And then there are the metasearch engines such as Hotelscombined and Kayak looking for a piece of the action.

Of course, online travel agencies (especially Booking.com) are still immensely powerful players and then, most recently, Room Key crash landed on the scene with a promise of multi-brand search utopia.

On the periphery are the startups, such as Room 77, which launched in a blaze of publicity and has since gone on to raise over $10 million in funding from, amongst others, the backers of ITA Software, General Catalyst.

It now turns out that travel expense management giant Concur (also owner of TripIt) was part of the funding round last summer when it took a minority stake in the business, an investment revealed today when Concur announced record results of its first $100 million quarter in revenue for Q4 2011.

Clearly Concur sees something in Room 77 that it feels is worth taking a punt on.

So with 12 months now passed since launch, and having backers with a pretty high pedigree, on both the investment and operational side of the industry, is Room 77 about to start shouting a little louder?

It would appear so.

Founder and chairman Brad Gerstner says: “We think there’s a lot to be done in hotel metasearch – we’re going to out-Kayak Kayak by focusing like a laser ONLY on hotels just like Hotels.com and Booking.com, but better.”

Fighting talk, indeed.

Back over at Concur, CEO Steve Singh is also talking up his company’s profile, referring to Room 77 as the “Zillow of hotel rooms”.

Zillow co-founder and executive chairman Rich Barton also happens to be an investor in Room 77, of course.

Singh says Room 77 would benefit both hoteliers and their customers if its content about individual hotel rooms could be integrated into hotel CRS and property management systems.

“It would allow hoteliers to monetize their properties at a more granular level and push choice to the end customer,” Singh says.

He believes resistance from hotels would “change over time”. He adds: ”I run a business that gets resistance all the time.”

Concur made a relatively small investment in Room 77 and a “more substantive one” in Taxi Magic, which enables business travelers to purchase ground transportation and integrate the expense into the Concur Expense system.

Singh says two things drive Concur’s investments: the ability to create as much content choice as possible for business travelers, and the ability to make it available to customers.

“If we can help foster that kind of innovation, bring it to market and make it available to our customers, then that delivers a tremendous user experience,” Singh says.

The Concur CEO argues that mobile is blurring the lines between corporate travel and consumer tools.

Singh believes corporate travel policies are diverse and he could see business travelers using Room 77 to pick hotel rooms in conjunction with corporate travel policies.

Alternately, he adds, perks outside the parameters of corporate policy could be billed to business travelers’ personal credit cards.

Asked if he could envision a larger investment in Room 77, Singh says: “What guides us is this: if it is innovative and delivers greater choice to end customers, we are interested in developing it.”

NB: Additional reporting by Dennis Schaal.

Rooms and More, which eventually will be integrated into Travelport’s Universal Desktop, is a travel agency site which looks in some ways like a typical metasearch site, although the agents don’t get shuffled off to the aggregator sites to complete their bookings. Travelport acquired hotel metasearch engine Sprice in May 2010, and it provides much of the foundation for Rooms and More.

Some 6,400 travel agents in 70 markets are currently using Rooms and More so it hardly is a major booking channel for Booking.com, Agoda and the Expedia Affiliate Network so far.

But, it is interesting to see how these hotel aggregators, along with the likes of Miki Travel, Hotels.com, Grupo TransHotel, Medhotels, Hostelworld and others are competing for travel agency bookings. Travelport has a dozen aggregators in Rooms and More, with about 18 others signed up for implementation.

Niklas Andreen, Travelport GDS’ group vice president, hospitality and partner marketing, estimates that Rooms and More has 200,000 to 300,000 of an estimated half a million hotels around the world in the system.

It is difficult to give a precise count of how many hotels are represented because the providers often have overlapping inventory, he says.

The hotel providers compete for travel agency bookings based on whether they offer pre-pay or post-pay models etc. and their varying commissions.

Travel agents search for hotels and then see an array of offers from the providers with divergent commission specified.

For example, today in the US market on Rooms and More, Miki Travel was offering 12% commission, TransHotel (12%), Expedia Affiliate Network (10%), Hotels.com (10%), Booking.com (5.5%), and Agoda (4.5%).

It is likely that a company such as Expedia, which deals in so much merchant hotel inventory, could afford to pay a higher commission than Booking.com, for instance, which largely deals in the retail or agency model.

Travelport negotiates the commissions, which are subject to change by market, timeframe, availability and other factors, with each provider.

All of this inventory is accessed through the Travelport Universal API, but the aggregators also compete against chain hotels offered through the Travelport GDS, which lists commissions ranging from 0% to 12%.

Agents select an inventory provider, which is the merchant of record, and then Travelport sends the credit card details to the aggregator, which confirms the bookings and sends a voucher to the agency or traveler. Travelport collects all the commissions for the agencies.

The user experience for the travel agent is similar to traditional metasearch, although all of the bookings take place within Rooms and More instead of on sites such as Expedia or Booking.com.

Andreen refers to the experience as “meta-book.”

Also along the lines of a consumer experience, travel agents using Rooms and More get access to consumer-written hotel reviews about each property from sites such as TripAdvisor, Yahoo Travel, AOL and others.

With some travel agents disparaging what they consider to be amateurish user-generated content, it is interesting to see many of them are accessing consumer reviews in Rooms and More.

Keith Harrison, global head of hospitality sales for Travelport, says agents often access the user reviews when the property or destination is unfamiliar.

And, Andreen says Travelport is in discussions with professional review providers to add them to Rooms and More, as well.

Note: The author took part in a Travelport-sponsored press event in Atlanta.

CEO of the business and ex-Pegasus founder John Davis has high hopes for Room Key, not least because it has been 18 months in the making after a number (names not disclosed) of the six founding partners came together to work out how to tackle the problem of growing distribution costs and a desire to capture more direct bookings.

From a corporate perspective, the six companies – Choice Hotels International, Hilton Worldwide, Hyatt Hotels, InterContinental Hotels, Marriott International and Wyndham Hotel Group - wholly own the joint venture, Davis says, although a exact breakdown of the stakes in the business has not been disclosed.

At launch today (Davis stresses it is a “beta” product at present) there are 23,00o properties listed on the system, with designs on having close to 80,000 worldwide by the middle of 2012.

Davis estimates the total number (“cap-out”) of hotels on the system will eventually be around the 120,000 mark.

The 23,000 figure will jump within the next week, Davis says, as another major hotel chain is joining the platform, though not as a founding partner.

Similar to the launch of Google Flight Search in September 2011, online travel agencies are currently not participating in the platform.

Industry analysts such as Henry Harteveldt of the Atmosphere Research Group suggest this is a “shot across the bows” of OTAs, but Davis says the door is open for them to participate, adding: “We will do whatever is necessary to get the right coverage on the site.”

Unlike the Travelweb multi-chain effort of the early-2000s, which featured Pegasus as a provider of accommodation, no GDS or other switch will be participating in Room Key, Davis confirms.

So what is the motivation behind Room Key, and why now?

Davis says chains have become increasingly wary of rising distribution costs for some time, while hotels increasingly want to “own the booking”, giving them a chance to up-sell ancillaries to travellers and allow guests to manage their bookings in a better way.

From a distribution perspective, Room Key will have lower “commission” or referral fees than other platforms, Davis claims, plus as the site is purely a metasearch service the hotel will continue to secure the booking and handle so-called guest management.

The shadowy figure of Google and its growing Hotel Finder service does appear to be lurking in the background, at least in terms of the timing of Room Key’s launch, although the idea for the site clearly came about before Google muscled in on the game.

Davis will not discuss where he thinks (and hopes) hotels will divert their existing distribution costs from in order to feature on Room Key, but Google is clearly one brand in his sights, as well as other metasearch players (Kayak’s Steve Hafner wrote “Travelweb part deux, congrats JD” on a TechCrunch article about Room Key) and the OTAs.

The challenge will presumably come when persuading OTAs that it might be a good idea to feature on Room Key, but at the same as potentially losing out on their home turf.

At this stage it appears chains are micro-managing whether all their properties are included or not, whether some are exempt, etc.

Davis says some of the chains have an opt-in system for franchises, while others have automatically include franchise properties and they will have to opt-out. Some may not have a choice, he admits.

The site is only at stage one, Davis concedes, with property reviews coming “very soon” at the conclusion of discussions with “major players in the review space”, as well as a plan at some point to include reviews from its own users.

The current process of allowing users only to search by city and date will also evolve, he says, with options to find properties based on hotel name and chain to follow.

But with any new consumer-facing brand comes the age-old problem of gaining exposure and growth.

Davis says a full-scale, multi-national marketing campaign will begin in March 2012 to attract visitors, with a number of “creative ways” of getting exposure.

More importantly, perhaps, will be the support which Davis says the chains (“birth parents”) themselves will be giving by alerting new and existing customers to the fact that the Room Key service exists.

Meanwhile, the Hotelicopter team, which is was quietly acquired by Room Key in June last year for an undisclosed fee, makes up a large part of the 22-strong number of staff.

Its CEO Adam Healey will head a Room Key Solutions division, maintaining the existing white label partnerships Hotelicopter has with tourism boards and DMOs while developing other partnerships, Davis says.

Choice Hotels International, Hilton Worldwide, Hyatt Hotels, InterContinental Hotels, Marriott International and Wyndham Hotel Group have combined to establish the joint venture under the leadership of CEO John Davis, founder of the Pegasus hotel distribution and technology service.

The site is essentially a metasearch platform for properties, prices and availability across all six companies, including their sub-brands and affiliates.

Users can browse rates across every property, read independent reviews, compare prices and share information around their various social networks.

The site is global and has enlisted ex-Hostess Brands SVP of marketing Stephany Verstraete as its chief marketing officer and J Kurt Zimmer (a former TIAA-CREF and Dupont IT executive) as chief technology officer.

Ahead of the launch, RoomKey bought accommodation site Hotelicopter to run the search technology behind the scenes as well as continue to provide its affiliate platform for destination marketing organisations, under a division known as Room Key Solutions.

The formation of the Room Key venture comes as the hotel sector continues to battle with various issues around distribution and pricing on the web, including the continued roll-out of Google’s Hotel Finder service (which many of the above brands participate in).

Davis says:

“Finding the right hotel is complex and, unlike booking a flight or reserving a car, it is a personal decision process – one which no one understands better than hoteliers.

“We believe Roomkey will provide consumers with an innovative resource that will give them unprecedented confidence in their booking decisions by fulfilling their hotel search needs, with comprehensive and trusted content, and over time, through additional features such as the ability to connect and share their plans with family and friends – all provided through a simple and flexible site experience.”

Collaborative efforts on the web by major hotel chains, similar to those that saw the formation of Orbitz and Opodo by the airlines, are not exactly new.

In April 2001, European trio Hilton, Accor and the Forte Group joined forces to launch AndBook, a search and booking service featuring properties from all three brands as well as accommodation on the Pegasus platform.

AndBook’s creation had to be validated by the European Union, due to competition concerns, but it was expected to become a significant player in hotel search.

It eventually failed to gain any significant traction as it suffered, similar to many travel brands at the time, from the downturn in tourism in the wake of the September 11 2001 terrorist attacks in the US.

The Forte Group was also broken up shortly after AndBook’s launch.

In the US, Travelweb was a web distributor of merchant hotel rooms in the early-2000s, formed by Hilton, Hyatt, InterContinental Hotels Group, Marriott, and Starwood.

Travelweb’s other part-owner Priceline took over the remaining 71% shares in the business in 2004 for $21 million, eventually folding the system into the main Priceline brand.

Room Key, however, arrives in a very different era in hotel distribution and marketing, with more channels than ever before and the emergence of big and potentially very influential players, such as Google.

The normally-fierce rivals are crawling over themselves to talk up Room Key, with is being described as “unique” (Chuck Sullivan, Hilton Worldwide), “well positioned” (John Wallis, Hyatt), an “industry first” (Steve Sickel, IHG), having “immediate scale” (Shafiq Khan, Marriott) and promising “clear benefits to the industry and consumers” (Flo Lugli, Wyndham).

NB: Further details here in this interview with Davis.

Here some of the hot topics of next year:

• Google Hotel Finder
• Metasearch and rate parity
• OTA commission levels
• Direct sales

It is a frantic time in the hospitality sector and in some respects it’s hard to figure out where to start for many hoteliers, but let’s focus on potentially the most disruptive and new of the quartet listed above.

Google Hotel Finder

A major development that will almost certainly impact the balance of the distribution world is the continued roll-out of Google Hotel Finder.

Google has developed its own metasearch tool as a counter move to Bing’s acquisition of Farecast, now called Bing Travel (remember that?).

In any case, Google recently started testing Google Hotel Finder ads above the regular Google Ads in search results.

Of course, this is inevitably causing mayhem and concern in the industry. In some respects, Google is effectively outmaneuvering metasearch sites such as HotelsCombined, Kayak and Trivago in one simple step.

Google Hotel Finder compares rates from major OTAs, which are paying a premium to show up feature in the service.

So, no, the OTA will not lose out on volume, but one could conclude that in the initial stages it will be a consolidation of volume to the larger OTAs, at least until Google has integrated more regional and local channels.

But what impact does this have on hotels? There are a few angles to consider here.

First of all, location has become even more important. Is your hotel situated within the preset parameters of your market according to Google Hotel Finder?

For New York, London and Paris the settings are quite all-encompassing, but in Amsterdam, Google Hotel Finder is curiously focused on the city center.

But what else should hotels consider when it comes to Google Hotel Finder? Reviews, is certainly one.

Over the last few years, Google has started collecting reviews from other websites to determine popularity and value of a hotel property.

Moreover, it has been collecting guest reviews also through Google Places (formerly known as Google Local Business Center). A mix of the reviews determines a hotel’s user rating, a tool by which consumers can also sort the hotels.

As suspected, reviews which are shown on the hotels page are only the ones from Google Places. For the other sites there is a smaller reference at the bottom of your hotel listing with the number of reviews.

Google does not even show a score for these other websites, which is something we admire from Trivago’s hotel listings.

Yes, hoteliers, Google is clearly on a mission to build the undisputed platform for hotel search. It will use the industry for as long as it needs to in order to get its own initiatives off the ground, but will then quietly move them into the background.

So in your efforts to gain traveler reviews and good guest scores, we now have to look beyond TripAdvisor, Oyster, Zoover, Vinivi,HolidayWatchdog, VirtualTourist, Yelp, etc.

Google Places and Google Hotel Finder have, almost overnight, gained huge significance in the area of hotel reviews.

Just imagine the impact on the demand and sales of  hotel when Google launches Hotel Finder into pole position for all hotel searches worldwide if a property is listed as #1 on the preset sort order, such as Hotel de Londres in San Sebastian.

Google will show not only OTAs, but also wholesalers, giving hoteliers a chance to secure reservations through less costly and preferred channels.

Properties will also have to press their representation companies to develop an interface with Google Hotel Finder, especially as it lists the hotel website URL.

See the example below of the Plaza Athenee Hotel in New York.

Of course, listing your website URL and phone number is currently free on Google Places, but we would not be surprised if Google introduced charges in the near future.

In any case it is very important to have the hotel account set up properly in Google Places – it will ensure a property appears in universal search results and Google Maps.

Metasearch and rate parity

Many hotels are trying to maintain a rate parity strategy on OTAs to level the playing field and create transparency for consumers.

However these efforts are being torpedoed by wholesalers publishing net rates at low mark-ups online.

We see wholesalers distributing package rates and net rates at low mark-ups directly and through affiliates that are listed on metasearch sites like Kayak, Trivago and HotelsCombined.

Here is a random date for a search in London on Trivago:

Hotels need to make sure they have their distribution well under control across all channels, online and offline.

Wholesalers are great channels, but hotels have to impose rules on the low net rates they offer and enforce them strictly, otherwise a strategy of rate parity might just be counter effective.

Increasing commissions/distribution costs

Another challenge hotels will be facing in 2012 is the increasing cost of distribution.

Quite a number of OTAs have raised their commissions from 12% to 15% in major destinations (which represents a 25% increase in cost, by the way), which will come straight from the bottom line of the hotel.

Many OTAs have also launched preferred programs for hotels to show up higher in the sort order of their own search results.

Commissions vary from 18% to 20%, and in some cases even 25%. Hotels have to be careful not to simply drive up costs while at the same time become reliant, or even dependent, on OTAs.

Keep in mind, their only mission is to grow in terms of global revenue, and that is not always in the best interests of a hotel.

We have seen some OTAs asking for high fixed allotments, another sign they are trying to penetrate hotels and the market as far as possible.

This happens when they can’t particularly grow any further geographically, but are pressed by shareholders for growth each year.

Frankly, unless we all start opening hotels on the moon in the next few years, the only way some agencies can grow is by getting a higher commission or control more of the inventory in a hotel.

So our advice is to be careful and develop alternative sales channels.

Direct sales

Nevertheless, we are seeing hotels becoming more aware each day of how they depend too much on OTAs, wholesalers and other third party distributors.

The rising cost of distribution and the advantages of direct sales is something hoteliers are starting to understand more profoundly. Therefore we foresee a shift or rather a re-shuffle in the distribution mix in hotels in 2012.

Hotels are willing to invest more in SEO, SEM, SMM and mobile marketing as a result of the increasing costs of distribution. There is a concerted effort to push direct sales, either through their own websites or call centers.

NB: Visit the Xotels blog for more tips and guidance, including a 2012 Marketing Plan for Hotels.

As we now know, Google is testing a version of its Comparison Ads format for online hotels.

These ads are currently only visible to a subset of Google search users in response to relevant queries such as “Las Vegas hotels”, and appear as the first ad at the top of the search engine results page.

Notably, the ads are integrated with GOOG’s recently launched Hotel Finder service via a “Book hotels” button.

Test shows Google is prioritizing its own hotel service

It is no secret that Google has been ramping up its focus on the travel vertical over the past year, following the acquisition of ITA Software, the launch of Google’s Flight Search and Hotel Finder products, and various innovations in how it displays organic listings for flight and hotel queries (displaying flight times, showing hotel rates, integration with Google Maps, etc)

This latest test of Comparison Ads is noteworthy because it provides a clue into how Google may change how it prioritizes/organizes paid search listings for hotels.

The most striking takeaway from these test ads is that Google is placing its own service/listings above all other content on the page, including other paid search listings from advertisers.

Latest, but likely not the last, Google innovation in travel search

It’s important to note that this is just a test. Google often tests new ad formats against a sub-set of its user base, and it’s unclear whether this Comparison Ad format for Hotels will be more widely adopted.

If deployed more widely, this type of ad unit could pose risks to the major OTAs (such as Priceline, Expedia and Orbitz, in the US alone) primarily in two key areas:

• Higher ad pricing
• Potential eventual disintermediation.

The first point is an issue of online “real estate”: if Google favors/prioritizes its own services, listings for the OTAs will be less prominently displayed.

In order to remain visible, OTAs may be required to bid more aggressively to ensure they rank highly in Google’s paid listings (reducing their advertising ROI, all else equal).

On the second point, Google’s Hotel Finder does not process hotel bookings itself and currently provides links to both OTA’s and hotel direct websites for actual bookings.

If Google changes its approach here and opts to either process bookings or bypass the OTAs and connect users directly with the hotels (as Google has starting doing with Flights, see discussion below), Google’s decision to prioritize its own travel listings would be a real threat.

Disintermediator or Lead Generator?

The key question is whether Google will remain a high-volume source of qualified leads for OTAs or whether it will dis-intermediate them?

Asked another way, will Google look to connect/integrate more directly with travel suppliers (particularly hotels) in order to improve its search results/ads and, more importantly, close the loop on a given travel transaction?

By funneling more transactions directly to travel suppliers, Google could disintermediate the OTAs.

This strategy would be, in some ways, analogous to what Google has pursued with e-tailers via tools such as Merchant Center, which risks disintermediating “middle men” like comparison shopping websites.

On one hand, building out/integrating a global network of hotels would take time (particularly in the fragmented International hotel space) and would not likely be popular with either regulators or Google’s travel advertisers.

On the other hand, Google is one of the few companies with the resources and will to tackle large projects such as this. Additionally, we would not be surprised to see a CPA-based ad offering evolve from Google’s various innovations in travel search.

Success defined by conversion rates – Priceline better positioned

Given Google’s importance in the online travel ecosystem (a recent Google/Compete survey estimated that around 25% of online hotel shoppers were referred by a Google search), this is clearly an area to monitor.

The company has repeatedly stated that it does not intend to process travel bookings itself, but it’s important to note that Google’s Flight Search metasearch service currently excludes OTAs from participating and links directly to airline sites for bookings.

Pursuing a similar strategy for hotels would not be easy for Google (for the reasons cited above) and would not be assured of success in our view, either (for either consumers or travel suppliers).

Evaluating success will come down to which channel can “convert” travel shoppers better, the supplier-direct channel or OTAs, and we believe that, particularly for International hotels, the OTAs will remain the optimal monetization channel for quite some time.

Nonetheless, we expect OTA investors to remain focused on this potential risk.

Within this context, we view Priceline as relatively better protected given its lower exposure to the US hotel market (which has a more sophisticated supplier-direct online channel than International markets) and Booking.com’s leading international brand and rapidly growing footprint of 170,000 direct hotel relationships.

NB: This is a guest article by Tom White, an analyst on internet and interactive entertainment for equity research at Macquarie Capital.

NB2: Image via Shutterstock.

A search for a hotel in some country markets now sees a new box appear at the top of the page titled “Comparison Ads”, featuring direct links to options on Hotel Finder, the search giant’s foray into a hotel search system elsewhere.

Initially only seen in the US, users in a number of countries are now seeing the Hotel Finder tool in search results.

The ire is expected to come from those bidding on keywords to get placement in pay-per-click results either in premium slots at the top of the page or in the existing sidebar.

The format and title being used, Comparison Ads, was originally only for users looking for financial services products such as mortgages and insurance.

Google said in February 2010 that it would consider using Comparison Ads for travel products, but other events appeared overtook it when the ITA Software acquisition kicked in during the summer of 2010 (finally approved in April this year).

Tnooz’s source, a hotelier in Las Vegas, says:

“The implications are many, especially to meta search competitors such as Kayak, but of course to OTA’s like Vegas.com and Expedia. In competing with us for clicks traffic in paid search, calling it an ‘Comparison ad’, Google is pushing users towards its Hotel Finder property.

“I see CPC’s increasing and there will probably be a CPA model once they push enough traffic to this property. Google Places already negatively impacted our clicks share and now Google is competing directly with advertisers? I think it’s extremely reckless and evil.”

A Google official says the company has been testing “interactive promotional ads that link to Hotel Finder over the last few months” and confirms that the ads are appearing across English-speaking markets at present.

Google’s move will validate what the likes of Expedia have been saying in recent weeks, suggesting that what the search giant does in the hotel space is potentially where the greater returns are for the company.

These services have all been good, but they are much like getting travel advice from a white-shirted accountant. Good, solid, reliable information but very flat and uninspiring.

What makes you want to go to a place to begin with? When you have chosen a place – what makes you want to explore further? The inspiration phase of leisure trip planning research has been by far the hardest for tech-based services to master.

Google has announced (and started sending out Beta invites to) a new service, known as Schemer, which attempts to compete in this gap.

Effectively it is local destination ideas based on tips from your (Google+) friends, celebrities (oh yes!) and professional destination content producers (ie. travel writers).

It uses content with the likes of Zagat, the review service it purchased in September this year.

From first look there doesn’t seem to be any commercialising of these experiences (nothing has an obvious price or is bookable) but it is as yet unlaunched and booking would be easy enough to add on later.

The travel industry companies most at risk from this move by Google are the 30 or so nascent person to person (P2P) tour guide marketplaces (that I reviewed back in September).

Many of these P2P services are based on individuals providing and consuming interesting destination experiences together.

With Google already having a Google+ social profile acting as the central glue, Schemer could move into this P2P tour guide area as the user could essentially see who it is booking from (and build trust).

Tie that in with Google Checkout and you have a powerful combination which most existing P2P tour guide marketplaces would struggle to compete with.

The second group of companies at risk from this move by Google is, well, everyone else.

If destination research moves to starting at Google Schemer rather than Google Search, then Google will be able to pitch flights, hotels and other travel services, without having to necessarily work within the confines of their existing web properties.

We are a long way from this though, of course – the service is yet to fully launch

Here is a walk-through by a writer from TheNextWeb:

And Google’s own, rather peculiar introduction to the service:

As we head into the busy travel season, travel agencies – both online and storefront – are poised once again to handle significant volumes of consumer traffic.

Online travel companies play a vital role helping airlines, hotels and other travel partners reach millions of consumers around the world through their one-stop travel shopping sites, and provide consumers with decision-making power to research, compare and purchase travel that fits their interest and budget.

Further, because of the transparency and competition that OTCs facilitate, they help lower prices for consumers, and to increase travel bookings for suppliers – a win-win-win for all involved.

For example, 40% of all travel is booked through travel agencies, and one third of all ecommerce in the US is travel based. So it is little wonder that Google – the Goliath of the Internet – wants in on the action.

Google closed its deal to acquire ITA Software for $700 million in April this year and has since launched the first version of its Google Flight Search tool.

For the travel shopper, what could be better? The biggest search engine in the world providing a search for consumers to get the best air fares, right? Wrong.

As that old adage reminds us: let the buyer beware.

The first version of Google Flight is not very impressive, with only a handful of airlines participating. No doubt it will get updated and expanded, but unless the underlying model changes dramatically, the choices will remain limited, and the prices will remain higher than traditional online travel companies – not a good tool for consumers to search for travel.

The reason for these shortcomings are clear, given that the parameters of Google Flight were clearly dictated by the small group of airlines that were Google Flight’s launch partners, and their intentional exclusion of agenices from the mix of search results.

Or, as Jeremy Wertheimer, the vice president for travel at Google, recently indicated when asked why Google Flight did not provide links and offerings from OTCs to help consumers search and compare, said:

“…we work with airline partners, we are in the airline industry, just as we are in the hotel industry. We are not actually in the stand-alone-technology-we-do-what-we-want industry – we’re in the airline industry. And our airline partners were very clear – as we discussed with them this year – that they were not interested in participating if we provided links to OTAs.”

Wertheimer’s comments speak for themselves as to why consumers who think they are going to Google Flight for impartial searches and the best information should be wary – they are not going to get an impartial search result with multiple choices like a traditional OTA, but instead are likely to end up with a limited menu of options, as dictated by the airlines.

And, it remains to be seen whether Google Flight will disclose those arrangements and limitations to consumers. It sounds like the airlines are calling the shots. And it sounds like Google Flight is perfectly fine with that arrangement, though their customers may not be.

In other words, instead of a typical Google search result, which delivers a significant supply of supposedly unbiased search results, Google Flight appears to simply serve as a search engine with a limited focus, and a clear, but undisclosed, bias toward a small group of suppliers.

This highlights another shortcoming of Google Flight for consumers – the lack of consumer protections that it provides.

The US Department of Transportation plays an active role in policing consumer protection rules with regard to advertising and transparency of information.

The established OTAs abide by very stringent rules with regard to how information is displayed and conveyed, and whether search results are biased (they are not).

However, whether Google Flight has embraced those same disclosures and protections is unclear. So the buyer should beware. And so should Google.

NB: This is a guest article by Joseph Rubin, president of the Interactive Travel Service Association (ITSA).

Hotel distribution changes every ten years. In the 1980s it was the GDS, in the 1990s the emergence of tour operators like TUI and Thomas Cook, and in the 2000s the adoption of the web and online travel agents.

At the beginning of the decade of the 2010s, we can already see a shift happening to digital marketing.

Hotel digital marketing is the response to consumer changes – consumers are much more “educated” in travel search, and they use multi-channel: OTAs, direct website, review sites, social media, mobile.

Never before are there so many search products: OTAs, metasearch such as Kayak, the new Google Flight Search and Hotel Finder, Hipmunk, the “cool” new search interface on top of Orbitz’s inventory.

In addition, the planning tools market is exploding. TripIt and TripCase are more traditional travel planners, but a whole slew of new social tools is emerging with Gogobot leading the pack, but also with new competitors like Gtrot, Flymuch and others.

Lastly, new products are now transactional online: restaurants at OpenTable, tours and activities using Viator and even derivative accommodation products using Airbnb, a new darling of Silicon Valley VCs.

So, against this backdrop of exploding choices, how does a hotel manager make its brand visible online?

Mass marketing vs Niche strategy

Hotel managers need to be realistic. Large OTAs spend tens of millions per month on SEO/SEM, and advertise on hundreds of thousands of keywords. So, becoming the #1 on “hotels in New York” is probably not an option.

But a niche strategy may work. Let’s consider New York City, one of the most competitive hotel markets in the world.

When searching for “Cheap Hotel in New York” the results are dominated by advertising from Booking.com, Hotels.com, Kayak, Airbnb and organic search results from Hotels.com, Hotelclub, etc.

However, just by focusing on the brand identify and location provides immediate differentiation. Let’s look at three examples:

• “boutique hotel in New York close to the Jacob Javits Center”
• “economy hotel in New York in soho”
• “corporate hotel in New York in chelsea”

Boutique hotels near the Jacob Javits Center

When searching more specifically for “boutique hotel in New York close to the Jacob Javits Center” the results are very different as can be seen from the screen capture below.

By focusing on brand and location, four things happen:

• While there is still some advertising, it is now dominated by specific brands (in our example morganshotel.com, royaltonhotel.com, thetimeny.com).
• The pay-per-click costs are lower
• The organic search results are now dominated by independents (#2 and #3 are ink48.com and indigochelsea.com)
• You have a good chance of showing up on the map

Let’s now try the other two searches and see if the same results apply:

Economy hotels in SoHo

Advertising is still very competitive with Booking.com, hotels.com and kayak.com. But by focusing on brand and location, three of the four things happen once again:

• The pay-per-click costs are lower
• The organic search results are now dominated by independents (#2 is TheSohoHotel.com)
• You have a good chance of showing up on the map

Corporate hotels in Chelsea

Advertising is very competitive with booking.com, hotels.com and kayak.com. But by focusing on brand and location, three of the four things happen once again:

• The pay-per-click costs are lower
• The organic search results are now dominated by independents (#1 is hotelchelsea.com)
• You have a good chance of showing up on the map

Experience tags differentiate further

Another element to differentiate your hotel is to associate experience tags with it. Let’s take a look at two examples: golf and wine for hotels in california.

When searching for “golf hotel california” we expect to see high levels of competition:

And, as expected, “golf” is a pretty wide term, and highly competitive with golf-oriented tour operators bidding no the keyword.

Surprisingly, the results for “wine hotel california” are quite different:

There is almost no competition, therefore an SEM/SEO strategy will work well for a hotel that is located in california and tied to the california wine experience. So, a quick search on the experience terms you can associate with your destination will probably provide a good benchmark of which keywords you should be optimizing for.

Conclusion

In conclusion, whether you are in a highly competitive market, or in a secondary market, three simple items will provide in-destination differentiation for you search optimization strategy:

• Your brand identity: economy, corporate, boutique, budget…
• The location of the property: landmarks around your hotel…
• Experience tags relevant for your destination: gourmet, horses, relax, nightlife, wine, museums…

Using these three items you will not necessarily make your hotel #1 on Google in your market, but you will have a good chance of having great occupation rates with guests that are going to enjoy the experience at your property.

NB: This is a guest article by Pedro Colaco, president and CEO of GuestCentric.

The site, which launched in June this year, has secured a deal with Russia’s notoriously protective distribution systems run by SIRENA and TAIS, getting access to content from a string of airlines which would ordinarily unavailable to those off the GDS grid.

Jizo claims air content on both the SIRENA and TAIS systems are out of reach from other search engines, giving it quite a sizeable lead over other consumer brands and also those outside of the country eager to give travellers access to the vast array of internal Russian airlines.

Out of approximately 30 Russian scheduled carriers, only five are hosted on external distribution systems (such as Aeroflot on Sabre), meaning there is a vast swathe of content currently inaccessible to travellers unless they visit a SIRENA or TAIS-connected travel agency.

Travelport has a existing strategic partnership, signed in July 2010, with SIRENA to give Russian agents access to international carriers via the Worldspan and Galileo platforms.

The Jizo deal will be the first time that many of the Russian carriers will be available in a consumer-facing search engine both in and outside of the country.

SIRENA is a system which was created in 1972 as the Soviet GDS. After the collapse of the Iron Curtain the organisation split into two (SIRENA and TAIS), essentially to allow competition between the pair.

SIRENA commercial director Marina Volodina says:

“No other search engine in the world has established direct access to the broadest CIS fare databases before. With this project Jizo becomes a unique metasearch engine currently including the most extensive proportion of domestic flights in Russia.”

NB: Image of Moscow Airport via Shutterstock.

Airlines have done a bunch to make personalized offers to their own loyalty program members through email marketing and some pledge to do likewise through direct-connects, but now they are pushing to take what they term “traveler authentication” to metasearch sites, where perhaps they can attract new customers and more efficient bookings.

The effort is all part of a new Open AXIS Group committee dubbed the Customer-Centric Meta-Search Working Group, which is being sponsored by flight and hotel metasearch company Hipmunk and has additional participation commitments from American Airlines, Air Canada, US Airways, United Airlines, Skyscanner, MindTree, Goldenware Travel Technologies and others.

“Hipmunk is the lead-sled dog on this and could get some first-mover advantage,” says Jim Young, executive director of the airline XML standards group, Open AXIS.

If tasking airlines and metasearch companies with the seemingly complex task of serving up personalized airline offers to travelers seems like pie-in-the sky, then Young counters that the organization already has been working on the initiative for a few months and hopes to see a beta in place with a couple of airlines and a metasearch company by March 2012.

The way Young envisions it, metasearch companies would furnish airlines with their users’ profile information — assuming consumers okayed such data-sharing — and then airlines would provide consumers with personalized offers for amenities or ancillary services, perhaps based on their zip codes or other data.

“Large carriers are getting carpet-bombed for search requests and they are not able to bring back anything, but the lowest fare,” Young says, adding they would love to have more information about who’s asking them for information so they can provide more relevant results and engage in more effective merchandising.

With such personalized merchandising, metasearch companies, such as allied members Hipmunk or Skyscanner, would benefit from increased conversions, Young says. Kayak is not part of Open AXIS and so far is not participating in the standards effort.

Asked about the initiative, John Gustafson, US Airways’ managing director of e-commerce and distribution, says, “We support traveler authentication, or more simply, delivering relevant products to customers at the right time.”

And, a spokeswoman for American Airlines confirmed it is “interested” in the working group and will indeed participate.

Young says the working group would create XML standards to accommodate traveler authentication for airline queries in metasearch, but that wouldn’t be where the heavy lifting would take place , and would amount to perhaps 20% to 40% of the group’s efforts. The XML standards would be published when completed.

However, the main focus of the working group would be on coming up with the business requirements for airlines and metasearch players to bring the proposition to life, Young adds, noting that deciding on how each airline would be able to merchandise their products would be high on the agenda.

Hipmunk, which is sponsoring the working group, “hasn’t decided on any particular products that would use personalized queries and certainly hasn’t decided on any timing,” says Adam Goldstein, Hipmunk co-founder. “The purpose of our attendance is to help understand what’s possible and then help formulate things that will make an even better experience for our users.”

This personalization push will be a key future direction, Goldstein says.

“We think personalized travel search is going to be increasingly important,” Goldstein says. “There’s no sense in showing people options that aren’t relevant to them and that we know they’d never want to take. That’s been our philosophy since the beginning and why we sort by ‘Agony’ to provide the best options. However, it’s relied entirely on business logic on our end. We look forward to potentially integrating what our users tell us they want with the APIs of our suppliers.”

Sounds like traveler data could be replacing business logic as a more effective and personalized marketing tack.

In the US alone, in 2009 the web was used by approximately 90 million American adults to make their travel arrangements (2009 is the most recent year these statistics are available from the US Travel Association).

Since that time, it is likely the figure has grown considerably as more consumers shift further from traditional travel planning methods to using sites such as metasearch engines and online travel agencies.

Travel reservation websites have become robust businesses that handle a tremendous volume of consumer searches, requests and transactions for making all their travel plans with frequent flyer miles, preferred hotel guest car rental points, hotel reservations and countless other online interactions.

These information hubs provide everything a traveler could want in preparation for their next destination.

While travel reservation sites provide an important service for consumers, the flipside is that they require a high degree of technical oversight due to the fact that the sites variables are changing rapidly and are updated dynamically and in real time.

This places greater demands on software development teams – teams that are increasingly distributed across multiple time zones and locations.

An added pressure is that software development is directly tied to revenue. The changes and updates development teams are called on to make are increasingly “business-critical”.

Consider the flood of data and volume of software code required for a single reservation or transaction on one of these major travel sites, then multiply that thousands of times over with the demands of real time as thousands of consumers research, reserve and purchase flight, car rental and hotel options.

Add to that the requirements of special offers, deals, and the unique attributes of each person’s frequent flyer or executive club profiles.

Then magnify this even more during the many peak travel times that occur throughout the year, or the demands of weather-related events that disrupt travel and it becomes apparent how a single software glitch or a site crash can result in major revenue losses, not to mention the residual consumer frustration and damage to the brand.

Because of this, with the exception of small airlines or hotels with more basic informational web sites, simple software development tools are becoming overwhelmed by the intense demands of these complex sites that are constantly processing a tremendous volume of reservations and transactions. This is where Software Configuration Management (SCM) comes into the picture.

Also known as Version Control, SCM consists of the tools and processes that developers and development teams use to make sure all implemented changes are incorporated and shared with the team in the most efficient and accurate way possible. A single misstep in version control, and a travel website could experience a glitch or the worst case scenario – a site outage.

Site outages can be devastating to online businesses such as travel sites. For these reasons, SCM has become a crucial element to the ongoing operations of travel web sites.

Let’s consider one example…

A global travel company operates dozens of sites in virtually every language and handles everything travel-related, including flights, hotels, car rentals, cruises. Travelers can choose from a wide variety of pleasure and business travel packages and special deals that are constantly changing and being updated in real time.

More than thirty development teams consisting of hundreds of developers are required to keep the site running smoothly 24/7. The developer teams are distributed across the globe, continually working in parallel and simultaneously on software development projects.

Unfortunately the site has outgrown the software development tools and processes that had been adequate at one time, but business growth demands required a more robust version control solution to manage the integration of all of these projects being developed in parallel around the clock.

The release engineers and architects working in this development environment will find themselves dealing with a number of challenges that are typical of complex, distributed software development initiatives such as:

• Getting to “done” within each stage of the development process
• The complexity of managing software changes
• Attaining rapid release cycles
• Remote and outsourced teams
• Scaling and code sharing among Agile and non-Agile teams

Attaining rapid release cycles is particularly important for travel web sites to handle the constant code changes and site updates already mentioned.

Travel sites also have a legal obligation to post immediate updates and changes to baggage or security policies imposed by regulatory and compliance organizations.

In addition, the recent daily deal and flash sales craze have intensified the variables and frequent changes that travel sites must manage seamlessly to handle the growing volume of these special deals.

To put this into perspective from a developer’s point of view, adding the capacity to handle coupon deals to a travel site is equivalent to at least half the effort of launching an entirely new site!

These challenges are driving travel and hospitality sites to take a closer look at the software development tools and processes they currently have in place to determine what’s needed to improve the efficiency, performance and reliability of their web sites which are the lifeblood of the business.

There’s no “one size fits all” solution. It all comes down to the right mix of tools and software development processes with a robust enterprise-class version control system as the hub and foundation for optimal web performance.

NB: This is a guest article by Chris Lucca, technical marketing manager for AccuRev.

NB2: Image via Shutterstock.

Who and what are you (including personnel and backgrounds)?

Superfly is a team of consumer internet and mobile travel pros, founded by Jonathan Meiri and Zviki Cohen.

• Jonathan is Superfly’s Co-Founder CEO. He started out as a product manager at eBay and was part of the team that launched PayPal Mobile. He then worked with companies that focus on digital travel, first as a director of mobile at Rearden Commerce and after that as VP product of WorldMate.
• Zviki Cohen is Superfly’s Co-Founder and CTO. Before Superfly he spent several years at Amdocs, most recently as Chief Architect of its consumer platforms.
• Kenneth Esterow is a Superfly advisor and the former CEO of GTA by Travelport.

What financial support did you have to launch the business?

We’ve raised just under $500,000 from an A-list of Israeli Angel investors.

What problem are you trying to solve?

Consumers do not have access to online personalized travel services. Travel agents offer a personalized service, but they are harder and harder to find. Online flight search has not changed in the past ten years and results are often not relevant to you.

Other industries have leveraged personal data or interests to enhance search results so that individual consumers can really find the best flight for them, but travel has not.

Describe the business, core products and services?

Superfly helps users organize their miles. Our personalized flight search is at the core of our platform, helping consumers see the subjective value of flight options out there.

We also enable the personal management of travel rewards and provide a forum for social networking between travelers with similar backgrounds and interests.

Who are your key customers and users at launch?

Our initial focus was travelers like the George Clooney character in hit movie Up in the Air, really heavy travelers who on the road all the time. We’re now expanding beyond that to a much wider group of travelers because there are over 80 million people in the US who collect miles (150M worldwide).

Did you have customers validate your idea before investors?

Yes, we surveyed a few hundred people before launching in order to see whether they would find our service worthwhile. We asked them the following questions (original results below):

• Help me organize all my frequent flier miles in one spot
• What is the current value of my miles?
• I’m looking at various tickets, which offers the best value?
• Help me get Elite status faster?

What is the business AND revenue model, strategy for profitability?

Our goal is to help travelers find the right flight (we will add hotels and cars in the near future), so we’re already seeing some revenue from people who book a flight through Superfly.

We are also considering a premium tier, to help elite travelers with just about anything that can think of.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• We are using a number of providers, including Everbread, we have a bigger flight inventory than any player out there
• We are making more revenue per user than it costs us to bring that user in

Weaknesses:

• We have yet to reach regional critical mass.
• We are a startup with limited resources.

Opportunities:

• Huge potential to create marketplace for elite travelers. Everyone, including the airlines will be able to better target travelers with individual offers.
• Google’s recent acquisition of ITA Software and the direct connect they offer with airlines essentially disintermediates many of players in the existing travel value chain. Online travel services are now scrambling to differentiate themselves, and tech innovation is the best way to do so.

Threats:

• If a large travel company enters our space.
• Google cuts off access to flight search

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

We launched at TechCrunch Disrupt in September of last year. One of the panelists was Sean Parker and he was concerned about our ability to reach large volumes of consumers.

We did listen to him! His point was well made and is a challenge we deal with every day. That being said, we’ve been very effective by using Parker’s Facebook properties to acquire users via guerilla marketing tactics.

What is your success metric 12 months from now?

Our initial targets for the beta we launched in May 2011 were based on the number of miles we’d have under management. We are now at close to 10x that number.

Our success metrics moving forward will be based on look to book ratio, which we believe is already better than Kayak.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Details of the settlement were not disclosed, but all hostilities between the pair are now over in three jurisdictions: UK, US and the Netherlands.

The threat of legal action and subsequent case has rumbled along for the best part of 18 months, with confirmation that Everbread was indeed on the receiving end of live lawsuit only coming last week via a Vayant official.

It is still unclear exactly what were the precise terms of the lawsuit, but in July 2010 officials at Vayant sent a letter to Everbread alleging it had hired about nine of the companies’ ex-employees and launched a competing product with similar functionality “at breakneck speed” by using “confidential information and/or by copying their copyright programs”.

At the time, Everbread said there was no merit in the claims and declined to comment any further, but Vayant was – in short – accusing the rival, including the now president and co-founder Assen Vassilev, of switching sides and taking the technical code to entrepreneur Morten Lund’s Everbread.

It now appears the war is over, with both sides confirming a “global settlement” over the weekend and pledging to now concentrate efforts on their own products rather than each other.

In a joint statement, Everbread CEO Lund says:

“We are very pleased to have resolved all issues between us and Vayant, and are now looking forward to developing our business with our Haystack code.”

For Vayant, CEO Brian Clark adds:

“Vayant is delighted to set aside all disputes so that we can concentrate on competing with our OneSearchTM platform in the marketplace and not in the courtroom.”

The circumstances leading up to the row and subsequent action has been hanging over the pair for months, a period which has unfortunately seen increased activity in the marketplace as companies seek alternatives to ITA Software for airfare shopping and pricing following its acquisition by Google and a thumbs-up to deal from US regulators.

Meanwhile, circumstances surrounding Vassilev’s former company Lessno, which spawned Vayant, have become confusing once again.

When the threat of legal action by Vayant against Everbread emerged in 2010, Lessno was at the same time being sued by Vassilev in the US.

Vassilev was listed as a creditor when Lessno was placed into Chapter 7 bankruptcy petition in 2009, after he had left the business for Everbread.

He was seeking to recover unsecured claims of almost $90,000 as part of a promissory note created about 10 days before the bankruptcy filing.

Founded in 2006, Lessno, which had offices in Sofia, Bulgaria, New York and Philadelphia,  operated a discount airfare website and was a joint venture of Smart Travel Network and EZSearch, which became Vayant Travel Technologies.

Neveq, a private equity fund specializing in eastern European startups, provided approximately $3.9 million in funding to Lessno.

In the summer of 2010, officials claimed the action being taken by Vassilev was independent of Everbread – although the company now says it cannot discuss any details about Lessno as it is also included in the settlement last week.

The company is releasing what it calls version 2.0 of of the platform, promising users of the technology access to faster results and access to more air inventory, on a global scale.

The launch will allow Vayant to further integrate availability results within the flagship OneSearch engine as well as its Microproduct suite.

Vayant claims the enhancements will give online travel agencies and metasearch engines complete real-time availability worldwide, including multi-carrier fares.

The news follows the release in November this year of an Airfare Intelligence tool to give an snapshot of airfares from carriers worldwide.

The company was named (belatedly) by Google in July 2010 as one of the air shopping technology providers in its infamous ecosystem chart.

Vayant has since in March 2011 secured an undisclosed but “substantial” round of funding from existing and principle investor Neveq LP, and Cape Capital.

It also announced a change at the top by appointing former-Fly.com general manager Brian Clark as its new CEO.

Google says the international roll out of Flight Search is “coming soon”, although it is expected to be a staggered launch in individual markets rather than a simultaneous unveiling across the rest of the world.

In his first media interview since Google announced its intention to buy ITA Software for $700 million in July 2010, former-CEO of Massachusetts-based ITA, Jeremy Wertheimer, now vice president for travel at ITA Software by Google, would not disclose an exact timeframe for the launches.

One option would be to begin with relatively limited functionality in terms of the cities and airlines covered by Flight Search, similar to how the US launch was introduced in September this year.

This would depend on any agreements Google is able to negotiate over the course of the next few months, Wertheimer says.

It is not known if the policy of only carrying search results from airlines will be used in other markets as it was in the US, once again excluding online travel agencies from participating in results.

But there are now also the first significant signs that other travel products are also being lined up for launch, with car hire appearing to be an obvious contender.

Nothing is off the table as yet, is the impression being given by Wertheimer, although in true Google fashion the emphasis is on “testing” and “experimenting” with ideas, rather than confirming one way or the other that a particular product line in the industry will be next on the list.

Other likely areas considered might be tours and activities or vacation rentals, for example, although Wertheimer declined to divulge precise plans.

How to address one of the most significant challenges with expanding Flight Search outside of the US, where the general perception is that ITA’s coverage is weaker, is still unclear.

Wertheimer says Google will secure partnerships with both airlines or “data providers” to introduce Flight Search in other markets, although he refuses to disclose any further details or if any of fare shopping providers or the GDSs (Travelport‘s ePricing or the MetaPricer product from Amadeus, are just two of a number of sources) will be involved.

“We will work with whoever we can in order to get the data,” he says.

Who and what are you (including personnel and backgrounds)?

Distribute was set up to enable new distribution opportunities for tour operators and OTAs, and provide businesses breaking into travel with a powerful platform to do this.

Our senior team:

• Nic Costa, managing director – Nic has been instrumental in the development of travel advertising technology products and services since 1997. He was a founder of travel specialist affiliate network, AffiliateFuture and instrumental in building the business to be the fastest-growing affiliate network in the UK with an unrivalled stronghold in the travel sector when it was sold in 2007.
• Giles Parnwell, commercial director – Giles is a well-respected travel industry figure, having won personal and company awards for services to the travel industry. He started at Singapore Airlines 20 years ago, responsible for UK sales and driving a number of online firsts in online advertising and marketing for the airline. He has extensive knowledge of affiliate marketing and travel technology, and proven commercial experience at managing business portfolio’s exceeding £180 million per year.
• Daniel Chick, technical director – Like Nic, Dan was with AffiliateFuture from the start and was the technical force behind its award-winning technology. Since selling the business in 2007 Dan has taken an advisory role for many big names in the industry. He has a strong background in all aspects of Internet related technology, with specific expertise in scalable web application infrastructure, online advertising, tracking technology, API development and ‘Cloud’ based computing architectures.

What financial support did you have to launch the business?

We’re self-funded so far.

What problem are you trying to solve?

We’re helping to create new high-volume distribution opportunities for tour operators and OTAs and providing complimentary brands with new revenue streams from travel without any technical resource requirements.

Describe the business, core products and services?

Distribute’s technology aggregates live data from a wide range of big name travel suppliers for syndication to high-profile web sites looking to promote holidays. The flexibility and open nature of the product uniquely allows any brand to deliver live pricing into websites, email or specialised marketing campaigns such as retargeted banner advertising.

We publish white label holiday search websites for complimentary brands, such as web portals, tourist boards, and price comparison sites.

Customers can be directed at live results pages in many ways:

• Via a colour customisable search box. We provide simple tools to do this
• Via a holiday search website homepage
• Via links within website text, email, banner ads, Google PPC ads to specific results pages, eg.
• Holidays from East Midlands Airports to the Canary Islands leaving in the next 6 weeks
• All inclusive holidays from London to Kos for 2 adults and 2 children next summer

The underlying high-capacity holiday price and availability data is also fed direct to existing leading travel aggregators and specialist advertising and marketing agencies for use in their own products and services.

Who are your key customers and users at launch?

• Travel suppliers: Thomas Cook, Lowcost Group, On Holiday Group, On The Beach, Expedia
• Travel aggregators: TravelSupermarket, Teletext Holidays
• Agencies: Struq & Flashtalking (retargeting), Rocketer (social), Fusepump (affiliate feeds & tools)

Did you have customers validate your idea before investors?

We presented the first version of our white label technology to Thomas Cook five months ago. They were clearly impressed, and suggested a use for it that we hadn’t thought of; on the late deals section of their own website. They carried out split tests to validate the technology, and found that conversions significantly increased. We couldn’t have asked for a better test case.

What is the business AND revenue model, strategy for profitability?

Software-as-a-service (SaaS) with monthly licensing fees dependent on volumes. Our strategy is simply to sign up more partner websites to increase our distribution network and revenues for all parties. In 2012 we’ll be adding flights, hotels, dynamic packages, car hire, and travel extras.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• The technology is extremely complex and volumes of data are huge. Our team have obsessed about travel distribution for years and have worked with most of the parties involved on the supply side with different hats on.
• We’re specialised in travel, and our technology has been designed from the outset to deal with the volatility in pricing and live availability specific to the travel sector.
• Having access to new cloud technology products in development before they are launched

Weaknesses:

• It can often take our suppliers months to track down the source of their data, or it may be tied into other distribution systems.

Opportunities:

• Substantial new distribution opportunities for our travel suppliers
• A hungry set of clients that are keen top showcase their product in new areas online
• High traffic websites that are keen to offer travel products to their visitors

Threats:

• Other players coming to market, but as we’re already working with the big players, and there is so much development work involved, we’re at a distinct advantage

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

We’ve only had encouragement so far.

What is your success metric 12 months from now?

• Substantial levels of targeted visitors delivered to our travel clients’ websites via our technology.
• Providing a genuinely simpler, more useful way for travellers to compare holidays, flights, and hotels.
• Creating a new revenue stream for many large players keen to break into travel.
• Expansion into other countries.

NB: Here is a Prezi overview.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

The company launched as a consumer-facing proposition in March this year (TLabs Showcase – Pocketvillage], but has now thrown its product feed into a service for partners.

At the same time the main site has also been given a new look, primarily to showcase what is on offer on the feed to potential third party users of the API as well as display information about each product such as geo-location, content, images and what the company calls a “pocket rating” to highlight how unique is each tour and activity.

Pocketvillage says it will have around 20,000 products on the system, and the API, but the figure increases substantially to around 50,000 when route variations and tours in multiple languages are included, a process which the likes of online travel agencies Viator and Isango use in their product count.

Co-founder Jann Kleen claims the new site and services will help push the company closer to its goal of becoming a Kayak for tours and activities.

The company, which launched in July this year, has been working with Facebook to develop the Flight Finder application within its existing fan page.

The project in its early stages and relatively simple at the moment, but essentially uses the location element from the member’s profile, identifies the closest airports from their locations and then analyses the airline schedules between the two points to reveal the cheapest fares…

…and then automatically redirects the user to a page on the main website with flight information pre-populated on the screen, using the bar and line format adopted by Jizo when it launched.

In this case, London to Barcelona:

Co-founder and CEO Serge Lavrentyev says over time the application will be enhanced so that the results are displayed within the application itself, as well as perhaps showing a “flight” option against a user’s name within the Facebook timeline.

So-called reverse search will also be included, allowing the user to establish which flights are available back from a location, as well being able to have multiple airports included in a search.

Friend filters will also be added, so users can quickly find a particular profile rather than having to scroll through an entire list of friends.