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Interesting findings from PCW and Ypartnership

Ypartnership has released an expanded summary of the findings that they and PhoCusWright have found on the “Next Generation Traveler”

These findings are really inline with the projections of current online usage, here is a summary of the key stats for the next gen traveler:

• They are smart (30% with a 4-year college degree; 20% with at least one year of graduate school)
• Affluent (30% of households with an annual income in excess of $100,000)
• Multi Generational (50% Echo Boomers (18-28 years) and 50% Baby Boomers (43 to 61 years)
• 71% use the Internet to search for travel information
• 41% have taken a virtual tour of a destination
• 38% have built a trip itinerary online
• 58% cite the “ability to check the best fares/rates” as the most important feature in a travel web site
• 37% report being influenced by personal comments read on social networking or travel advisory web sites, but they frequent social networking sites such as MySpace.com (56%) and Facebook (30%) more than travel advisory or review sites such as TripAdvisor (14%);
• 33% have authored and posted a travel review online.

The summary goes on to state that these consumers are less likely to be influenced by advertising messages. With all of these stats taken into consideration, it is no surprise that the travel industry is in a battle against comoditization.

As Jeremiah Owyang points out with Facebook’s new advertising model, there are new attempts to engage this demographic, and advertisers are striving to penetrate this attention lacking group. These trends are leading me to believe that travel has to really engage the senses and imagination of this new market in order to prompt buying action. A recent interview with Jess Butcher, head of partnerships at online travel experiences company isango!, shed some light into this area.

She was asked what was on the horizon for travel, here is what she said:

“The marriage of ‘where-to-go’ inspiration and commerce functionality is still one that no one’s quite nailed online just yet and we really believe the opportunity here could be immense.   There are an increasing number of inspiration-style tools that take activity preference and demographic-detail into consideration, but they tend to culminate in standard flight/ hotel/ car booking engines.  There’s a proliferation of new community style-sites, technologies, widgets and trip planning tools emerging right now – from which we expect to see a bit of boom and bust cycle – but looking forward to seeing the winners.”

I agree, there is an ever increasing decline in what hotel, which airline, and which car rental company consumers choose, and more of a focus on “I did the most crazy tour when I was in ____________,  check out this amazing tour website!”

Testing New micro blogging app

Uttered Content

50 Tips For Marketing with Social Media

Joe Buhler found a great list of marketing tips regarding social media. I found some new and interesting advice from the list, I recommend checking it our for yourself:

50 Ways Marketers Can use Social Media to Improve Their Marketing

If you are not familiar with Social Media, the great people at CommonCraft have a video explanation, Social Media in Plain English:

Yeild Managment VS. Price Transparency

(Image showing India’s static Airline pricing structure. From the Boot - Thanks Tim and Ram)

Robert Crandall, former Chairman and CEO of American Airlines, has called yield management “the single most important technical development in transportation management since we entered deregulation.”

The world is getting smaller, and travel pricing information is easier to acquire then ever before, much to the chagrin of revenue management analysts. With trends towards openness and transparency, the question has to be asked, can the travel industry maintain its elaborate yield management structures, or will consumers be able to circumvent their efforts?

Yield Management -

Yield Management has, since approx 1990 when airfares were deregulated, effectively raised revenue margins. It is fundamentally accomplished by separating price points based on demand and consumers willingness to buy. It is most effective when a good is perishable, being that it has no value after a specific time (when the tour bus leaves, empty seats are lost).

You can see this in effect in most businesses in the travel industry, most notably the Airlines, Rental car, Hotel industry, and it is also starting to appear in the destination activity vertical. You have probably seen this in effect. Consider the last time you booked a flight online; The general rule of thumb is the further out you book a flight, the cheaper it will be (I know there are many exceptions), the closer the flight is, the less availability there is, and the demand is therefore increased as is the price.

How is the Internet changing this?

While elastic pricing will be around for some time, the ability for consumers to track pricing and trends is also increasing. The simple example from Cleartrip at the top of this post demonstrates how easy it is becoming to track the historic price point of every major carrier in India. Yapta is also making waves in the industry for giving consumers a tool that will essentially counter price fluctuations in the Airline industry. It tracks specific routes of interest, and allows you to buy at a historically ‘cheap’ price point, then if the rate drops further, Yapta connects you will a rebate cheque from the airline. So this is the first step in equalizing price points across different demand points.

A glimpse into the future

The ever secretive travel industry is starting to evolve; with the prominence of Internet booking, and supplier direct reservation capabilities, consumers are now given more choices as to where they can purchase their travel products and packages at the best price. Taking these trends towards transparency, it is my opinion that the age of the multi-tiered, dynamic segmentation are going to start to fade. This will be facilitated by the increased focus on upselling of ancillary product as proven effective by Ryan Air.

However, those last minute flights are sure to cost you an arm and a leg So for now the responsibility is still on the consumer to plan ahead, and it is easier then ever to do so.

What do you see? Will consumers always be subject to an every fluctuating price scheme?

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