Venturing deeper into the "dark side" of hospitality, they said.

The hotel industry has been dazed, confused, and overall fragmented about the impact of Airbnb on their business.  On one hand, you have hotels citing they are disadvantaged and their unions accusing Airbnb of creating a reduction in hotel jobs.  On the other, you have a few top tier hotel chains that claim Airbnb is not a threat, including a VP that hasn't even heard of Airbnb's existence.
Seriously?  I'm sure that VP has been educated in recent weeks.

These days it seems the hotel resistance is beginning to take on a new cohesive shape.  Tnooz reports of the American Hotel & Lodging Association mobilizing its 52,000 members to battle against the evil doings of short term rental companies and websites like Airbnb.  A brief snippet of their objective:

Together with our partner states, identifying target cities and localities where we can engage in select tax, safety, and health fights at the council level to pre-empt other deals being sought by short-term online rental companies.

Maybe Brian Chesky's "fuck hotels" frontback pic may have been the straw that broke the camel's back.

As tensions continue to mount between Airbnb and the hotel industry, I've experienced an increase in light-hearted trash talking from my fellow Cornell hotel school grads who are always so quick to point out my first crossover to the dark side with Expedia, and now ever darker having recently joined Airbnb.

I still love the majesty and cultural richness of many hotels, and I believe that the basic principles of hospitality remain a strong common denominator between hotels and Airbnb.  But perhaps that's a bit too philosophical for most executives when it comes down to market share and financial statements.

From my point of view, it's not at all dark on this side.  In fact, the future is really bright thanks to visionary leaders like Brian who want to create Shared Cities all over the world, "rogue" hoteliers like the legendary Chip Conley who inspired me a decade ago to pursue hospitality as a career, and a deeply passionate and energetic Airbnb team working together with so much love for what they are doing.

I may have to kiss my Cornell Hotel Society hopes goodbye, but helping build Airbnb's vision to create shared cities and provide travelers uniquely local experiences is going to be oh so much sweeter.  :-)

Did Google just take a monster step towards becoming an OTA?

There's been a lot of press the past couple days on Google's licensing deal with Room 77.  Some articles have been a bit bold in claiming that Google is entering the hotel booking business as an OTA. This would actually mean Google itself is transacting hotel bookings, which doesn't seem to be the case (just yet?).

There's also been a lot of hype over the big increase in Google's hotel content (photos, reviews, etc.) to make its search results resemble those of Priceline and Expedia, for example.  If I'm not mistaken though, this is part of a larger initiative to increase local business content across the board and isn't focused exclusively on hotels just for the sake of making them more bookable on Google search results.

But one thing is for sure . . . the more enhanced content Google adds, the more likely customers may begin their hotel search on Google versus the OTA sites.  And with the addition of Room 77's extensive database of hotel level information such as room views and floor plans, as well as its advanced hotel search algorithms, Google just may have made its biggest step yet in possibly becoming a full end-to-end hotel search and booking engine (and in the process eventually trumping TripAdvisor and OTAs).

I remain doubtful Google would get that low in the purchase funnel though.  My guess is they are amassing the best possible content at the hotel level in a drive to become the undisputed starting point for consumers doing a hotel search.  Over time, Google's hotel search volumes will increase, and if they can simultaneously ramp up ad spending from the non usual suspects (i.e. more hotels spending on adwords and not just the OTAs), it's plain simple math Google can squeeze billions more out of the travel vertical than it already makes today.

For now though, I can't help but wonder how Priceline and Expedia, some of Google's biggest adwords customers, feel about Google's licensing deal with Room 77 and what that might foreshadow.

Expedia gets sexier with a home page makeover, and smarter with full responsive design

I am totally digging Expedia's new homepage, although it's been overdue for a makeover.  The new design finally plays to the user's imagination instead of serving a plethora of often half ass travel deals all over the screen.

The sleekness and simplicity of the new Expedia homepage makes way for a more responsive design on a slew of mobile devices, but unfortunately many of Expedia's international sites haven't been touched up quite yet.  The Singapore site is below . . . see how busy the old design used to be?

While Expedia's new design comes a few steps closer to the visual dreaminess and slickness of Airbnb, its multi-product offerings of hotels, flights, packages, cars, cruises, and activities will make it tough to get much more uncluttered.

Update - Check out this tnooz post to see the evolution of Expedia's homepage design since 1996.

Now if only Orbitz will do the world a favor and tidy things up a bit on their homepage.  I mean seriously, how do I even make a search with all the merchandizing attacking me?  Although once you turn on your browser's ad blocker, Orbitz will undoubtedly have more white space than all the rest.

Because migrating birds also deserve a unique Airbnb home after a long journey

Airbnb has done some pretty rad marketing in recent past.  Remember the short film Hollywood & Vines that was made entirely from six-second Vine clips?  What about the home made Obama O's that two of the founders created to raise money for their fledgling venture?

Well now Airbnb is all grown up with its first integrated advertising campaign called Birdbnb, which uses a metaphor of migrating birds and birdhouses for travelers and our desire to feel at home whenever we're on the road.

Watch this awesome video here.

But these aren't just ordinary birdhouses.  They're 50 unique bird-sized spaces inspired by real life Airbnb listings from all over the world.  Although they're beautifully constructed by professional artists, the real beauty shines when each of the migrating birds finds a home and starts exploring the cozy living quarters . . . even treating themselves to popcorn while perched on the TV couch!

I couldn't imagine a traditional lodging e-commerce site like Expedia creating an advertisement such as this one.  It really highlights the strong value Airbnb places on creating unique travel experiences through its hundreds of thousands of unique spaces around the world.

I think I can safely speak for the birds when I say, "How could you not love this company!?"

At last, Priceline edges out Expedia in gross bookings and becomes the new king of online travel

Although Expedia's global websites don't yet admit defeat, Priceline has in fact surpassed Expedia in gross bookings to become "the world's largest online travel company" -- a claim Expedia has long marketed to customers and suppliers on its global websites.

In the past several days, Priceline has simply dominated the news headlines.  First came their Q3 earnings release, highlighting yet another consistently strong quarter underscored by increased market share.  Second was the public announcement that the venerable Priceline CEO, Jeffery Boyd, would step down as CEO but remain as Chairman of the Priceline board.  

(Here are seven of the biggest impacts Jeffery Boyd made on the online travel industry.)

Some news writers reacted with shock to the news surrounding Jeffery Boyd, yet the industry insider PhoCusWright suggested the leadership change had been in the works for some time.  But what actually shocked me most was the headline on Priceline overtaking Expedia in gross bookings for the first time in history.  Wow!

And when reflecting on the evolution of Priceline over the past decade, PhoCusWright was equally as surprised.  In a well written article by Douglas Quinby of PCW that portrays Priceline's come from behind surprise win . . .

The year was 2002. Once an Internet princeling, the online brand synonymous with "name your own price" had fallen out of favor. Moves into mortgages, groceries and gas proved misguided. Its share price had plummeted. In online travel, the company was effectively the fourth horse in what was quickly becoming a three-horse race among the leading online travel agencies. It was considered likely to get acquired or – worse – fizzle out.

When Jeff Boyd assumed the role of CEO in November of that year, the odds were against a resurgent Priceline. Iconic commercials starring the famed former captain of Star Trek notwithstanding, few would have expected over the next decade that the company would, on pretty much every metric that matters, become the global leader in online travel. Looking back, that was certainly one surprise.

I had a hunch that one day Priceline would surpass Expedia in gross bookings, yet upon reading this headline my jaw still managed to drop to the floor.  It was as though a consecutive Olympic gold medalist had been knocked off the top platform by an arch nemesis.  Congratulations, Priceline.

Now that Priceline has done the previously unthinkable, Jeffery Boyd will pass on the reins of CEO to his successor, Darren Huston.  And as Mr. Boyd dusts off his shoulders, he'll be watching Expedia admit defeat (at least temporarily) and remove its tagline, "The World's Largest Online Travel Company" from its global websites.

While Airbnb inks petition signatures, HomeAway inks landmark business deals

I find it interesting that the two biggest names in online vacation rentals, Airbnb and HomeAway, exhibit such stark contrast when it comes to their respective press headlines.  Although Airbnb focuses more on peer to peer shared accommodations, both companies are in no short supply of whole unit rentals which people like you and I can book on their sites.  Yet Airbnb seems to be under intense legal scrutiny while HomeAway flies more or less under the radar.

Airbnb has taken big hits in New York recently, having been subpoenaed by New York's Attorney General to provide personal data for up to 225,000 of its New York hosts.  Airbnb has publicly expressed that the request is unreasonably broad and that the company will fight it with everything they've got.

And so the fight continues in New York, and Airbnb has armed itself with artillery.  On the lighter side, a Save Airbnb in New York petition has drummed up over 70,000 signatures and far exceeded the original goal of 20,000 signatures.  Did you know this petition was started by one of the company's users?  It's impressive to see such die hard fanatics the Airbnb brand/experience has cultivated.  In full disclosure I'm also one of them!

For the heavier artillery, Airbnb has released an economic study that shows it generated $632 million in economic activity in New York City in just one year, and that 82% of all listings were in neighborhoods outside the traditional tourist zones in Midtown.  Surprisingly 87% of Airbnb hosts rent out the home they live in and earn on average $7,530 per year.  Critics argue that Airbnb's contributions are just a drop in the ocean when put into the context of overall New York City tourism receipts, but for such a young travel company to impact outlier neighborhoods the way it has in New York and other major international cities is down right unprecedented.

So while Airbnb was caught up in a defensive web of legal issues, petitions, and lobbying, what was HomeAway up to in the last week?  There was no sign of HomeAway draining valuable resources on legal battles.  Instead they were gettin down to business with launching a new commission-based business model and inking a landmark distribution deal with Expedia which should significantly boost the demand profile for their vacation rental product starting in 2014.

But interestingly this vacation rental product isn't so different from the type of product that Airbnb is coming under fire for in New York.  The legislation that should apply equally to both companies is the ban on short term stays of less than 30 days when the owner or leaseholder is not present.   But a quick search on HomeAway properties in Manhattan shows over 1,000 whole unit listings available.  Many of these only require a three night minimum stay if any.

This is certainly just speculation, but it's possible that HomeAway and other vacation rental sites may be cooperating with government requests for submitting user data.  If that's the case, and again this is just speculation, then I believe all the more reason to admire Airbnb for putting up a public fight in New York to protect user privacy and not taking the easy way out like some of these other tech companies.

Booking.com takes over hotel bookings on New York tourism website

Powered by Booking.com

The arch nemesis of Expedia is making new friends in the USA, and one of them happens to be none other than New York City.  Booking.com has kicked off an affiliate partnership deal with nycgo.com, the city's official tourism website, to power hotel bookings in New York.

American OTAs must be feeling the sting as the Amsterdam based Booking.com increasingly stomps deeper into American home turf.  Priceline group is already on top of the leader boards in Asia and Europe, according to PhoCusWright.

It appears the NYC site was previously powered by Travelocity, and I suspect that part of the decision to switch to Booking.com was the number of localized sites it has around the world.  Currently Booking.com supports over 40 languages.  This potentially allows NYC to tap into large international markets that are more likely to visit the tourism site compared to domestic travelers already familiar with NYC.

New York is one of the most popular tourism destinations in the United States, and this new partnership may be the tipping point for additional American tourism organizations to partner with Booking.com and appeal to a more international audience.  A quick search also shows San Francisco's tourism site being powered by Booking.com.

From a supply perspective, Booking.com offers 573 properties while Expedia and Orbitz have 508 and 447 properties respectively.

Priceline jumps on the sponsored listings bandwagon and lets hotels advertise on search results

Priceline's new sponsored listings program for hotels looks pretty darn familiar.  Why?  Competitor OTAs like Expedia, Orbitz, and Travelocity have all featured pretty much the same product on their own search results pages for several years.  Just like display ads, the sponsored listings are also a complementary revenue stream to traditional OTA margins on the materialized bookings.

The sponsored listings are all auction based, pay per click campaigns that shoot hotels all the way up to the highly desired numero uno position in the search results of a particular destination.  In instances when there are pages upon pages of cookie cutter search results, it's easy for hotels buried deep into the dog pile to ascend to the top and gain maximum marketing exposure.  These sponsored hotels will get to sit in the spotlight with more or less free advertising unless someone clicks on their listing.

Since Priceline just launched their sponsored listings program last week, I would advise hotels interested in pay per click advertising to sign up ASAP and target their future lean occupancy dates.  The early adopters will enjoy low cost per click because there will be less competition bidding up the prices in the auction.  But winning isn't everything.  To improve the performance of their campaign, hotels absolutely need to ensure their rates are ultra competitive with the market and their inventory is well stocked to maximize conversion and ultimately the campaign's ROI.



As a consumer you can spot the hotels with sponsored listings because of their faded background color and typically the words "sponsored listing" near the hotel name.  In the example below of Expedia's search results for Bali, the Viceroy Bali is visibly designated as a sponsored listing and commands the #2 ranking after Mantra Nusa Dua (which is part of the Daily Deals merchandizing that trumps even sponsored listings).  Let's face it, getting to #2 in the rankings isn't too shabby when there's a whopping 874 other hotels listed beneath.

Hotel Quickly's last minute mobile rates not so exclusive

Hotel Quickly is the Hotel Tonight ripoff here in Asia.  Both have super sexy UX and pride themselves on fantastic deals at the last minute.  Every day at 12 noon local time, Hotel Quickly pushes out several hotel deals in key Asian destinations.  If you read the mobile FAQ on how it works, Hotel Quickly claims that its deals are exclusive to their app users.  I decided to put their claim to the test today.

For a one night stay arriving in Singapore tonight, Hotel Quickly offered six hotels.  Two were called 'prime', two were labeled as 'design', and the last two were classified as 'comfy'.  I decided to compare the rates and availability of these six hotels across some other popular mobile booking sites in Asia . . . specifically Agoda, Booking, and Expedia.

Here are the takeaways.  Keep in mind I compared all rates inclusive of taxes and service charges, the "all in" price.

1) Hotel Quickly (green bar in graph below) fell short of defending their value proposition, at least for today.  Their app didn't offer even one hotel that had rates lower than any other OTA's mobile app.  Even the featured hotel they recommended, identified by shaking the phone, was only on par with Agoda and Booking's rates.

2) Expedia (yellow bar in graph below) lost out in some way with four of these six hotels.  They didn't have availability or relationships with Hotel Royal at Queens or Grand Park Orchard, so these weren't bookable at all.  They did show availability at Amara and Ramada, but their rates were $30-40 SGD more than their competitors.  Yes, I made sure I compared the same room types.

Hotel Quickly has come out with aggressive marketing communications to create consumer perception that their rates are exclusive over other booking channels.  They also have a very clever kickback technique, including a referral program that snags users 10 USD in credits when friends make a booking with the user's unique invite code.  Although the average last minute consumer is less likely to compare prices across multiple mobile apps, Hotel Quickly needs to up the game on their so called exclusive rates if it wants to create real and sustainable value for its app users.  

Travelocity's surrender to Expedia

I remember the first time I booked on Travelocity back in 2001 -- a nonrefundable airline ticket to Miami for spring break.  But being the beer bonging undergrad with impaired judgment at times, I accidentally entered the wrong travel dates.  I immediately called Travelocity's customer service hotline to rebook the correct dates.  They told me I had to make a new booking and refused to refund the erroneous one.  Man I hated that (ugly) gnome from that point forward.

Time to put this gnome out of its misery

Reflecting on this experience, I half grinned when I read about the strategic marketing partnership between Expedia and Travelocity announced last week and expected to begin begin next year.  It appears to me this is more or less Travelocity's inevitable surrender.  Its supply and customer operations will soon be handed over to Expedia, and the Travelocity brand will become little more than a gnome that thinks it can pull from its sleeve a marketing plan that will trump the online and offline marketing power of Priceline, Expedia, and TripAdvisor.

But will Travelocity even get a reasonable chance to flex its marketing muscle  when all its content and pricing will be powered by Expedia?  A Travelocity spokesman Joel Frey says they will continue to offer their own travel deals and pricing that will be different from Expedia.  I'm not convinced.  As if Expedia would even entertain the idea of letting its new ex-competitor affiliate undercut its own pricing, especially under the performance share model they've entered together.

The winner in this partnership is Expedia, who will soon absorb the North American traffic and booking orders of its previous arch nemesis.  According to Phocuswright, the market share of these two brands combined is over 60% based on its estimates of 2012 gross bookings.  Commanding this much market share will bolster Expedia's relevance and negotiation power with suppliers, and will likely lead to conversion increases as it sources better rates and inventory for consumers.  All of this couldn't have come at a better time with Booking.com biting at Expedia's ankles and OTA traffic increasingly diverted through meta search sites.  With intensifying competition and diminishing margins in the OTA industry, along with increased substitution from vacation rental sites, I suspect other companies will surrender themselves