U.S. groups and meetings market sees online revenue growth slow
January 30, 2007

Revenues generated for the hospitality industry by meetings and conventions are expected to grow to $175 billion by 2008, compared with $164.1 billion in 2006, according to “Groups and Meetings: Market Opportunity Redefined,” a study by HSMAI and PhoCusWright.

Travel revenues (including air, hotel, car rental, ground transportation, cruise and tour expenses) represent 54 percent of the total revenue. Non-travel expenses (including meeting rooms, catering and audio/visual equipment) represent 46 percent of the total.

Corporate meeting revenues are expected to grow to $75.8 billion by 2008, up from $73.4 billion in 2005. PhoCusWright predicts the online corporate travel market to hit $24 billion by 2008, or 60 percent penetration, up from $19.8 billion in 2005.

Association meeting revenues represented only 5 percent of the market, or $8.5 billion, in 2005. While the number corporate meetings per organization increased 11.2 percent from 2005 to 2006, association meetings declined 2.1 percent. However, this sector is forecasted to reach $10.4 billion in 2008, or 5.9 percent of the market.

Online revenues in the U.S. groups and meetings market are expected to grow to $39.1 billion, or 41 percent of the total market. The online sector accounted for only 33.7 percent of the market in 2005 and 37 percent in 2006. Online travel revenues are expected to grow from $33 billion in 2006 to $39 billion in 2008, with $18 billion of the total coming from air travel and $15.4 billion from hotel bookings.

The No. 1 factor inhibiting online booking is the lack of personal contact. Forty-four percent of survey respondents prefer to talk to someone in person while booking.

Other findings include:

- Hoteliers are working to centralize their groups and meetings inventories and rates to enhance offerings and optimize resources.

- Large meeting components continue to move online to achieve efficiency and offload tasks to planners and attendees.

- The rise in new market entrants and efforts by established players to automate aspects of groups and meetings will draw attention to technology tools, educate the marketplace and encourage people to book online.

The study was conducted between August and October 2006. PhoCusWright contacted more than 35 executives from 24 supply companies, 2,000 meeting professionals and corporate meeting decision-makers, executives from 17 technology providers and more than 1,100 consumers. Responses were collected via e-mail and telephone.

Microsoft takes email design back five years

Microsoft Outlook 2007, released next month, will stop using Internet Explorer to render HTML emails and instead use the crippled Microsoft Word rendering engine. Outlook enjoys a 75-80% share of the corporate email market, which is similar to Internet Explorer’s share of the browser market – they make the rules.

E-Mail Marketing company Campaign Monitor has been doing some early testing, as have a few other brave souls, and come February, here’s just a taste of what won’t be supported:

- No background images – Background images in divs and table cells are gone, meaning Mark’s image replacement technique is out the window.

- Poor background color support – Give a div or table cell a background color, add some text to it and the background color displays fine. Nest another table or div inside though and the background color vanishes.

- No support for float or position – Completely breaking any CSS based layouts right from the word go. Tables only.

- Shocking box model support – Very poor support for padding and margin, and you thought IE5 was bad!

Microsoft have released a full run down of what is and isn’t supported, including a downloadable validator that helps you validate your HTML for their engine. Word of warning though, it only works with Microsoft software and Dreamweaver.

E-mail should be smaller: EmailLabs

E-mail marketing firm EmailLabs, a subsidiary of J.L. Halsey Corporation, is advising business-to-consumer marketers to reduce template size to account for the trend in smaller viewing areas in Web-based e-mail clients.

The recently released Yahoo Mail Beta and Microsoft’s Window Live Mail Beta, now enable preview panes by default. These smaller reading spaces enable consumers to quickly scan their messages before opening them, forcing marketers to get to the point.

“Marketers need to rethink how their e-mail templates are designed so that the top left corner of the message includes the core call to action,” said Lena Waters, director of marketing at EmailLabs, Menlo Park, CA. “It is important to have a full understanding of what the clients are going to see.”

Due to widespread adoption of Microsoft Outlook’s preview-pane function in corporate settings, business-to-business marketers have been dealing with this design challenge for some time. But this is not true for business-to-consumer marketers, who for the most part always have designed e-mails under the assumption that consumers would see the entire e-mails as designed.

Ms. Waters said that even when messages are viewed in a full window, shrinking real estate can still be a factor. Many e-mail clients now serve display ads on the right-hand side of the screen, taking that space away from the message window. Also, many e-mail programs automatically disable all images in the preview pane, leaving a big red X or an empty space where the main idea should be.

So she recommended adding text-based e-mail navigation in case images are automatically blocked, as well as color backgrounds as opposed to images.

“Designing with these new viewing habits in mind is important to communicating with your customer,” Ms. Waters said.

Travel providers go beyond the browser
January 12, 2007

by John Bray, PhoCusWright

While realizing that search has been a great vehicle for increasing travel planning (seven in ten trips begin with search), most travel providers would agree that search has done little to instill consumer loyalty. Sensing that consumers are perhaps a bit too easily distracted in all their shopping and browsing, travel providers have invented numerous ways to get between the consumer and their browser in hopes of opening a more direct channel of communication, stimulating more demand and hopefully encouraging more loyalty.

Online travel started by leveraging the power of the Web browser to enable travel booking. However, if you look closely at today’s leading travel sites (e.g., Expedia, Southwest, Hilton) you see that most of the emphasis is on the so-called “booking button” – the little window that allows consumers to price a travel product – and further, you see that there’s not a really a fundamental difference, in the user experience for the booking portion of these sites.

Essentially, consumers have launched their browsers expecting inspiring travel planning, only to be disappointed by seeing largely the same thing that they’ve had online for four or five years now. Given this remarkable sameness (i.e., the lack of originality in this travel planning process), a convenient circumstance for the emergence of search and metasearch occurred.

Certainly, search is a great thing, simplifying the travel planning experience in many respects. However, the side effect of all this searching is a lot of churn. Of course, consumers shop intermediaries like agencies and then ultimately buy from suppliers. But what is not as often known is that they also shop suppliers in great numbers and then end up going to intermediaries.

In fact, there’s little loyalty in online travel buying, even though the online travel industry is now over seven years young. Three in ten online travelers don’t even have a single site that they prefer for travel purchase, and a vast majority, 68%, have numerous preferred sites.

Sensing this and eager to create loyalty, suppliers and travel distributors have gotten smart. Realizing that the browser may not be the ideal medium to derive consumer loyalty, they’ve built tools to go beyond it.

Several examples of this movement have occurred across the industry. The first one, probably the ‘poster child’ for this movement is a product called “Ding” from Southwest Airlines. In the first three years since launch, Southwest now has over one million users that actively have the product open and are using it on their desktop everyday. They have over five million downloads. And what the Ding product provides is a pervasive way for Southwest to advertise to their loyal customers, those who would download a piece of software and put it on their desktop, when their best fares are available. Through Ding, they open up this channel and offer fares that are not available anywhere else to this selected group in the local market where they reside or where they choose their preferences.

In my case I live in Denver, Colorado. With Ding, I can only see the special fares that they want to promote to me in this market on an irregular basis. How do I know those fares are there? I don’t even have to go and look for them. I don’t have to open up a browser and search for them. I am literally dinged – ding, doorbell sound – whenever these fares are promoted or available in the market. And they’re only available for a very limited amount of time. So like Pavlov’s dog, if you will, the consumer is being trained – ding, ding, ding – come to this special fare.

Ding belongs to a category known as branded desktop applications (BDAs), and there are others from folks like Travel Alberta, Vail Resorts, and most recently Expedia. But there are other examples of going beyond the browser. One is AOL Instant Messenger (AIM). With AIM, by selecting “kayakbuddy” (provided by Kayak) as a chat buddy, you can search for flight and hotel prices, right from your IM window without even opening the browser.

The Google Earth product is truly a great mapping application, but one of the ways to enhance it is for distributors and suppliers to provide “skins” for Google Earth that consumers can overlay on top of the mapping for preferred hotels, properties and travel destinations. With a skin provide by Earth Booker, I can fly in, choose the hotel that I want, and very quickly buy that hotel directly.

The next example will be very familiar to those who used so-called push-technology tools like Point Cast when the Internet was just becoming popular. With the forthcoming launch of Microsoft’s new operating system (Vista), the desktop will be transformed from a static canvas, where the most you can do is place a picture, to a dynamic workspace where rich fidelity applications that act like purpose-built travel planning tools will reside. One can gain a glimpse of this by visiting start.com (requires Windows Internet Explorer 7.0). What start.com allows you to do is select numerous snippets of travel shopping applications (in Microsoft parlance they’re called “Gadgets”), there is one from Kayak as well as one from Orbitz already. I can keep any number of these Gadgets local, essentially taking all the extraneous stuff out of the travel site and say “just give me that booking window”, if that’s all I want to have. Similar to Gadgets, is a product from Yahoo! called Widgets, including travel-specific tools from Octopus Travel, and Flight Compare as well as several other metasearch engines.

In addition to these tools, very soon you’ll see where you can buy travel from your car. In the United States, General Motors now has the OnStar dashboard in over 1.5 million cars with a portal for GPS two-way communication installed in it. Very soon we’ll see travel applications brought locally, the ability to buy hotel rooms on the road, make hotel and dinner reservations, and make this travel buying, if you will, from a map and a browser. In fact, not even a browser, but rather from a dashboard – the dashboard of your car.

Through these new applications, travel providers have seen that they can get between the browser and the consumer; because in the browser, consumers can get lost or misled or just lose attention. By trying to get between the browser and consumers, suppliers and distributors seek to get closer, get more personal, and become more intimate.

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