Travel Comparison Engines - SideStep’s Phil Carpenter
Ok, I’m almost through Hard Landing. What a great crash course on the Airline industry…deregulation, pricing, fare wars, labor costs/unions, reservation systems, and more. I highly recommend the book (SideStep makes it required reading for all new employees).
There’s so much to cover within shopping comparison engines that I’ve been reticent to jump into coverage of travel comparison engines (or travel search as some people like to say). I spoke with SideStep and Mobissimo early on, but did not really follow up. However, I think there are a lot of synergies between shopping search and travel search which makes coverage important. And just as with shopping comparison engines, no one is really concentrating on travel comparison engines like SideStep, Kayak, FareChase, and Mobissimo which are clearly changing the way people shop for travel services.
I sat down with Phil Carpenter, SideStep’s VP of Corporate Marketing, while at Search Engine Strategies…
A little background…
“There are a number of Global Distribution Systems (GDS) or reservation systems: Sabre (used by Travelocity), Galileo/Apollo, Worldspan (used by Expedia), Amadeus (Europe), and Abacus (Asia). These systems are expensive for travel providers to sell through as there are associated booking and query fees.”
“When the world wide web came along, travel suppliers were slower at developing consumer friendly websites. But in the end, they want consumers to come directly to them. That’s why SideStep works well; after the first sale through SideStep, that user might go to that channel directly.” [Editor’s Note: Expedia, Travelocity, and Orbitz are online travel agents (OTAs). These companies take your reservation and even hold inventory – seats, rooms, etc. SideStep, Kayak, and the other travel comparison engines send you to the source to book your reservation.]
“The travel search engine model is strategically aligned with how travel providers want to go. This is especially true for hotels. However, from late 2001 through 2003, 9/11 and the SARS epidemic hit and the hoteliers got desperate. They were willing to give away the store to companies like Expedia. They just wanted to fill rooms.”
“Fast forward a couple years [past 9/11 and SARS] and the hotels are not having the same issues and their own websites have become a lot better. They go back to the Expedia and say that the original deal doesn’t work anymore. They want to restructure the arrangement and pay less. In some cases they ‘come to blows’ and in one case, a major hotel chain, InterContinental Hotels Group, walked away from Expedia. If you’re looking for a Holiday Inn (an InterContinental property) on Expedia, you’re not going to find it. This is in contrast to SideStep which maintains a great relationship with InterContinental because we send people directly to the InterContinental website. Hotels want the direct interaction and brand dialogue with the customer. Jet Blue is another example. They want to share the trueBlue experience directly with the traveler.”
So how does SideStep work…
“Just as travel marketers are spending money through Google Adwords, we are of a similar nature. However, we are more interesting to marketers because we provide a qualified, focused audience; people are coming specifically to look for travel.” [This should sound familiar to readers of my shopping comparison engine posts. Think Vertical Search!]
“Sidestep works on a CPC, CPM, and a CPA basis. Who are we to go to a multi-million dollar company and say this is how things work? In the end, it all backs out to the same number, so anyway [the travel providers] want to work, we’re going to do it. Besides the search results, we also have an e-mail newsletter which delivers great returns for advertisers. Additionally, the SideStep website has a deals area and we offer a toolbar which people particular like because we’re shifting bookings away from expensive channels.”
On the old guard…
“The OTAs are the established, old school players. Just as people are turning to Shopping.com instead of Amazon.com, this is a new way in which people will shop for travel.”
“Some of the established OTAs haven’t gotten on board, but Orbitz has. Orbitz has a different mindset; they come from the travel supplier world [as the Orbitz website states: Five airlines - American, Continental, Delta, Northwest and United - came together to fulfill a mission: Develop a travel website that would serve people better. Orbitz was designed for you - to make your travel planning experience easier and more affordable.] They are feisty, aggressive, and resourceful, with a competitive spirit. They are technically savvy. They understand new tech as opposed to Travelocity which means Sabre, which means old tech.”
“The DNA of [the other OTAs] is really different. We’re much more akin to an Orbitz or a Google. Sidestep is a technology company. Our roots are in technology, the founders are technologists. Which is perhaps why we’re successful; there’s a fundamentally better way to do it [buy travel]. We’ve been diligently working on our technology for the last 5 years.”
One reason Travelocity and Expedia say they won’t work with you is because your queries will cost them millions of dollars…
“We have a dynamic directory. For a particular search, we’re going to search these sources and only these sources, we’re not going to search unnecessarily. If an airline serves a certain area seasonally, for example ski towns during parts of the year, we have our own technology that helps us look at just this information. We’re very picky in terms of where we look and what we look for. Any of the travel suppliers which we query – Hotels.com, InterContinental, JetBlue - would back this up.”
What about international expansion…
“Yes, there’s a great opportunity internationally. We already search a lot of low cost airlines in Europe. We’re already doing a decent amount of volume there as roughly 1/3 of our flight searches involve foreign destinations or arrivals. One reason we do a good job is because our model works better; we search OTAs, consolidators, and travel suppliers themselves. Use our toolbar and do a search on Expedia for a trip to Paris.” [Editors Note: On the one search I did (LGA -->CDG, leaving 9/13 and returning 9/18), Expedia’s best price was $673 while SideStep’s best price was $599 and included 5 additional options under $673. SideStep saved me $74.].
“In Europe, there are a bunch of little guys. The only real player is Kelkoo. We have not announced any international expansion plans as there’s room to grow in the US. One thing that we’ve been careful about is to not spread ourselves too thinly. We’ve chosen to get deeper into the categories we provide. [The company launched vacation package search in June.] International expansion talks always come up, but we’ve maintained our focus.”
Are you going to be the travel engine for many sites out there? How are you marketing?
We have done some co-branded partnerships. Knight Ridder Digital is one example. We have the capability, and we’re open to those types of opportunities.”
“We do a lot of search engine marketing (SEM) such as pay-per-click (PPC) and search engine optimization (SEO). We do a lot of PR and promotions. We talk to the consumer and industry publications. Word of mouth is also big. Our approach is more akin to Google than Expedia; we’re not going to buy ads on blimps. We’re going to build a great service and deliver something so good that friends will tell friends, colleagues, etc.”
