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Web 3.0 & Travelocity

Posted on Thursday, Apr 26th 2007

We have been discussing the online travel industry and have covered Yahoo! Travel and TripAdvisor from a Web 3.0 perspective earlier. Here we will take a look at Travelocity’s offering.

Travelocity, launched in 1996 is an online travel agency. It is owned by Sabre Holdings. According to Nielsen//NetRatings, Travelocity is ranked number two among the most-visited travel sites in the world with over 13 million visitors per month.

In general, most travel sites that have been around for a while offer a certain baseline set of functionality, that including Airline, Hotel, and Car Rental Bookings, as well as Vacation Packages, Cruises and Deals. I am looking at where these sites need to go in the Web 3.0 era.

Context
Context, so far, is limited to two rather broad ones: Business Travel and Pleasure Travel. In my opinion, this is hardly enough, since both Business Travel and Pleasure Travel come in many forms. Business Travel could be hyper luxury, CEO traveling with his Board of Directors and the entire team staying at the Four Seasons, or it could be a sales rep of a startup going to a tradeshow, and staying in the most economic motels possible.

Similarly, in pleasure travel, the luxury traveler in search of the Aman resorts is a very different “context” than the student backpacker looking for Youth Hostels. I would like to see these Context nuances included as options in the navigation.

Travelocity, having been around for so long, has a vast amount of content and inventory. Without Contextual navigation, this repository of information is way too time-consuming and click-consuming to plod through.

Content
Travelocity is rich in content and covers information for over 700 airlines, more than 50,000 hotels and about 50 car rental companies across the world. The site offers over 6,500 vacation packages, tours and cruises and has travel content in 12 languages including English, French, and German.

The interesting differentiated aspects are what I will focus on. Travelocity is the only site that allows users to book train tickets.

Travelocity’s Activities section is also nice. (See screenshot below for Angels & Demons tour in Rome.) It allows you to book theatre and sports tickets, site seeing tours, etc in more than 200 cities. It clearly stands out. I would however, like Travelocity to include local festivals in it as well.

Going back to my earlier example of planning a trip in Andalucia (Southern Spain), let’s say I am looking to stay at small, romantic Bed & Breakfasts in various cities and small villages: Toledo, Granada, Cordoba, Seville, Arcos De La Frontera, etc. I want to know how the local festival dates line up with my travel dates, and how should I arrange my trip to work those in.

Also, local entertainment and local reviews is super important, and a mashup of information from the travel guides (Lonely Planet, Rough Guide, Guide du Routard), review sites (Yelp, Chowhound, CitySearch), would be very good to access through Travelocity.

I also like to dance the Argentine Tango, and I would like to be able to know where to go dancing and when, in each city, from right within the Travelocity environment, without having to go scouting separately on the web.

None of this exists yet, but in this age of mashups, it ought to. The place-smart search technology exists, to tag local content in a way that sites can mash them up easily. Travelocity should investigate a small Canadian company called Cquay, to make this happen.

Community
Travelocity lacks good community features. The only community feature that deserves mention is the review of hotels and tours, but that is old functionality. They should take lessons from TripAdvisor, whose Community features are just fantastic. The site does allow photo sharing with collaboration with snapfish, trying to emulate Yahoo’s integration of Flickr. Good idea. Not a great implementation.

Commerce
Travelocity earns commission on hotels and other services booked through its site, which is pretty much the standard revenue model in this business. The site in collaboration with hotlink retails it Gnome range of merchandise, which does a much better job than TripAdvisor but still leaves a lot to be desired. A good innovation is the Travelocity Hotel Gift Card and the Travelocity Credit Cards. Travelocity Rewards MasterCard is a good co-branding strategy that the site is pursuing in collaboration with MasterCard.

Personalization
Travelocity’s personalization allows users to view and save their trips, receive alerts about low airfares to favorite destinations by emails in collaboration with FareWatcher, receive change notifications, upload and share photos. Nothing grand. Nothing earth shattering.

Now, here’s what would be earth shattering: integration with the frequent flyer programs of various airlines. The day Travelocity can automatically book a coach class ticket on British Airways, and then use my miles to upgrade it to business class, capture my meal preferences, and order special diets at the hotels I reserve through them, I would give them some points for Personalization.

The other area of Personalized service that could be superb is if I need to change my dates on a specific, complex itinerary, and they can take care of all the behind the scenes adjustments. Boy, would I leap for joy, as this is one of the most painful things in life. I will write about a small startup that is attempting innovations in this area soon.

Vertical search

I found vertical searches in Travelocity to be more user-friendly than TripAdvisor. By and large, all the Airline, Hotel, Car Rental searches happen as one would imagine, but there is no imagination in any of this quite yet.

They should think of vertical search based on Context. In the Context of First Class Business Travel, the search interface should look very different, than what it should look in the context of budget backpacking vacation. The requisite amenities, the navigation and search options presented to the user, all need to be different.

Business Model

Travelocity makes most of its revenues on commissions. However, with an Alexa traffic rank of 604, according to comScore, Travelocity is one of the most effective advertising options for sponsored search advertisers, having a 6.5% click-through rate, compared to the 4 – 5 percent click-through rates achieved by Expedia or Orbitz. The advertising rates for Travelocity vary between $25 – $55 CPM. Travelocity earned revenues of $1.1 billion in 2006 an increase of 31% over 2005.

Web 3.0 Rating : Context: B+; Content: B+; Community: C; Commerce: A; Personalization: C; Vertical Search: C; Overall : B-

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Hi Sramana,
A great point to build communities on travel sites would be integrate videos.People can come and share their traveling experieces.What do you think?

Pawan Sahay Thursday, April 26, 2007 at 12:39 PM PT

Absolutely. All sorts of content – video, photos, travelogues, reviews, ratings.

You have to pull in content from everywhere, not just content that was born on the site, or produced exclusively for the site. And then make it all searchable and navigable.

That’s what’s missing. I’m still looking through the large sites to see if anyone has a strong implementation of large scale mashups.

Sramana Mitra Thursday, April 26, 2007 at 12:45 PM PT

Really enjoying this series…are you going to give Travelocity a letter grade for each component?

Amber Thursday, April 26, 2007 at 2:27 PM PT

Ouch, Amber, so sorry, I forgot to put the letter grades … thanks for catching.

Sramana Mitra Thursday, April 26, 2007 at 2:31 PM PT

Excellent piece. You have highlighted the biggest issue facing local search in general and place-centric content in particular… that the vast majority of interesting local content is massively distributed across millions of sites and also buried in the so called “deep web” – behind password protected sites (media) or in databases (travel) that today’s search engines can’t reach.

Local search is not just about the meager content that the Google and others have linked to a mapping system inside their walled garden. It is about re-mixing and indexing any and all web content around the context of location. As you know, Cquay has investment many millions in developing a next generation content indexing, syndication and search platform – to solve this problem.

Imagine using one web interface to search for any real world place, and be able to retrieve all of the web content that is associated with that place, or other places in close proximity.

For example, Travelocity could stick to their knitting managing hotel, car rental, airline and event content, but enable reviews, news feeds, photos, blog entries, history and culture, dining, entertainment, sports, and a myriad of other content related to the destination, to be dynamically pulled into the user experience, from other sites.

While we are still in stealth mode, I can’t share (yet) how we can do this, but I can assure you the problem is very hard, our patented technology is a critical piece of Web 3.0 (which involves context, semantics and mass syndication of content) and the user experience it enables is a true breakthrough. First clue – GeoTags fall way short.

By the way… local ad content and the associated media sales, ad design, creation, and placement industry is equally fragmented and distributed… local ad management and targeting is the other half of the problem, in terms of monetizing PlaceSmart Search ™. They will need our indexing engine as much as Travelocity does.

Cal McElroy Thursday, April 26, 2007 at 5:37 PM PT

one other good website is travelistic.com, which im not too sure is strong on mashups or not.see it through, its quite popular now.

Pawan Sahay Friday, April 27, 2007 at 6:35 AM PT

nice post. interesting to note that a noted differentiator, activities, is powered by stubhub/ebay. not a high barrier for other travel sites to achieve unless this is multi year exclusive which i seriously doubt looking at stubhubs past partnerships strategies.

Btw, do you know what percent of ad revenues are CPC versus CPM?

ventureblogalist Saturday, April 28, 2007 at 5:33 PM PT

Yes, and much of the functionality I am pushing for is available in a fragmented format at various other sites. But, the whole Web 3.0 philosophy I am articulating is of an integrated user experience.

I am not sure about the CPC/CPM split.

Sramana Mitra Sunday, April 29, 2007 at 4:13 AM PT

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