Two-Way Street

PR, social media, events and incentives – Collaboration & communication ideas for demanding businesses from The Castle Group's Mark O'Toole

Hub of the Travel Industry

Posted by thecastlegroup on September 21, 2009

I was on the phone with Scott Kirsner on the morning of September 11, 2001 at the time the terrorist attacks were just starting to be picked up by news outlets. We were speaking, ironically, about Boston-area online travel companies and how they were built to withstand the economic downturn that we were in. I had collaborated with other area PR firms and companies to make sure we could share a story of growth with Scott. As the Globe’s newsroom exploded with activity around the events of the day, and my staff had gathered in our conference room to watch the new coverage, Scott and I ended the call, both of us unsure at that moment how serious the situation had become.

The grave events of the day made a story about local travel companies seem trivial. Scott shelved the broader story, though revisited the topic two weeks later in his column, framing it in the light of the impact of the terrorist attacks on travel technology companies and the changes the industry might face as a result. This article, which was to focus on my client e-Travel (a brilliant idea by John Ackermann, who is now leading Jet-It-Together, a community for private jet flight-sharing), ITA Software, Passkey and VacationCoach.com, is excerpted below.

Yesterday, almost eight years to the day of the 2001 article, Scott once again explored the topic of travel companies in Boston. In 2001, many of these ideas were experimental and unproven. Today, our region can boast of some of the travel industry’s biggest online success stories. Scott’s piece focuses on Kayak.com, ITA Software (still going strong), TripAdvisor and new start-up, Goby.

Two encouraging trends emerge. First, these companies have managed to fuse innovative back-end technologies with user-friendly front-end offerings. Second, the VC and private equity community has continued to invest in these ideas, signaling a belief that there is room for innovation and profit in travel technology. (Our client Web Reservations International, based in Dublin, is another good example of an online travel success story. WRI was an early adopter of user-generated content and now dominates the hostel/budget accommodation booking industry. Summit Partners is an investor there. And our newest travel client, Explorica, has an aggressive, creative, technology-rich service for the school group tour industry. Big things are coming for them.)

Goby’s plans sound ambitious. There is still a huge information gap on travel information. Consumers still shop, compare, research and buy from various online entities to build comprehensive plans. Some do it for the comfort of feeling like they found a great deal, and others just can’t find what they need in any one place. Viator already has a good offering for the “tours, things to do and day trip” business. It will be interesting to see what gaps Goby fills, how intuitive the consumer interface is, and how they plan to differentiate themselves.

With all this travel technology activity bubbling up locally, what do you perceive to be gaps in service in the travel world? What do you wish you could find online when planning and booking travel? What back-end solution will solve a lot of industry problems?

The area is ripe for innovation once again. If we suggest it, there’s a good chance someone locally can build it.

 

Excerpt from: FACING THE ABYSS, by Scott Kirsner, The Boston Globe, September 24, 2001

Just before the hijackings, I’d been planning to write about how some of the online travel companies based in the Boston area seemed well-positioned to weather the continuing economic turbulence. Travel planning and ticket buying online seemed to be booming – it was one clear area of our lives where the Net had really changed consumer behavior.

On my list of companies to watch were ITA Software, which provides the technology that runs Orbitz.com; VacationCoach.com of Maynard, which offers personalized vacation recommendations; e-Travel in Waltham, a corporate travel portal; and Passkey.com in Quincy, which helps to simplify the booking of large blocks of hotel rooms.

Suddenly, with businesspeople limiting their travel plans through the end of the year and consumers postponing vacations, companies in the online travel space will have to fight harder than before to stay alive, let alone continue along their earlier growth trajectories.

Rob Roberts, the CEO at VacationCoach, says there are a few reasons he and his employees aren’t despairing. “All our deals in the pipeline are still alive,” he says. In addition to being used on Travelocity, VacationCoach’s software will be deployed this fall on a new travel site from Cendant Corp., which operates chains like Avis and Howard Johnson. And, he adds, “even if we do take a little bit of a hit in the travel industry, [travel sites] are going to be continuing to look to differentiate themselves. If it’s a smaller pie in the short term, [sites] will want more of it.”

At ITA, vice president of marketing Cara Kretz acknowledges that the terrorist attacks “absolutely” will have an impact on the company’s growth rate. But she says, “We think this is a short-term disruption, and that the long-term prospects are still good. [Airlines] need our technology” – which helps them manage information about flight options and prices – “for [operating] efficiencies and keeping their costs down.”

But even as people travel less often, it’s possible prospects could brighten for other kinds of technology companies. Publicly traded videoconferencing equipment makers saw their stock prices jump last week, on the assumption that when the worries and hassles surrounding air travel increase, people may be more willing to use videoconferencing as a tool for conducting meetings.

Howard Anderson, founder of YankeeTek Ventures in Cambridge, is requiring all of his portfolio companies to install videoconferencing gear so they can communicate with partners, prospective customers, and other investors without hopping a plane.

“It’s a response not only to [trying to reduce] travel costs, but to the increasing impossibility of travel,” he says. “The idea that you can do two meetings a day in two different cities, showing up 20 minutes before a flight and doing your O.J. Simpson routine through the airport – that’s gone.”

Don Gibbs, chief executive of a Montreal telecom company called VIPswitch, made a prediction at a conference in Boston last week. As air travel bogs down, he said, business users will be more amenable to adopting not just videoconferencing, but Internet telephony, and storage networks, where data is backed up safely off-site by a vendor. “The bandwidth hogs are back,” Gibbs said, referring to applications that require lots of communications bandwidth.

When I spoke with him after his presentation, he observed, “The events of Sept. 11 may be the catalyst that drives people to wider use of videoconferences and online collaboration. It’s a hell of a catalyst, though.”

Anderson at YankeeTek predicts that fledgling companies face an exhausting march that will last between two and four years.

“It has never been tougher” to sustain and grow young companies, Anderson says. But he points out that while many venture firms seem to be on pause, focusing on their existing portfolio companies, YankeeTek is still making investments; Anderson has funded three new software and telecom companies in the past month.

 In America, Anderson says, “We have always viewed those who start companies as our own economic heroes. Our way of life is dependent on their ability to start, finance, and grow insanely great companies. That’s what makes our economy unique.”

Maybe the ability to tune out the chaos, and the nauseating plunges of the Nasdaq, is essential to the entrepreneur. Maybe the ability to concentrate on company-building at all costs is both pathological and inspiring.

“Not everybody works for the Red Cross,” says Roberts at VacationCoach. “But my personal philosophy is, you create value where you can.”

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3 Responses to “Hub of the Travel Industry”

  1. Thanks for the reminiscence about this ….

  2. Jonas said

    Thanks for the link to Goby – hadn’t heard of them yet. Seems like they are doing something similar to what we (www.planetabroad.com) are trying to do mainly in SE Asia now (and based from Singapore, not Boston ;-))

  3. […] Comments Jonas on Hub of the Travel Industr…Scott Kirsner on Hub of the Travel Industr…Social Tuesday: sust… on Sustainable […]

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