We saw a fluffy piece here that's a bit of a backhanded compliment to the on-line travel industry. Apparently, there is an "American Consumer Satisfaction Index". This index suggests that, in general, consumers were less satisfied with e-commerce last year. E-commerce satisfaction dropped from 82 to 80 (out of 100). However, satisfaction with the travel segment of e-commerce did NOT decline.
More specifically:
"Expedia (+2.7) and the All Others category (-2.5 percent) tie for first at 77. Travelocity comes in second place (+2.7 percent to 75) followed by Orbitz (+1.4 percent to 74). Priceline.com falls one percent to 72"
We're not surprised to see Priceline lagging in this index, as their opaque model is a bit more vulnerable to lingering ill will if the consumer has a bad travel experience. In related news, Priceline reported 4Q revenue up 21% last night after the bell. So I guess we'll believe the consumers voting with their wallets rather than those voting in the "index". Even if you were burned by a bad opaque buy, if price is your main driver, you're probably going to go back to their well time and again.
Showing posts with label Priceline. Show all posts
Showing posts with label Priceline. Show all posts
Thursday, February 19, 2009
Monday, November 26, 2007
OTA Booking Fees: Why?
Intereting realization at Phocuswright that Priceline is no longer charging a fee to consumers for air bookings. Why? To build their brand reputation as a low-price retailer.
They confessed at PCW that, for these bookings, they don't really add service value over a carrier site, and they don't offer the customer care tools of their OTA peers. Bravo! What have we been saying for some time?
Don't look for other OTAs to match, because they've invested too much in pitching their service proposition to throw away that revenue stream. Unless Priceline is able to make up some ground in share of course, which may be unlikely, but actually could happenen. Especially through savvy partnership with meta's.
The important takeaway here for FMV is that this is another chink in the armor of the OTAs. We simply beleive that they are really going to struggle to stay relevant in the long run when: a) meta's are there to provide cross shopping, b) carriers remain commited to driving shift to internal channels, and c) traditional Travel Agent's provide a much clearer service proposition, for a competitive fee...
They confessed at PCW that, for these bookings, they don't really add service value over a carrier site, and they don't offer the customer care tools of their OTA peers. Bravo! What have we been saying for some time?
Don't look for other OTAs to match, because they've invested too much in pitching their service proposition to throw away that revenue stream. Unless Priceline is able to make up some ground in share of course, which may be unlikely, but actually could happenen. Especially through savvy partnership with meta's.
The important takeaway here for FMV is that this is another chink in the armor of the OTAs. We simply beleive that they are really going to struggle to stay relevant in the long run when: a) meta's are there to provide cross shopping, b) carriers remain commited to driving shift to internal channels, and c) traditional Travel Agent's provide a much clearer service proposition, for a competitive fee...
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