Elliott Ng, co-founder of UpTake, wrote a great summary of PhoCusWright’s  Travel Innovation Summit. Here’s my uptake on Wednesday and Thursday’s Center Stage presentations, hallway conversations, and miscellaneous (usually unsubstantiated scuttlebutt.

Conflict and Opportunities Abound in Lodging Sector

If you believe Bill Carroll, Chris Anderson and Jake Fuller – and they have the data to support their hypothesis – the lodging industry’s recovery is 4 years away. There are number of reasons for this:

Lodging industry supply is increasing

Supply is still increasing. There are structural limitations (ownership and political) on why lodging rooms aren’t going to be taken out, discount expectations are hard to reverse, fragmented ownership inhibits price leadership and chain brand value and controls have been diluted. An excellent analysis that has implications for online travel ecosystem – the OTAs’ resurgence will continue, conflict between chains and franchisees will grow, and there will be interesting opportunities for businesses that can deliver enough opacity to disable best guaranteed pricing. The dynamics were similar in 2001-2003 when Expedia and Hotels.com dominated online hotel sales to propel into number one position.

OTA's reach a tipping point

What do you think of the Cornell (and Jake Fuller) analysis and conclusion that the lodging sector will be below the magical 60% occupancy line for another 4 years? And what new businesses will emerge and what other implications do you think there will be?

The Next 6-12 Months will Signal a LOT about the Health of Online Travel

The big event we were looking forward to at the start of 2009 happened – booking fees got cut. And the OTAs survived – and thrived (primarily by taking share from suppliers). Jeff Boyd, Priceline’s President and CEO has  Priceline and Booking.com dominating European hotels and growing almost 50% Y/Y. Dara Khosrowshahi, Expedia’s CEO  has the company growing almost 30% and well positioned given the ongoing hotel occupancy struggles. Barney Harford, CEO of Orbitz took the firm off death watch, cleaned up the balance sheet, raised $100M in cash and is driving Orbitz to finally build a hotel business. Fair to say the publicly-traded OTAs are doing well!

So why do the next 6-12 months matter? Because a number of later stage, private travel companies are primed to go public – Amadeus, Travelport have filed their S-1 and hired bankers respectively. Potentially four more have the size – but perhaps not the size AND growth – to go public: HomeAway, ITA Software, Kayak and Sabre. Will they try? Can they get public?

If they do, it certainly will help the earlier stage private travel companies. Most need to raise additional capital in the next 6-12 months, but if there aren’t some exits and some liquidity to enable acquisitions, it is inevitable that there will be a slew of travel start-ups going under. And even if there is more investment capital available or there are acquisitions as a result of some IPOs, as Brad Gerstner, founder & CEO of Altimeter Capital said, there will be a need to reset valuation expectations. E.g. Priceline and Expedia are growing at 47 and 28% and trading at 8-9X multiples. {Disclosure: UpTake is one of those earlier stage travel companies, and although we don’t need to raise additional capital until 2012, we are very aware that we will benefit from more travel companies going public and an improvement in valuation multiples}

Obviously HomeAway, ITA and Kayak don’t have control over the public markets, but they all have major initiatives underway that will materially impact their growth trajectory and perception from investors. HomeAway will start building awareness of the vacation rental category with an ad campaign – including super bowl ads! ITA is moving ahead with its new GDS and has additional search innovations (e.g. Needle) teed up. Kayak is building brand with their offline campaigns, building their hotel business to offset the cuts in booking fees, and investing to go deeper into the transaction process. Interesting times, big bets, big potential upside!

Who do you think will try and succeed in going public? What do you think will happen to the several dozen private travel start-ups that need capital in the next year?

Either Search & Discovery still needs improvement – or a lot of us don’t get it

There is plenty of  ongoing investment in new search and discovery:

• Amadeus’ Affinity Shopper, the winner of the Innovation Award with their dynamic packaging search-;
• Goby with long tail search, , my personal favorite – ;
• Voyij, my favorite runner-up is filtering the Twitter stream, compiling them into emails to slow down the real time feed and enabling me to find what I need when I have time to look;
• TripAdvisor, the investment closest to my heart,  Steve Kaufer discussed how TripAdvisor is investing in semantic search to deliver the gestalt of a product and save consumers the need to read 3,300 reviews on the Bellagio;
• Car Trawler on car rental comparison shopping;
• 10Best (VinePulse) on enabling hotels to search reviews from across the web about their hotel etc.

Disclosure – no surprise on this  (gasp!) UpTake is a search engine! We have aggregated content from over 5,000 local, travel and professional sites and done the ontology-driven attribute – e.g. ‘6 year old’ indicates a family related fact – and sentiment analysis – e.g. ‘loved the pool’ indicates a positive feeling so we can recommend products that best fit consumers trip preferences. For example, we return different hotels if you are looking for family hotels versus romantic hotels}

Are Goby, Voyij, Car Trawler, TripAdvisor, UpTake all search ‘hammers’ looking for search ‘nails’, or is there a real problem for the search & discovery companies to solve? What do you think they need to do to succeed?

TripAdvisor and Google are the 800 and 8,000 pound Gorillas (respectively)

Expedia has to battle Priceline, Orbitz and Travelocity and vice versa.

But up the travel funnel, there is less competition.

Google has crushed Yahoo Search. Bing is battling valiantly, but Bing’s pick- up 200 basis points of search (from Yahoo) to get to 9% market share hardly shifts the market dynamics (when Google has north of 60% market share). The three most successful online travel CEOs – Dara, Jeff and Steve (Kaufer – sorry Steve Hafner all mentioned their concern about Google (or Troogle – Google + Travel) and their dependency on Google (given 73% of travelers search and search an average of 10-12 times before they book). Even though Google has publicly said they aren’t entering ‘vertical search’ like travel, Google continues to extend their lead in related categories – e.g. maps, photos, video, the ‘local modules’ – and therefore increasingly influences online travel. A benign 8,000 pound gorilla (generating over $2B a year in lead generation revenue from travel), but growing larger as each PhoCusWright comes and goes.

TripAdvisor is as dominant as the ‘second click’ for travel research as Google is as the starting point for travel research. Already dominant domestically, they have quietly launched localized versions globally over the last two years and are estimated to generate over $300M in 2009 revenue and $200M in operating income. And they too, are extending their lead. In the last year, the TripAdvisor Media Group has expanded into China further with the Kuxun acquisition (already owning DaoDao), launching flight metasearch, getting into deals (via SmarterTravel), and driving into the vacation rentals sector. Fortunately, TripAdvisor continues to be collaborative with the rest of online travel, but like Google, they continue to extend their lead.

In an industry where size (of market share) matters, Google and TripAdvisor are dominant. What does that mean for the long term health and balance of the online travel ecosystem?

Google has enhanced the functionality of Google Maps with an exciting new tool – Place Pages for Google Maps. Each Place Page has all the relevant information – photos, videos, reviews, related websites, popular attractions, maps, directions, etc. – listed on one single page.

Place Pages for Google Maps - Snapshot

And the thing that makes it so awesome is that there is a literally a Place Page for every place in the world. You can find all the information you want about businesses, points of interest, transit stations, neighborhoods, landmarks and cities all over the world.

You do a search on Google Maps, and if you click on “more info” in search results, or on ”more info” in the mini-bubble, it takes you to the Place Page. The photos are powered by Panoramio, videos by youtube.

A search for Katz’s Deli in New York resulted in a page where the overview included all the usual stuff such as a menu, pricing, dining style, maps and location.

And then you have separate sections for photos & videos; user reviews from TripAdvisor, Citysearch and other sources; web pages devoted to the place; and user content such as wikipedia pages and flickr photo sets.

Place Pages for Google Maps - Snapshot

The overall impression, once you check out one of these pages, is that you don’t really need to go anywhere else. Everything you need to know about ‘the’ place is aggregated right there – on that one page.

If you’re a business owner, you can add or update your business details through Google’s Local Business Center.

As of now, cities and most businesses have their own URL under google.com/places. For example, New York is google.com/places/us/new-york/new-york-city. And San Francisco is google.com/places/us/california/san-francisco-city.

Question is, are these Place Pages going to compete in web search results? They’re not completely kept out of search results - a few queries, closely tied to the page titles, did return these pages. But as of now, the use of Place Pages looks to be limited for use with Google Maps.

Even so, given the massive reach and visitor base for Google Maps, its a virtual guarantee that Place Pages will very quickly become a go-to source for checking out restaurants and other consumer-oriented businesses where reviews matter a great deal.

Google’s mobile advertising division has started providing stellar results for the search giant’s major desktop customers like Vegas.com.

Vegas.com

Vegas.com is seeing ad click-through rates as high as 20% for their iPhone Android search ad campaign. The search ads appear alongside search results on iPhones, Palm Pre and devices running the Android operating system.

And with this mobile campaign, Vegas.com has tapped into a very high potential and lucrative market – people who are looking for Las Vegas hotels and other tourism service providers ‘after’ they land up in Vegas. These customers haven’t done any travel research, and they’re looking for last-minute bookings, which makes it an easy sell.

Scarlet Lento, Internet marketing manager at Vegas.com, tells Mediapost that click-through rates on Apple’s iPhone and Google’s Android operating system  surpasses desktop campaigns. He adds that Vegas.com plans to keep the mobile ad campaign going for now, and since the ads met their ROI goals, they will launch more ads.

And this is not just happening or staying in Vegas. According to ComScore data, 7 million mobile browsers accessed information or services related to travel, spread across the US, UK, Germany, France, Italy and Spain. The US growth in mobile use for travel related info and services was a stunning 62% in 2008.

A research report by London based EyeforTravel Research on the use of mobile technology in travel explores all the issues and things that travel companies need to be aware of before they jump into a mobile ad campaign.

EyeForTravel Mobile Tech report

EyeForTravel’s Andrew Merrie tells Travel Trade that the industry is ‘cautiously excited’ about mobile technology and quite aware of the growing impact of mobile devices and the possibilities it holds to connect with customers.

He adds, however, that most travel companies are still in the dark about how to go about doing this ‘connecting’ and are unsure about where to start, which mobile platform to focus on, whether to go through the internet or use apps, and what kind of ROI to expect. 

Just so you know, there is no need to put up a separate mobile version of your site, if you’re running an iPhone Android search ad campaign like Vegas.com. It’s a question of knowing how to run an Adwords campaign, and knowing how to create a mobile ad. Here’s Google’s full mobile ads faq, which should help you get started.

And you can see the full EyeForTravel ‘Mobile Technology in Travel’ report here.

With the launch of City Tours (http://citytours.googlelabs.com/), Google adds to the list of trip-planning solutions which use some combination of local data, maps, user generated content and social networking tools.

Google City Tours

City Tours is still under Google Labs , and as such, it’s still pretty much in it’s infancy, but it’s already being touted as something with immense possibilities. City Tours points out the attractions and plans out multi-day trips. All you do is name the city and you’re good to go. And if you specify the location of your hotel and the length of your trip, City Tours will map out a complete itinerary for you.

When you type in the city name, you get back a planned 3-day trip, with around 10-12 attractions mapped out per day. The site suggests time to be spent at each location, and walking distances between the mapped attractions. You can modify the number of days, and add new attractions.

It’s pretty basic and simple, and adding new attractions seems to work, so long as you don’t try to add some name or attraction which could have other meanings. But the interesting part is in the possibilities that City Tours offers. It uses Google Maps to figure out the relative positions of the attractions in each itinerary, and line them up so as to create a suggested tour with the minimum overall amount of walking necessary.

So you could, for example, work out a complete trip plan, starting from your hotel, throw in restaurants, attractions, shows, and a complete trip, rather than just the attractions. You could make it work for a multi-day roadtrip across state lines, involving multiple destinations.

And instead of just walking between destinations, if you could plug-in Google Transit to cover the distances between the attractions, that would make it even more closer to reality. You’d get a trip plan with suggested attractions for each day of your stay, and the closest public transport options for traveling from one point to the next. That’s pretty much all you’re looking for in a trip planner.

And there are plenty of sites, like GoPlanit, which already offer something close to this. The difference with Google is the vast scale of it and the user participation - pretty soon, people will have added so many attractions to each place that the system will be bigger and better than what any other trip planning site can offer.