Deconstructing Distribution - It's all About the Customer.Presented at The Leading Hotels Hotels of the World Sales, Marketing & Distribution Conference in Bonn, Germany May 13-15, 2011.

1. Leading Hotels of the WorldSales, Marketing & Distribution ConferenceDeconstructing DistributionIt’s All About the Customer Robert Cole | RockCheetah Kameha Grand Bonn | May 15, 2011 Image: Brave Heart (Flickr)

2. Deconstructing Distribution The Customer Affluent Travelers Personalization & Customization Multiple Stages & Touchpoints The Channels The Splinternet SoLoMo Discounts The Future New User Experiences One Size Does Not Fit All May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 2 Image Credit:

3. Pitfall: SOS (Shiny Object Syndrome) May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 3 Image Credit: Every New Idea is Not a Good Idea

4. Pitfall: Egocentric Customer Relationship May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 4 Image: i-love-cartoons.com

5. Pitfall: Customer Engagement ≠ Marriage May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 5 Image: Defence Images (Flickr)

6. The Customer: Affluent Travelers 6.44 million US Affluent Online Travelers 89% Take At Least 1 Leisure Trip per Year 62% Have Investible Assets of $1-$2.5 Million 95%+ College Graduates | 45% Post-Grads Average Age 58 | 14 Years Above US Avg. 73% Manage Finances Online 45% Make Own Investment Decisions 30% Worse Off than One Year Ago May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 6 Image: Curtis Gregory Perry (Flickr) | Source: Forrester Research - Selling To US Online Affluent Travelers Poses A First-Class Challenge To Travel eBusiness (January 2011)

7. Affluent Travelers: Value is King May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 7 Source: Forrester Research - Selling To US Online Affluent Travelers Poses A First-Class Challenge To Travel eBusiness (January 2011)

8. Personalization & Customization Guests Are Not Frequent Guest Numbers Interactive Conversations Can Get Complicated True Customer Engagement Doesn’t Scale Well May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 8 Image: kagey_b (Flickr)

9. Guests Have Multiple Personas May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 9

10. Multiple Travel Phases (Seven) May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 10

11. Multiple Hotel Touch Points (Six) May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 11

12. Channels: A Small Sampling May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 12 Image: Michael Coghlan (Flickr) | Source: VFM Leonardo

13. SoLoMo – Distribution Gets Tricky Social Personal Likes / Group Likes / Similar Likes Cannot Fully Control Message in the Wild Local Proximity Based Offers Context-Sensitive Offers Mobile Variations – Form Factor / OS / Carrier Mobile Web (HTL5) v. Native Application (App) May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 13 Image: Jason Mcdermott(Flickr)

14. SoLoMo Travel Factoids Leisure Travel Search Average is 22 Sites Over 10 Sessions Mobile 19% Hotel Queries From Mobile Devices IHG Europe – Adding Click to Call +91% Revenue Local 70% Mobile - 1 Person, 1 Night, Same Day Social 80% of Travelers Participate in Social Media 49% Book Based on Others Experiences/Reviews May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 14 Sources: Forrester Research | Google | Ipsos/OTX 2010/2011

15. Social Media: Cynical Perspective May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 15

16. Social Media – It’s All About Trust May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 16 Source: The Nielsen Company – April 2009

17. Splinternet– Walled Gardens May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 17 Image: Stephen Bowler (Flickr) | Source: Forrester Research “The Splinternet” (January 2010)

18. Splinternet – Advertising Impact May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 18 Image: Stephen Bowler (Flickr) | Source: Forrester Research “The Splinternet” (January 2010)

19. Discounting Considerations Do Discounts Translate to Consumer Value? Does Channel Absorb Discount as Profit? Group Buying “Have never seen a profitable Groupon deal for a travel site” – H. Harteveldt, Forrester Research Flash Sales How Exclusive is the Club? Qualified User Base? New Models - Micro Auctions Off & Away – Is it a Game, a Con or New Model? Packaging Protects Retail Pricing; Requires Strong Rules Control May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 19 Image: Christopher Sessums(Flickr)

20. The Future – New User Experiences Voice Commands Google Android Voice Actions Near Field Communications Interaction / Authorization / Payment Integrated Travel Experience Apple iTravel Traditional Channels Travel Agencies / GDS / Telephone May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 20 Image: Iris Shreve Garrott(Flickr)

21. Future – Voice Commands May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 21

22. Future – Near Field Communications May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 22 Integrates Distribution / Engagement / Access Unique Sound Pattern Mobile Phone Key Openways (Example) Pre-Arrival Contact Engagement for Stay Supports All Cell Phones Uses Existing Locks Cards Keys Still Work More Secure than Cards Code Change – 12 Secs Future Support for NFC

23. Apple iTravel – End to End Control May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 23

24. Apple iTravel – Traveler Identity May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 24

25. Apple iTravel – Airport Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 25

26. Apple iTravel – Hotel Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 26

27. Apple iTravel – Cruise Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 27

28. Apple iTravel – Conference Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 28

29. Apple iTravel – Event Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 29

30. Apple iTravel - Payment May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 30

31. Apple iTravel - Merchandising May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 31

32. Apple iTravel – Passive App Delivery May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 32

33. Future - Traditional Channels May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 33 Traditional Travel Agents - Specialization Origin (Local) v. Destination (Experience) Type of Travel – Luxury / Destination Weddings Online Travel Agencies Rate Parity / Last Room Availability / Max. Discount Order Takers or Order Makers? Global Distribution Systems Critical Role for Air Vertical & Corporate Segment Air Model Change – Cost Shift to Intermediary Telephone High Touch / Customer Care Mobile Click to Call

34. The New Customer Seeks Value Is More Sophisticated & Empowered Desires Unique Experiences Demands the Lowest Available Price Has Questionable Brand Loyalty Has Situational, Itinerary-centric Needs Defines the Degree of Engagement Demands Seamless Cross-Channel Access May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 34 Image: Sergey Galyonkin (Flickr)

35. New Distribution Challenges Must Have Presence in Favored Channels Consistent Cross-Channel Brand Message Consistent Online & Offline Experience Value is a Highly Personal Assessment Time, Convenience, Simplicity, Quality, Cost Efficiently Managing App & Channel Silos Competition May Behave Irrationally Distribution Costs May Shift to Subscribers May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 35 Image: Toni Blay (Flickr)

36. Navigating Distribution Obstacles Three Core Distribution Goals Easier Faster Cheaper To Be Successful, Luxury Hoteliers Must Control Retail Pricing Structure Access to Visual & Descriptive Content Distribution Rules – Access to Rates & Inventory Only Point of Focus - The Guest Why is Guest Using that Channel/Site/Tool? Is Guest Able to Accomplish that Goal? Why Not? May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 36 Image: The U.S. Army (Flickr)

37. It’s All About The Customer Questions? Copies of the Presentation? Comments? Robert Cole mail: robert@rockcheetah.com phone: +1.262.309.9560 skype: robertkcole twitter: @robertkcole web: rockcheetah.com/blog/ May 15, 2011 – Bonn, Germany Leading Hotels of the World ● Distribution Robert Cole | RockCheetah - Page 37