Elie Seidman, the co-founder and CEO of Oyster.com, thinks the new Orbitz hotel ad campaign, is slick, but divorced from reality.

Here’s a recent YouTube video from the hotel-focused Orbitz ad blitz, which has the tag line, “When you Orbitz, you know:

On July 15, Orbitz Worldwide President and CEO Barney Harford tweeted about the campaign: “No-one likes a know-it-all until they need to book a hotel. Bless you, cannonball. Know what to expect from your vacation. http://ow.ly/2C3FS

A few hours later, Seidman retweeted Harford’s tweet.

Seidman tweeted: “Orbitz ad is good but is divorced from product reality of Orbitz. RT @barneyh: Know what to expect from your vacation http://ow.ly/eC3FS

Seidman claims that Orbitz and the hotels themselves distribute hotel photos and descriptions that can be misleading to customers because they depict images of pristine settings and amenities that may not reflect the actual circumstances.

“The gall of Orbitz’s ad is that it describes the customer problem — not knowing what I’m going to get when I show up at the hotel — and implies that Orbitz solves it,” Seidman says.

Oyster, which offers journalist-written hotel reviews for a limited number of destinations, has been running Oyster Photo Fakeouts, which purport to portray the gap between the images of hotel publicists and more realistic portrayals on Oyster.com.

Oyster put together a series of what it describes as Orbitz photo fakeouts.

“But as the photo fakeouts of Orbitz show, Orbitz is a part of the problem it claims to solve, and self-evidently is not the solution,” Seidman says. “Their ads, while funny, ring hollow and Orbitz and their ad agency,BBDO, need to be taken to task for this.”

So, take a look at some of Seidman’s Orbitz fakeouts — and judge for yourself.

Here’s a poolside photo from Orbitz.com at the Hard Rock Hotel and Casino in Las Vegas:

Here’s the actual scene that a visitor might experience at the Hard Rock Hotel and Casino in Las Vegas, according to the Oyster photo below:

Orbitz, however, does indeed have a photo in its Hard Rock photo slideshow, which Seidman didn’t submit, depicting a crowded pool. Here it is below:

The following is an Orbitz photo of the beach at the JW Marriott Ihilani Resort & Spa in Oahu:

And, the following is Oyster’s depiction of the same beach — albeit at a different time with cranes in the background — at the JW Marriott Ihilani Resort & Spa in Oahu:

Here’s another example of what Oyster considers an Orbitz fakeout. This is is an Orbitz photo of the Hyatt Regency Washington:

And, here’s the Oyster photo showing the Hyatt Regency Washington’s front entrance:

Here’s another tranquil pool setting from Orbitz. This one is at Sofitel in Los Angeles:

Meanwhile, the Oyster image of the pool at Sofitel in Los Angeles makes sure to get Macy’s into the photo:

Orbitz spokesman Brian Hoyt didn’t comment directly about Oyster’s compilation of alleged Orbitz photo fakeouts, but said:

“No one in the industry offers the comprehensive content, resources and service that makes up the hotel assurance we provide consumers who book a hotel on Orbitz. No one has total-price hotel display like Orbitz. Orbitz has Hotel Price Assurance, where if another customer books a hotel room for less on our site, a check is in the mail.”

“Then add on features like hotel reviews (from customers we verify stayed at the property), features like Google Street View and the other hotel information resources,” Hoyt says. “Add to that our history of innovation in other parts of our business like customer care and simply put: We’re happy to go head to head with any travel site. So bring it.”

What do you think?

Should online travel agencies, such as Orbitz, begin to publish more realistic photos?

That would empower consumers, but probably wouldn’t make hotel partners very happy.

Orbitz launched a new cable television branding campaign to push its hotel business, with the tag line, “When You Orbitz, You Know.”

Here’s the video, which is pretty funny:

The campaign, which begins on cable channels such as CNN, ESPN and Bravo, and will expand to print in Travel & Leisure, Condé Nast Traveler, Bon Appétit and Food and Wine, emphasizes Orbitz Hotel Price Assurance, hotel reviews and Google Maps Street View.

Orbitz was reluctant to disclose the precise dimensions of the campaign, which was developed in partnership with BBDO New York.

“We don’t disclose our marketing budgets, but you can guess with a new campaign of this magnitude that it will get the appropriate attention by the company as we continue our quest to build our hotel distribution business,” says Orbitz spokesman Brian Hoyt.

Founded by airlines in 2001, Orbitz is now “airline-free,” Hoyt says, and putting its focus on hotels and vacation packages.

NB: This is a guest article by Mike Nelson, president of the Partner Services Group at Orbitz Worldwide

In recent months, much has been written about the relationship between hotels and online travel companies, in part due to ongoing debate over public policy matters.

These are difficult and complex issues to be sure, but we can’t lose sight of the valuable underlying asset at stake – a healthy, long-term business partnership.

As market conditions fluctuate and individual hoteliers evolve their pricing and distribution strategies, online travel companies remain an important part of the overall equation.

In any economic climate, online travel companies are a strategic resource for hotels that want to stimulate demand, access a global distribution platform and benefit from vast marketing and promotional investments.

From a category perspective, I believe the advent of online travel companies and their current roots remain the same – to lower travel barriers by making the planning, search and booking of hotel rooms easier, especially for customers that are not loyal to a particular hotel brand.

Each day, tens of millions of potential travelers search for hotel rooms on an travel site. A majority of those visitors are supplier agnostic.

When a customer is loyal, they’ll most often book directly with the supplier. As depicted in the chart, the percentage of customers booking directly with suppliers is expected to remain constant.

The growth of online travel companies is expected to come from other third party sources.

The defining value of OTCs is turnkey access to millions of global customers that a hotel would not otherwise reach.

This is true in established markets like the US and Western Europe, and will be even more critical for hotels looking to attract customers in high-growth regions like Asia Pacific and Latin America.

Online travel companies with a strong global footprint are especially helpful in driving bookings outside of a hotel’s domestic market where its brand is not as strong.

Using Orbitz as an example, our percentage of hotel bookings coming from destinations outside of the US has nearly doubled in the last three years.

Online travel companies also make steep investments in sales and marketing activities. The top three publicly-traded online travel companies by total booking volume spend nearly $2 billion annually in sales, marketing and advertising programs.

These investments range from online search engine placements and integrated print and broadcast advertising campaigns to time-sensitive web promotions.

As a result hotel partners benefit from broad-based customer pull and the ability to manage pricing through the use of promotions and the opacity associated with packaging.

Pricing flexibility is particularly helpful in spurring seasonal or off-peak travel demand. A recent example was a Winter Hotel Blowout Sale on Orbitz, which offered our hotel partners the opportunity to reach millions of customers with promotional offers.

Partner hotels that participated in this broad promotion achieved 26% year-over-year room night growth versus flat year-over-year performance for those that did not.

In addition, an online travel companies diverse mix of traffic – including customers searching primarily for airfare – provides a qualified customer that is highly engaged in the travel planning process.

These customers are exposed to real time pricing and availability along with user reviews, virtual tours, and photos.

In fact, many of these customers will choose to book a hotel directly with the supplier after researching on an online travel company.

Independent studies have shown that listing on an OTA can drive a 25% increase in direct bookings. As a result, the true distribution costs of working with an online travel company are in fact much lower than typically perceived.

To whatever degree a supplier chooses to work with an online travel company, we’re but one piece of the larger puzzle.

In good times and bad, online travel companies should be focused on building stable long-term partnerships with their hotel suppliers. We remain focused on working with our hotel partners to build new distribution channels and products, reach new customer segments and deliver an industry-leading travel experience.

For our part, the balancing act will always rely on our ability to win each and every day on behalf of our suppliers and customers.

NB: Mike Nelson is president of the Partner Services Group at Orbitz Worldwide, running the worldwide business operations for the company’s supplier relations, customer experience and partner marketing organizations.

Travelocity, Yahoo Travel’s longtime travel partner, took back some real estate in Yahoo’s travel offering.

In penning a new, multiyear agreement with Yahoo, Travelocity continues to be Yahoo Travel’s exclusive air, car and hotel provider, but also usurps a couple of roles previously handled by Orbitz, and becomes Yahoo Travel’s exclusive vacation package and cruise vendor, as well.

Travelocity sources its cruise inventory directly from the cruise lines and uses ACS, based in Seattle, for cruise customer service.

The agreement — the financial terms of which were not disclosed — also enables consumers to view and share content, such as travel reviews posted to both to Yahoo and Travelocity, and paves the way for new “joint-marketing opportunities,” Travelocity says.

Travelocity spokesman Joel Frey says Travelocity doesn’t currently use Yahoo reviews and how they will be integrated on Travelocity.com remains to be determined.

Travelocity has been Yahoo Travel’s major travel partner since 1997, although the relationship has had its twists and turns, particularly when Yahoo acquired metasearch engine FareChase and made it the default search option on Yahoo Travel.

In early 2009, however, Yahoo shut down FareChase as CEO Carol Bartz went on a bing of closing what were deemed to be noncore operations.

While the financial terms of the new Yahoo-Travelocity deal were not detailed, in 2007, when Travelocity parent Sabre was still a public company and disclosed numbers for some agreements, Travelocity was obliged to pay Yahoo $32.8 million to be Yahoo Travel’s exclusive air, car and hotel provider.

For consumers concerned that their beachside hotel vacation along the Florida Gulf Coast may turn into a gunky mess, Orbitz is offering a refund for their hotel stay if the pristine sands turn into a tar-ball fiasco.

Customers who book a hotel — but not as part of a vacation package — at a participating property on Orbitz.com for stays through July 31, 2010, are eligible for a full refund if a government agency shuts a beach within 20 miles of the hotel or declares the waters dangerous, Orbitz says.

Here’s a list of the participating hotels, located from St. Petersburg to the Florida Keys.

To receive a refund through Orbitz’s Open Beach Guarantee, customers must request it for any unused hotel nights if a government agency declares a nearby beach off limits or dangerous.

“While our initial focus is Florida, we are working with hotel partners to quickly extend this guarantee to other Gulf Coast beach destinations,” states Barney Harford, president and CEO of Orbitz Worldwide.

“We hope to expand this to other regions in the Gulf outside of Florida soon, but since we had to work with each hotel to get them to sign onto this guarantee, we focused on Florida first (as it is our largest of the markets impacted),” adds Orbitz spokesman Brian Hoyt.

“ We also have been working with very concerned CVBs (Convention and Visitors Bureaus) in the region who approached us weeks ago asking us to help the state,” Hoyt says. “But we will get the other communities and more hotels on board soon.”

Orbitz also unveiled a resource center for travelers seeking timely information about the Deepwater Horizon/BP oil spill.

The Orbitz Care Center team provides daily updates, along with National Oceanic and Atmospheric Administration maps about the spill’s meanderings, volunteer opportunities and links to other governmental resources.

Here’s an image of Orbitz’s June 14, 2010, update about the spill.

The updates have a widget option at the bottom, enabling website publishers and bloggers to embed the code into their sites, and then to share the information on social networks.

If you can’t beat them, join them, appears to the mantra in the world of European online travel agencies with news that Ebookers is to launch a travel agency affiliate scheme.

Beginning first in the UK and Ireland, then elsewhere around the OTA’s other European sites, Ebookers For Agents will allow partners to access and book hotel, package holiday, flight and car products from Ebookers in return for a commission.

Around 90,000 hotels, for example, will be available as part of the programme.

Such schemes are gaining in popularity in the OTA sector as they look to push their product range to corners of the offline world where a range of hotel options, at least, may have been limited in the past.

So the launch of such a scheme shouldn’t come as much of a surprise given that parent company Orbitz Worldwide launched its agent affiliate scheme in February 2010.

But crucially, Tamer Tamar, managing director of Ebookers, is widely credited with developing and running the successful Expedia programme before switching sides in June 2009.

Expedia expanded its own agent affiliate programme (TAAP) into the US last week after beginning in a number of territories across Europe, Australia and Canada.

Priceline keeps growing its global hotel business and stealing market share.

In releasing the company’s first quarter 2010 financial results, Priceline CEO Jeffery Boyd notes that the numbers of its competitors — namely Expedia Inc. and Orbitz Worldwide – were good, but Priceline is happy to take market share even as it grows from a higher base.

In the quarter, Priceline’s global room nights grew 56.8% to roughly 20 million while Expedia’s room nights climbed 18% to around 16 million.

Meanwhile, Orbitz, which showed strength from its ebookers unit, saw its hotel room nights grow 13%.

Without disclosing hard numbers, Boyd says Priceline’s Agoda business is growing at a faster rate than Priceline’s overall business and the Booking.com unit is notching “impressive” growth rates in Asia.

Priceline’s strategy is to connect to independent properties with its retail model and to use Priceline’s market power to drive demand.

Another element, Boyd explains, is to share inventory among the various brands.

Thus, Priceline.com uses Booking.com inventory from Europe, and Agoda has been selling Booking.com inventory in Asia, he says.

Sharing the inventory is only part of the story, Boyd says, adding that the next stage is to optimize how that inventory is displayed.

Priceline constantly works on optimizing these displays “to get it just right,” and the results will be beneficial to the company’s financial results over time, Boyd says.

For the first quarter, Priceline saw its profits increase 115.3% $53.9 million, compared to Q1 2009, on revenue of $584 million, a jump of 26.5%.

The company has seen some disruption in the second quarter, however.

The ash cloud in Europe led to $50 million in lost gross bookings from hotel cancellations, officials said.

And, the turmoil in Bangkok and other Thailand destinations has had a “significant impact,” Boyd added.

Orbitz Worldwide released its Q1 2010 results this morning. A summary is as follows:

• Gross bookings – $3,011,625 (up 24% from $2,428,687 y/y)
• Net revenue – $187,153 (down 1% from $188,393 y/y)
• Operating cash flow – $95,991 (down 18% from $116,721 y/y)
• Profit – $-5.3 million (down from $-336.2 million y/y)

Barney Harford, president and chief executive of Orbitz Worldwide, says:

“Orbitz Worldwide delivered strong Adjusted EBITDA growth of 12% in the first quarter. Transaction growth accelerated for the fourth consecutive quarter to 20% driven by consumer fee reductions and ongoing operational improvements.

“Room night growth remained solid at 13%, with particular strength coming from ebookers and Orbitz for Business, which grew stayed room nights 80% and 26% respectively.”

Expedia claims it has little to worry about a potential Google-ITA Software merger, but should Orbitz be concerned? Well, that’s another story.

Dara Khosrowshahi, the Expedia Inc. CEO, calls ITA Software a “very strong” technology company, but adds “from our standpoint, we don’t feel too exposed” to the rumored merger.

That’s because Expedia has built an airfare shopping and pricing system, Best Fare Search, which is “similar” to ITA’s QPX air shopping and pricing system, Khosrowshahi claims.

Orbitz, on the other hand, would become highly dependent on Google for airfare pricing, should Google pull the trigger and buy ITA, because Orbitz.com uses ITA’s QPX for flight search, Khosrowshahi says.

It’s probably true that Expedia.com would have less exposure than Orbitz.com on the air-search front if Google absorbed ITA.

But, if Expedia’s Best Fare Search were comparable to ITA’s QPX system, then why did Expedia’s TripAdvisor contract with ITA [pdf] to use QPX for TripAdvisor’s flight metasearch?

Why didn’t TripAdvisor opt to use Expedia’s Best Fare Search instead?

And, might there not be some exposure for TripAdvisor if Google buys ITA and then uses QPX as the foundation for a Google flight-metasearch tool?

On the other hand, would it really be in Google’s interest, if it buys ITA, to cut off Orbitz.com and TripAdvisor when all of that fat, air-search revenue is coming in the door?

And are the Expedia Best Fare Search and ITA QPX systems really similar?

Consider Expedia’s description of Best Fare Search:

“For example, our Best Fare Search technology essentially deconstructs segment feeds in the United States from GDS partners for air flight searches and recommends the best way to re-assemble multi-leg itineraries so that they are less expensive and more flexible for the traveler,” Expedia states in its most recent 10-K report. “We are looking to expand this technology internationally.”

So, Best Fare Search basically parses air segments primarily from the global distribution systems, which connect to airlines using very dated EDIFACT messaging.

QPX, though, calculates flight options and fares through direct-connects with airlines, OAG, ATPCO, IATA and GDSs, and is widely considered to deliver a best-in-class array of flight options with availability.

Meanwhile, apart from the issue of air pricing and shopping systems, it would remain to be seen how buffered Expedia would be if Google goes ahead and builds its own air — and, more importantly, hotel — metasearch capabilities.

At that point, given Google’s market power, perhaps Expedia and Orbitz would find themselves in similar straits.

Meanwhile, Khosrowshahi, who was speaking at Expedia Inc.’s first quarter earnings call April 29, said the company would be “opportunistic” about acquisitions, especially for small, international media companies.

“I can tell you now there aren’t any huge, huge targets out there, but that could change long-term,” Khosrowshahi said.

Even in an industry full of hyperbole the claim by tour operating giant Thomas Cook that it will become one of the top online travel agencies in Europe needs examining.

The London-listed PLC, headed my CEO Manny Fontenla-Novoa, says it has identified a gap in the marketplace to wade and challenge the likes of Expedia and Priceline to become a dominant online travel agency.

Simple so far.

The company said at its investor day in March 2010 that it saw a major opportunity to come in against the established players because the dynamics (and, indeed, fragmentation) of the European sector were fundamentally different to that of the US, where Expedia, Travelocity, Orbitz and Priceline run the lion’s share of the OTA business.

In Europe, where Expedia, Opodo, Priceline (through Booking.com) and Travelocity (through Lastminute.com) capture around a third of the OTA business, according to PhoCusWright research from 2008, around half of the online agency revenues are still largely untapped by a major player.

Cue Cook’s strategic shift.

The company says it has also identified major openings in the markets in Spain (eDreams anyone?) and Italy to make significant progress.

Fontenla-Novoa says the company wants to have direct contracts (like Expedia, Booking.com et al) with thousands of other hotels to add to its existing portfolio of beach product, a process that will need to be repeated with airlines presumably, both charter and low-cost, as well as it’s own fleet.

Thomas Cook has spent the past few years snapping up hotel contracting firms (bedbanks) in the shape of Hotels4u and MedHotels (from Lastminute.com) to increase its stock.

Meanwhile, the company says it will use the Thomas Cook brand to front many of its country OTA sites. But if it wants to go head-to-head in a serious way against the big boys of Europe, many questions mark remain.

NB: Officials at Thomas Cook have refused to shed any significant light on how it might achieve such lofty goals.

• Contracting hotels is a resource and cost-heavy business – although Booking.com and others are showing that growth can be achieved quickly and, apparently, leanly.
• Marketing will be a key factor. Shifting the existing bucket-and-spade mindset of millions of potential customers to that of we-do-everything-through-everybody will take significant doing.
• Acquisitions are where many see the opportunity. Thomas Cook apparently has a warchest for such delicate matters and  everyone from Opodo and Travelrepublic to eDreams and Ebookers are mentioned privately as possible targets.
• From a technology standpoint, things could be better. The BlueSky debacle left Thomas Cook with a cloud hanging over its tour operating reservation system, although it stresses progress is being made. Nevertheless, it admits “some investment” is required.

Interestingly and perhaps significantly, Fontenla-Novoa has surrounded himself with some important folk in recent months.

Ex-Expedia Europe president Simon Breakwell is still on the books as an ecommerce consultant, despite his seemingly bigger play in Seattle with other Expedia alumni through NewTravelco, while even the appointment of Five TV boss Dawn Airey as a non-executive director suggests to some that fresh thinking ahead of such large ambitions has been the order of the day at a board level.

Some suggest that speed is now the most important factor for Thomas Cook and its goal.

It may have to contend with competition from its major rival across Europe, TUI Travel (which presumably could try the same thing), as well as the marketing muscle and first-mover advantage of those already in play.