relevance: delivering the right product, to the right customer, at the right time tedd evers...
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Relevance:Delivering the right product, to the
right customer, at the right time
Tedd EversDirector
Partner Marketing, Europe
Reykjavik
February 18, 2005
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What I’d Like to Talk About…
1. Who is Travelocity? …a Case Study for Today
2. The Online Road Divides: Finding the Right Path
3. Staying Relevant in Today’s Marketplace
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Travelocity’s “Family Tree”
• Wholly owned by Sabre Holdings
• Our business philosophy is “The Best Trips Start at Travelocity”, with offers built upon direct supplier relationships
• Our culture is proactive, positive, passionate, and creative in pursuit of our business philosophy
• Investment and growth in 2005 is focused on growing globally
RH
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Travelocity Overview
• $5 billion in gross travel bookings in 2004– Revenue up 30%– Packaging Rev. up 90%
• Millions of registered members
• 42,000+ affiliates in 40 countries
• 15 million+ unique users/mo.
• 6th largest US travel agency
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Source: Forrester, 10/02
Household income
# leisure trips/year
Travel spend/year
Air traveler
Hotel guest
International traveler
Avid leisure traveler
Brand loyal
$89,3254
$4,29584%89%43%50%44%
+7%+8%21%+6%+6%
+14%+17%+14%
Travelocity Booker
Travelocity vs. all agencies’ Bookers
Travelocity US Booker Profile
Travelocity bookers earn more,travel more, spend more, and stay in more hotels than the average travel consumer…
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Consumer Marketing Identity
• US : “Roaming Gnome” Multi-Million $USD Advertising Campaign
• UK ads star cult travel journalist Alan Whicker, who pops up in unexpected situations across the globe
• Campaign won the Grand Prix Prize, British Travel Awards 2004
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Significant Sales Potential
Over 30,00030,000 airline tickets
More than 14,00014,000 hotel reservations
Over 5,5005,500 car rentals
More than 1,5001,500 vacation and cruise packages
On Average, Every Day Travelocity sells…
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Travelocity distributes to millions of registered members, and through exclusive
partnerships with:
Exclusive Distribution Channels
World Choice Travel is a wholly owned subsidiary of Travelocity.com
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An Expanding European Presence
UK France GermanyScandinavia
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Distribute Globally, Market Locally
Fully Owned Subsidiaries Joint Venture Partners
Sweden, Denmark, Norway
Canada
Japan
Australia, Hong Kong, Singapore, Taiwan, Korea
Germany
France
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The Online Road…is rough
1. Online loyalty is absent, customers shop
multiple sites
2. Most customer relationships are
transactional, transient and price-driven
3. No one has succeeded in differentiating
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Consumers Increasingly Shop Multiple Sites…
Consumers getting savvier, moving away from closed environments unless they have proven, distinct value propositions
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… And Frequency of Use Is Largely Price-Driven
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No Online Players Have Succeeded in Differentiating
• Only 10 to 15% of bookers felt that the top three sites were really differentiated
Stands out as an extremely different travel site
Stands out as a little different from other travel sites
It’s not very different
Brand Commitment
34% 39% 40% Top 2 Categories
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Online Development: Two Paths with Different Values
Core Beliefs/Assumptions:
• Price is only a ticket to play—
travelers want more
•Travel planning is about
inspiring ideas, honest guidance,
unbiased reviews
• Be responsible all trip long
• Travel products, and above all
service, are differentiated--full
disclosure before you book
Core Beliefs/Assumptions:
• Price Matters—Exclusively!
• Travel planning is price comparison process
• Be responsible for the shopping process—nothing else
• Travel products services are commodities
Travel AdvocatesTravel Commoditizers
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How to Stay Relevant?
• Travel Advocates for our Consumers
• Mutually Successful Supplier & Destination Partnerships
• World Class Retailing & Compelling Offers
• Passion: Travel is life!!
We Will Differentiate
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Consumer Advocacy: Showing Available Airline Seats – BEFORE purchase
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Consumer Advocacy: Search by Neighborhood
Neighborhood search makes the booking
process simpler, increases customer
conversion, satisfaction
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Consumer Advocacy: Delivering Rates when Rooms are Available
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How to Stay Relevant?
• Travel Advocates for our Consumers
• Mutually Successful Supplier & Destination Partnerships
• World Class Retailing & Compelling Offers
• Passion: Travel is life!!
We Will Differentiate
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Travelocity 3rd Generation
- Flexible rates & inventory = effective merchandising
- Industry-leading last-minute demand creation
- Connectivity options enable broadest range of hotels
- Immediate payment upon guest checkout
Early Internet Merchant
- Fixed allotments and one-sided contract terms
- Limited connectivity options
- Slow payment to hotels
Fixed Traditional Model- Hotels tied to one rate per season
- Fixed allotments and one-sided contract terms & slow payment to hotels
- Limited last-minute availability
Delivering Supplier Value: Hotels
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Our Unique Supplier Proposition Gained Hotelier Traction Rapidly
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Jan-02 Jan-03 Jan-04
Me
rch
an
t H
ote
l P
rop
ert
ies
Dec-02 Dec-03 Dec-04
In Just Two Years, We Grew to 17,000+ Properties Worldwide
Merchant Hotel Growth Chart
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Benefits to Hoteliers:• Drive more volume by providing net, non-commissionable rates and receive preferred placement in Hotels path
• Multiple Connectivity Options via CRS or Extranet
• Instant Payment upon checkout for each booking
• Participate in Travelocity Consumer Advertising Campaigns and in special regional hotel promotions
• Participation in the Travelocity Redistribution Network
How Did We Grow So Fast?
A ‘Win-Win’ Hotelier Value Proposition
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Dynamic Packaging & Travel Extras
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Supplier Value: Building the Non-Core Travel Businesses for Many Leading Travel Brands
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Destination Marketing Alliances
Bahamas Tourist Office- Targeted key origination markets- 106% increase in bookings
Aruba Tourist Authority- 159% increase in bookings- Best in Class Click Thru Rate
Visit Scotland- Unique sweepstakes offers- 139% increase in hotel sales
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How to Stay Relevant?
• Travel Advocates for our Consumers
• Mutually Successful Supplier & Destination Partnerships
• World Class Retailing & Compelling Offers
• Passion: Travel is life!!
We Will Differentiate
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Merchandising Compelling Offers
Promotions may be based on:- Themes- Seasonality- Exclusive offers- Unique experiences
Entry-level Pricing, but:- many consumers upgrade- hotel ADR can also increase
January “Cool / Hot” Promo:- 48% increase in room nights- 11% increase in ADR
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Targeted Email and Sweepstakes Offers
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Integrated Marketing Partnerships with some of the Most Valuable Brands in the World…
..That Have Yielded Significant Results for our Partners, and for Travelocity.
TE
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Takk fyrir!