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DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                          Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                       	
  
                                                                                                                                                                                    	
  



       	
  
       Library	
  of	
  Congress	
  Cataloging-­‐in-­‐Publication	
  Data	
  
       Fitzgerald,	
  Chicke	
  J.	
  
       Dare	
  to	
  Differentiate,	
  Tapping	
  the	
  Drive	
  Traveler	
  –	
  The	
  Forgotten	
  Mass	
  Market	
  
       ISBN	
  0-­‐9721398-­‐3-­‐4	
  
       Copyright	
  @	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  
       All	
  rights	
  reserved	
  under	
  the	
  Pan-­‐American	
  and	
  International	
  Copyright	
  Conventions.	
  	
  No	
  part	
  of	
  this	
  book,	
  in	
  
       whole	
  or	
  in	
  part,	
  may	
  be	
  reproduced,	
  stored	
  in	
  a	
  retrieval	
  system,	
  or	
  transmitted	
  in	
  any	
  form	
  by	
  any	
  means	
  
       electronic,	
   mechanical,	
   photocopying,	
   recording	
   or	
   otherwise,	
   without	
   the	
   prior	
   written	
   permission	
   from	
  
       Solutionz	
  Group	
  International,	
  Inc.	
  
                                                                                   	
  

                                                          Dare	
  to	
  Differentiate	
  
                                   Tapping	
  the	
  Drive	
  Traveler	
  |	
  The	
  Forgotten	
  Mass	
  Market	
  
                                Cover	
  image	
  courtesy	
  of	
  MMG	
  Worldwide,	
  all	
  rights	
  reserved	
  
                                                                                   	
  
       	
  
       Publisher:	
  	
       Solutionz	
  Group	
  International	
  Inc.	
  
                              13911	
  W.	
  Hillsborough	
  Avenue,	
  Suite	
  312	
  
                              Tampa,	
  FL	
  	
  33635	
  U.S.A.	
  
       	
  
       Printed	
  in	
  the	
  United	
  States	
  of	
  America	
  




	
                                                                                            	
  
       ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                          Page	
  |	
  i	
  
       	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                   Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                	
  
                                                                                                                                                                                             	
  



       	
  
                                         	
  

                                                                                                            	
  
                                                                                                                   	
  

                                                                                                     	
  
                                                                                                     	
  
                                                                                                     	
  
                                   Dare	
  to	
  Differentiate	
  
                               Tapping	
  the	
  Drive	
  Traveler	
  |	
  The	
  Forgotten	
  Mass	
  Market	
  
                                                                                                     	
  
                                                                                                	
  
                                                                                               	
  
                                                                                                     	
  
                                                                           By	
  Chicke	
  Fitzgerald	
  
                                                                                                     	
  
                                                                         Summer	
  2010	
  Edition	
  	
  
                                                               “Not	
  So	
  White	
  Paper™”	
  series	
  
       	
  




	
                                                                                            	
  
       ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                  Page	
  |	
  ii	
  
       	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                                                                                                                                                                                               Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                                                                                                                                                                                            	
  
                                                                                                                                                                                                                                                                                                                                                                         	
  


         	
                                                                      THE	
  FACTS	
  
                                                                                 •                                85%	
  of	
  all	
  overnight	
  trips	
  in	
  the	
  
         	
                                                                                                       US	
  are	
  taken	
  by	
  car	
  	
  
         	
                                                                      •                                78%	
  of	
  all	
  spending	
  on	
  travel	
  in	
  
         	
                                                                                                       the	
  US	
  is	
  done	
  by	
  people	
  
                                                                                                                  traveling	
  by	
  car	
  
         	
  
                                                                                 •                                6	
  out	
  of	
  the	
  top	
  10	
  search	
  terms	
  
         	
                                                                                                       in	
  the	
  travel	
  category	
  include	
  
         	
                                                                                                       mapping	
  and	
  driving	
  directions	
  

         	
                                                                      Do	
  you	
  intentionally	
  market	
  to	
  the	
  
                                                                                 drive	
  traveler?	
  
         	
  
                                                                                 	
  
         	
  
                                                                                 	
  
         	
  
         	
  
         	
  
                                                                                                                                                                                                                                                                                    1
                                                                         Source:	
  	
  U.S.	
  Travel	
  Association	
  and	
  Hitwise 	
  

       PREFACE	
  
         For	
   over	
   50	
   years	
   airlines	
   have	
   been	
   the	
   biggest	
   guns	
   in	
   the	
   travel	
   industry;	
   it	
   is	
   therefore	
  no	
   surprise	
   that	
   the	
  
         air	
  traveler	
  sits	
  at	
  the	
  heart	
  of	
  the	
  multi-­‐billion	
  dollar	
  travel	
  industry.	
  	
  	
  
         As	
   an	
   industry,	
   we	
   cater	
   to	
   [aka	
   intentionally	
   market	
   to]	
   the	
   air	
   traveler	
   at	
   every	
   turn	
   –	
   providing	
   tools	
   for	
  
         them	
   to	
   plan	
   their	
   business	
   and	
   leisure	
   trips,	
   as	
   well	
   as	
   giving	
   options	
   for	
   their	
   vacations	
   and	
   weekend	
  
         getaways.	
  	
  We	
  quite	
  naturally	
  sell	
  them	
  airline	
  tickets.	
  	
  We	
  also	
  sell	
  them	
  hotel	
  rooms,	
  timeshare	
  ownership	
  
         and	
  vacation	
  home	
  rentals,	
  we	
  rent	
  them	
  cars,	
  motorcycles	
  and	
  RVs,	
  we	
  sell	
  tours	
  and	
  cruises	
  to	
  them	
  and	
  we	
  
         entice	
  them	
  to	
  come	
  to	
  our	
  destinations	
  and	
  attractions.	
  	
  Even	
  our	
  technology	
  is	
  geared	
  around	
  their	
  needs	
  
         and	
  their	
  behaviors.	
  	
  Yet,	
  air	
  travelers	
  are	
  a	
  surprisingly	
  small	
  part	
  of	
  the	
  total	
  travel	
  picture.	
  
                                                                                                                                                                                                                                                                                                                           2.
         The	
  U.S.	
  Travel	
  Association	
  reports	
  that	
  there	
  are	
  ten	
  trips	
  by	
  car	
  for	
  every	
  air	
  trip 	
  	
  Whether	
  or	
  not	
  this	
  is	
  a	
  
         surprise	
   to	
   you,	
   wouldn’t	
   it	
   be	
   irrational	
   to	
   focus	
   on	
   just	
   the	
   one,	
   versus	
   the	
   ten?	
   	
   But	
   it	
   is	
   both	
   a	
   fact	
   and	
   the	
  
         topic	
  of	
  this	
  paper	
  and	
  the	
  reason	
  that	
  I	
  urge	
  you	
  to	
  consider	
  this	
  opportunity	
  for	
  differentiation.
         The	
  obsession	
  that	
  we	
  have	
  with	
  the	
  air	
  traveler	
  is	
  superficially	
  logical.	
  	
  The	
  foundational	
  technology	
  for	
  the	
  
         retail	
   side	
   of	
   our	
   industry	
   was	
   built	
   by	
   the	
   airlines.	
   	
   And	
   the	
   air	
   traveler	
   spends	
   more	
   per	
   trip;	
   stays	
   away	
  
         longer	
  and	
  quite	
  frankly,	
  the	
  mechanics	
  behind	
  planning	
  a	
   point-­‐to-­‐point	
  trip	
  are	
  much	
  easier	
  than	
  one	
  taken	
  
         by	
   car.	
   	
   However,	
   with	
   air	
   travelers	
   representing	
   just	
   15%	
   of	
   all	
   overnight	
   trips	
   in	
   this	
   country	
   and	
   just	
   22%	
   of	
  
         all	
  travel-­‐related	
  spending,	
  if	
  you	
  are	
  looking	
  for	
  a	
  competitive	
  edge	
  and	
  if	
  you	
  need	
  to	
  grow,	
  you	
  owe	
  it	
  to	
  
         yourself	
  to	
  evaluate	
  the	
  drive	
  market	
  opportunity.	
  
         I	
  do	
  not	
  suggest	
  that	
  you	
  should	
  turn	
  away	
  from	
  the	
  air	
  traveler,	
  which	
  may	
  still	
  be	
  lucrative	
  for	
  you.	
  	
  	
  



         	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
         1
          	
  U.S.	
  Travel	
  Association	
  Domestic	
  Travel	
  Market	
  Report	
  –	
  2007	
  Edition	
  and	
  June	
  Hitwise	
  Top	
  Search	
  Terms	
  as	
  of	
  June	
  26,	
  
         2010	
  
         2
                	
  A	
  trip	
  is	
  defined	
  as	
  being	
  more	
  than	
  50	
  miles	
  from	
  home	
  or	
  at	
  least	
  one	
  night	
  spent	
  away	
  from	
  home	
  
	
                                                                                                                                                                                                                                                                                      	
  
         ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                                                                                                                                                                                           Page	
  |	
  iii	
  
         	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                                                                                                                                                                                         Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                                                                                                                                                                                         	
  
                                                                                                                                                                                                                                                                                                                                                                      	
  


       However,	
  I	
  do	
  want	
  to	
  point	
  out	
  the	
  fact	
  that	
  growth	
  may	
  be	
  as	
  simple	
  as	
  expanding	
  your	
  focus	
  to	
  the	
  “other	
  
       85%”	
  of	
  travel	
  in	
  this	
  country,	
  which	
  for	
  the	
  purpose	
  of	
  this	
  report	
  I	
  have	
  dubbed	
  the	
  “Forgotten	
  Mass	
  
       Market”.	
  
                                                                                                                                                                                                                                                                                                                                                                  3
       A	
   few	
   years	
   ago,	
   I	
   wrote	
   a	
   guest	
   article	
   that	
   was	
   published	
   in	
   ProMedia’s	
   The	
   Beat™	
   subscription	
   newsletter. 	
  	
  
       It	
  was	
  entitled	
  “The	
  Irresistible	
  Pull	
  of	
  Irrational	
  Behavior	
  –	
  Travel	
  Industry	
  Style”,	
  with	
  the	
  title	
  borrowed	
  from	
  
                                                                                                             4
       the	
   sub-­‐title	
   of	
   the	
   book	
   Sway,	
   by	
   Ori	
   and	
   Rom	
   Brafman. 	
   	
   The	
   subject	
   of	
   that	
   article	
   was	
   distribution	
   channel	
  
       choice	
  and	
  more	
  specifically,	
  the	
  use	
  of	
  travel	
  agents	
  and	
  the	
  GDSs	
  by	
  travel	
  suppliers,	
  a	
  subject	
  on	
  which	
  I	
  am	
  
       extremely	
  passionate	
  –	
  and	
  very	
  vocal.	
  	
  I	
  have	
  included	
  excerpts	
  of	
  the	
  text	
  of	
  that	
  article	
  here	
  because	
  it	
  also	
  
       applies	
  as	
  strongly	
  to	
  the	
  industry’s	
  love/hate	
  relationship	
  with	
  the	
  airlines	
  and	
  our	
  natural	
  obsession	
  with	
  the	
  
       air	
  traveler,	
  as	
  it	
  does	
  to	
  travel	
  distribution	
  channel	
  choices.	
  	
  	
  
                                                                                                                                                                                                    	
  
                                                       I	
  just	
  started	
  reading	
  a	
  book	
  titled	
  Sway	
  last	
  night.	
  The	
  parallels	
  of	
  the	
  stories	
  told	
  by	
  authors	
  
                                                       Ori	
   and	
   Rom	
   Brafman	
   about	
   various	
   situations	
   where	
   intelligent,	
   normally	
   logical	
   individuals	
  
                                                       make	
  decisions	
  that	
  make	
  absolutely	
  no	
  sense	
  immediately	
  struck	
  me.	
  
                                                       For	
  anyone	
  that	
  follows	
  my	
  musings	
  about	
  distribution	
  on	
  a	
  regular	
  basis,	
  you	
  know	
  that	
  I	
  have	
  
                                                       written	
  columns	
  for	
  The	
  Beat	
  that	
  poke	
  a	
  bit	
  of	
  fun	
  at	
  our	
  industry	
  and	
  discuss	
  how	
  the	
  issues	
  of	
  
                                                       distribution	
   fall	
   into	
   that	
   category	
   of	
   "irrational	
   behavior."	
   While	
   told	
   tongue-­‐in-­‐cheek,	
   they	
  
                                                       ring	
   all	
   too	
   true	
   and	
   are	
   a	
   stark	
   example	
   of	
   how	
   our	
   decision-­‐making	
   in	
   this	
   industry	
   gets	
  
                                                       derailed	
  by	
  looking	
  at	
  what	
  is	
  going	
  on	
  around	
  us.	
  
                                                       The	
  key	
  points	
  of	
  the	
  book	
  focus	
  on	
  the	
  things	
  that	
  "derail	
  our	
  decision-­‐making":	
  
                                                                       •                                Loss	
  aversion	
  -­‐	
  tendency	
  to	
  go	
  to	
  great	
  lengths	
  to	
  avoid	
  perceived	
  losses	
  
                                                                       •                                Diagnosis	
  bias	
  -­‐	
  original	
  diagnosis	
  blocks	
  our	
  ability	
  to	
  see	
  subsequent	
  results	
  clearly	
  
                                                                       •                                Chameleon	
  effect	
  -­‐	
  tendency	
  to	
  take	
  on	
  characteristics	
  that	
  have	
  been	
  arbitrarily	
  assigned	
  to	
  us	
  
                                                                                                                                                                                                                                                                                                                                                                        	
  
       This	
   paper	
   is	
   about	
   differentiation.	
   	
   The	
   basic	
   premise	
   behind	
   my	
   thesis	
   is	
   that	
   when	
   you	
   market	
   and	
   sell	
   your	
  
       products	
   and	
   services,	
   if	
   you	
   remain	
   focused	
   on	
   the	
   status	
   quo	
   (marketing	
   to	
   the	
   air	
   traveler),	
   you	
   may	
   be	
  
       missing	
  a	
  huge	
  opportunity.	
  
       We	
   hope	
   that	
   this	
   paper	
   prompts	
   you	
   to	
   determine	
   which	
   of	
   these	
   derailing	
   drivers	
   are	
   keeping	
   you	
   from	
  
       exploring	
  how	
  to	
  differentiate	
  and	
  grow	
  your	
  business	
  by	
  extending	
  your	
  marketing	
  to	
  the	
  “other	
  85%”.	
  
                                       1.                              What	
  do	
  you	
  think	
  you	
  might	
  gain	
  if	
  you	
  added	
  a	
  focus	
  on	
  the	
  drive	
  market?	
  	
  
                                       2.                              If	
  you	
  were	
  starting	
  at	
  ‘ground	
  zero’	
  how	
  would	
  you	
  think	
  about	
  this	
  opportunity?	
  	
  
                                       3.                              Are	
  you	
  thinking	
  independently	
  and	
  being	
  objective	
  about	
  evaluating	
  the	
  potential	
  of	
  this	
  market?	
  	
  
       When	
  you	
  finish	
  reading,	
  if	
  you	
  find	
  that	
  you	
  have	
  been	
  focusing	
  solely	
  or	
  primarily	
  on	
  the	
  air	
  traveler	
  and	
  see	
  
       merit	
  in	
  exploring	
  the	
  drive	
  market	
  in	
  greater	
  detail,	
  then	
  by	
  all	
  means,	
  stand	
  out	
  from	
  the	
  crowd	
  and	
  go	
  for	
  
       the	
  incremental	
  profits!	
  	
  	
  
       At	
  the	
  end	
  of	
  the	
  day,	
  you	
  will	
  need	
  to	
  make	
  your	
  own	
  decisions	
  that	
  make	
  sense	
  for	
  you	
  and	
  your	
  business.	
  	
  
       And	
   perhaps	
   you,	
   too,	
   can	
   be	
   an	
   iconoclast	
   and	
   help	
   the	
   industry	
   "sway"	
   the	
   other	
   direction!	
   	
   Dare	
   to	
  
       differentiate	
  your	
  marketing,	
  your	
  services	
  and	
  your	
  business	
  models.	
  
       Chicke Fitzgerald
       CEO	
  Solutionz	
  Group	
  	
  |	
  www.solutionz.com	
  |	
  1-­‐813-­‐925-­‐0789	
  |	
  www.twitter.com/chickefitz	
  

       	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
       3
              	
  www.promedia.travel	
  
       4
              	
  ©2008	
  by	
  Ori	
  Brafman	
  and	
  Rom	
  Brafman,	
  Sway.	
  All	
  rights	
  reserved,	
  Doubleday.	
  
	
                                                                                                                                                                                                                                                                                	
  
       ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                                                                                                                                                                                       Page	
  |	
  iv	
  
       	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                      Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                      	
  
                                                                                                                                                                                                   	
  




       EDITORIAL	
  NOTES	
  
        WHY	
  IS	
  THIS	
  REPORT	
  FOR	
  ME?	
  	
  AM	
  I	
  REALLY	
  OBSESSED	
  WITH	
  THE	
  AIR	
  TRAVELER?	
  
         Individuals	
   who	
   should	
   read	
   this	
   report	
   include	
   C-­‐level	
   executives	
   (and	
   investors)	
   that	
   set	
   strategy	
   and	
  
         influence	
  technology	
  investment	
  in	
  the	
  following	
  sectors:	
  

                Travel	
  suppliers	
  (air,	
  car,	
          If	
  your	
  selling	
  process	
  begins	
  with	
  where	
  your	
  product	
  picks	
  up	
  and	
  
                hotel,	
  rail,	
  cruise)	
                    leaves	
  off,	
  then	
  you	
  are	
  an	
  air-­‐traveler	
  centric	
  supplier.	
  	
  And	
  if	
  you	
  are	
  a	
  
                                                                hotelier	
  and	
  you	
  are	
  not	
  asking	
  the	
  starting	
  point,	
  you	
  are	
  missing	
  out	
  on	
  
                                                                the	
  potential	
  of	
  securing	
  the	
  enroute	
  bookings,	
  as	
  well	
  as	
  those	
  on	
  the	
  
                                                                way	
  home.	
  
                Travel	
  retailers	
  (online	
                If	
  your	
  dialogue	
  with	
  a	
  traveler	
  begins	
  with	
  where	
  do	
  you	
  want	
  to	
  go	
  and	
  
                and	
  offline	
  agencies)	
                   when,	
  and	
  you	
  never	
  ask	
  them	
  their	
  starting	
  point	
  or	
  mode	
  of	
  
                                                                transportation,	
  you	
  are	
  an	
  air-­‐traveler	
  centric	
  retailer.	
  
                Corporate	
  Travel	
  Agencies	
   If	
  you	
  are	
  not	
  providing	
  a	
  service	
  for	
  the	
  52%	
  of	
  corporate	
  travelers	
  that	
  
                                                    drive	
  (other	
  than	
  expense	
  report	
  processing),	
  you	
  may	
  be	
  missing	
  a	
  huge	
  
                                                    opportunity	
  to	
  aggregate	
  the	
  purchasing	
  power	
  for	
  and	
  make	
  
                                                    commissions	
  on	
  the	
  hotel	
  nights	
  consumed	
  by	
  this	
  group.	
  	
  
                Travel	
  packagers	
                           If	
  you	
  package	
  together	
  travel	
  at	
  a	
  destination,	
  then	
  you	
  are	
  an	
  air-­‐
                                                                traveler	
  centric	
  packager.	
  
                Destination	
  marketing	
                      If	
  you	
  don’t	
  help	
  travelers	
  get	
  from	
  where	
  they	
  are	
  to	
  you	
  and	
  your	
  
                organizations/convention	
                      planning	
  process	
  is	
  all	
  about	
  your	
  destination,	
  then	
  you	
  are	
  an	
  air-­‐
                and	
  visitors	
  bureau	
                     traveler	
  centric	
  DMO/CVB.	
  
                Travel	
  technology	
                          If	
  your	
  technology	
  dialogue	
  with	
  retailers	
  or	
  the	
  consumer	
  starts	
  with	
  
                companies	
  and	
  Global	
                    when	
  and	
  where,	
  and	
  you	
  never	
  ask	
  them	
  their	
  mode	
  of	
  transportation,	
  
                Distribution	
  System	
                        you	
  are	
  an	
  air-­‐centric	
  company	
  (even	
  if	
  your	
  technology	
  is	
  for	
  hotels,	
  car	
  
                companies	
                                     rental	
  companies,	
  and	
  cruise	
  lines).	
  
                Attractions	
  and	
                            If	
  you	
  don’t	
  help	
  travelers	
  get	
  from	
  where	
  they	
  are	
  to	
  you	
  and	
  your	
  
                destination	
  resorts	
                        planning	
  process	
  is	
  all	
  about	
  your	
  attraction	
  or	
  resort,	
  then	
  you	
  are	
  air-­‐
                                                                traveler	
  centric.	
  
                Industry	
  associations	
  and	
               If	
  your	
  meeting	
  and	
  conference	
  agendas	
  and	
  your	
  research	
  and	
  lobbying	
  
                government	
  agencies	
                        efforts	
  do	
  not	
  include	
  the	
  drive	
  market	
  as	
  a	
  key	
  topic/focus,	
  then	
  you	
  are	
  
                                                                air-­‐centric	
  and	
  not	
  helping	
  your	
  constituents	
  tap	
  into	
  the	
  85%	
  of	
  travelers	
  
                                                                that	
  drive.	
  
                Location-­‐based	
  services	
                  If	
  your	
  product	
  simply	
  does	
  point-­‐to-­‐point	
  mapping	
  and	
  navigation	
  and	
  
                companies,	
  including	
  GPS	
                doesn’t	
  take	
  into	
  account	
  that	
  people	
  using	
  your	
  product	
  need	
  to	
  plan	
  
                and	
  navigation	
  firms	
  and	
             their	
  entire	
  journey,	
  have	
  different	
  preferences	
  when	
  they	
  are	
  with	
  
                mapping	
  technology	
                         different	
  people	
  and	
  travel	
  under	
  different	
  circumstances,	
  then	
  you	
  are	
  
                companies	
                                     not	
  tapping	
  into	
  the	
  drive	
  traveler	
  market.	
  	
  
                Investors	
                                     If	
  your	
  questions	
  about	
  travel	
  trends	
  start	
  with	
  what	
  is	
  happening	
  with	
  
                                                                vacation	
  travel	
  (8%	
  of	
  total),	
  corporate	
  travel	
  (25%	
  of	
  total),	
  or	
  air	
  travel	
  
                                                                volume,	
  or	
  what	
  will	
  happen	
  in	
  the	
  next	
  round	
  of	
  GDS	
  negotiations,	
  then	
  
                                                                you	
  are	
  air-­‐centric	
  and	
  missing	
  a	
  huge	
  upside	
  opportunity	
  for	
  the	
  
                                                                companies	
  in	
  which	
  you	
  have	
  invested	
  (or	
  are	
  about	
  to	
  invest).	
  

	
                                                                                               	
  
         ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                       Page	
  |	
  v	
  
         	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                                                                                                                                                                                          Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                                                                                                                                                                                      	
  
                                                                                                                                                                                                                                                                                                                                                                   	
  


       NAVIGATING	
  THIS	
  REPORT	
  	
  
        We	
   recognize	
   that	
   everyone	
   who	
   reads	
   this	
   paper	
   will	
   come	
   from	
   a	
   different	
   place	
   of	
   knowledge	
   and	
  
        understanding	
  of	
  the	
  travel	
  industry,	
  of	
  the	
  history	
  behind	
  the	
  industry’s	
  focus	
  on	
  the	
  air	
  traveler	
  and	
  of	
  the	
  
        drive	
   market.	
   	
   Some	
   may	
   need	
   to	
   “stop”	
   and	
   think	
   about	
   your	
   current	
  
        approach,	
   or	
   at	
   minimum	
   “yield”	
   to	
   the	
   possibility	
   that	
   there	
   is	
   an	
  
        opportunity	
  that	
  is	
  yet	
  untapped.	
  	
  	
  
        Here	
  are	
  some	
  tips	
  of	
  how	
  to	
  get	
  the	
  most	
  out	
  of	
  this	
  report:	
  
                                        •                               If	
  you	
  are	
  not	
  at	
  all	
  familiar	
  with	
  the	
  travel	
  industry,	
  we	
  recommend	
  
                                                                        that	
  you	
  read	
  the	
  report	
  in	
  its	
  entirety.	
  
                                        •                               If	
  you	
  don’t	
  need	
  the	
  history	
  and	
  background	
  on	
  the	
  air	
  focus	
  and	
  
                                                                        want	
  to	
  just	
  “cut	
  to	
  the	
  chase”	
  about	
  the	
  drive	
  market	
  opportunity,	
  
                                                                        then	
  you	
  should	
  begin	
  with	
  The	
  Forgotten	
  Mass	
  Market.	
  
       ABOUT	
  THE	
  NOT	
  SO	
  WHITE	
  PAPER™	
  SERIES	
  
        Our	
   reports	
   are	
   topical	
   and	
   timely	
   and	
   we	
   focus	
   on	
   analyzing	
   emerging	
   trends.	
   	
   Because	
   they	
   are	
   published	
   in	
  
        real	
  time,	
  we	
  constantly	
  update	
  the	
  content.	
  	
  This	
  report	
  is	
  an	
  update	
  to	
  a	
  paper	
  on	
  the	
  Drive	
  Market	
  titled	
  
        “Are	
  You	
  Reaching	
  the	
  Forgotten	
  Mass	
  Market?”	
  originally	
  published	
  in	
  2008.	
  	
  	
  
        Our	
   authors	
   are	
   considered	
   experts	
   in	
   the	
   selected	
   subject	
   and	
   they	
   are	
   backed	
   up	
   with	
   respected	
   industry	
  
                    5
        research .	
   	
   The	
   papers	
   include	
   anecdotal	
   insights	
   and	
   analogy	
   to	
   stress	
   the	
   points	
   of	
   the	
   paper.	
   	
   They	
   are	
  
        written	
  in	
  a	
  slightly	
  irreverent,	
  frank	
  style.	
  	
  Items	
  of	
  particular	
  importance	
  are	
  noted	
  with	
  a	
  light	
  bulb.	
  	
  	
  	
  
        Throughout	
  this	
  report	
  the	
  use	
  of	
  “I”	
  denotes	
  my	
  personal	
  perspective	
  and	
  “we”	
  generally	
  refers	
  to	
  the	
  “global	
  
        we”	
  where	
  I	
  speak	
  as	
  a	
  member	
  of	
  the	
  travel	
  industry,	
  unless	
  used	
  in	
  a	
  personal	
  story.	
  
        If	
   you	
   are	
   fond	
   of	
   reports	
   with	
   a	
   heavy	
   statistical	
   or	
   analytical	
   bent	
   or	
   those	
   written	
   in	
   the	
   detached	
   third	
  
        person,	
  the	
  Not	
  So	
  White	
  Paper™	
  series	
  may	
  not	
  be	
  for	
  you.	
  	
  However,	
  if	
  you	
  consider	
  yourself	
  intellectually	
  
        curious	
  and	
  are	
  willing	
  to	
  look	
  outside	
  of	
  our	
  industry	
  and,	
  more	
  importantly,	
  outside	
  of	
  your	
  own	
  experience,	
  
        then	
  you’ve	
  come	
  to	
  the	
  right	
  place.	
  
       ABOUT	
  THE	
  AUTHOR	
  
                                                                                                                                                                                                                              Chicke	
   Fitzgerald	
   is	
   the	
   CEO	
   of	
   Solutionz	
   Group	
   International,	
   Inc.,	
   a	
   Tampa-­‐
                                                                                                                                                                                                                              based	
   global	
   consultancy	
   specializing	
   in	
   marrying	
   travel	
   buyers	
   and	
   sellers	
   via	
  
                                                                                                                                                                                                                              multiple	
  channels.	
  	
  	
  
                                                                                                                                                                                                                              Chicke	
   has	
   over	
   thirty	
   years	
   experience	
   in	
   the	
   electronic	
   distribution	
   and	
  
                                                                                                                                                                                                                              marketing	
   fields,	
   with	
   a	
   focus	
   on	
   the	
   travel,	
   transportation,	
   and	
   mobile	
  
                                                                                                                                                                                                                              industries.	
  	
  	
  
                                                   She	
   is	
   a	
   strategist,	
   author,	
   keynote	
   speaker	
   and	
   was	
   an	
   early	
   investor	
   in	
   a	
  
        groundbreaking	
  technology	
  firm	
  serving	
  the	
  travel,	
  mapping,	
  navigation,	
  and	
  media	
  industries.	
  That	
  company	
  
        is	
  currently	
  sitting	
  in	
  hibernation,	
  waiting	
  for	
  the	
  inevitable	
  financial	
  thaw	
  and	
  for	
  the	
  “believers”	
  in	
  the	
  drive	
  
        market	
  opportunity,	
  who	
  are	
  surely	
  out	
  there.	
  
        Her	
   specialty	
   is	
   developing	
   strategy,	
   crafting	
   profitable	
   business	
   models,	
   and	
   creating	
   executable	
   plans	
   to	
  
        achieve	
   her	
   client’s	
   vision.	
   	
   Her	
   passions	
   include	
   incubating	
   early	
   stage	
   businesses,	
   fostering	
   joint	
   ventures,	
  
        and	
  mergers	
  and	
  acquisitions.	
  



        	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
        5
               	
  See	
  Appendix	
  A	
  for	
  information	
  about	
  the	
  resources	
  used	
  for	
  this	
  paper	
  
	
                                                                                                                                                                                                                                                                                 	
  
        ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                                                                                                                                                                                       Page	
  |	
  vi	
  
        	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                    Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                   	
  
                                                                                                                                                                                                	
  


                               The	
   firm	
   has	
   expertise	
   in	
   all	
   sectors	
   of	
   the	
   travel	
   distribution	
   value	
   chain,	
   including	
  
                               offline/online	
   agencies,	
   corporate	
   travel,	
   travel	
   suppliers,	
   GDS	
   companies,	
   destinations,	
  
                               travel	
  technology,	
  service	
  providers,	
  content	
  companies,	
  and	
  social	
  media.	
  	
  Prior	
  to	
  forming	
  
       her	
  own	
  consulting	
  firm,	
  Ms.	
  Fitzgerald	
  held	
  senior	
  positions	
  with	
  Equant,	
  SITA,	
  Worldspan,	
  and	
  Sabre.	
  
       In	
   addition	
   to	
   the	
   Not	
   So	
   White	
   Paper™	
   series,	
   she	
   has	
   published	
   three	
   books	
   on	
   travel	
   distribution,	
   known	
   as	
  
       the	
  Travel	
  Distribution	
  Library.	
  	
  She	
  also	
  was	
  the	
  executive	
  editor	
  on	
  a	
  series	
  of	
  white	
  papers	
  completed	
  for	
  
       the	
  Hotel	
  Electronic	
  Distribution	
  Network	
  Association	
  (HEDNA).	
  	
  	
  
       Her	
  iconoclast	
  style	
  is	
  also	
  featured	
  in	
  regular	
  articles	
  on	
  The	
  Beat™	
  subscription	
  newsletter	
  and	
  in	
  their	
  blog	
  
       <http://www.thebeat.travel/blog/>.	
  
       The	
  investment	
  community	
  recognizes	
  Chicke	
  as	
  an	
  expert	
  on	
  the	
  travel	
  industry.	
  	
  She	
  has	
  achieved	
  top	
  5%	
  
       status	
  in	
  the	
  Gerson	
  Lehman	
  Group	
  Council	
  of	
  Expert	
  Advisors,	
  <http://www.glgroup.com>,	
  in	
  a	
  field	
  of	
  more	
  
       than	
  250,000	
  advisors	
  across	
  all	
  industries.	
  	
  	
  
       Chicke	
  and	
  her	
  husband,	
  Michael,	
  presently	
  reside	
  with	
  their	
  son	
  and	
  daughter	
  in	
  Tampa,	
  Florida.	
  	
  	
  
       For	
  more	
  information,	
  see	
  www.solutionz.com,	
  or	
  contact	
  Chicke	
  by	
  email	
  at	
  chicke@solutionz.com	
  or	
  phone	
  
       (+1-­‐813-­‐925-­‐0789).	
  	
  	
  




	
                                                                                             	
  
       ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                    Page	
  |	
  vii	
  
       	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                              Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                                 	
  
                                                                                                                                                                                                              	
  




       TABLE	
  OF	
  CONTENTS	
   	
  
          EXECUTIVE	
  SUMMARY................................................................................................... 1 	
  
            Breaking	
  Down	
  the	
  Limiting	
  Myths ....................................................................................................1	
  
            Turbulent	
  Times	
  Demand	
  Creative	
  Solutions .....................................................................................2	
  
            How	
  is	
  Planning	
  Done	
  Today? ............................................................................................................3	
  
            The	
  Purpose	
  of	
  this	
  Report.................................................................................................................4	
  
          WHY	
  DIFFERENTIATE? .......................................................................................... 5 	
  
           eCommerce	
  Pioneers .........................................................................................................................6	
  
           Differentiation	
  or	
  Accelerated	
  Commoditization? .............................................................................6	
  
           Disintermediation	
  as	
  a	
  strategy..........................................................................................................7	
  
           What	
  now? .........................................................................................................................................8	
  
          THE	
  FORGOTTEN	
  MASS	
  MARKET ............................................................................ 9 	
  
            The	
  Terminology.................................................................................................................................9	
  
               Non-­‐Air	
  Traveler..............................................................................................................................9	
  
               Drive	
  Market ...................................................................................................................................9	
  
               Mass	
  Market ...................................................................................................................................9	
  
               Life	
  Travel......................................................................................................................................10	
  
            The	
  Logic...........................................................................................................................................10	
  
               Better	
  said	
  “Why	
  should	
  I	
  care?” ..................................................................................................10	
  
               Measuring	
  the	
  Impact...................................................................................................................10	
  
               The	
  Decision	
  to	
  Drive ....................................................................................................................11	
  
            Sizing	
  the	
  Market..............................................................................................................................12	
  
               Total	
  Trips	
  by	
  Mode	
  of	
  Transportation .........................................................................................13	
  
               Overnight	
  Trips	
  by	
  Mode	
  of	
  Transportation	
  –	
  2006	
  to	
  2009.........................................................14	
  
               Top	
  Misconceptions	
  of	
  the	
  Road	
  Traveler.....................................................................................14	
  
                       Fallacy	
  #1	
  –	
  Low	
  Income	
  Demographic ...................................................................................................................... 15	
  
                       Fallacy	
  #2	
  –	
  This	
  is	
  the	
  Economy	
  Traveler .................................................................................................................. 15	
  
                       Fallacy	
  #3	
  –	
  We	
  already	
  serve	
  the	
  road	
  traveler ........................................................................................................ 16	
  
                   The	
  Electronic	
  Distribution	
  Picture................................................................................................17	
  
                 Air	
  Disintermediates	
  Hotels..............................................................................................................17	
  
                 Investment	
  Community	
  Focus..........................................................................................................18	
  
                 Further	
  Reductions	
  in	
  Air	
  Travel.......................................................................................................19	
  
          THE	
  HEART	
  OF	
  THE	
  MATTER	
  –	
  A	
  PRIMER	
  ON	
  THE	
  DRIVE	
  MARKET ............................ 20 	
  
            Road	
  Trip	
  2010	
  Style.........................................................................................................................21	
  
            Why	
  Do	
  I	
  Need	
  a	
  Primer	
  on	
  Marketing	
  to	
  the	
  Drive	
  Market? ..........................................................22	
  
              Distribution	
  Value	
  Chain	
  Penetration ...........................................................................................22	
  
              Getting	
  Perspective.......................................................................................................................23	
  
              Why	
  Does	
  Mode	
  of	
  Transportation	
  Matter?.................................................................................24	
  
              Changing	
  your	
  mindset .................................................................................................................24	
  
            Road	
  Traveler	
  Needs ........................................................................................................................26	
  
            The	
  Online	
  Planning	
  Process ............................................................................................................26	
  
            The	
  Journey	
  Planning	
  Tools ..............................................................................................................27	
  
              The	
  Model .....................................................................................................................................28	
  

	
                                                                                                      	
  
          ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                              Page	
  |	
  viii	
  
          	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                          Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                            	
  
                                                                                                                                                                                                         	
  


                Demographics	
  -­‐	
  It’s	
  not	
  just	
  the	
  Economy	
  traveler .......................................................................28	
  
              The	
  Bottom	
  Line ...............................................................................................................................29	
  
       LOOKING	
  OUTSIDE	
  OUR	
  INDUSTRY ...................................................................... 30 	
  
         The	
  Transformation	
  of	
  the	
  Restaurant	
  Industry	
  –	
  A	
  Story	
  of	
  Product	
  Centricity .............................30	
  
         The	
  Television	
  Industry	
  –	
  A	
  Story	
  of	
  Customer	
  Centric	
  Design ........................................................32	
  
         The	
  Shipping	
  Industry	
  -­‐	
  Becoming	
  Multi-­‐Modal...............................................................................33	
  
         From	
  Hamburgers	
  to	
  Televisions	
  to	
  Shipping...................................................................................33	
  
       HIGHER	
  ORDER	
  MARKETING™ ............................................................................. 34 	
  
         Product .............................................................................................................................................34	
  
         Action ...............................................................................................................................................34	
  
         Intent ................................................................................................................................................34	
  
         The	
  Higher	
  Order	
  Marketing	
  Equation .............................................................................................35	
  
       MOVING	
  FORWARD ........................................................................................... 36 	
  
        There	
  is	
  Hope ...................................................................................................................................36	
  
        The	
  Profitability	
  Challenge ...............................................................................................................36	
  
        Cost	
  Cutting	
  is	
  Not	
  a	
  Strategy...........................................................................................................37	
  
        Mode	
  of	
  Transportation	
  Matters .....................................................................................................37	
  
        Are	
  You	
  Customer	
  or	
  Product	
  Centric? ............................................................................................38	
  
       TAKING	
  ACTION................................................................................................. 39 	
  
         Your	
  To	
  Do	
  List..................................................................................................................................40	
  
         The	
  Role	
  of	
  the	
  Travel	
  Agent ............................................................................................................41	
  
         Geographical	
  Focus ..........................................................................................................................42	
  
         Sector	
  by	
  Sector	
  Action	
  Plan ............................................................................................................42	
  
           Gathering	
  Data	
  and	
  Creating	
  A	
  Marketing	
  Plan ...........................................................................42	
  
                     Travel	
  Suppliers .......................................................................................................................................................... 42	
  
                     Travel	
  Technology	
  Companies.................................................................................................................................... 43	
  
                     Destination	
  Marketing	
  Organizations ........................................................................................................................ 43	
  
                     Industry	
  Associations	
  and	
  Government	
  Agencies	
  and	
  Research	
  Companies............................................................. 43	
  

       BACK	
  TO	
  THE	
  “IRRESISTIBLE	
  PULL	
  OF	
  IRRATIONAL	
  BEHAVIOR” ................................ 44 	
  
        Loss	
  aversion ....................................................................................................................................44	
  
        Diagnosis	
  bias ...................................................................................................................................44	
  
        Chameleon	
  effect .............................................................................................................................44	
  
       CONCLUSION..................................................................................................... 45 	
  
       NOTES .............................................................................................................. 46 	
  
       CONTACT	
  INFORMATION .................................................................................... 47 	
  
       APPENDIX	
  A	
  -­‐	
  RESOURCES .................................................................................. 48 	
  
       	
  
       	
  




	
                                                                                                  	
  
       ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                              Page	
  |	
  ix	
  
       	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                                                                                                                                                                                                Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                                                                                                                                                                                            	
  
                                                                                                                                                                                                                                                                                                                                                                         	
  




       EXECUTIVE	
  SUMMARY	
  
                                                                                                                                                                         As	
   you	
   look	
   at	
   the	
   cover	
   of	
   this	
   report,	
   you	
   will	
   see	
   a	
   lone	
   airplane	
   and	
   on	
   the	
   roads	
  
                                                                                                                                                                         below,	
  scores	
  of	
  cars,	
  along	
  with	
  SUVs,	
  motorcycles,	
  trucks	
  and	
  RVs.	
  	
  	
  
                                                                                                                                                                         Every	
  day	
  on	
  every	
  road	
  in	
  the	
  U.S.	
  the	
  story	
  is	
  the	
  same.	
  	
  Excluding	
  commuters,	
  each	
  
                                                                                                                                                                         vehicle	
  is	
  on	
  a	
  journey	
  of	
  varying	
  lengths	
  and	
  different	
  levels	
  of	
  complexity	
   –	
  taking	
  trips	
  
                                                                                                                                                                         around	
   town,	
   day	
   trips	
   and	
   weekend	
   getaways	
   in	
   the	
   region,	
   all	
   the	
   way	
   up	
   to	
   and	
  
                                                                                                                                                                         including	
   the	
   Great	
   American	
   Road	
   Trip.	
   	
   Some	
   have	
   pre-­‐planned	
   their	
   outings.	
   	
   Still	
  
                                                                                                                                                                         others	
  are	
  more	
  spontaneous,	
  planning	
  as	
  they	
  go.	
  	
  	
  
         According	
  to	
  research	
  conducted	
  on	
  this	
  market	
  in	
  2007	
  by	
  the	
  U.S.	
  Travel	
  Association,	
  there	
  are	
  over	
  2	
  billion	
  
         trips	
  taken	
  annually,	
  with	
  over	
  85%	
  by	
  car,	
  representing	
  78%	
  of	
  all	
  spending.	
  	
  Over	
  50%	
  of	
  those	
  vehicles	
  ⎯	
  
                                                                                                                                                                                     1
         yes,	
   that	
   is	
   one	
   billion	
   ⎯	
   are	
   going	
   more	
   than	
   50	
   miles	
   from	
   home	
   and	
   will	
   require	
   a	
   hotel	
   room .	
   	
   And	
  
                                                                                                                                                                                                  6
         according	
  to	
  our	
  own	
  research,	
  over	
  85%	
  of	
  those	
  ⎯	
  850	
  million	
  	
  ⎯	
  will	
  stay	
  in	
  3,	
  4	
  and	
  5	
  star	
  motels/hotels .	
  	
  	
  
         Most	
  all	
  of	
  these	
  road	
  travelers	
  will	
  need	
  driving	
  directions	
  for	
  at	
  least	
  a	
  portion	
  of	
  their	
  trip,	
  suggestions	
  of	
  
         where	
   to	
   eat,	
   things	
   to	
   do,	
   places	
   to	
   shop	
   and	
   some	
   will	
   want	
   to	
   know	
   about	
   events.	
   	
   However,	
   today	
   as	
   a	
  
         rule,	
  the	
  travel	
  industry	
  leaves	
  all	
  this	
  work	
  to	
  the	
  consumer.	
  	
  And	
  by	
  and	
  large,	
  as	
  an	
  industry,	
  we	
  maintain	
  
         our	
  singular,	
  transaction-­‐focused	
  model,	
  making	
  money	
  from	
  the	
  sale	
  of	
  our	
  products	
  (or	
  the	
  booking	
  fees	
  or	
  
         commissions	
  from	
  those	
  sales).	
  	
  Most	
  industry	
  players	
  have	
  not	
  given	
  serious	
  consideration	
  to	
  the	
  possibility	
  
         that	
  they	
  can	
  augment	
  this	
  tried	
  and	
  true	
  model	
  with	
  a	
  new	
  revenue	
  stream	
  by	
  knitting	
  these	
  tools	
  together.	
  
                                                               7
         Hitwise 	
  reports	
  that	
  6	
  out	
  of	
  10	
  of	
  the	
  top	
  search	
  terms	
  in	
  the	
  travel	
  category	
  include	
  mapping	
  and	
  driving	
  
         directions.	
   	
   It	
   is	
   no	
   surprise	
   that	
   the	
   bulk	
   of	
   the	
   revenues	
   from	
   this	
   lucrative	
   market	
   go	
   to	
   MapQuest	
   and	
  
         Google,	
  CitySearch	
  [and	
  the	
  like],	
  while	
  the	
  travel	
  industry	
  happily	
  serve	
  the	
  other	
  15%	
  of	
  overnight	
  travelers	
  
         that	
  fly	
  to	
  their	
  destination.	
  	
  	
  
        BREAKING	
  DOWN	
  THE	
  LIMITING	
  MYTHS	
  
         The	
   purpose	
   of	
   this	
   Not	
   So	
   White	
   Paper™	
   is	
   to	
   break	
   down	
   the	
   myths	
   that	
   hold	
   us	
   in	
   our	
   present	
   conundrum,	
  
         focusing	
  on	
  the	
  addressable	
  air	
  traveler	
  market,	
  which	
  is	
  declining	
  before	
  our	
  very	
  eyes.	
  	
  Those	
  myths	
  are:	
  
                                                                                    MYTH	
                                                                                                                                                                                                      FACT	
  
                 Air	
  travel	
  is	
  the	
                                                                                                                                                   Air	
  travelers	
  only	
  represent	
  15%	
  of	
  all	
  travel	
  in	
  the	
  US	
  and	
  just	
  22%	
  of	
  all	
  spending	
  in	
  
                                                                                                                                                                                                                             8
                 mass	
  market	
                                                                                                                                                               the	
  travel	
  category .	
  	
  The	
  real	
  mass	
  market	
  is	
  the	
  drive	
  market.	
  
                 We	
  know	
  our	
                We	
  may	
  know	
  their	
  preferred	
  airlines	
  or	
  hotel	
  brands,	
  but	
  we	
  do	
  not	
  understand	
  
                 customers	
  and	
  their	
   their	
  behavior	
  under	
  different	
  situations	
  and	
  how	
  it	
  changes	
  based	
  on	
  whom	
  they	
  
                 behaviors	
  and	
  intent	
  	
   are	
  traveling	
  with	
  or	
  why	
  they	
  are	
  traveling.	
  
                 The	
  current	
                                                                                                                                                               Travel	
  technologies	
  (including	
  those	
  selling	
  hotel,	
  cruise	
  or	
  those	
  supporting	
  travel	
  
                 technologies	
  meet	
                                                                                                                                                         planning	
  to	
  destinations)	
  are	
  highly	
  air-­‐centric.	
  	
  They	
  begin	
  the	
  dialogue	
  with	
  the	
  
                 the	
  needs	
  of	
  the	
                                                                                                                                                    traveler	
  asking	
  them	
  WHERE	
  they	
  want	
  to	
  go	
  and	
  WHEN,	
  with	
  an	
  orientation	
  on	
  top	
  
                 mass	
  market	
                                                                                                                                                               destinations.	
  	
  They	
  don't	
  include	
  the	
  customer’s	
  starting	
  point	
  (other	
  than	
  an	
  
                                                                                                                                                                                                airport),	
  the	
  details	
  of	
  the	
  journey,	
  mapping	
  and	
  driving	
  directions,	
  which	
  are	
  key	
  
                                                                                                                                                                                                needs	
  of	
  the	
  drive	
  market.	
  



         	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
         6
                	
  LeisureLogix	
  Drive	
  Market	
  Study	
  2006	
  –	
  LeisureLogix	
  was	
  co-­‐founded	
  by	
  Chicke	
  Fitzgerald	
  
         7                                                                                                                                                                                                                                                                          th
                	
  Hitwise	
  Top	
  10	
  Travel	
  Search	
  Terms	
  As	
  of	
  June	
  26 ,	
  2010	
  
         8
                	
  US	
  Travel	
  Association	
  2007	
  
	
                                                                                                                                                                                                                                                                                       	
  
         ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                                                                                                                                                                                             Page	
  |	
  1	
  
         	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                                                                                                                                                                                                           Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                                                                                                                                                                                                       	
  
                                                                                                                                                                                                                                                                                                                                                                                    	
  


       TURBULENT	
  TIMES	
  DEMAND	
  CREATIVE	
  SOLUTIONS	
  
                                                                       “If	
  people	
  say	
  that	
  Sept.	
  11	
  was	
  a	
  perfect	
  storm,	
  I	
  believe	
  now	
  that	
  that	
  was	
  just	
  partly	
  cloudy	
  with	
  
                                                                       a	
  chance	
  of	
  showers.”	
  
                                                                                                                                                                                                                                                                                  Roger	
  Dow,	
  president	
  and	
  CEO	
  of	
  the	
  U.S.	
  Travel	
  Association.	
  	
  
                                                                                                                                                                                                                                                                                                                   9
       In	
  2008	
  and	
  2009,	
  the	
  U.S.	
  saw	
  double-­‐digit	
  cutbacks	
  in	
  airline	
  capacity 	
  and	
  frequency	
  as	
  a	
  direct	
  result	
  of	
  the	
  
                      10
       fuel	
   crisis .	
   	
   The	
   Air	
   Transport	
   Association	
   reports	
   that	
   from	
   2000-­‐2009,	
   over	
   700	
   planes	
   were	
   retired	
   and	
  
       parked	
  in	
  the	
  desert	
  or	
  sold	
  to	
  third	
  world	
  nations,	
  never	
  to	
  return	
  to	
  service	
  here	
  in	
  the	
  U.S.	
  	
  	
  
       Domestic	
  air	
  ticket	
  sales	
  though	
  the	
  travel	
  agency	
  community	
  (online	
  and	
  offline)	
  for	
  2008	
  and	
  2009	
  declined	
  
       11%	
   and	
   5%	
   respectively.	
   	
   International	
   air	
   ticket	
   sales	
   through	
   the	
   travel	
   agency	
   channel	
   for	
   the	
   same	
   period	
  
                                                             11
       declined	
   14%	
   and	
   9%	
   respectively .	
   	
   In	
   2010,	
   if	
   approved,	
   the	
   United	
   and	
   Continental	
   merger	
   promises	
   to	
  
       yield	
  another	
  10%	
  decline	
  in	
  their	
  combined	
  capacity	
  and	
  frequency.	
  	
  	
  
       These	
   declines	
   have	
   impacted	
   every	
   sector	
   of	
   the	
   travel	
   industry	
   and	
   have	
   been	
   compounded	
   by	
   the	
   extreme	
  
       economic	
   challenges	
   we	
   have	
   faced	
   over	
   the	
   last	
   24	
   months.	
   	
   And	
   while	
   airlines	
   will	
   invest	
   in	
   new	
   aircraft	
  
       when	
  the	
  economy	
  recovers,	
  channel	
  shift	
  will	
  persist	
  as	
  they	
  continue	
  dogged	
  pursuit	
  of	
  direct	
  distribution	
  
       through	
  their	
  websites.	
  	
  This	
  strategy	
  of	
  disintermediation,	
  albeit	
  misguided	
  in	
  my	
  opinion,	
  is	
  here	
  to	
  stay.	
  
       As	
   a	
   group,	
   the	
   travel	
   agency	
   community	
   faces	
   continually	
   shrinking	
   (and	
   even	
   vanishing)	
   supplier	
  
       commissions	
   and	
   the	
   pressures	
   of	
   suppliers	
   selling	
   direct	
   to	
   consumers	
   and	
   corporations.	
   	
   The	
   industry	
   has	
  
       gone	
   from	
   a	
   high	
   of	
   47,000	
   agencies	
   in	
   1996	
   to	
   just	
   under	
   16,000	
   in	
   2010.	
   	
   Last	
   year,	
   with	
   system-­‐wide	
   air	
  
                                                                                                                                                         12
       sales	
  of	
  $186.1	
  billion,	
  just	
  $65.8	
  billion	
  (35%)	
  was	
  sold	
  through	
  the	
  agency	
  channel .	
  
       As	
  the	
  air	
  business	
  through	
  the	
  agency	
  community	
  declines,	
  so	
  goes	
  the	
  primary	
  revenue	
  stream	
  to	
  the	
  GDS	
  
       companies,	
   which	
   are	
   based	
   on	
   booking	
   fees	
   from	
   the	
   airlines.	
   	
   And	
   every	
   other	
   type	
   of	
   supplier	
   and	
   every	
  
       destination	
  that	
  depends	
  on	
  air	
  travelers	
  for	
  business	
  are	
  likely	
  seeing	
  similar	
  rates	
  of	
  decline	
  in	
  business.	
  	
  	
  
       Following	
   the	
   lead	
   of	
   the	
   airlines,	
   other	
   travel	
   suppliers	
   continue	
   their	
   pursuit	
   of	
   direct	
   distribution	
   to	
   the	
  
       consumer,	
  cutting	
  out	
  as	
  many	
  middlemen	
  as	
  possible.	
  	
  Statistics	
  show	
  that	
  this	
  strategy	
  may	
  save	
  on	
  the	
  cost	
  
       side	
   of	
   the	
   equation,	
   but	
   the	
   net	
   yield	
   on	
   transactions	
   is	
   substantially	
   less	
   due	
   to	
   the	
   focus	
   on	
   price	
   that	
   is	
  
       rampant	
  online.	
  	
  The	
  profit	
  gap	
  cannot	
  be	
  made	
  up	
  in	
  volume.	
  	
  	
  
       It	
  is	
  certainly	
  a	
  turbulent	
  time	
  for	
  the	
  travel	
  industry.	
  	
  	
  
       Welcome	
  to	
  the	
  new	
  norm.	
  	
  	
  
       It	
   will	
   be	
   up	
   to	
   you	
   to	
   determine	
   how	
   you	
   will	
   respond	
   to	
   continued	
   pressure	
   on	
   the	
   current	
   model,	
  
       particularly	
  if	
  you	
  rely	
  heavily	
  on	
  air	
  travelers	
  for	
  your	
  revenues.	
  	
  The	
  question	
  isn’t	
  whether	
  we	
  need	
  a	
  new	
  
       business	
   model	
   moving	
   forward	
   ⎯	
   it	
   is	
   “When	
   will	
   we	
   agree	
   on	
   a	
   model	
   that	
   will	
   result	
   in	
   growth	
   for	
   the	
  
       majority	
  of	
  constituents	
  in	
  the	
  travel	
  value	
  chain?”.	
  	
  	
  
       The	
   challenge	
   we	
   pose	
   through	
   this	
   paper	
   is	
   whether	
   there	
   is	
   opportunity	
   that	
   has	
   been	
   missed	
   due	
   to	
   the	
  
       singular	
  focus	
  that	
  most	
  of	
  the	
  travel	
  industry	
  has	
  on	
  the	
  air	
  traveler.	
  	
  	
  
       Imagine	
  if	
  you	
  will,	
  being	
  able	
  to	
  sell	
  the	
  same	
  products	
  and	
  services,	
  but	
  appealing	
  to	
  a	
  much	
  larger	
  audience	
  
       than	
  you	
  do	
  today,	
  simply	
  by	
  making	
  some	
  changes	
  in	
  the	
  tools	
  that	
  are	
  used	
  to	
  market	
  to	
  and	
  service	
  your	
  
       customers.	
  
       	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
       9
              	
  Air	
  Transport	
  Association	
  (ATA)	
  2010	
  Industry	
  Review	
  	
  
       10
                  	
  ATA 2010 Industry Review reports that in 2008 alone, U.S. airlines paid $16 billion more in fuel than in 2007. 	
  
       11
                 	
  Airline	
  Reporting	
  Corporation	
  (ARC),	
  Sales	
  by	
  Agency	
  Type	
  
       12
                 	
  ATA	
  System	
  wide	
  Sales	
  versus	
  ARC	
  Agency	
  Sales	
  for	
  2009	
  
	
                                                                                                                                                                                                                                                                                      	
  
       ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                                                                                                                                                                                                          Page	
  |	
  2	
  
       	
  
DARE	
  TO	
  DIFFERENTIATE	
  
                                                                                                                          Summer	
  2010	
  Edition	
  “Not	
  So	
  White”	
  Paper	
  Series	
  
                                                                                                                                                                                                            	
  
                                                                                                                                                                                                         	
  


        Before	
  you	
  can	
  move	
  forward,	
  sometimes	
  you	
  have	
  to	
  think	
  back	
  and	
  see	
  how	
  history	
  has	
  played	
  out.	
  	
  And	
  
        sometimes	
  you	
  have	
  to	
  look	
  outside	
  of	
  your	
  own	
  world	
  and	
  see	
  what	
  has	
  happened	
  in	
  other	
  industries.	
  	
  	
  
        This	
  paper	
  will	
  take	
  a	
  look	
  at	
  both	
  the	
  restaurant	
  and	
  television	
  industries,	
  contrasting	
  the	
  adjustments	
  that	
  
        they	
   made	
   as	
   their	
   consumer	
   changed	
   before	
   their	
   eyes.	
   In	
   both	
   cases,	
   the	
   tools	
   and	
   delivery	
   mechanism	
  
        changed,	
  but	
  the	
  products	
  (e.g.	
  hamburgers	
  and	
  TV	
  programming)	
  remained	
  the	
  same.	
  	
  We	
  will	
  also	
  look	
  at	
  
        the	
   shipping	
   industry	
   and	
   their	
   need	
   to	
   consider	
   the	
   investment	
   required	
   to	
   meet	
   multi-­‐modal	
   shipping	
  
        opportunities.	
   	
   I	
   believe	
   there	
   is	
   a	
   strong	
   correlation	
   to	
   marketing	
   your	
   existing	
   products	
   and	
   services	
  
        specifically	
  to	
  the	
  drive	
  market	
  and	
  adopting	
  that	
  same	
  multi-­‐modal	
  approach	
  to	
  your	
  customers.	
  	
  	
  
       HOW	
  IS	
  PLANNING	
  DONE	
  TODAY?	
  
        Planning	
  a	
  trip	
  by	
  car,	
  SUV,	
  RV,	
  motorcycle	
  or	
  truck	
  is	
  more	
  complex	
  than	
  planning	
  a	
  trip	
  by	
  air.	
  	
  The	
  consumer	
  
        who	
  is	
  driving	
  instead	
  of	
  flying	
  generally	
  has	
  a	
  number	
  of	
  different	
  needs	
  in	
  planning	
  their	
  trip:	
  
               •       Picking	
  their	
  destination	
  (often	
  impacted	
  by	
  who	
  they	
  are	
  traveling	
  with	
  and	
  what	
  they	
  want	
  to	
  
                       accomplish)	
  and	
  options	
  for	
  the	
  return	
  trip	
  or	
  trip	
  extensions	
  to	
  other	
  nearby	
  destinations	
  
               •       Choosing	
  a	
  tool	
  to	
  plan	
  their	
  route,	
  including	
  determine	
  where	
  the	
  stopping	
  point	
  is	
  each	
  day	
  (based	
  
                       on	
  route	
  preferences,	
  driving	
  style	
  and	
  speed	
  limits)	
  
               •       Finding	
  someone	
  to	
  book	
  their	
  lodging	
  (offline	
  agency,	
  online	
  agency	
  or	
  supplier	
  direct)	
  
               •       Locating	
  what	
  is	
  in	
  proximity	
  to	
  where	
  they	
  are	
  going	
  (places	
  to	
  stay,	
  things	
  to	
  do,	
  things	
  to	
  see,	
  
                       places	
  to	
  eat,	
  places	
  to	
  shop,	
  events	
  to	
  attend)	
  
               •       Exploring	
  what	
  is	
  along	
  their	
  route	
  (things	
  to	
  do,	
  etc.)	
  and	
  knowing	
  how	
  long	
  it	
  will	
  take	
  to	
  stop	
  and	
  
                       get	
  back	
  on	
  their	
  way	
  
               •       Seeing	
  who	
  else	
  is	
  going	
  to	
  the	
  same	
  place	
  that	
  they	
  are	
  going	
  
               •       Getting	
  input	
  from	
  others	
  on	
  the	
  choice	
  of	
  destination	
  or	
  things	
  to	
  do	
  and	
  see	
  along	
  the	
  way	
  and	
  at	
  
                       the	
  destination	
  
        While	
  there	
  are	
  some	
  very	
  interesting	
  trip	
  planning	
  and	
  social	
  media	
  tools	
  in	
  the	
  marketplace,	
  in	
  general	
  we	
  
        still	
   have	
   a	
   chasm	
   that	
   exists	
   between	
   the	
   travel,	
   the	
   mapping/navigation	
   and	
   the	
   location-­‐based	
   content	
  
        industries.	
  	
  We	
  lack	
  an	
  integrated	
  solution.	
  
        The	
  travel	
  industry	
  generally	
  focuses	
  on	
  the	
  destination	
  or	
  the	
  product	
  itself	
  (e.g.	
  the	
  hotel,	
  the	
  attraction,	
  the	
  
        cruise)	
  and	
  has	
  a	
  bias	
  toward	
  top	
  destinations.	
  	
  The	
  mapping	
  and	
  navigation	
  industries	
  focus	
  on	
  getting	
  from	
  
        point	
  to	
  point	
  and	
  providing	
  location	
  based	
  content	
  information	
  (e.g.	
  points	
  of	
  interest),	
  but	
  do	
  not	
  do	
  a	
  good	
  
        job	
  on	
  the	
  planning	
  of	
  multiple	
  day	
  journeys.	
  	
  Both	
  camps	
  have	
  their	
  hands	
  in	
  the	
  content	
  game,	
  but	
  neither	
  
        one	
   has	
   the	
   ability	
   to	
   tailor	
   content	
   to	
   match	
   the	
   travelers’	
   unique	
   needs	
   based	
   on	
   the	
   purpose	
   of	
   trip	
   or	
   who	
  
        is	
  traveling	
  together.	
  	
  These	
  variables	
  are	
  not	
  easily	
  handled	
  by	
  single	
  dimensional	
  travel	
  profiles.	
  
        I	
  liken	
  this	
  to	
  the	
  way	
  that	
  we	
  used	
  to	
  do	
  our	
  shopping	
  before	
  the	
  launch	
  of	
  superstores,	
  such	
  as	
  Super	
  Wal-­‐
        Mart,	
  BJ’s	
  or	
  Super	
  Target.	
  	
  We	
  went	
  to	
  one	
  store	
  for	
  our	
  food	
  staples,	
  another	
  for	
  our	
  beer/wine,	
  for	
  paper	
  
        goods,	
  for	
  home	
  and	
  garden,	
  for	
  clothes,	
  for	
  toys	
  and	
  yet	
  another	
  for	
  pharmacy	
  items.	
  	
  You	
  get	
  the	
  picture.	
  	
  
        There	
   were	
   some	
   stores	
   that	
   stocked	
   several	
   categories,	
   reducing	
   the	
   number	
   of	
   steps	
   to	
   fulfill	
   our	
   list,	
   but	
  
        nevertheless,	
  the	
  onus	
  was	
  on	
  us	
  to	
  make	
  our	
  list,	
  determine	
  the	
  best	
  places	
  to	
  go	
  and	
  then	
  plot	
  out	
  the	
  most	
  
        efficient	
  way	
  to	
  get	
  everything	
  that	
  we	
  need.	
  	
  	
  
        Consider	
  for	
  a	
  moment,	
  what	
  it	
  would	
  take	
  to	
  plan	
  a	
  road	
  trip	
  from	
  Tampa	
  to	
  New	
  York	
  City.	
  	
  You	
  are	
  going	
  to	
  
        an	
  industry	
  conference,	
  but	
  decide	
  to	
  take	
  your	
  family	
  along.	
  	
  On	
  the	
  way	
  up,	
  you	
  want	
  to	
  take	
  the	
  most	
  direct	
  
        route,	
  with	
  a	
  minimum	
  number	
  of	
  stops.	
  	
  On	
  the	
  way	
  back,	
  it	
  doesn’t	
  matter	
  how	
  long	
  it	
  takes	
  and	
  you	
  want	
  
        to	
  visit	
  the	
  Jersey	
  shore,	
  several	
  battlefields,	
  visit	
  friends	
  in	
  Murfreesboro,	
  TN	
  and	
  visit	
  Dollywood.	
  	
  It	
  would	
  be	
  
        fun	
   to	
   go	
   through	
   Atlanta	
   on	
   the	
   way	
   back	
   and	
   see	
   the	
   Coca	
   Cola	
   museum	
   and	
   catch	
   an	
   Atlanta	
   Braves	
   game.	
  	
  
        You	
   have	
   your	
   favorite	
   hotel	
   chain,	
   or	
   perhaps	
   you	
   want	
   to	
   stay	
   at	
   historic	
   bed	
   and	
   breakfast	
   inns.	
   	
   And	
   of	
  
        course,	
   you	
   want	
   to	
   know	
   where	
   all	
   the	
   Starbucks	
   are	
   along	
   the	
   way.	
   	
  Where	
   would	
   you	
   start?	
   	
   How	
   many	
  
        players/tools	
  would	
  be	
  involved	
  in	
  the	
  process?	
  	
  Give	
  it	
  some	
  thought,	
  and	
  let’s	
  move	
  on.	
  	
  
	
                                                                                                  	
  
        ©	
  2010,	
  Solutionz	
  Group	
  International,	
  Inc.	
  	
  All	
  Rights	
  Reserved.	
                                                                              Page	
  |	
  3	
  
        	
  
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Dare to differentiate

  • 1.  
  • 2. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series         Library  of  Congress  Cataloging-­‐in-­‐Publication  Data   Fitzgerald,  Chicke  J.   Dare  to  Differentiate,  Tapping  the  Drive  Traveler  –  The  Forgotten  Mass  Market   ISBN  0-­‐9721398-­‐3-­‐4   Copyright  @  2010,  Solutionz  Group  International,  Inc.   All  rights  reserved  under  the  Pan-­‐American  and  International  Copyright  Conventions.    No  part  of  this  book,  in   whole  or  in  part,  may  be  reproduced,  stored  in  a  retrieval  system,  or  transmitted  in  any  form  by  any  means   electronic,   mechanical,   photocopying,   recording   or   otherwise,   without   the   prior   written   permission   from   Solutionz  Group  International,  Inc.     Dare  to  Differentiate   Tapping  the  Drive  Traveler  |  The  Forgotten  Mass  Market   Cover  image  courtesy  of  MMG  Worldwide,  all  rights  reserved       Publisher:     Solutionz  Group  International  Inc.   13911  W.  Hillsborough  Avenue,  Suite  312   Tampa,  FL    33635  U.S.A.     Printed  in  the  United  States  of  America       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  i    
  • 3. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series                     Dare  to  Differentiate   Tapping  the  Drive  Traveler  |  The  Forgotten  Mass  Market            By  Chicke  Fitzgerald     Summer  2010  Edition     “Not  So  White  Paper™”  series         ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  ii    
  • 4. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series         THE  FACTS   • 85%  of  all  overnight  trips  in  the     US  are  taken  by  car       • 78%  of  all  spending  on  travel  in     the  US  is  done  by  people   traveling  by  car     • 6  out  of  the  top  10  search  terms     in  the  travel  category  include     mapping  and  driving  directions     Do  you  intentionally  market  to  the   drive  traveler?                 1 Source:    U.S.  Travel  Association  and  Hitwise   PREFACE   For   over   50   years   airlines   have   been   the   biggest   guns   in   the   travel   industry;   it   is   therefore  no   surprise   that   the   air  traveler  sits  at  the  heart  of  the  multi-­‐billion  dollar  travel  industry.       As   an   industry,   we   cater   to   [aka   intentionally   market   to]   the   air   traveler   at   every   turn   –   providing   tools   for   them   to   plan   their   business   and   leisure   trips,   as   well   as   giving   options   for   their   vacations   and   weekend   getaways.    We  quite  naturally  sell  them  airline  tickets.    We  also  sell  them  hotel  rooms,  timeshare  ownership   and  vacation  home  rentals,  we  rent  them  cars,  motorcycles  and  RVs,  we  sell  tours  and  cruises  to  them  and  we   entice  them  to  come  to  our  destinations  and  attractions.    Even  our  technology  is  geared  around  their  needs   and  their  behaviors.    Yet,  air  travelers  are  a  surprisingly  small  part  of  the  total  travel  picture.   2. The  U.S.  Travel  Association  reports  that  there  are  ten  trips  by  car  for  every  air  trip    Whether  or  not  this  is  a   surprise   to   you,   wouldn’t   it   be   irrational   to   focus   on   just   the   one,   versus   the   ten?     But   it   is   both   a   fact   and   the   topic  of  this  paper  and  the  reason  that  I  urge  you  to  consider  this  opportunity  for  differentiation. The  obsession  that  we  have  with  the  air  traveler  is  superficially  logical.    The  foundational  technology  for  the   retail   side   of   our   industry   was   built   by   the   airlines.     And   the   air   traveler   spends   more   per   trip;   stays   away   longer  and  quite  frankly,  the  mechanics  behind  planning  a   point-­‐to-­‐point  trip  are  much  easier  than  one  taken   by   car.     However,   with   air   travelers   representing   just   15%   of   all   overnight   trips   in   this   country   and   just   22%   of   all  travel-­‐related  spending,  if  you  are  looking  for  a  competitive  edge  and  if  you  need  to  grow,  you  owe  it  to   yourself  to  evaluate  the  drive  market  opportunity.   I  do  not  suggest  that  you  should  turn  away  from  the  air  traveler,  which  may  still  be  lucrative  for  you.                                                                                                                                           1  U.S.  Travel  Association  Domestic  Travel  Market  Report  –  2007  Edition  and  June  Hitwise  Top  Search  Terms  as  of  June  26,   2010   2  A  trip  is  defined  as  being  more  than  50  miles  from  home  or  at  least  one  night  spent  away  from  home       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  iii    
  • 5. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       However,  I  do  want  to  point  out  the  fact  that  growth  may  be  as  simple  as  expanding  your  focus  to  the  “other   85%”  of  travel  in  this  country,  which  for  the  purpose  of  this  report  I  have  dubbed  the  “Forgotten  Mass   Market”.   3 A   few   years   ago,   I   wrote   a   guest   article   that   was   published   in   ProMedia’s   The   Beat™   subscription   newsletter.     It  was  entitled  “The  Irresistible  Pull  of  Irrational  Behavior  –  Travel  Industry  Style”,  with  the  title  borrowed  from   4 the   sub-­‐title   of   the   book   Sway,   by   Ori   and   Rom   Brafman.     The   subject   of   that   article   was   distribution   channel   choice  and  more  specifically,  the  use  of  travel  agents  and  the  GDSs  by  travel  suppliers,  a  subject  on  which  I  am   extremely  passionate  –  and  very  vocal.    I  have  included  excerpts  of  the  text  of  that  article  here  because  it  also   applies  as  strongly  to  the  industry’s  love/hate  relationship  with  the  airlines  and  our  natural  obsession  with  the   air  traveler,  as  it  does  to  travel  distribution  channel  choices.         I  just  started  reading  a  book  titled  Sway  last  night.  The  parallels  of  the  stories  told  by  authors   Ori   and   Rom   Brafman   about   various   situations   where   intelligent,   normally   logical   individuals   make  decisions  that  make  absolutely  no  sense  immediately  struck  me.   For  anyone  that  follows  my  musings  about  distribution  on  a  regular  basis,  you  know  that  I  have   written  columns  for  The  Beat  that  poke  a  bit  of  fun  at  our  industry  and  discuss  how  the  issues  of   distribution   fall   into   that   category   of   "irrational   behavior."   While   told   tongue-­‐in-­‐cheek,   they   ring   all   too   true   and   are   a   stark   example   of   how   our   decision-­‐making   in   this   industry   gets   derailed  by  looking  at  what  is  going  on  around  us.   The  key  points  of  the  book  focus  on  the  things  that  "derail  our  decision-­‐making":   • Loss  aversion  -­‐  tendency  to  go  to  great  lengths  to  avoid  perceived  losses   • Diagnosis  bias  -­‐  original  diagnosis  blocks  our  ability  to  see  subsequent  results  clearly   • Chameleon  effect  -­‐  tendency  to  take  on  characteristics  that  have  been  arbitrarily  assigned  to  us     This   paper   is   about   differentiation.     The   basic   premise   behind   my   thesis   is   that   when   you   market   and   sell   your   products   and   services,   if   you   remain   focused   on   the   status   quo   (marketing   to   the   air   traveler),   you   may   be   missing  a  huge  opportunity.   We   hope   that   this   paper   prompts   you   to   determine   which   of   these   derailing   drivers   are   keeping   you   from   exploring  how  to  differentiate  and  grow  your  business  by  extending  your  marketing  to  the  “other  85%”.   1. What  do  you  think  you  might  gain  if  you  added  a  focus  on  the  drive  market?     2. If  you  were  starting  at  ‘ground  zero’  how  would  you  think  about  this  opportunity?     3. Are  you  thinking  independently  and  being  objective  about  evaluating  the  potential  of  this  market?     When  you  finish  reading,  if  you  find  that  you  have  been  focusing  solely  or  primarily  on  the  air  traveler  and  see   merit  in  exploring  the  drive  market  in  greater  detail,  then  by  all  means,  stand  out  from  the  crowd  and  go  for   the  incremental  profits!       At  the  end  of  the  day,  you  will  need  to  make  your  own  decisions  that  make  sense  for  you  and  your  business.     And   perhaps   you,   too,   can   be   an   iconoclast   and   help   the   industry   "sway"   the   other   direction!     Dare   to   differentiate  your  marketing,  your  services  and  your  business  models.   Chicke Fitzgerald CEO  Solutionz  Group    |  www.solutionz.com  |  1-­‐813-­‐925-­‐0789  |  www.twitter.com/chickefitz                                                                                                                                       3  www.promedia.travel   4  ©2008  by  Ori  Brafman  and  Rom  Brafman,  Sway.  All  rights  reserved,  Doubleday.       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  iv    
  • 6. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       EDITORIAL  NOTES   WHY  IS  THIS  REPORT  FOR  ME?    AM  I  REALLY  OBSESSED  WITH  THE  AIR  TRAVELER?   Individuals   who   should   read   this   report   include   C-­‐level   executives   (and   investors)   that   set   strategy   and   influence  technology  investment  in  the  following  sectors:   Travel  suppliers  (air,  car,   If  your  selling  process  begins  with  where  your  product  picks  up  and   hotel,  rail,  cruise)   leaves  off,  then  you  are  an  air-­‐traveler  centric  supplier.    And  if  you  are  a   hotelier  and  you  are  not  asking  the  starting  point,  you  are  missing  out  on   the  potential  of  securing  the  enroute  bookings,  as  well  as  those  on  the   way  home.   Travel  retailers  (online   If  your  dialogue  with  a  traveler  begins  with  where  do  you  want  to  go  and   and  offline  agencies)   when,  and  you  never  ask  them  their  starting  point  or  mode  of   transportation,  you  are  an  air-­‐traveler  centric  retailer.   Corporate  Travel  Agencies   If  you  are  not  providing  a  service  for  the  52%  of  corporate  travelers  that   drive  (other  than  expense  report  processing),  you  may  be  missing  a  huge   opportunity  to  aggregate  the  purchasing  power  for  and  make   commissions  on  the  hotel  nights  consumed  by  this  group.     Travel  packagers   If  you  package  together  travel  at  a  destination,  then  you  are  an  air-­‐ traveler  centric  packager.   Destination  marketing   If  you  don’t  help  travelers  get  from  where  they  are  to  you  and  your   organizations/convention   planning  process  is  all  about  your  destination,  then  you  are  an  air-­‐ and  visitors  bureau   traveler  centric  DMO/CVB.   Travel  technology   If  your  technology  dialogue  with  retailers  or  the  consumer  starts  with   companies  and  Global   when  and  where,  and  you  never  ask  them  their  mode  of  transportation,   Distribution  System   you  are  an  air-­‐centric  company  (even  if  your  technology  is  for  hotels,  car   companies   rental  companies,  and  cruise  lines).   Attractions  and   If  you  don’t  help  travelers  get  from  where  they  are  to  you  and  your   destination  resorts   planning  process  is  all  about  your  attraction  or  resort,  then  you  are  air-­‐ traveler  centric.   Industry  associations  and   If  your  meeting  and  conference  agendas  and  your  research  and  lobbying   government  agencies   efforts  do  not  include  the  drive  market  as  a  key  topic/focus,  then  you  are   air-­‐centric  and  not  helping  your  constituents  tap  into  the  85%  of  travelers   that  drive.   Location-­‐based  services   If  your  product  simply  does  point-­‐to-­‐point  mapping  and  navigation  and   companies,  including  GPS   doesn’t  take  into  account  that  people  using  your  product  need  to  plan   and  navigation  firms  and   their  entire  journey,  have  different  preferences  when  they  are  with   mapping  technology   different  people  and  travel  under  different  circumstances,  then  you  are   companies   not  tapping  into  the  drive  traveler  market.     Investors   If  your  questions  about  travel  trends  start  with  what  is  happening  with   vacation  travel  (8%  of  total),  corporate  travel  (25%  of  total),  or  air  travel   volume,  or  what  will  happen  in  the  next  round  of  GDS  negotiations,  then   you  are  air-­‐centric  and  missing  a  huge  upside  opportunity  for  the   companies  in  which  you  have  invested  (or  are  about  to  invest).       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  v    
  • 7. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       NAVIGATING  THIS  REPORT     We   recognize   that   everyone   who   reads   this   paper   will   come   from   a   different   place   of   knowledge   and   understanding  of  the  travel  industry,  of  the  history  behind  the  industry’s  focus  on  the  air  traveler  and  of  the   drive   market.     Some   may   need   to   “stop”   and   think   about   your   current   approach,   or   at   minimum   “yield”   to   the   possibility   that   there   is   an   opportunity  that  is  yet  untapped.       Here  are  some  tips  of  how  to  get  the  most  out  of  this  report:   • If  you  are  not  at  all  familiar  with  the  travel  industry,  we  recommend   that  you  read  the  report  in  its  entirety.   • If  you  don’t  need  the  history  and  background  on  the  air  focus  and   want  to  just  “cut  to  the  chase”  about  the  drive  market  opportunity,   then  you  should  begin  with  The  Forgotten  Mass  Market.   ABOUT  THE  NOT  SO  WHITE  PAPER™  SERIES   Our   reports   are   topical   and   timely   and   we   focus   on   analyzing   emerging   trends.     Because   they   are   published   in   real  time,  we  constantly  update  the  content.    This  report  is  an  update  to  a  paper  on  the  Drive  Market  titled   “Are  You  Reaching  the  Forgotten  Mass  Market?”  originally  published  in  2008.       Our   authors   are   considered   experts   in   the   selected   subject   and   they   are   backed   up   with   respected   industry   5 research .     The   papers   include   anecdotal   insights   and   analogy   to   stress   the   points   of   the   paper.     They   are   written  in  a  slightly  irreverent,  frank  style.    Items  of  particular  importance  are  noted  with  a  light  bulb.         Throughout  this  report  the  use  of  “I”  denotes  my  personal  perspective  and  “we”  generally  refers  to  the  “global   we”  where  I  speak  as  a  member  of  the  travel  industry,  unless  used  in  a  personal  story.   If   you   are   fond   of   reports   with   a   heavy   statistical   or   analytical   bent   or   those   written   in   the   detached   third   person,  the  Not  So  White  Paper™  series  may  not  be  for  you.    However,  if  you  consider  yourself  intellectually   curious  and  are  willing  to  look  outside  of  our  industry  and,  more  importantly,  outside  of  your  own  experience,   then  you’ve  come  to  the  right  place.   ABOUT  THE  AUTHOR   Chicke   Fitzgerald   is   the   CEO   of   Solutionz   Group   International,   Inc.,   a   Tampa-­‐ based   global   consultancy   specializing   in   marrying   travel   buyers   and   sellers   via   multiple  channels.       Chicke   has   over   thirty   years   experience   in   the   electronic   distribution   and   marketing   fields,   with   a   focus   on   the   travel,   transportation,   and   mobile   industries.       She   is   a   strategist,   author,   keynote   speaker   and   was   an   early   investor   in   a   groundbreaking  technology  firm  serving  the  travel,  mapping,  navigation,  and  media  industries.  That  company   is  currently  sitting  in  hibernation,  waiting  for  the  inevitable  financial  thaw  and  for  the  “believers”  in  the  drive   market  opportunity,  who  are  surely  out  there.   Her   specialty   is   developing   strategy,   crafting   profitable   business   models,   and   creating   executable   plans   to   achieve   her   client’s   vision.     Her   passions   include   incubating   early   stage   businesses,   fostering   joint   ventures,   and  mergers  and  acquisitions.                                                                                                                                       5  See  Appendix  A  for  information  about  the  resources  used  for  this  paper       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  vi    
  • 8. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       The   firm   has   expertise   in   all   sectors   of   the   travel   distribution   value   chain,   including   offline/online   agencies,   corporate   travel,   travel   suppliers,   GDS   companies,   destinations,   travel  technology,  service  providers,  content  companies,  and  social  media.    Prior  to  forming   her  own  consulting  firm,  Ms.  Fitzgerald  held  senior  positions  with  Equant,  SITA,  Worldspan,  and  Sabre.   In   addition   to   the   Not   So   White   Paper™   series,   she   has   published   three   books   on   travel   distribution,   known   as   the  Travel  Distribution  Library.    She  also  was  the  executive  editor  on  a  series  of  white  papers  completed  for   the  Hotel  Electronic  Distribution  Network  Association  (HEDNA).       Her  iconoclast  style  is  also  featured  in  regular  articles  on  The  Beat™  subscription  newsletter  and  in  their  blog   <http://www.thebeat.travel/blog/>.   The  investment  community  recognizes  Chicke  as  an  expert  on  the  travel  industry.    She  has  achieved  top  5%   status  in  the  Gerson  Lehman  Group  Council  of  Expert  Advisors,  <http://www.glgroup.com>,  in  a  field  of  more   than  250,000  advisors  across  all  industries.       Chicke  and  her  husband,  Michael,  presently  reside  with  their  son  and  daughter  in  Tampa,  Florida.       For  more  information,  see  www.solutionz.com,  or  contact  Chicke  by  email  at  chicke@solutionz.com  or  phone   (+1-­‐813-­‐925-­‐0789).           ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  vii    
  • 9. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       TABLE  OF  CONTENTS     EXECUTIVE  SUMMARY................................................................................................... 1   Breaking  Down  the  Limiting  Myths ....................................................................................................1   Turbulent  Times  Demand  Creative  Solutions .....................................................................................2   How  is  Planning  Done  Today? ............................................................................................................3   The  Purpose  of  this  Report.................................................................................................................4   WHY  DIFFERENTIATE? .......................................................................................... 5   eCommerce  Pioneers .........................................................................................................................6   Differentiation  or  Accelerated  Commoditization? .............................................................................6   Disintermediation  as  a  strategy..........................................................................................................7   What  now? .........................................................................................................................................8   THE  FORGOTTEN  MASS  MARKET ............................................................................ 9   The  Terminology.................................................................................................................................9   Non-­‐Air  Traveler..............................................................................................................................9   Drive  Market ...................................................................................................................................9   Mass  Market ...................................................................................................................................9   Life  Travel......................................................................................................................................10   The  Logic...........................................................................................................................................10   Better  said  “Why  should  I  care?” ..................................................................................................10   Measuring  the  Impact...................................................................................................................10   The  Decision  to  Drive ....................................................................................................................11   Sizing  the  Market..............................................................................................................................12   Total  Trips  by  Mode  of  Transportation .........................................................................................13   Overnight  Trips  by  Mode  of  Transportation  –  2006  to  2009.........................................................14   Top  Misconceptions  of  the  Road  Traveler.....................................................................................14   Fallacy  #1  –  Low  Income  Demographic ...................................................................................................................... 15   Fallacy  #2  –  This  is  the  Economy  Traveler .................................................................................................................. 15   Fallacy  #3  –  We  already  serve  the  road  traveler ........................................................................................................ 16   The  Electronic  Distribution  Picture................................................................................................17   Air  Disintermediates  Hotels..............................................................................................................17   Investment  Community  Focus..........................................................................................................18   Further  Reductions  in  Air  Travel.......................................................................................................19   THE  HEART  OF  THE  MATTER  –  A  PRIMER  ON  THE  DRIVE  MARKET ............................ 20   Road  Trip  2010  Style.........................................................................................................................21   Why  Do  I  Need  a  Primer  on  Marketing  to  the  Drive  Market? ..........................................................22   Distribution  Value  Chain  Penetration ...........................................................................................22   Getting  Perspective.......................................................................................................................23   Why  Does  Mode  of  Transportation  Matter?.................................................................................24   Changing  your  mindset .................................................................................................................24   Road  Traveler  Needs ........................................................................................................................26   The  Online  Planning  Process ............................................................................................................26   The  Journey  Planning  Tools ..............................................................................................................27   The  Model .....................................................................................................................................28       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  viii    
  • 10. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       Demographics  -­‐  It’s  not  just  the  Economy  traveler .......................................................................28   The  Bottom  Line ...............................................................................................................................29   LOOKING  OUTSIDE  OUR  INDUSTRY ...................................................................... 30   The  Transformation  of  the  Restaurant  Industry  –  A  Story  of  Product  Centricity .............................30   The  Television  Industry  –  A  Story  of  Customer  Centric  Design ........................................................32   The  Shipping  Industry  -­‐  Becoming  Multi-­‐Modal...............................................................................33   From  Hamburgers  to  Televisions  to  Shipping...................................................................................33   HIGHER  ORDER  MARKETING™ ............................................................................. 34   Product .............................................................................................................................................34   Action ...............................................................................................................................................34   Intent ................................................................................................................................................34   The  Higher  Order  Marketing  Equation .............................................................................................35   MOVING  FORWARD ........................................................................................... 36   There  is  Hope ...................................................................................................................................36   The  Profitability  Challenge ...............................................................................................................36   Cost  Cutting  is  Not  a  Strategy...........................................................................................................37   Mode  of  Transportation  Matters .....................................................................................................37   Are  You  Customer  or  Product  Centric? ............................................................................................38   TAKING  ACTION................................................................................................. 39   Your  To  Do  List..................................................................................................................................40   The  Role  of  the  Travel  Agent ............................................................................................................41   Geographical  Focus ..........................................................................................................................42   Sector  by  Sector  Action  Plan ............................................................................................................42   Gathering  Data  and  Creating  A  Marketing  Plan ...........................................................................42   Travel  Suppliers .......................................................................................................................................................... 42   Travel  Technology  Companies.................................................................................................................................... 43   Destination  Marketing  Organizations ........................................................................................................................ 43   Industry  Associations  and  Government  Agencies  and  Research  Companies............................................................. 43   BACK  TO  THE  “IRRESISTIBLE  PULL  OF  IRRATIONAL  BEHAVIOR” ................................ 44   Loss  aversion ....................................................................................................................................44   Diagnosis  bias ...................................................................................................................................44   Chameleon  effect .............................................................................................................................44   CONCLUSION..................................................................................................... 45   NOTES .............................................................................................................. 46   CONTACT  INFORMATION .................................................................................... 47   APPENDIX  A  -­‐  RESOURCES .................................................................................. 48           ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  ix    
  • 11. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       EXECUTIVE  SUMMARY   As   you   look   at   the   cover   of   this   report,   you   will   see   a   lone   airplane   and   on   the   roads   below,  scores  of  cars,  along  with  SUVs,  motorcycles,  trucks  and  RVs.       Every  day  on  every  road  in  the  U.S.  the  story  is  the  same.    Excluding  commuters,  each   vehicle  is  on  a  journey  of  varying  lengths  and  different  levels  of  complexity   –  taking  trips   around   town,   day   trips   and   weekend   getaways   in   the   region,   all   the   way   up   to   and   including   the   Great   American   Road   Trip.     Some   have   pre-­‐planned   their   outings.     Still   others  are  more  spontaneous,  planning  as  they  go.       According  to  research  conducted  on  this  market  in  2007  by  the  U.S.  Travel  Association,  there  are  over  2  billion   trips  taken  annually,  with  over  85%  by  car,  representing  78%  of  all  spending.    Over  50%  of  those  vehicles  ⎯   1 yes,   that   is   one   billion   ⎯   are   going   more   than   50   miles   from   home   and   will   require   a   hotel   room .     And   6 according  to  our  own  research,  over  85%  of  those  ⎯  850  million    ⎯  will  stay  in  3,  4  and  5  star  motels/hotels .       Most  all  of  these  road  travelers  will  need  driving  directions  for  at  least  a  portion  of  their  trip,  suggestions  of   where   to   eat,   things   to   do,   places   to   shop   and   some   will   want   to   know   about   events.     However,   today   as   a   rule,  the  travel  industry  leaves  all  this  work  to  the  consumer.    And  by  and  large,  as  an  industry,  we  maintain   our  singular,  transaction-­‐focused  model,  making  money  from  the  sale  of  our  products  (or  the  booking  fees  or   commissions  from  those  sales).    Most  industry  players  have  not  given  serious  consideration  to  the  possibility   that  they  can  augment  this  tried  and  true  model  with  a  new  revenue  stream  by  knitting  these  tools  together.   7 Hitwise  reports  that  6  out  of  10  of  the  top  search  terms  in  the  travel  category  include  mapping  and  driving   directions.     It   is   no   surprise   that   the   bulk   of   the   revenues   from   this   lucrative   market   go   to   MapQuest   and   Google,  CitySearch  [and  the  like],  while  the  travel  industry  happily  serve  the  other  15%  of  overnight  travelers   that  fly  to  their  destination.       BREAKING  DOWN  THE  LIMITING  MYTHS   The   purpose   of   this   Not   So   White   Paper™   is   to   break   down   the   myths   that   hold   us   in   our   present   conundrum,   focusing  on  the  addressable  air  traveler  market,  which  is  declining  before  our  very  eyes.    Those  myths  are:   MYTH   FACT   Air  travel  is  the   Air  travelers  only  represent  15%  of  all  travel  in  the  US  and  just  22%  of  all  spending  in   8 mass  market   the  travel  category .    The  real  mass  market  is  the  drive  market.   We  know  our   We  may  know  their  preferred  airlines  or  hotel  brands,  but  we  do  not  understand   customers  and  their   their  behavior  under  different  situations  and  how  it  changes  based  on  whom  they   behaviors  and  intent     are  traveling  with  or  why  they  are  traveling.   The  current   Travel  technologies  (including  those  selling  hotel,  cruise  or  those  supporting  travel   technologies  meet   planning  to  destinations)  are  highly  air-­‐centric.    They  begin  the  dialogue  with  the   the  needs  of  the   traveler  asking  them  WHERE  they  want  to  go  and  WHEN,  with  an  orientation  on  top   mass  market   destinations.    They  don't  include  the  customer’s  starting  point  (other  than  an   airport),  the  details  of  the  journey,  mapping  and  driving  directions,  which  are  key   needs  of  the  drive  market.                                                                                                                                       6  LeisureLogix  Drive  Market  Study  2006  –  LeisureLogix  was  co-­‐founded  by  Chicke  Fitzgerald   7 th  Hitwise  Top  10  Travel  Search  Terms  As  of  June  26 ,  2010   8  US  Travel  Association  2007       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  1    
  • 12. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       TURBULENT  TIMES  DEMAND  CREATIVE  SOLUTIONS   “If  people  say  that  Sept.  11  was  a  perfect  storm,  I  believe  now  that  that  was  just  partly  cloudy  with   a  chance  of  showers.”   Roger  Dow,  president  and  CEO  of  the  U.S.  Travel  Association.     9 In  2008  and  2009,  the  U.S.  saw  double-­‐digit  cutbacks  in  airline  capacity  and  frequency  as  a  direct  result  of  the   10 fuel   crisis .     The   Air   Transport   Association   reports   that   from   2000-­‐2009,   over   700   planes   were   retired   and   parked  in  the  desert  or  sold  to  third  world  nations,  never  to  return  to  service  here  in  the  U.S.       Domestic  air  ticket  sales  though  the  travel  agency  community  (online  and  offline)  for  2008  and  2009  declined   11%   and   5%   respectively.     International   air   ticket   sales   through   the   travel   agency   channel   for   the   same   period   11 declined   14%   and   9%   respectively .     In   2010,   if   approved,   the   United   and   Continental   merger   promises   to   yield  another  10%  decline  in  their  combined  capacity  and  frequency.       These   declines   have   impacted   every   sector   of   the   travel   industry   and   have   been   compounded   by   the   extreme   economic   challenges   we   have   faced   over   the   last   24   months.     And   while   airlines   will   invest   in   new   aircraft   when  the  economy  recovers,  channel  shift  will  persist  as  they  continue  dogged  pursuit  of  direct  distribution   through  their  websites.    This  strategy  of  disintermediation,  albeit  misguided  in  my  opinion,  is  here  to  stay.   As   a   group,   the   travel   agency   community   faces   continually   shrinking   (and   even   vanishing)   supplier   commissions   and   the   pressures   of   suppliers   selling   direct   to   consumers   and   corporations.     The   industry   has   gone   from   a   high   of   47,000   agencies   in   1996   to   just   under   16,000   in   2010.     Last   year,   with   system-­‐wide   air   12 sales  of  $186.1  billion,  just  $65.8  billion  (35%)  was  sold  through  the  agency  channel .   As  the  air  business  through  the  agency  community  declines,  so  goes  the  primary  revenue  stream  to  the  GDS   companies,   which   are   based   on   booking   fees   from   the   airlines.     And   every   other   type   of   supplier   and   every   destination  that  depends  on  air  travelers  for  business  are  likely  seeing  similar  rates  of  decline  in  business.       Following   the   lead   of   the   airlines,   other   travel   suppliers   continue   their   pursuit   of   direct   distribution   to   the   consumer,  cutting  out  as  many  middlemen  as  possible.    Statistics  show  that  this  strategy  may  save  on  the  cost   side   of   the   equation,   but   the   net   yield   on   transactions   is   substantially   less   due   to   the   focus   on   price   that   is   rampant  online.    The  profit  gap  cannot  be  made  up  in  volume.       It  is  certainly  a  turbulent  time  for  the  travel  industry.       Welcome  to  the  new  norm.       It   will   be   up   to   you   to   determine   how   you   will   respond   to   continued   pressure   on   the   current   model,   particularly  if  you  rely  heavily  on  air  travelers  for  your  revenues.    The  question  isn’t  whether  we  need  a  new   business   model   moving   forward   ⎯   it   is   “When   will   we   agree   on   a   model   that   will   result   in   growth   for   the   majority  of  constituents  in  the  travel  value  chain?”.       The   challenge   we   pose   through   this   paper   is   whether   there   is   opportunity   that   has   been   missed   due   to   the   singular  focus  that  most  of  the  travel  industry  has  on  the  air  traveler.       Imagine  if  you  will,  being  able  to  sell  the  same  products  and  services,  but  appealing  to  a  much  larger  audience   than  you  do  today,  simply  by  making  some  changes  in  the  tools  that  are  used  to  market  to  and  service  your   customers.                                                                                                                                       9  Air  Transport  Association  (ATA)  2010  Industry  Review     10  ATA 2010 Industry Review reports that in 2008 alone, U.S. airlines paid $16 billion more in fuel than in 2007.   11  Airline  Reporting  Corporation  (ARC),  Sales  by  Agency  Type   12  ATA  System  wide  Sales  versus  ARC  Agency  Sales  for  2009       ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  2    
  • 13. DARE  TO  DIFFERENTIATE   Summer  2010  Edition  “Not  So  White”  Paper  Series       Before  you  can  move  forward,  sometimes  you  have  to  think  back  and  see  how  history  has  played  out.    And   sometimes  you  have  to  look  outside  of  your  own  world  and  see  what  has  happened  in  other  industries.       This  paper  will  take  a  look  at  both  the  restaurant  and  television  industries,  contrasting  the  adjustments  that   they   made   as   their   consumer   changed   before   their   eyes.   In   both   cases,   the   tools   and   delivery   mechanism   changed,  but  the  products  (e.g.  hamburgers  and  TV  programming)  remained  the  same.    We  will  also  look  at   the   shipping   industry   and   their   need   to   consider   the   investment   required   to   meet   multi-­‐modal   shipping   opportunities.     I   believe   there   is   a   strong   correlation   to   marketing   your   existing   products   and   services   specifically  to  the  drive  market  and  adopting  that  same  multi-­‐modal  approach  to  your  customers.       HOW  IS  PLANNING  DONE  TODAY?   Planning  a  trip  by  car,  SUV,  RV,  motorcycle  or  truck  is  more  complex  than  planning  a  trip  by  air.    The  consumer   who  is  driving  instead  of  flying  generally  has  a  number  of  different  needs  in  planning  their  trip:   • Picking  their  destination  (often  impacted  by  who  they  are  traveling  with  and  what  they  want  to   accomplish)  and  options  for  the  return  trip  or  trip  extensions  to  other  nearby  destinations   • Choosing  a  tool  to  plan  their  route,  including  determine  where  the  stopping  point  is  each  day  (based   on  route  preferences,  driving  style  and  speed  limits)   • Finding  someone  to  book  their  lodging  (offline  agency,  online  agency  or  supplier  direct)   • Locating  what  is  in  proximity  to  where  they  are  going  (places  to  stay,  things  to  do,  things  to  see,   places  to  eat,  places  to  shop,  events  to  attend)   • Exploring  what  is  along  their  route  (things  to  do,  etc.)  and  knowing  how  long  it  will  take  to  stop  and   get  back  on  their  way   • Seeing  who  else  is  going  to  the  same  place  that  they  are  going   • Getting  input  from  others  on  the  choice  of  destination  or  things  to  do  and  see  along  the  way  and  at   the  destination   While  there  are  some  very  interesting  trip  planning  and  social  media  tools  in  the  marketplace,  in  general  we   still   have   a   chasm   that   exists   between   the   travel,   the   mapping/navigation   and   the   location-­‐based   content   industries.    We  lack  an  integrated  solution.   The  travel  industry  generally  focuses  on  the  destination  or  the  product  itself  (e.g.  the  hotel,  the  attraction,  the   cruise)  and  has  a  bias  toward  top  destinations.    The  mapping  and  navigation  industries  focus  on  getting  from   point  to  point  and  providing  location  based  content  information  (e.g.  points  of  interest),  but  do  not  do  a  good   job  on  the  planning  of  multiple  day  journeys.    Both  camps  have  their  hands  in  the  content  game,  but  neither   one   has   the   ability   to   tailor   content   to   match   the   travelers’   unique   needs   based   on   the   purpose   of   trip   or   who   is  traveling  together.    These  variables  are  not  easily  handled  by  single  dimensional  travel  profiles.   I  liken  this  to  the  way  that  we  used  to  do  our  shopping  before  the  launch  of  superstores,  such  as  Super  Wal-­‐ Mart,  BJ’s  or  Super  Target.    We  went  to  one  store  for  our  food  staples,  another  for  our  beer/wine,  for  paper   goods,  for  home  and  garden,  for  clothes,  for  toys  and  yet  another  for  pharmacy  items.    You  get  the  picture.     There   were   some   stores   that   stocked   several   categories,   reducing   the   number   of   steps   to   fulfill   our   list,   but   nevertheless,  the  onus  was  on  us  to  make  our  list,  determine  the  best  places  to  go  and  then  plot  out  the  most   efficient  way  to  get  everything  that  we  need.       Consider  for  a  moment,  what  it  would  take  to  plan  a  road  trip  from  Tampa  to  New  York  City.    You  are  going  to   an  industry  conference,  but  decide  to  take  your  family  along.    On  the  way  up,  you  want  to  take  the  most  direct   route,  with  a  minimum  number  of  stops.    On  the  way  back,  it  doesn’t  matter  how  long  it  takes  and  you  want   to  visit  the  Jersey  shore,  several  battlefields,  visit  friends  in  Murfreesboro,  TN  and  visit  Dollywood.    It  would  be   fun   to   go   through   Atlanta   on   the   way   back   and   see   the   Coca   Cola   museum   and   catch   an   Atlanta   Braves   game.     You   have   your   favorite   hotel   chain,   or   perhaps   you   want   to   stay   at   historic   bed   and   breakfast   inns.     And   of   course,   you   want   to   know   where   all   the   Starbucks   are   along   the   way.    Where   would   you   start?     How   many   players/tools  would  be  involved  in  the  process?    Give  it  some  thought,  and  let’s  move  on.         ©  2010,  Solutionz  Group  International,  Inc.    All  Rights  Reserved.   Page  |  3