Mrs. Chicke Fitzgerald

GLG News by Mrs. Chicke Fitzgerald, Chief Executive Officer

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Google's entry into travel - Extending the obsession with the air traveler

July 12, 2010

Analysis of:Facts about Google's acquisition of ITA | www.google.com

Last week, Google announced its acquisition of ITA, a Boston-based technology firm devoted to the development of technology to assist with the search and purchase of airline tickets.  They reported a price tag of $700 million in cash.I originally wrote about this transaction on April 23rd, in an article titled Travel Game Changer - What does Google's potential acquisition of ITA mean?

Dare to Differentiate - Travel, Mapping and Content Industry Challenge

July 9, 2010

Analysis of:Stop the Obsession with the Air Traveler | distribution-solutionz.blogspot.com

The more competition you face, the greater the need to highlight the differentiation -- the unique advantage of your product or service -- in order to succeed in the marketplace.Successful companies in all industries have long engaged in head-to-head competition in search of sustained, profitable growth. They have fought for competitive advantage, battled over market share, and struggled to balance differentiation with both risk and available resources for development.

Travel Game Changer - What does Google's potential acquisition of ITA mean?

April 23, 2010

Earlier this week, Bloomberg released a story "Google Said to Be in Talks to Buy Travel Company ITA".  They report that venture funded ITA may be seeking as much as $1b. Who is ITA Software and why are they appealing to Google?Whether this rumor is indeed true, what would this mean for the GDS & OTA industries?How would this acquisition impact Google?  Would it create new opportunity for Yahoo and Bing if Google's travel advertisers decide to boycot their new direct competitor?

GDS - Private to Public and Back - eCommerce Pioneers continue their evolution

April 23, 2010

Amadeus IT Group SA (Amadeus) is one of the world’s leading IT solutions providers for the travel and tourism industry, offering transaction processing capabilities to travel service providers and travel agencies. On Tuesday of this week Amadeus announced plans to launch their IPO April 29th on the Madrid Stock Exchange.  They will seek to raise 910 million euros ($1.23 billion) to pay off debt. Amadeus competes head to head with Travelport and Sabre, both privately held. 

The Future of the GDS as privately held companies

February 11, 2010

Analysis of:Travelport Defers U.K. IPO, Cancels Debt Tender Offer (Update1) | www.businessweek.com

Travelport cancelled its IPO and debt tender offer this week, citing "volatile equity market conditions".  Travelport started the share sale on Feb. 1 with a marketing process to sell between 383 million and 528 million shares at a price of 210 pence to 290 pence apiece. The IPO would have been the biggest in the U.K. since 2007, giving the company a so-called enterprise value of 8.8 times earnings before interest, taxes, depreciation and amortization.

The downward trend on air ticket sales continues for the agency channel

January 22, 2010

Analysis of:Air Ticket Sales for 2009 were down 17.29% | www.arccorp.com

Year over year air ticket sales through the travel agency channel (both online and offline) declined 17.29% in 2009.  Total sales were $65.8b, with $29.9b from domestic fares and $25.6b from international fares (with the balance being taxes and fees).  There are 15,928 agencies in the US and 188 airlines.  The number of agencies declined 10% from 17,673 in 2008.  This is due to continued consolidation and to some extent, the closure of the low end agencies that cannot survive in today's economy.  The number of airlines grew from 173.  Who knew?   The number of transactions (aka tickets) only declined 5.48%.  International sales as a percentage of total declined just slightly to 39%.  The average price of an international ticket declined 16% to $700.47 and a domestic ticket declined 12% to an average of $298.93, which signals an increase in sales through the top 4 online sites.

All three key metrics in hospitality are down for 2009 - No surprises there

January 22, 2010

Analysis of:US hotel industry ends '09 with double-digit RevPAR drop | www.hotelnewsnow.com

The three top metrics in the hospitality industry are revenue per available room (RevPAR), occupancy and average daily room rate (ADR).Revenue per available room fell 16.7 percent to US$53.71 during 2009, according to year-end reports from Smith Travel Research.The industry’s occupancy fell 8.7 percent to 55.1 percent for the year and average daily rate dropped 8.8 percent to US$97.51.  None of the top 25 markets showed any growth in these top 3 metrics.

We need to better understand the entire automotive industry ecosystem

January 12, 2009

Analysis of:U.S. Drivers Keep Autos Longer, Shun Showrooms on Job-Loss Risk | www.bloomberg.com

I was on the phone the other day with a colleague from Freescale and I was frankly surprised to hear that the decline that they are seeing in their production/demand is due to the automotive meltdown.  Because I'm only peripherally involved in the industry (through GPS and indash infotainment), I really didn't think through that car manufacturers were a primary consumer of semi-conductors. 

As oil continues its decline, can it prop up the travel industry's slumping profitability picture?

January 12, 2009

Analysis of:Oil Prices Hit $86 a Barrell | www.msnbc.msn.com

Jet fuel is one of the top 3 cost items for airlines. Since the summer of 2008, the price of oil has declined from $140 barrel to under $40 a barrel today.  This should be very good news for investors in airline stocks, as it should directly flow to the bottom line if airline ticket prices hold steady. Likewise, cruise lines' profitability is closely tied to this volatile commodity and the major players in the cruise industry could benefit from the continued decline in pricing. But right now, what we face is a need to stimulate travel, which is normally done through price reductions.  Will these suppliers pass on the cost reductions to consumers?

The travel ecosystem is shifting, beginning with the GDSs and online players

January 8, 2009

Analysis of:Expedia Vet Takes Orbitz Helm, Sabre Vet Takes Travelocity Wheel | www.btnonline.com

Both Orbitz and Travelocity this week announced new leaders at the helm.  Both have cut costs substantially due to reduced revenues and profitability.  Orbitz now has a technology savvy, operationally capable, marketing focused executive who is talking already about social media, which implies new models afoot for the OTA.  Orbitz had been outpaced by Expedia and Travelocity in the advertising model/social media capabilities, but does it really help them to do a "me too" offering to match Trip Advisor and iGoUGo? Just weeks ago, Amadeus founding CEO Jose Tazon stepped down in favor of his number two, David Jones, who had been the de facto day to day leader for some time, as Jose managed board and investor relationships with their private equity owners, BC and Cinven. Sabre puts its own COO at the helm of Travelocity, not replacing him in the Sabre organization, but instead splitting his job amongst his peers.  Is it time to go from 3 GDS companies down to two? 

The lines of travel distribution are blurring

December 30, 2008

Analysis of:New Report Evaluates Trends in Online Travel Market | www.travelagentcentral.com

The PhoCusWright report that spawned this article reports that the online travel distribution market has shifted to 61% being sold via supplier sites (otherwise known as consumer direct) and 39% is sold via online travel agents. Suppliers are trying to wring more dollars out of frequent, loyal bookers, which means increased focus on personalization, loyalty and community. OTAs, by comparison, are trying to wring any dollars out of their mass of unconverted lookers, as the almighty transaction gives ground to eyeballs and emerging advertising-based lines of business.

What will happen to the gaming industry as travel to Las Vegas declines?

December 5, 2008

Analysis of:Travel Numbers see steep decline [in Las Vegas] | www.klas-tv.com

Las Vegas has always enjoyed occupancy rates higher than the national average, but in the last few months, the economic situation plaguing the country has hit them hard.  Occupancy is down to 84%, which rivals post September 11th levels.  In the month of October, Las Vegas had a drop of 13% year over year, or nearly a half a million visitors.  Historically there has been a direct correlation between occupancy and gaming revenues.  That correlation weakened somewhat in the 90s when Las Vegas attempted to become a family destination.  Now that the city is squarely back in the "Sin City" role, the tie between hotel occupancy and gaming is very strong again. Factors to watch: - Air capacity and frequency declines - Visitor statistics - Occupancy rates - Proportional gaming revenue declines

Financial markets react to the historic election of Obama - what of the travel industry?

November 6, 2008

Analysis of:Asia cheers Obama win, but Europe down | robots.cnnfn.com

With the economy as a clear priority of the new administration, the world markets reacted to the election of Barack Obama, with investors voting with their wallets. In Asia, the Nikkei, the major index for the Tokyo Stock Exchange, closed up 4.5%. South Korea's Kospi composite index finished with a 2.4% advance, according to Dow Jones. The Hang Seng index in Hong Kong ended up 3.7%. The Australian All Ordinaries index was up almost 3% at its close and the markets in Taiwan and the Philippines ended lower. European stocks and U.S. futures fell after Democrat Barack Obama was projected to have been elected President of the United States. London's FT-100 and Paris' CAC-40 eeach fell more than 2%, while Germany's Dax was about 1.5% lower. It remains to be seen how the markets will close today in Europe and how the US markets will react. But it is the longer term results that will matter.

Is the reported "airline recovery" just the upside of the jetfuel roller coaster?

November 4, 2008

Analysis of:US airlines pull out of a tailspin | us.ft.com

Airlines are enjoying much lower fuel costs than they did in the summer of 2008.  Perhaps the use of the word "enjoy" and the notion that recovery is around the corner is a bit like a weatherman in the middle of a hurricane talking about tomorrow's sunshine.  At least that was the observation of a writer in Airline Weekly this week.  When the prices were high, the airlines kicked into high gear, cutting costs, trimming schedules, parking aircraft in the desert and finding ways to charge passengers for various services, previously offered gratis.  Now that the prices are low (remembering that everything is relative), will they hand off a slice of those profits to consumer?  Not likely! And what will be the impact on the other sectors of the industry?  The GDS companies depend on airline ticket sales for 90% of their revenues.  And the hospitality industry also caters to the air traveler as their primary market.  What will become of them?

Is the reported "recovery" just the upside of the jetfuel roller coaster?

November 4, 2008

Analysis of:US airlines pull out of a tailspin | us.ft.com

Airlines are enjoying much lower fuel costs than they did in the summer of 2008.  Perhaps the use of the word "enjoy" and the notion that recovery is around the corner is a bit like a weatherman in the middle of a hurricane talking about tomorrow's sunshine.  At least that was the observation of a writer in Airline Weekly this week.  When the prices were high, the airlines kicked into high gear, cutting costs, trimming schedules, parking aircraft in the desert and finding ways to charge passengers for various services, previously offered gratis.  Now that the prices are low (remembering that everything is relative), will they hand off a slice of those profits to consumer?  Not likely! And what will be the impact on the other sectors of the industry?  The GDS companies depend on airline ticket sales for 90% of their revenues.  And the hospitality industry also caters to the air traveler as their primary market.  What will become of them?

Totally myopic view of the travel industry will not stimulate growth

September 9, 2008

Analysis of:Sector Snap: US online travel stocks mostly fall | biz.yahoo.com

Orbitz stock fell 7.2% on Thursday, largely attributed to the fact that 87% of its bookings are US domestic and 74% of their product sold is comprised of air tickets. Priceline also fell, but not as substantially.  Only Expedia reported a rise in value. The following facts substantiate this observation about the online industry being myopic in its approach to the travel marketplace. •  Just 15% of US overnight travel is by air •  85% is by car, motorcycle, RV or other •  Just 8% of all travel in the US is for pure vacation travel to top 100 destinations •  Just 26% is business travel • That leaves 66% that do day trips, weekend jaunts close to home, visit friends and family and "life event" travel (weddings, funerals, sports tournaments, graduations, family reunions, etc.) to the other 86,900 cities, towns and villages in the US. The online players (and their offline counterparts alike) virtually ignore all but the vacationing and business travelers.

Until we get to "intent-based, situationally relevant" search, there is no vision

August 25, 2008

Analysis of:Is Microsoft's Vision of Search Enough to Catch Google? | www.businessweek.com

We are still in the world of Search 1.0 at best.  As long as search engines don't care what my intent is or what my current circumstances are, then I will still get 563,000 results when I enter Travel Tampa in a search bar.  Is there anyone out there that really thinks that this is effective search?

Who will win - the device manufacturers, the carriers or the applications providers?

June 16, 2008

Analysis of:T-Mobile invests $6m in deCarta's location based platform | www.thestandard.com

Following Nokia's recent investment in Navteq and Apple's announcements last week about having full GPS on the iPhone, T-Mobile announced an investment in DeCarta, a leading provider of mapping tools and location based services. In the article, DeCarta CEO Kim Fennell states that he believes that Nokia and Apple will introduce their own set of location based services, but that they will be tied to a particular device.  Since T-Mobile is device agnostic as a carrier, it will be interesting to see what they have planned to leverage the investment in DeCarta.     

Impact of Airline Capacity Cuts on the Hospitality Industry

June 6, 2008

Analysis of:Hotel CEOs Lament Softening Demand, Foresee Some Discounting | www.btnmag.com

All key metrics are still up (occupancy, demand, supply, average daily room rate), but what impact  will the economic downturn and reduction in airline supply have on the hospitality industry? Air travel represents less than 12% of all travel in the US today by Americans, yet all tools in the industry are air-traveler centric. Hospitality executives cite reduction in weekend demand and softening of business travel midweek.  They do not look at tools (other than online itself) at playing a role in driving traffic to their brands.

Is the travel pie still growing? Where are the GDS companies in non-air travel planning?

October 12, 2007

Analysis of:LeisureLogix Takes Back the Road with Its Personalized Road Trip Planning and Booking Tool | www.forbes.com

The GDS industry, which earns its money primarily from the travel agency community (both online and offline) booking airline tickets, has been said to be totally commoditized and destined for decline.  In 2005 (the last year that all reported their earlings publicly), globally the GDSs processed 1.3b bookings and earned $8.7b in Gross Revenues and yielded $774.1m in EBITDA collectively. The interesting statistic behind all of this is that out of the total US Travel market, which in the same year yielded 1.4b trips, of those trips, less than 10% of them were by air.  The balance of travel was by car, motorcycle, RV, train or bus.  Yet, the GDS companies do not have a product that addresses the drive market. For 2007 the Travel Industry Association reports that US spending on travel was $733.9b.  Of that, just 35% was sold electronically (which includes travel agencies and online agents). 

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