Innovative online travel companies are finding a market for their services despite -- or perhaps because of -- the weak economy. "Travelers are definitely looking to be more frugal and to cut expenses wherever they can," said Tom Romary, CEO and cofounder of Yapta.com. "You might say that some of the newer online travel companies were born out of the recession."
Many college students have been spending the week on the beaches of Padre Island and other balmy locales, soaking up equal parts sun and alcohol. Meanwhile, the families of America are starting to think about where they'd like to dig their toes in the sand for summer vacations -- if they're not already picturing themselves joining the long, sweaty lines at the nation's major theme parks.
What do these two disparate demographic groups have in common this year? A greater reliance than ever before on technology, particularly the online travel companies that have managed to stay busy as the country tries to blow away recessionary storm clouds.
That goes for the Web sites for the top airlines or hotel chains in the country, the major online travel aggregators like Expedia (Nasdaq: EXPE) and Orbitz (NYSE: OWW), and specialized Web sites like Yapta and TripIt that target hourly changes in airfares or help travelers organize their business or pleasure visits. Add to that mix the relatively new factors of social media networks and smartphone applications, and you've got extremely empowered consumers -- along with a lot of jousting for their business.
"What's still happening is a lot of fierce competition right now, and you have got to have the right twists and turns," BestFares.com founder and CEO Tom Parsons told the E-Commerce Times. "You've got a lot more travel gurus out there sitting at home saying, 'I know how to play this game' -- but the game changes every hour."
Those changes can mean hundreds of dollars saved on airfares and hotel rates, and various packages involving both kinds of costs. Just as travelers are trying to avoid the stress that comes with spending too much money for their rest-and-relaxation trips, online travel companies are also trying to contain costs by enhancing the services they already provide, rather than merging with other companies -- or buying them outright.
"I would guess that more travel companies, online and offline, will continue to forge partnerships in an effort to expand their offerings and gain visitors and travelers, but without incurring major costs," said Tom Romary, CEO and cofounder of Yapta.com. The same spirit that led to previous travel connections -- such as Expedia buying TripAdvisor, or Travelocity's purchase of Sabre -- has been put on hold by the recession.
Latest Online Travel Trends
Necessity -- and a recession -- being the parents of invention, some new Web-based companies have sprung up in response to the greater demand for cost-saving services accessed from a computer or smartphone, noted Romary.
Packlate, which targets last-minute deals in the vacation rental/vacation home market, and GetARoom, which provides the latest information on so-called nonpublished hotel room rates, are two examples.
Yapta, which scans changes in airfare and hotel room prices and alerts customers accordingly, was doing business before the recession, but has still managed to market itself as a resource to cost-conscious travelers.
"While the recession did result in fewer travel dollars being spent, it also thrust services like ours into the spotlight," Romary told the E-Commerce Times. "Travelers are definitely looking to be more frugal and to cut expenses wherever they can. You might say that some of the newer online travel companies were born out of the recession. These sites help fill a need for travelers on a tight budget. Again, it's a sign of the times."
However, the newer companies and their new technology tools may be giving customers a false sense of security, argued BestFares.com president Parsons.
"In the business today, John Q. Public still has to be careful about what system they use," he said. "This year, the consumer is not just relying on the search engines to do their work. The airfares can change three times a day. What you see on Tuesday in the morning can change a couple of times by 5 p.m. You have to use a little more common sense other than solely relying on any one of us (online travel companies). You've got to play the game a little bit harder."
Advent of Smartphones and Social Media
These days, if an airline or any other travel-related company doesn't have some form of social media strategy, it's a cause for raised eyebrows, said Dan Levy, editor of Sparksheet.
Twitter and Facebook accounts can help manage public relations crises and alert customers to deals, Levy told the E-Commerce Times, but the ship still hasn't come in yet regarding any real impact on company bottom lines.
"There are a few examples, like JetBlue (Nasdaq: JBLU), which made a bit of a splash when they were the first ones to start giving away cheap seats via Twitter," Levy said. "If you're able to unload extra inventory, then I think that's a clear case of social media being a good business decision."
Southwest Airlines (NYSE: LUV) is trying to find a way to measure engagement on its Twitter and Facebook accounts by tracking click-throughs that lead to its ticket-booking services on Southwest.com.
"I got the impression they're not huge numbers, but they are at least tracking," observed Levy. "They are seeing whether people are coming through social media or from organic, direct traffic."
There's more potential in the smartphone application world, in his view, and he hopes that established travel-related companies -- be they the Web sites of the major airlines, the aggregators like Expedia or specialized Web-based companies -- will seek out the entrepreneurs who are trying to merge GPS-related services with the needs of the travel industry.
It's still a work in progress, though.
"I think maybe it's a case of the airlines trying to do it all in-house," said Levy, "when there are enthusiastic airplane geeks out there who are developing some really cool stuff that's miles ahead of what the airlines are developing."
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