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Relevance: Delivering the right product, to the right customer, at the right time Tedd Evers

Relevance: Delivering the right product, to the right customer, at the right time Tedd Evers Director Partner Marketing, Europe Reykjavik February 18, 2005. What I’d Like to Talk About…. Who is Travelocity? …a Case Study for Today The Online Road Divides: Finding the Right Path

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Relevance: Delivering the right product, to the right customer, at the right time Tedd Evers

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  1. Relevance: Delivering the right product, to the right customer, at the right time Tedd Evers Director Partner Marketing, Europe Reykjavik February 18, 2005

  2. What I’d Like to Talk About… • Who is Travelocity? …a Case Study for Today • The Online Road Divides: Finding the Right Path • Staying Relevant in Today’s Marketplace

  3. 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

  4. 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

  5. Travelocity vs. all agencies’ Bookers Travelocity Booker Household income # leisure trips/year Travel spend/year Air traveler Hotel guest International traveler Avid leisure traveler Brand loyal $89,325 4 $4,295 84% 89% 43% 50% 44% +7% +8% 21% +6% +6% +14% +17% +14% Travelocity US Booker Profile Travelocity bookersearn more, travel more, spend more, and stay in more hotels than the average travel consumer… Source: Forrester, 10/02

  6. 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

  7. Significant Sales Potential On Average, Every Day Travelocity sells… • Over 30,000 airline tickets • More than 14,000 hotel reservations • Over 5,500 car rentals • More than 1,500 vacation and cruise packages

  8. Exclusive Distribution Channels Travelocity distributes to millions of registered members, and through exclusive partnerships with: World Choice Travel is a wholly owned subsidiary of Travelocity.com

  9. An Expanding European Presence UK Scandinavia France Germany

  10. Distribute Globally, Market Locally Fully Owned Subsidiaries Joint Venture Partners Germany Sweden, Denmark, Norway Japan France Australia, Hong Kong, Singapore, Taiwan, Korea Canada

  11. The Online Road…is rough • Online loyalty is absent, customers shop multiple sites • Most customer relationships are transactional, transient and price-driven • No one has succeeded in differentiating

  12. Consumers Increasingly Shop Multiple Sites… Consumers getting savvier, moving away from closed environments unless they have proven, distinct value propositions

  13. … And Frequency of Use Is Largely Price-Driven

  14. Brand Commitment 34% 39% 40% Top 2 Categories Stands out as an extremely different travel site Stands out as a little different from other travel sites It’s not very different No Online Players Have Succeeded in Differentiating • Only 10 to 15% of bookers felt that the top three sites were really differentiated

  15. Online Development: Two Paths with Different Values Travel Commoditizers Travel Advocates 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 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

  16. How to Stay Relevant? We Will Differentiate • Travel Advocates for our Consumers • Mutually Successful Supplier & Destination Partnerships • World Class Retailing & Compelling Offers • Passion: Travel is life!!

  17. Consumer Advocacy: Showing Available Airline Seats – BEFORE purchase

  18. Consumer Advocacy: Search by Neighborhood Neighborhood search makes the booking process simpler, increases customer conversion, satisfaction

  19. Consumer Advocacy: Delivering Rates when Rooms are Available

  20. How to Stay Relevant? We Will Differentiate • Travel Advocates for our Consumers • Mutually Successful Supplier & Destination Partnerships • World Class Retailing & Compelling Offers • Passion: Travel is life!!

  21. Delivering Supplier Value: Hotels • 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

  22. Our Unique Supplier Proposition Gained Hotelier Traction Rapidly In Just Two Years, We Grew to 17,000+ Properties Worldwide • Merchant Hotel Growth Chart Merchant Hotel Properties Dec-02 Dec-03 Dec-04

  23. How Did We Grow So Fast? A ‘Win-Win’ Hotelier Value Proposition 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

  24. Dynamic Packaging & Travel Extras

  25. Supplier Value: Building the Non-Core Travel Businesses for Many Leading Travel Brands

  26. 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

  27. How to Stay Relevant? We Will Differentiate • Travel Advocates for our Consumers • Mutually Successful Supplier & Destination Partnerships • World Class Retailing & Compelling Offers • Passion: Travel is life!!

  28. 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

  29. Targeted Email and Sweepstakes Offers

  30. 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

  31. Takk fyrir!

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