The site [featured in a TLabs Showcase in 2010] has entered into “direct relationships” with the likes of FlipKey, HomeAway, iStopOver, roomorama and 9Flats to provide access to more than 500,000 vacation rentals in some 15,000 cities, says Jen O’Neal, co-founder and CEO of Tripping.

“Each deal structure is different but we essentially get commission for every booking that comes through us,” O’Neal says. “The money we make goes to support the Tripping community and the International Red Cross.”

So, if you navigate to the rental section of Tripping.com, which detects your location, you’ll see vacation rental choices from third-parties.

If you search for vacation rentals in Berlin, you’ll see offerings from 9Flats, HomeAway and roomorama. Click on the book button of your vacation rental choice and you’ll navigate to the source site, where you can tap into their divergent ways of booking the property.

Tripping plots the locations of the properties on a Google Map, and gives consumers the option of searching for locals in that destination and saving their favorite locals and properties.

It’s all a way for vacation rental intermediaries and property owners to increase their distribution and for Tripping to make some bucks and better service its users.

The department also decided to require airlines to reimburse passengers’ bag fees when their luggage is lost, increased compensation to passengers when they are involuntarily bumped from flights and expanded curbs on tarmac delays.

The global distribution system companies, including Sabre, Amadeus and Travelport, as well as a broad swath of travel management companies and corporations have been pressing the DOT to require airlines to distribute their ancillary fees through the GDSs, but the DOT balked for now and instead will issue a proposed rule later in 2011 which would require ancillary fee displays in every point of sale.

Proponents and opponents will be able to comment at that time about the proposed rule, pending a DOT decision.

Here’s the DOT’s thinking on its delaying of a decision on ancillary fees’ GDS distribution.

We cannot at this time agree that it is in the public interest to mandate that step, since we lack additional information about costs, benefits and consequences of requiring U.S. and foreign carriers to provide ancillary fee information to GDSs … ” the DOT wrote. “The Department wants to ensure that any action it takes does not have unintended consequences, particularly given the sensitive nature of the market and the negotiations currently taking place between carriers and GDSs.

The DOT did take several steps, which it says “partially address the problem of hidden and deceptive fees…”

Airlines and foreign carriers will be required to list all of their fees for optional services on their websites; airlines and travel agents must disclose on the first fare quote screen that additional fees may apply and point to where it can be found; and airlines and travel agents must disclose bag fee information on e-ticket confirmations.

So, a resolution of the pitched battle concerning whether airlines can retain ancillary fee information in their own channels or will be required to distribute optional services through the GDSs has been delayed pending another round of DOT rulemaking later this year.

And, perhaps airline-GDS negotiations will sway the outcome.

The Business Travel Coalition, one of the groups pressing the DOT to mandate airline ancillary services’ distribution through the GDSs, hailed the DOT notice of proposed rulemaking, saying “the agency is heading in the right direction regarding full disclosure of airline fees.”

Meanwhile, American Airlines stated it was pleased the DOT “declined to mandate the way we deal with Global Distribution Systems (GDSs).”

The airline, which is pursuing a direct-connect strategy that could bypass GDSs in some instances, stated that “mandating which sales channels we must use or implementing rules that would prevent us from introducing new technology would actually restrict our ability to provide the best possible options to the public.” American Airlines added:

We are confident that additoinal study will reinforce the Department’s decision not to intervene in the commercial relationships between airlines and GDS companies. We remain committed to full transparency in dealing with consumers and finding ways to provide a robust set of options geared to their needs and preferences.

The Air Transport Association, reacting to the DOT announcement, stated: “The airline industry supports increased communication and full transparency, ensuring that our customers always know exactly what they are getting every step of the way; and market forces — not additional regulations — are already providing customer benefits.”

The ATA downplays the transparency issue, however.

“Some airlines have opted to offer customers the option to pay for products and services that they want and, in doing so, have continued to be full transparent, ensuring that customers know exactly what they are buying and paying for before the purchase transaction,” the ATA stated. “Airlines will continue to work to present a clear differentiation between the fare charged by the airlines and the government taxes and fees, which can account for roughly 20% of the ticket price.”

And, the American Society of Travel Agents clearly was not pleased about the DOT’s decision to delay a decision on airline ancillary fee distribution in the GDSs.

ASTA stated that it and other proponents of GDS distribution “made clear that the issue of retailer access to optional fee information was the most impactful matter at stake in the proceeding. ASTA will continue to work with the Department to assure that prompt action follows to bring this issue to closure.”

The travel agency trade association also said it will be evaluating the new rule requiring e-ticket confirmations to contain links about baggage fee information. ASTA stated it may have concerns about the rule.

The Global Business Travel Association urged the DOT “to move quickly and require airlines to provide ancillary fee and fare information on any platform selling airline inventory, not just airline websites — without dictating specifics on how the fee data be transmitted or displayed.”

Under the agreement, signed April 12, online travel agencies and travel management companies would be able to hook up to the Delta-Farelogix platform to access the airline’s full-content, including schedules, fares and optional services.

And, Delta plans on using the direct-connect for merchandising purposes such as offering upgrades to individual travelers.

Although American Airlines similarly intends to merchandise through its own direct-connect, using Farelogix as a subcontractor, Delta is hinting that it is taking a softer approach, offering its direct-connect supposedly as an option to third parties which see value in it.

Delta intends to continue making its fares and optional services available to third parties through the GDSs, but direct-connect partners would get more robust content.

Delta issued no official press release about the Farelogix partnership, but communicated the news via email to journalists.

Plans for the direct-connect are said to be in their initial stages with implementation slated for the fourth quarter of 2011.

The economics of Delta’s direct-connect platform weren’t available, but obviously the airline sees it as becoming a low-cost channel which cuts out the global distribution system middlemen.

The airline’s salespeople have not yet gone out to customers with Delta’s direct-connect proposition.

In addition to offering direct-connects to third parties, Delta plans on implementing the Farelogix platform on a private label basis on its WorldAgent Direct site for travel agents. Agents using the site would be able to settle their transactions through ARC.

Positioning the direct-connect as an alternative to GDS distribution, Delta stated in an email: “… Farelogix and Delta will implement a platform to allow customers additional access to Delta content. It will provide another source for the travel agency community to access Delta’s fares and other products and services, in addition to the legacy Global Distrbution Systems with whom Delta currently participates.”

Delta characterizes the partnership with Farelogix as “the latest step in the evolution of Delta’s distribution strategy.”

The airline still seeks to push consumers directly to Delta.com and is gearing the Farelogix platform toward online travel agencies and other third parties.

Delta believes travel agencies will see benefits in direct-connect because they will be able to access optional services and merchandising offers in a manner that the GDSs don’t.

American Airlines has been battling the GDSs and some online travel agencies, including Orbitz, as it pushes them to establish direct-connects with the airline.

Delta says its direct-connect is not mandatory for third parties, but advantageous.

Meanwhile, American Airlines declined to comment directly about the Delta program, but assuredly having another major carrier launch a direct-connect initiative must be a welcome development.

“While we can’t comment on Delta’s efforts, we believe that direct connect technologies will allow American to distribute  a broader range of products through travel agencies, and in the process become more competitive and thus provide a better service to our travelers,” said Ryan Mikolasik, a spokesman for American Airlines.

Sabre, too, chimed in when asked to comment.

“It’s not for us to characterize Delta’s plans, that’s a question better suited for the airline,” says Sabre spokeswoman Nancy St. Pierre. “We believe Delta remains committed to the Sabre GDS and recognizes the value it brings them.  Sabre will continue to innovate and invest in the most efficient, effective way to shop for travel.  The marketplace will decide which products serve them best.”

The widget would look something like this on a tourism website:

There is no Cheapflights branding on the Airports Nearby widget, but when visitors click on Flights to Newark today – or any other preferred airport — they’ll navigate to a Cheapflights page which looks like this and from there they can search flight deals from Cheapflights’ suppliers:

The feature is obviously good for Cheapflights, but why install it on your hotel, leisure travel or tourism website?

Chris Cuddy, CEO of Cheapflights Media, makes the case for the widget.

“It helps convert holiday ‘browsers’ into ‘bookers’ by providing travelers with the extra impetus to book their flight,” Cuddy says. “It’s a great tool for your business or destination to look savvy with your international customers by providing them with free flights deals and comparisons that make it easy for them to access the best travel prices.”

Of course, there is no compensation for the partner website in this widget deal. But, if your website does not offer a flight booking engine or flight information, adding the Cheapflights widget will round out your offerings a bit and give visitors an option to book airline tickets.

To install the widget, you go to the Cheapflights Airports Nearby page, type in the name of your property or attraction and address [it will be added to the map] and click Create. You’ll see the map and an HTML snippet, which you can paste into your Web page or have your developer handle it.

Those trends were revealed by LeisureLink, which tracks queries for vacation rentals, timeshare resorts and boutique hotels from online travel agencies, including Travelocity, Orbitz and Expedia; the GDSs; and LeisureLink’s own ABetterStay.com.

The conversion rate in vacation lodging sales in December 2010 increased 14% over the prior month, November 2010, and 44% over December 2009, LeisureLink says.

“This trend indicates that consumers are shifting from shopping to buying,” says Steve Reich, the company’s senior vice president of sales. “The combination of increased conversion and demand will result in revenue growth and guest acquisition opportunities.”

The Gulf Coast, the Rockies ski regions and Hawaii saw especially strong conversion spikes, LeisureLink says.

LeisureLink gauges consumer queries across its Major Market Access platform, which provides supplier distribution through GDSs, OTAs, wholesalers and ABetterStay.com.

Which leads to the question — are other online travel agencies on Delta’s hit list?

BookIt.com CEO Bud Finlaw describes the reasoning Delta’s top distribution official articulated for the pullout when the airline contacted BookIt.com Dec. 15 and gave the online travel agency just two days to remove Delta’s schedules and fares from the website.

“We got a Christmas card from Delta on the Monday and a termination notice on Wednesday,” Finlaw says. “The phone call on Wednesday afternoon was literally our first hint.”

Chris Phillips, Delta’s director of distribution planning, told BookIt.com on Dec. 15 that Delta has made a fundamental decision after a long analysis to change its online distribution strategy because of confusion in the market over the way its schedules and fares are displayed by online travel agencies, Finlaw recalls.

Phillips pointed to “the product not showing up consistently, [not] showing schedules properly, different display types and  fare matrices,” Finlaw says, adding that the confusion was impacting Delta.com.

“Again, all allusions were [made by Delta] to a wide implementation, affecting all online distribution,” Finlaw says. “The tone of the conversation was that this was not a move against BookIt.com, but was going to be a complete revamping of Delta and its distribution strategy.”

Finlaw says Delta’s reasoning as it related to BookIt.com was curious because the online travel agency predominantly used Delta inventory as part of vacation packages and didn’t display logos and fares.

Asked to elaborate on Delta’s distribution philosophy and whether a fundamental policy change indeed is under way, a Delta spokesman said the airline has only removed its flights from BookIt.com, CheapOair and OneTravel and declined to comment beyond its statements a couple of weeks ago.

Meanwhile, the airline’s decision wasn’t part of a contract dispute between Delta and BookIt.com, Finlaw says, because BookIt.com accessed Delta inventory through its Travelport relationship and not through a direct Delta contract.

Delta apparently has the option to cut off online travel agencies accessing the airline through Travelport.

BookIt.com is the largest of the “second tier” OTAs in Travelport GDS, Finlaw says, so it BookIt.com might be an effective test case of Delta’s new distribution strategy, Finlaw says.

“We assume this was a test, a shot across the bow,” Finlaw says.

When Delta pulled the plug on BookIt.com, it just impacted BookIt.com’s online distribution. Consumers calling the BookIt.com call center can still book Delta flights, Finlaw says, explaining the airline kept that option open.

So, how has the removal of Delta’s online fare displays impacted BookIt.com?

Delta had been responsible for 21.5% of the online travel agency’s flight bookings before the withdrawal and chipped in just 2.7% of flight bookings over the last seven days, Finlaw says.

But, at least some of those lost flight bookings have shifted to other carriers, with American Airlines’ share of bookings up more than two percentage points to 17.6% and Continental’s climbing three percentage points to 15%, for example, he adds.

Package sales have increased with customers using carriers other than Delta, Finlaw says.

So, Delta’s exit “doesn’t feel like it’s been detrimental in one sense,” Finlaw says, although he adds that it has been a negative because BookIt.com wants to give customers a full suite of options.

Finlaw says he was surprised a couple of weeks ago when Glen Hauenstein, Delta’s executive vice president of network planning, revenue management and marketing, speaking at an investor event, talked of the airline’s exodus from the three OTAs and noted that the Delta is trying to create a unique customer experience on Delta.com akin to the Apple store experience. Hauenstein had contrasted a differentiated Apple store visit to the more generic Best Buy experience.

Finlaw says the analogy doesn’t work because Delta doesn’t have a unique product or cult following, as Apple does.

Says Finlaw: “Delta is more like a Dell or any of the other Windows machines.”

Travelport’s apprehensions were revealed in a judge’s Dec. 20 ruling denying Travelport’s request for a preliminary injunction blocking American’s exodus from Orbitz.

The disclosure also highlights why other GDS vendors, including Sabre, are lining up to support Travelport.

In his decision, Cook County Circuit Court judge Martin Agran in Chicago cited a court statement from Kurt Ekert, chief commercial officer of Travelport GDS, about Travelport’s fears.

The judge said Ekert stated in court: “If American is successful in its actions here, I believe the customer migration away from Travelport to American’s direct connect or other solutions will be massive.”

However, as part of his rationale in denying Travelport’s request for a preliminary injunction, the judge wasn’t buying Ekert’s argument, noting that Ekert hadn’t been able to point to any travel agencies who are leaving Travelport GDS to switch to AA Direct Connect.

“The irreparable harm that is claimed at this juncture is based on beliefs and fears and is too speculative to allow the entry of a preliminary injunction,” the judge ruled.

In other grounds for denying the preliminary injunction, the judge decided that Travelport, which controls 48% of Orbitz, “does not have standing to sue on behalf of Orbitz.”

“… Orbitz is a separate and distinct publicly traded corporation,” the judge wrote.

The judge also decided that any damages coming to Travelport in the event Travelport eventually prevails in its suit against American on a breach of contract claim would be “ascertainable,” and thus Travelport “has not established that there is no adequate remedy at law.”

Thus, Travelport did not get the preliminary injunction it sought against American, but the litigation continues.

It didn’t get much notice at the time, but Delta removed its flights Dec. 17 from second-tier — but still important — online travel agencies, CheapOair, BookIt.com and OneTravel.

Delta wants to drive more direct traffic to its website and to make a Delta.com visit a unique experience — sort of like the distinct shopping experience consumers get walking into an Apple store, one official said.

Delta, like American, also wants to reduce its distribution costs, and Delta’s pullout from the three OTA sites could be a negotiating ploy.

When asked about Delta’s withdrawal, Bill Miller, senior vice president of strategic partnerships for Travelong, which operates, CheapOair, said: “We’ve had a 10-plus-year partnership with Delta and we fully expect to renew our contract with Delta in 2011.  This is our only comment at this time.”

Several searches this morning for JFK to Atlanta Delta flights through CheapOair and OneTravel  turned up United Airlines, US Airways and American flights instead.  Here are CheapOAir search results from a Delta query. Notice the DL airline code at bottom left and United and US Airways featured in search results.

Unlike American, which pulled its flights off Orbitz, Delta hasn’t publicly proclaimed its intent to pursue a direct-connect strategy, although that can’t be ruled out as a future goal.

Instead, Delta is getting a tad more Southwest-like and explains its exit from the three smaller OTAs as a bid to drive more traffic to Delta.com.

Speaking at a Delta investor event Dec. 17, Glen Hauenstein, Delta’s executive vice president of network planning, revenue management and marketing, said the airline wants to drive more direct traffic to its website and will do so through enhancements, and offering loyalty currency and other exclusive website features.

“You are purchasing our product [and] the most robust experience you should have in that transaction should theoretically be our website,” Hauenstein said. “We look at it very much like an Apple store versus Best Buy. You can buy components or Apple products at both. Your experience in an Apple store is obviously quite different than it is at a Best Buy store. That model is what we think about when we think about Delta.com.”

The one thing that the Delta and American moves have in common is that both airlines are pushing to reduce distribution costs. Thus, Delta’s pullout from BookIt.com, CheapOair.com and OneTravel may give the airline leverage with the likes of Expedia, Travelocity, Orbitz and Priceline.

And, don’t underestimate the import of Delta’s decision to withdraw inventory from lesser-known OTAs — they own a piece of the pie.

CheapOair consistently ranks among the most-visited U.S. travel websites. In a recent tally, CheapOair ranked just behind Orbitz and Travelocity in percentage of visits at No. 6, and ahead of Hotwire, Kayak, Bing Travel and Cheap Tickets among the top 10.

Hans Lerch, vice chairman of the Migros Group of Switzerland, which owns Hotelplan, who was recently appointed caretaker global CEO of Hotelplan, says this is a logical step.

“Just look at yourself when you buy something – you may not buy at the cheapest price, what you want is the best value for money. And when you go to a destination, it does not matter if you spend $20 or $30 for a meal – what you want is the experience. People, when they are in-destination, will not bargain as hard and tend to spend more.”

Lerch reckons disintermediation has taken out the margins in all parts of the value chain, adding:

“Tour operators give less margin to the travel agent, and you are earning less and less as you bring the product to the client.”

This was why tour operating groups like Hotelplan are looking at buying suppliers of in-destination products such as ski operators or dive companies.

Lerch says:

“These kind of services add to the experience of a destination and customers will pay on the ground for these services.”

Owning such Long Tail supply also means more control over destination services given stricter legislation makes tour operators like Hotelplan liable for accidents that happen to customers when using sub-contracted suppliers.

It’s a model that has been tried before, with tour operators starting up their own hotel operations. But Lerch says this is difficult, claiming that running a hotel “is a different business” from running a tour operator.

But niche, specialty products and services are different, he says, and these cannot be copied by online travel agencies, adding: “Virtuality stops somewhere.”

As caretaker CEO, Lerch aims to reposition Hotelplan. He says: “In 1965, it [Hotelplan] was substantially bigger than Kuoni, but Kuoni is now two-and-half times bigger.”

Indeed, it was Lerch who was responsible for building up Kuoni’s global operations.

Asked if he intends to do with Hotelplan what he did with Kuoni, Lerch says: “That took over 40 years to build. That train has left the station.”

Instead, Lerch sees four ways traditional tour operator can grow in the new marketplace:

1. Continuing to grow the legacy model “which still pays the salaries”.
2. Invest in the online channel. Every tour operator has to take part in this. “The good news is that Expedia did not knock out the legacy tour operators within two years like they said they would and was feared. Many legacy tour operators have made good investments in the online channel and have built good businesses.”
3. Through companies that cannot be copied in their content and brand or the way it is packaged. For example, Abercrombie & Kent in UK or Intrepid Travel in Australia. “These continue to enjoy good organic growth.”
4. Expansion by geographic markets. “Where is business going to grow quicker and how can you attack these markets?”

Mobile trip-management company WorldMate is “deeply involved” with multiple parties “in the mobile landscape” which are seeking to embed travel services from mobile check-in to last-minute travel purchases into their core operating systems, says Chief Commercial Officer Nadav Gur.

Gur says the players include smartphone manufacturers which are looking to travel — and talking with online travel agencies and other distribution parties — as a substantial revenue stream to offset margin pressure on smartphone manufacturing and services.

Gur, who was the founding CEO of Worldmate, says he expects one smartphone manufacturer to launch a deeply integrated travel product this year.

WorldMate, which offers trip-management services and competes against TripIt, TripCase, Kayak Trips and others, claims to have the largest user base in the crowd, although the company is relatively short on brand recognition in North America.

The smartphone players seeking to get involved in travel are not talking about building apps and linking to third parties for trip-planning, but seek to embed travel services and booking off-the shelf into their devices.

With the cash that some of these giant device manufacturers have available, it isn’t inconceivable that they could be looking at acquiring an OTA, with their smaller market caps  – even an Expedia or Priceline — as they seek to shake up the market and move their plans forward.

WorldMate’s role with the smartphone manufacturers or mobile operating-system providers is to provide them with technology expertise and the business acumen necessary to break into the travel industry.

Privately held WorldMate has investments from Motorola Ventures and the Blackberry Partners Fund, but Gur says don’t necessarily use those relationships to read the tea leaves about which mobile partners WorldMate is involved with.

So why would a major smartphone manufacturer, like Apple or Motorola or Nokia, need WorldMate as an entrée into the travel industry?

Gur says having a first-mover advantage might be critical, and perhaps WorldMate might trim six to nine months off the delivery process for its partners.

The last-minute travel arena might be a key focus of some of these mobile players because of the nature of their devices. They can push hotel or car-rental offers to travelers at airports, for instance, especially if there are flight delays or cancellations.

With many people saying that mobile devices may eventually replace the PC as the primary means for browsing the Web and booking travel, perhaps smartphone manufacturers and mobile-operating system providers will play a huge role in changing travel distribution as we know it.

Gur, citing confidentiality agreements, declined to identify WorldMate’s partners in the new mobile-travel push.