Talk about playing hardball.

The Associated Press is reporting that American Express will start stripping  the frequent mileage/frequent stay points any co-branded card users earned that month if they don’t pay the bill on time. The new rule will affect Delta, JetBlue, Hilton Hotels and Starwood Hotels accounts.

It is possible to get them back, of course — for a $29 reinstatement fee on top of your late fee and penalty interest rate.  That’s a steep price to pay for a mistake. (And what’s with the odd number? It looks like a retail psychology ploy to keep folks from getting pissed you charged them $30.)

“I think over the course of time, people miss a payment at least once because of unforeseen circumstances like something getting lost in the mail or a long vacation taking your focus off making your payments,” John Ulzheimer, president of educational services for Credit.com went on record saying.

American Express’ spokesperson is calling this a way of incentivizing good behavior by essentially spanking you for bad habits. Other credit card companies are simply calling it harsh  — although they don’t dare say it that bluntly. Even as they look to solidify profits in front of the February 2010 federal rules prohibiting certain fees and interest rate, that‘s not on their radars, they point out.

• Citi: Pay late one month and the associated points might not be available for redemption until the traveler and credit card company settle the bill. But so far, American Airlines and Hilton cobranded card holders are safe from reinstatement fees.

• JP Morgan Chase: Blow off paying the account on your cobranded United card and you won’t earn new points until you settle the balance.

Delta is on record as being OK with this, and early feedback from consumers at blogs is a shrug. Not paying your bills on time still lands in “socially unacceptable” category in general … except when it’s your payment that’s on the wrong side of the deadline, of course. But is it a bluff? Selling airline miles to partners creates a $5 billion a year profit flow for that industry — and like Ulzeheimer says, everyone misses a payment now and then. Taking away their points could eventually wash back to hurt the travel companies themselves.

It certainly isn’t taking anything off the table for American Express, unless card members decide to throw in their plastic and move to a different dealer.

Photography: pheezy (Flickr.com)

In the wake of falling prices and fewer fliers, airlines seem hellbent on irritating their customers as a fiscal strategy.

Apparently, the outcry against adding fees to flights on specific high-traffic days during the holidays wasn’t loud enough, because Delta, American and United announced yet more such because-we-can fees in 2010. Delta and United have carved out no less than 41 flying dates between January and May to slap an extra $30 onto the ticket as punishment for going on Spring Break when everyone else does. All three airlines announced $50 surcharges for select flights on February 8. Odd day? Not to those flying home from the Super Bowl in Miami.

Guess getting reamed $12 for a hot dog at Dolphin Stadium isn’t enough insult to loyal sports fans.

“This is becoming kind of a grab” for passengers’ cash, Robert W. Mann, president of consultant R.W. Mann & Co., told Bloomberg. “Nickel and diming in the form of $5 and $10 bills is really where it’s going.” But is it good business? Ask hotels, which are backing off from charging fees for every little service.

And it’s not as if they don’t have other revenue streams to explore. For starters, prices are steadying now, according to FareCompare. Similar travel-management companies are also predicting airfares will continue to rise in 2010, putting an end to the free fall drop in revenue.

American Airlines will dip its toe into retail sales on U.S. to London flights, peddling Heathrow Express train tickets. Its new inflight wi-fi service will promote online buying from SkyMall. After all, if you have the credit card reader on the back of the seat, they will buy. “We wouldn’t invest if we didn’t feel comfortable it would provide a fair rate of return,”  John Tiliacos, American Airlines’ managing director of onboard products, told a reporter from The New York Times. Reportedly, Broadway theaters and the Walt Disney Company want to elbow in on the action to sell their tickets on planes.

This direction fits right in with the snacks for sale, luggage charges and headset fees.

Then there are the behind-the-scenes moves, such as American Airlines and ARC’s partnership to develop an electronic tool that i.d.s duplicate bookings. The airline estimates these errors cost it “huge sums of money,” and considering the sums that pass through these companies in the first place, that figure must be large indeed to rate that kind of label from executives.

Yes, the recession is a bitch. Yes, the airlines weren’t in the black anyhow when the economy tanked. But at some point in your scramble to survive, you have to protect your future. At least these alternative ways of raising cash allow the customer a chance to decline and provide an extra service for their money. Tacking on fees for the heck of it is just tacky.

Photography: Mr. Usagi, jonathanb1989, psyberartist (Flickr.com)

At the premier online travel conference PhoCusWright 2009, 4 startups were selected by audience vote from a pool of 32 Travel Innovation Summit presenters to receive “Five Minutes of Fame” at the conference: EveryTrail, Gliider, Affinity Shopper from Amadeus IT Group, and Translations.com. Kevin May covered the entire Travel Innovation Summit event on Tnooz and wrote his quick reactions on each startup. Tim Hughes highlighted his 4 picks here (none of which won) and Stephen Joyce posted his 2 picks here and 1 here (none of which won).

Philip Wolf, CEO of PhoCusWright, has created a high-production value, entertaining, “American Idol” style event for travel startups. But after the sound and fury of the event is over, the morning after the parties are done, what really are the key travel technology trends that have been highlighted by these Innovation Summit presenters? I’ll focus on my take on that, and for the 6 readers who want to know my picks, you’ll have to read to the end of the post!

Summary: 7 trends and observations

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Here’s my biggest takeaways from the event:

1. Mobile will open up new opportunities for in-trip planning, shopping, and booking.
2. Sensors, system data, and geolocation-tagged data will be everywhere
3. An Epic Battle over the social web is ensuing between Facebook and Google, creating opportunities for all
4. Online search and discovery is still the biggest problem in travel planning and shopping (in other words plenty of need for the kind of stuff UpTake is doing)
5. The industry continues to focus on using data to drive better ad targeting and site conversion.
6. Social media is changing travel marketing, distribution, and customer service, and new tools are being created to help companies monitor and manage this new channel.
7. Many consumer-oriented startups still seem to be in the “build it and they will come” approach toward traffic acquisition. C’mon, don’t do that to yourself.  Stop it. Now.

1. Mobile Opening Up In-Trip Planning, Shopping, and Booking

In-trip planning, shopping, and buying via mobile is a clear opportunity. We believe that for every $1 spent on air, car, and hotel, there is another $2-3 spent on attractions, activities, restaurants, and other services at the destination. Mobile planning, shopping and booking will become a key tool for travelers to use when on their travels.

CarTrawler painted an intriguing scenario of last-minute comparison shopping for your rental car on your mobile phone. Currently, rental car reservations don’t carry a penalty for cancellation. CarTrawler allows you to access latest car rental rates so you can shop for a better deal while you’re waiting for your luggage at the baggage carousel!

The CarTrawler concept could be applied to any product that has expiring inventory and some kind of yield management. For example, travelers can make travel plans while they are on their trip on services like nightlife, entertainment, casinos, restaurants, tours, and attractions.

EveryTrail, one of the 4 winners, allows hikers to share waypoints and geolocation data as they hike and upload this to a trip plan or trail map. That data can then be used by others to do in-trip planning in the future. While the application and site is focused on hiking and trails, the same model could be applied toward other itineraries that would create maps useful for in-trip planning.

2. Sensors. System Data, and Geolocation-Tagged Data Everywhere

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Imagine a world filled with people uploading geolocation-tagged data from their mobile phones. EveryTrail founder Joost Schreve shared a quote from Google’s Eric Schmidt that mobile allows for magical things to happen:

The mobile platforms, Android and the others, are so powerful now that you can build client apps that do magical things that are connected with the cloud. This is I think the most visually obvious example of that…don’t limit your imagination to this set of problems. Anything where you can produce this phenomenal customer benefit when you have a mobile device broadly defined connected to the cloud….

(is  “Minority Report” advertising in our future?  Photo credit: PR via Guardian UK)

EveryTrail claims that 1000 trails are already being uploaded each day to EveryTrail. With increasing applications and increasing smartphone penetration, one can imagine a massive amount of geolocation-tagged data being uploaded by people on their mobile devices.

On top of that, imagine a world with sensors everywhere, that automatically publish data on objects in the physical world. In addition to user-uploaded photos, videos, reviews, and other content, sensors could publish the location and status of buses, trains and rental cars. Imagine other information, such as restaurant wait times by party size, tour/attraction availability and price, event ticket availability, and other travel services also publishing status information into the cloud to be accessed from mobile devices.

Processing all this data from sensors and from people in a way that creates useful applications will be a huge opportunity and challenge. Vanguard ID Systems tantalized us with some “vaporware” – RFID tags that could track the location of your bags at all points.

3. Epic battle between Facebook and Google for the one Web ID Ring that will Rule Them All.

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An epic battle is brewing between Facebook and Google to control the key standards and services of the social web. An example of that is Google Friend Connect and Facebook Connect, both of which want to provide a lightweight single-sign-on to all Websites. In other words, the One Ring To Rule Them All.  Jeremiah Owyang of Altimeter Group has written extensively about Google’s Stealth Social Network and how Facebook is having to open up to compete. At this point, it appears that Facebook has a commanding lead in driving adoption of a useful single-sign-on standard that also provides exciting direct marketing opportunities to travel Websites.

This epic battle will create opportunities for online travel companies in 2 ways.

First, access to Facebook and Google data will enable companies to run direct-marketing campaigns to drive customer acquisition and repeat purchase. Facebook just recently announced a policy change where sites integrating Facebook Connect can request users to authorize Facebook to provide the user’s email address to the site.

Second, travel companies will be able to use technology to participate in what I call “social discovery.” Social discovery means learning about something from watching what your friends do, or asking your friends for advice and recommendations. In the opening keynote, PhoCusWright’s Philip Wolf talked about social search, which implies integration of Twitter and Facebook into Google or Bing search results. The concept of social discovery includes social search in Google or Bing, but also a more serendipitous sharing of recommendations from inside of Facebook.

The companies that seem to have the biggest opportunity to insert themselves into the social discovery process is Localyte, EveryTrail, TourAbout, and Gliider. Localyte is a social network of local “experts” (basically anyone who wants to dispense advice) and travelers looking to connect with a local. Tips and advice could be posted to the Facebook news feed and thus drive new users to the Localyte site. EveryTrail allows the posting of trip status into the Facebook news feed, and Gliider allows you to ask your friends for advice, which could drive further application adoption.

Gliider, one of the 4 winners, is a browser plug-in that allows you to bookmark the information you get from across the Web into a trip portfolio that can be used for pre-trip decision making. They seek to make money by having users discover targeted deals and offers without their application. Honestly, I’m not sure if this really a company—it feels more like a product or even a feature of a product. But they have already integrated Facebook Connect so you can ask your friends for advice, and that’s a smart way to use Facebook.

TourAbout seeks to build a “social marketplace” of local tour and attraction providers which combines aggregated content on those travel products with the social recommendations you get from friends. Stephen Joyce wrote extensively about this company and appears to have a Internet crush on this company:

The concept is simple, and one that I have been advocating for some time; engage with potential customers by building social equity through the sharing of expertise.

The opportunity for operators is two fold: firstly, the operator gets to create a profile page that allows them to showcase their tours, their areas of expertise, and humanizes them.

Secondly, the operators get to answer questions posted by travelers that fit their areas of expertise and build relationships both passively and actively.

The social marketplace allows independent operators to overcome a major hurdle with marketing, primarily the question of credibility. By answering questions in the marketplace, the operator builds social equity and credibility.

I want to learn more.  I’ll update this post after I talk to the company.  I wasn’t paying attention during their demo.  I talked to the company.  Now I understand.  They are creating a database of tour operators, activity providers, and destination specialists and helping them play in the social space.  The way they intend to do that is by creating a Q&A community for travelers where suppliers are welcome to provide answers and information to consumers, including travel “insights” which are basically tips and advice.  They do sentiment analysis and automatic tagging of all the content to make it easy to find, and to organize similar questions together.  This “social marketplace” will include the “social” features, like Q&A on the site and via Facebook and Twitter, but also a “marketplace” where leads can be sent to activity providers and operators.

4. Search and Discovery Still The Biggest Problem/Opportunity for Travel

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UpTake’s perspective has always been that “Web search is broken” for travel and needs to be fixed. At PhoCusWright, I heard Google reaffirm their research that people conduct 12 searches and visit 22 sites before booking. After watching a number of Travel Innovation presenters, I’m convinced there are still big opportunities to improve in search and discovery in all areas of travel.

Amadeus IT Group, one of the 4 winners, highlighted a new map based search called “Affinity Shopper” for the 18-30% of people (I heard various stats) who start the planning process without knowing exactly where they want to go. This is a big problem that needs to be solved, and it is relatively less rewarding to solve it because those customers may be further up the purchase decision funnel and less likely to convert. Amadeus’ “Affinity Shopper” also seemed to include additional filters and information to serve the customer who is just starting the travel planning process. Their launch customer is Lufthansa, who showed how a map-based, and interest-based search might work.

Voyij is focusing on aggregating and organizing deal content. They highlighted Twitter as a real-time channel where deals are being pushed by suppliers and intermediaries. In reality, whether or not Twitter becomes a dominant channel for deals, the social web is likely to become more fragmented over time and the need for a specialized aggregator to bring content together in a searchable way is likely to increase.

Goby had one of the most compelling demos of the day. They are also addressing a need that UpTake has focused on, helping Web searchers figure out what to do and where to go. Goby has a very nice map-based, proximity search feature that helps you decide what activities to do based on proximity to your starting point. TripAdvisor has a similar feature but it is buried and hard to find. Is this proximity search a signature feature that will differentiate Goby from the pack of other aggregators (including UpTake)?

Other startups that are also addressing search and discovery include search engine service provider Exalead. the complex itinerary optimization engine YourTour (from the unfortunately named company deciZium, probably the worst company name I have ever come into contact with), and even Limo aggregator site CheapLimoRates.com.

Looks like a few other startups, and the PhoCusWright selection committee, concur with our position that “search is still broken.” Of course, these companies still need to have a traffic strategy, which in my opinion needs to be focused on Google, Facebook, or both.

5. The industry continues to focus on using data to drive better ad targeting and site conversion

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Several startups are helping advertisers do better contextual targeting on publisher sites, and better merchandising to improve site conversion. Tim Hughes at BOOT and Tnooz already wrote extensively about this in his post about his 4 top picks and how this trend relates to what he calls “EveryYou” concept.  EveryYou goes beyond the concept of the Long Tail:

The Long Tail is based on matching the unconstrained supply of the Internet to niche demand. What is missing is that the niche demand in Long Tail theory is constrained because it depends on knowledge. That is, someone can only demand a niche product if they know about it and believe that they like it (or could like it). For unconstrained niche demand you need to have a systematic and automated means of making trusted and targeted recommendations to someone. This is the EveryYou principle. Using the four dimensions of data we now have on people interacting with our sites (breadth), the different things an individual does on a site (depth), the interrelation between the data we have one person and others (context) and the freely provided data we have unrelated to transactions (community) we can develop a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time.

Matching demand to supply using data is the trend illustrated by several companies:  Dapper and X+1.  Here’s how these companies are described:

Dapper:  “Travel advertisers have a constantly changing inventory, and Dapper Ads allow them to connect their travel offers in real-time to their display ad campaigns. Dapper Ads’ intent engine uses a combination of real-time bidding and geo, behavioural, semantic and contextual cues to decide exactly which impressions to buy, and then which offer from your website inventory to show in the ad creative, each time the ad loads.”

X+1: “x+1 makes online media and marketing more effective by identifying highly valuable customers and prospects and serving up relevant content on ad units, sites and landing pages. x+1 products enable online marketers to reach their target audience anywhere on the web. Site+1 is an audience management solution that automatically assembles data about customers and chooses the statistically optimal messaging to show each visitor in order to drive more profitable site visits.”

I’m not smart enough to figure out exactly what they are saying, but there you have it.  Contact Tim Hughes for more on this topic!

6. Social media is changing travel marketing, distribution, and customer service, and new tools are being created to help companies monitor and manage this new channel

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Another aspect of data is Three companies showed travel-industry oriented social media monitoring tools. I’ll again quote Kevin’s post:

10Best / VinePulse – “10Best’s knowledge about the travel and hospitality industry is reflected in VinePulse, an industry-unique social media reputation monitoring and response tool. VinePulse offers a user-friendly, flexible, comprehensive dashboard that allows all the stakeholders – from corporate managers, to regional managers, down to individual property managers – to listen and interact.”

iPerceptions – “The unique integration of Voice of Cusotmer survey data with corresponding behavioural/clickstream data, delivered through an advanced interactive dashboard. The most innovative version of this integration is made possible by matching relevant session-level Google Analytics raw data with matching individual VoC survey responses, as opposed to the commonly available aggregated data.”

eBuzzConnect – “EBuzz Connect is a online social media management system for hotels, restaurants and businesses to monitor and manage their online reputation and social media channels from an integrated single interface. The system enables hotels to respond to reviews and comments from the tool whenever the channels offer capabilities for hotels to respond. In addition to social media channels, eBuzz Connect also monitors online travel agency channels such as Expedia and Travelocity.”

This is an important trend that is not confined to the travel industry. From a business model standpoint, I am much less excited about this but I’m sure there is plenty of opportunity for lots of vendors in this space.  It doesn’t feel like a winner-take-all opportunity and I expect this space to be very fragmented and very professional-services oriented.  Also, I think travel industry focused solutions will compete with more generalized tools and services.

7. Pet Peeve: many consumer-oriented travel startups still have “Field of Dreams” approach toward traffic

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Travel Innovators are either keeping their consumer acquisition strategy very close to the vest or there is a bit of “field of dreams” inherent in these plans. I think it is a bit of both.  Traffic acquisition is the most important driver of success and that strategy should be clearly evident.

Take CheapLimoRates.com. They claim to be the first aggregator of the fragmented, $10 billion limo industry. But how are they going to be found?

What about Goby.com? Extremely appealing but I didn’t hear about how they were going to drive traffic, other than the core appeal of their respective concepts. Other than SEO-friendly URLs, I didn’t see any new acquisition tactics built into their product concept. Voyij is another product where I didn’t immediately see new and different acquisition tactics. Headed by online travel veterans from SideStep, I’m confident they will come up with something. Twitter deal aggregation is very interesting as a core product concept, but I also would like to see how Voyij could publish tweets to a user’s Twitter feed that would result in Followers seeing a viral message that would get more people to come to Voyij.

(Disclosure: UpTake is in discussions on or have established a co-marketing relationship with both Goby and Voyij, so we know a little more than I’m writing here.)

I was befuddled by how Gliider could get traffic so I asked Jordan Stolper, CEO and Co-Founder of Gliider. He responded that OTA and publisher partnerships was the key way he would drive adoption of his tool…a key dependency to their model. Partnerships are also central to TripIt’s consumer acquisition strategy, according to Gregg Brockway, founder and President of TripIt.  Gliider will need to execute on the same strategy as TripIt with a planning widget as compared to TripIt’s itinerary management widget.

Only EveryTrail talked about Facebook integration and how publishing information into the Facebook news feed. By streaming EveryTrail uploads into the news feed, consumer can share what they are doing with their friends and make people aware of EveryTrail. Facebook to iPhone conversion rate is limited to the incidence of iPhone.

Localyte does seem to have built in acquisition into their product. Their signup process has an aggressive “invite your friends” to drive adoption. Unfortunately, you cannot connect your Facebook account until you set up a Localyte account.

The company also claims some incredible adoption numbers: 40,000 local experts producing 20 million new words a month, equivalent to 80,000 250-word articles per month. That seems hard to believe, and is amazing if true. Localyte’s SEO metrics (page rank, backlinks, indexed pages) and Compete.com traffic seem low relative to this kind of content creation.

Still reading? Wow. I’m honored by the 3-4 people that are reading this sentence. As a thank you, my treat on breakfast or lunch in Palo Alto! (must register for this promotion by Dec 1 by emailing Elliott at ngventures dot com)

OK, here’s my picks

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EveryTrail is by far the most interesting new play, that combines mobile sharing of geolocation-tagged content (photos, waypoints), mobile trip planning, and Facebook Connect viral marketing. Goby, Voyij, and Amadeus IT’s “Affinity Shopper” are my other picks because they are part of the same good cause that UpTake is on to improve search and discovery in travel! Congrats to all the new travel startups!

Tracking organizations say the rate of decreases in international tourism is slowing  — or, put another way,  fewer folks are not globetrotting lately, which lends hope these numbers could climb out of the red and into the black in the near future.

According to the United Nations World Tourism Organization’s World Tourism Barometer report, the number of international tourists declined 7 percent in the first 8 months of 2009. But because the bleeding is beginning to taper off to the tune of only 3 percent in the hold during July and August, UNWTO is guessing the final decrease for this year will be 5 percent.

We’re still talking big numbers of course — 600 million visitors worldwide compared to the 643 international visitors countries usually welcome. And it’s understandable, given the poor economic conditions in previously strong countries and a  flu pandemic. It’s just not acceptable to countries that rely on these visitors’ dollars (which shrank 10 percent during those same 8 months, making it an even more dismal story than the head count)  to keep their own employment bases strong.

How hard were countries hit? Stats from the World Tourism Barometer:

In Europe (-8 percent), destinations in Central and Eastern Europe were the most affected, but results for all other subregions were close to the average.
o        Asia and the Pacific (-5 percent) shows the clearest signs of improvement with growth already positive in August driven by the encouraging results of North-East Asia.
o        In the Americas (-7 percent) there are still no clear signs of a reversal in the current decline trend. Growth continued to be fairly negative during the second quarter as well as in the months of July and August. South America has shown the best performance so far (-1 percent).
o        The Middle East (-8 percent), though still well down on the growth levels of previous years, already saw a shift to positive growth between June and September (data for the region is fairly volatile due to the influence of major religious events in tourism flows).
o        Africa’s growth (+4 percent) was very positive given the current difficult environment.

So, since its travel industry seems to be suffering the most on this list, what is the United States government doing to improve the situation? If you ask the European Parliment, that would be pissing off the foreign tourists it needs. EU lawmakers are requesting that Secretary of Homeland Security Janet Napolitano  lead the charge against a likely $10 visa waiver registration fee passed by Congress but not yet signed into law by President Obama. Oh, they’re upset with the online visa waiver, too, but slapping a $10 charge to the process has apparently rubbed salt in the wound.

According to MSNBC, Napolitano is willing to discuss this airline passenger paperwork thing, but, uh … we need that $10. “Unlike many of your countries, the United States does not have a separate agency to promote tourism and travel, and so the goal of this is to use that to actually fund and help tourists and travelers who wish to come to the United States,” Napolitano reportedly responded. “In that respect I think that it is not only reasonable but in these days of reduced government budgets, it’s the way to fund that.”

MSNBC says that EU lawmakers are angry because we American’s don’t have to pay these fees and jump through these hoops on their end. No, we just have to justify a  dollar sinking against the Euro with our personal budgets.

How sure is UNWTO that these numbers will improve?

Photography: Julie Sturgeon