After transforming the way travel is bought, can online travel companies continue to make huge, not incremental, innovations? Harford, 39, gives a resounding yes, and shows Raini Hamdi how he is breaking ground at Orbitz, which also owns ebookers, CheapTickets, HotelClub, Asia-Hotels, etc
President & CEO
Orbitz Worldwide, US
Are OTAs making huge leaps in innovation or is what we’re having now pretty much it?
We’ve come so far in the last 15 years with online travel. At the same time, I believe there is so much more we can do to make it even better.
I think personalisation, for example, is going to be a big thing going forward.
We fundamentally believe there is an opportunity to understand the behaviour of consumers on our websites – what their preferences are, what their shopping purchases are – and use that to make personalised recommendations to them.
Did you know, for example, that people shopping on the Mac typically spend US$20 more per night than those shopping on PCs?
Why is that?
It’s a different consumer – Macs are more expensive. So when we see someone shopping on a Mac, we’re going to recommend them a slightly different hotel.
Similarly, we know that people who are travelling with kids prefer different hotels than those travelling without kids, so we actually have developed a kid-friendliness index for every hotel on our web. Also, a kid-avoidance index.
So based on search, we are able to change what we recommend. That’s really important because 90 per cent of what we sell in terms of hotels is one of the hotels on the first- page results. Fifty per cent is one of the first five hotels and 25 per cent is the first hotel on that sort, so being able to nail it with the first five properties in particular is really important.
So if someone tells you there is not much going on with OTA innovation, you’d say…
…rubbish. There’s huge innovation. The innovation that is going on is not a new model but on ground-breaking ways a consumer can book travel, for example, via mobile on the same day, via private email sales or mobile-only sales, via personalised dynamic packaging – finding new ways to work out which hotel and which flight to show to customers – and reworking the packaging display with our global platform.
Let’s talk about that. Since joining Orbitz as CEO in January 2009, a key change is your new global platform.
Yes, we invested US$145 million to basically put all our consumer-facing businesses on one platform; we call it a global platform. We operate 12 businesses across Europe which came together through acquisitions.
When Orbitz acquired that combined entity, they were on a multitude of different platforms. We migrated them to one common global platform. Since then business growth rates have been phenomenal, both topline and bottomline, a testament to how strong and efficient the new platform is.
How does it make a difference?
The speed with which we can innovate. As an example, five years ago, we might have felt excited if we were updating our website six times a year. Last year, we updated our website over 800 times a year – that’s more than once a day. It is continually changing and, within any given period, we may be testing a variety of different treatments, so one set of users will see one thing, another set will see something else, and our statisticians are studying the differences.
It also allows us to launch groundbreaking mobile apps.Today we’re seeing over 12 per cent of hotel searches being executed on mobile devices. For customers, it’s a real value proposition because if you search using a mobile device, we’re actually able to show you exclusive mobile-only rates. We call them Orbitz mobile steals and these are rates that are 20 to 30 per cent off available only on mobile.
“The innovation that is going on is not a new model but on groundbreaking ways a consumer can book travel, for example, via mobile on the same day or personalised dynamic packaging.”
Why do mobile bookings enjoy these steals?
Our supplier partners recognise that 55 per cent of our mobile bookings are for the same day vs typically 15 per cent (on website. They know this inventory is going to expire; they don’t necessarily want to show that discount to every single customer under the sun and recognise we put fences around it.
So we highly encourage customers to get the best possible deal by using, one, our mobile app, especially if they are looking at a same-day booking and have access to a mobile device and, two, by signing up for our emails for Orbitz insider steals, which are 72 hours every week from around mid-day Tuesday to mid-day Friday, where we select six to seven beautiful properties around the world that are being discounted 50 per cent or more from the normal price.
No wonder hotel chains are fed up with OTAs – you’re encouraging the customer to book last-minute and wait for the best deals.
I don’t think we’re educating customers to do that. I think, instead, we are giving them the empowerment. These consumers are going to book same day anyway; we’re empowering them to be better informed.
In the past, these customers might walk in to the hotel and get a walk-in rate, which you know is not the best, the hotel knows it’s got the customer there. Now the customer turns his mobile on, we recognise where he is and in five seconds the app shows him a broad selection of hotels around where he is that are available tonight with the prices.
Our goal is to make the user experience super simple and make sure we have the powerful tools to help consumers slice and dice and make the most of their travel dollars. We think of ourselves as a travel maximiser: we help you get the best possible travel experience for the limited budget that you have.
What do you think of Roomkey, yet another attempt by chains to regain control of customers?
Competition is always good for customers. But it is tough to develop a compelling hotel site. That’s the reason why there aren’t that many players in the space and not many new entrants. It’s a lot of investment – look at how much we’ve spent on our common platform.
I look at Roomkey and they don’t have user reviews – how can you have a hotel site without user reviews!
You’re an avid traveller yourself.
Yes, and I fundamentally believe travel has an incredible role to play in creating friendships between cultures. The opportunity we have is to use technology and data analytics to make travel a more fulfilling experience for consumers.
You were Expedia Asia-Pacific’s president and made inroads for Expedia in China, with the controlling stake in eLong, Japan and Australia. Would you do the same for Orbitz in Asia?
Due to limited resources, no, but there is huge opportunity to expand HotelClub in Asia. It’s been the more challenging part of the business in the last couple of years but we recently put Tamer Tamar, president of ebookers, over that business. He’s now responsible for both, is fully engaged and has interesting ideas.
We feel better about how it is positioned right now. It’s a strong brand in Australia in particular, and we have a decent presence in South-east Asia and Hong Kong, so we’ll be building that up.