According to Gurion, the company is now in a position to offer “unmatched integration and flexibility”.
Gurion, who in his current role is responsible for the company’s private label distribution business and alternative distribution initiatives including the Orbitz for Agents programme, recently spoke to EyeforTravel’s Ritesh Gupta. Gurion, who is scheduled to speak at the forthcoming Travel Distribution Summit North America 2010, to be held in Chicago (13-14 October), spoke about the status of the OTA industry, location-based applications, efforts related to personalisation and other relevant issues. Excerpts:
Marco Saio: Which according to you has been the most striking or potentially path-breaking development from the travel sector in the last six months or so? Would you call it a real innovation at this stage?
Ronnie Gurion: I think you could argue it’s the rapid and continued innovation in enhanced search. When you look at the capabilities of the iPhone and other GPS-based devices, and what Google is doing with ITA, it’s clear that we’re moving quickly towards better, faster and more accurate personalised search. The companies that get it right are the ones that will gain market share. This isn’t a new concept; it’s been a series of iterations that started with the launch of online travel companies (OTCs) like Orbitz as a better way to search. And for our part, we continue to make the investments in mobile and search technologies to deliver faster, more relevant results to our customers.
In my particular area of focus – the Orbitz Worldwide Distribution practice – we just developed a new method for delivering highly customised private label solutions to our customers, many of which are airlines that want the ability to cross-sell other travel products seamlessly within their existing airfare booking path. Unlike legacy template based solutions – which take a rigid, one-size-fits-all approach – we’re now able to build highly-scalable, fully-customised solutions that give our customers unmatched integration and flexibility.
M. S.: Top US online travel agencies have referred to the performance of their international business, hotel reservations and also advertising and media revenue as the highlights of their business. Can you elaborate on what do these signal as far as the OTA business is concerned?
Ronnie Gurion: I think it signals that our industry is becoming ever more complex, multi-faceted, global and less reliant on the transactions business. We’re learning to better monetise our site traffic and deliver improved marketing channels for our partners. It’s really about utilising scale to build healthier, more diversified businesses that leverage the very benefits of scale – audience reach, cost efficiency, and continued R&D. If you can achieve scale, you’re able to grow all of these core business lines in parallel. At Orbitz, we are the #2 seller of online travel in the world and we feel that this scale positions us extremely well for continued growth and innovation.
But to bring it back to my area of the business, I see our distribution capabilities, beyond Orbitz branded sites, becoming a larger differentiator for us in the marketplace. Our private label business and the new Orbitz for Agents programme are examples of how the company continues to add new unique layers to the product portfolio that deliver incremental value for our customers and suppliers.
M. S.: How do you assess the emergence of location-based applications in the travel industry? For instance, the industry has just seen the launch of an iPhone augmented reality application that uses the GPS to determine a user’s location and displays the nearest airports from which one can access great deals.
Ronnie Gurion: The mobile market is definitely finding its way into the travel business, more as an information tool and service portal than as a major source of transactions at this time but we expect that to shift over the coming years.
But akin to the airport example, travellers will soon have the ability to make, modify, and pay for travel reservations on the fly and use real-time location-based data to determine the best possible deal given their current location. Furthermore, while there is a lot of attention on current private sale-type sites, with GPS capabilities becoming more common, suppliers will soon be able to deliver much more targeted and personalised last-minute offers that marry their real-time revenue management strategies with an individual’s specific location and trip lifecycle status.
Imagine a service that alerts customers once they land in an airport with specific hotel or car offers for that evening based on their real-time availability. It’s really the next generation of opaque type offers.
M. S.: Malaysia Airlines recently introduced the world’s first kiosks to sell airline tickets using the Apple iPad. Apple recently sold its three millionth iPad, just 80 days after its introduction in the US. How do you assess the role of technology and gadgets for additional sales channels and driving customer loyalty in the time to come?
Ronnie Gurion: I think the best assessment comes from a data point Mary Meeker of Morgan Stanley used earlier this year in a presentation on the mobile Internet. According to Morgan Stanley Research, they expect mobile Internet users to eclipse desktop users in the next three years - two years if you ask Google. And if you look at the first five years of mobile Internet adoption vs. the first five years of desktop Internet adoption, it’s not even close. Within the first two years of their existence, mobile Internet adoption nearly doubled that of desktop adoption.
So the iPad integration isn’t a big surprise. It’s part of this larger wave of innovation where diverse mobile devices, mobile applications and mobile users will quickly be the norm. If you start connecting the dots, mobile is also a major enabler of social media, which has an increasing impact on where and how people book their travel.
We’re already making significant investments in mobile across our business, and we’ve been using our presence on Facebook and Twitter as both sales and customer satisfaction channels. And when you consider the potential referral opportunities from a social network like Facebook – which boasts more individual users than the populations of most developed countries – the impact and influence is just enormous.
For the Orbitz distribution business, a big differentiator is the ability to deliver our APIs, tools and technologies to the right set of innovative partners that can build new applications for the next generation of devices. Orbitz has a history of providing our tools and technologies to innovate with companies early in their life cycle, such as those in meta-search, and we expect that trend to continue with many emerging technology companies exploiting new devices and platforms.
M. S.: Online travel companies have been trying to create tools that work in the organic way people like to think about travel. Also, browsing content is a critical part of the research phase, however travel businesses must get better at communicating their unique value proposition or generating urgency in the buying process. How do you assess the need to improve upon this facet of business? Also, what can we expect from all the efforts which are moving towards personalisation?
Ronnie Gurion: We know social networks, travel review sites, OTC reviews and blogs continue to grow in volume, scope and influence. We know that path to prominence is paved by a growing traveller appetite to read and share travel experiences. And, we know the influence these shared experiences wield in the final purchase decision. Now comes the tricky part. How do we leverage, quantify and affect the influence being driven? What are the levers we need to pull to drive higher conversion percentages and larger booking volumes?
If we look at just the review portion – which is the fastest growing and most influential area of user-generated content in the travel industry – there’s been a proliferation of data over the past few years. For example, some hotels on Orbitz and sites like TripAdvisor have literally thousands of user reviews, and that volume becomes overwhelming for most users. The next big innovation is looking at the aggregate data and figuring out how to extrapolate or extract the most relevant data in a way that is most useful to an individual traveller. We’re evolving past the point of aggregation to personalised insight.
M. S.: Going by the developments in the recent past, what do you think will be “the next big thing” in online travel?
Ronnie Gurion: In addition to personalisation, I think the obvious next big thing will be in the mobile space, going from where we’re at now –which is largely access and research – to a full-service booking path available directly from your device.
In our distribution business, one big area is our ability to enable global airlines to effectively create an OTC-like experience on their core airline booking paths. Right now, our platform currently powers four of the six largest airlines in the world, allowing these partners to cross-sell other travel products within their core booking path in a single, seamless transaction.
M. S.: Over the past 18 months or so, online travel companies proved their worth by helping to mitigate weak demand by pouring resources into marketing, promotions, and offering value pricing to the leisure traveller. OTAs also came up with several initiatives related to fees and price guarantees. Overall, how have OTAs changed the game and how has the distribution game changed overall?
Ronnie Gurion: It’s important to note that during that time OTCs continued to make huge investments in sales and marketing activities on behalf of their supply partners. I think if you look at the top three publicly-traded OTCs by booking volume, you’ll see they’ve spent roughly $4 billion in sales, marketing and advertising programmes over the last two years. Those investments drive things like integrated advertising programmes, search engine placements and web promotions.
And looking back at some of the other things Orbitz has done – Total Price hotel search results, Flight and Hotel Price Assurance, removing airline booking fees – you could say that OTCs have also really accentuated the value of ‘the travel deal’ in today’s economy.
Travel Distribution Summit North America 2010
Ronnie Gurion, president, Orbitz Worldwide Distribution is scheduled to speak at the forthcoming Travel Distribution Summit North America 2010, to be held in Chicago (13-14 October). The two-day event will feature over 60 speakers, including the ones from Hilton, Wyndham, Travelport, Lufthansa, Expedia, Google and from many other such organisations of repute.