.-based CIC Research Inc. A random Internet poll found that the 1,301 respondents favor the economy class seating options on the Boeing 767 over other commercial jets, including the MD11 and the Boeing 777. The most unpopular plane, as far as the cheap seats go, is the Boeing 747.
Did you think this was a year for the books? Sure, it had all the elements of a vintage season, with blockbuster deals, nail-biting dramas, and heartbreaking finales headlining the schedule. Wait until next year. The deals will be even bigger, the growth faster, and maybe, just maybe, we’ll start to turn a profit, according to industry insiders. It seems unbelievable that anyone could expect that kind of encore. But quite a few folks are.
For every one useful travel gadget introduced in 1997, there were at least 10 completely frivolous toys marketed to unsuspecting business travelers. Maybe you’ve seen these contraptions for sale in an in-flight catalog. Or snickered at them in a crowded airport shop. Worse still, it’s possible there’s one from a well-meaning relative, wrapped and waiting for you this holiday. Like it or not, the SkyMalls of the world are filled with toys that are about as useful to the road warrior as a Hula Hoop in the back of crowded 747.
Check into the $400-a-night Mark hotel in Manhattan, and along with your room key you’ll get a cellular phone with no strings attached. Or so it will seem. They say the phone is free at this swanky Upper East Side property, and technically speaking, it is-until you turn it on. That’s when the meter starts running at an astronomical rate of $1.75 a minute, regardless of whether you’re calling or being called. On a normal hand-held, you’d pay about 47 cents a minute for the same service.
Microsoft and Pegasus. Yahoo! and Travelocity. Worldview and Hilton. Preview Travel and Excite. The latest string of high-profile deals in the interactive travel business begs a few questions: Are these agreements part of a new push to find long-term partners within the industry, or just the latest round of musical chairs? What do these partnerships mean for the industry? How important is having a solid partner to your bottom line? And, in what appears to be a rapidly consolidating business, is there room for smaller companies?
When I arrived at San Francisco International Airport a few weeks ago, I was greeted by signs warning me that if I wanted to drop off a rental car, I’d better plan on getting to the lot an hour and a half before my flight leaves. SFO is in the middle of a $2.4 billion expansion project that will, among other things, consolidate and relocate its car rental facilities. But instead of pooling the rental areas closer to the terminals, the airport is moving the lots farther away. It turns out San Francisco isn’t alone. At Dallas/Fort Worth International Airport, the common rental area will be pushed toward the perimeter by 1999. Boston, Houston Intercontinental, San Jose and Kansas City are considering similar moves.
Good-bye, Destination Florida. The site, which set the standard for destination portals, effectively put the Sunshine State online, and defined a new category of Web presence, is dead. The project’s owners at Knight-Ridder and Tribune Co. concluded last month that Destination Florida wasn’t meeting their financial goals. So they pulled the plug on it.
Ever wonder how all those studies about interactive travel come to such vastly different conclusions? Take a look at research published by the likes of Plog Research Inc., Forrester Research Inc. and Jupiter Communications, and you can’t help but wonder if these folks are reading from the same book. Estimates about the size of the interactive travel industry run from tiny to titanic. Conservative forecasts peg the size of the business in the hundreds of millions of dollars per year. The optimists, meanwhile, are talking billions of dollars by the turn of the century.
Is there room for one more? That’s the question Intel Corp. executive Jennie Bettles asked herself a year ago, when she witnessed the meteoric rise of Microsoft Corp.’s Mungo Park and Mountain Travel Sobek in the estimated $10 billion-a-year adventure travel niche. And her answer was yes. Definitely.
US Airways this week quietly raised the bar for airline sites when it began offering online redemption of frequent flier awards. The Arlington, VA, carrier upgraded its dial-up Priority TravelWorks service, which it developed with Galileo in 1995, to let its premier frequent travelers cash in rewards without the help of an agent. By year’s end, the airline will add a booking capability to its Web site, some of the same service it has offered on the proprietary Priority TravelWorks product for the past two years. It also will overhaul its Web site to allow all US Airways frequent fliers to redeem their miles on the Internet-another first.
The moment of truth for Bruce Bishins is likely to come on Oct. 17 in Chicago. That’s when he presents the details of his startup Genesis reservations system to a meeting of prospective customers. It is a moment he’s waited six years for and one that, if the major airlines had their way, he would wait another six for. The 47-year-old president and CEO of the U.S. Travel Agent Registry intends to strip the CRSs of their hegemony in electronic reservations by offering an agent-run alternative.
Reed Travel Group is not having a good year. The world’s largest independent supplier of travel information embarrassed its Anglo-Dutch parent company this month by posting a 21 percent plunge in profits for the first half of 1997. The company is blaming competition from travel-related Web sites and the cost of transferring Reed’s popular flight booking directories and other travel data to the Web for a 6 percent decline in the division’s sales. After almost a decade of respectable earnings growth, the travel group now has the distinction of being Reed Elsevier’s worst-performing unit. And whose fault is it? The Internet’s, we are told.
Since the rise of interactive travel, there’s been a lot of talk about a corresponding fall for traditional travel agencies. But the evidence of retailer ruin hasn’t been quantifiable – until now. A recent series of focus groups conducted by Preview Travel suggests that most travelers would gladly dump their human agent, presumably in favor of an electronic replacement. A similar study by Pegasus Systems Inc. charts a steady decline in hotel bookings through traditional channels. And the folks at Forrester Research agree that the commission-hungry middlemen are on the skids.
There’s something fishy about the stock market. Fishy, as in red herrings. The unexpected cancellation of Uniglobe Travel Online’s private share placement last week, blamed on “Internet-related market conditions,” looked like it might poison this year’s harvest of red herrings, the glossy brochures mailed to prospective investors when a company sells its stock to the public. But something didn’t make sense about the news.
Three cheers for Southwest Airlines! The no-frills carrier did what no other airline had the courage to do: it stopped paying commissions on ticket sales made through the Internet, online services, cable networks, and other forms of consumer-direct electronic commerce. Painful as it is may be, the Dallas airline’s decision was necessary for interactive travel, because it suggests there is a better way to sell tickets than through the antiquated, corruption-prone “agent commission” model.
No interactive business is an island, especially when it comes to Java. I arrived at this literary conclusion after attending Europe’s first Java developer conference. Not a single speaker represented the travel industry. Ditto for the exhibitors. And, even though Java holds plenty of promises for marketing travel, most of the estimated 300 delegates programmed for banks, software companies, and Web page designers. Have the applets of our eyes grown dim, or was I just at the wrong show? Maybe it was a little of both.
Electronic Data Systems is one of the industry’s perennial high scorers. Through a complex web of consulting agreements and financial relationships, the Plano, TX, company is aligned with some of interactive travel’s most successful players. So when I heard the news that EDS launched a Web site for the 1998 World Cup, which is being held in my backyard next year – the French border is a two hour drive – I wanted to know more. How did EDS leverage the relationships with its travel agencies and CRSs on the France ’98 site? Todd Oken, EDS Global Sports’ World Cup Internet project manager, generously offered me a play-by-play on the project. As he explained it, his employer approached the French Organizing Committee about building a site for the international soccer tournament a year ago. Event planners wanted a way “to communicate with a worldwide audience for a full year before the World Cup, and to meet objectives such as selling tickets and filling stadiums,” he said.
The on-again, off-again discussion about liberalizing the Internet’s top-level domain name system is ignoring an important industry – ours. Earlier this month in Geneva, an international ad hoc committee of governing groups announced broad support for the implementation of seven new top-level Internet domain names, including “.arts” for art-related sites, “.firm” for businesses, “.info” for information resource sites, “.nom” for personal home pages, “.rec” for recreational sites, “.store” for retail services, and “.web” for Web-related sites. It’s an encouraging development for anyone who has spent hours on the WHOIS database, struggling to find a catchy “.com” name, only to lose the address to InterNICs draconian first-come, first-served policy.
