travelport online conference 1

13 Apr 2011, Bucharest

Agenda

10.00 – 10.45 Welcome coffee

10.45 – 11.10 Global online market overview

With Marcin Pilarski, Travelport Managing Director Eastern Europe

11.10 – 11.30 Romania online market overview11.10 – 11.30 Romania online market overview

Vlad Dobrutchi, Travelport Romania

11.30 – 12.15 Live demo Travel Manager

12.15 – 13.00 Live demo eTrip

13.00 – 13.45 Lunch break

13.45 – 14.30 Live demo Netbook

14.30 – 15.15 Live demo Q Travel Online

15.15 – 15.25 Summary

Internet? Tamed!Internet? Tamed!

Marcin PilarskiManaging Director Eastern EuropeBucharest, 13 April 2011

Agenda

• Online Travel Market Overview

– Global

– European

– Direct and Indirect

• Building blocks of your online success• Building blocks of your online success

• Trends in the Online Market

– Evolving Business Models

– Increased Complexity

– New Competitors

5Travelport confidential

Few words about your presenter

• Internet and OTA business model fan

• Active in Polish and EE GDS / OTA space since 20032003

• Currently managing all Eastern European markets

• Likes to win & challenges ☺most recent 10 km run in Warsaw beating up my 13 year old daughter!

Global Travel Market

2,0672,203

2,3492,489

2,576 2,541 2,5712,648

2,7492,873

2500.0

3000.0

3500.0

Travel Market Retail Value

1,937 1,9222,067

0.0

500.0

1000.0

1500.0

2000.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$B

n

7

Source: Travel and Tourism: Euromonitor International 2009

Travelport confidential

World Travel Market by Region

APAC 27%

RoW 11%

2008 Travel Market By Region

Value in $ B

APACAPAC 700.8700.8

NAM 24%

Europe 38%

APACAPAC 700.8700.8

NAMNAM 616.0616.0

EuropeEurope 982.8982.8

RoWRoW 273.5273.5

Source: Travel and Tourism: Euromonitor International 2009

8Travelport confidential

E-commerce impact on travel

37%

21%

Share of total European leisure travel industry 2006 - 2011

Travelport confidential 9

Online Travel Agents (OTA) are gaining ground within the online market

40%

50%

60%

70%

80%

0%

10%

20%

30%

40%

2006 2007 2008 2009 2010 2011

Supplier.com OTA

Travelport confidential 10

Thinking about the trips you have taken in the last 12 months, approximately how much do you think you spent on each of the following areas?

Air travel

Hotel or other accommodation

Food and drink

Entertainment

$658

$132

$126

$110$87

$197

Survey average

Average spend / trip

More than 75% of Leisure travellers spend is on non-air related product and services

Source: The Futures Company/Lightspeed Research-Travelport Consumer Segmentation survey Nov 2009 – Jan 2010

Entertainment

Car (rental)

Sea travel

Rail travel

Bus / Coach travel

Other

$589

$425

$132

$520

Base: 12,757 Leisure Travellers

Av. Numberof trips / annum

5.4

$524

Who doesn’t plan travel online these days?

Just 6% of French travelers, 9% of German travelers and 5% of U.K travelers plan and book their trips completely offline

Source: Euromonitor, PhoCusWright, Company Reports, Travelport Market Strategy assumptions

Clear correlation between internet penetration and leisure online travel penetration

10 20 30 40 50 60 70 80 90 100Growth

2000-2009

North America 134%

Oceania / Australia 175%

Europe 298%

74%

60%

52%

North America leads developed world in Internet penetration; Greatest growth seen in the Middle East.

Latin America / Caribbean

891%

Middle East 1648%

Asia 546%

Africa 1392%

Global Average 380%

31%

28%

19%

7%

26%

Source: Internet World Stats

Asia 15% 2,059 (↑17%)

Europe 23% 697 (↑11%)

United States 50% 1,174

Share of credit card transactions

Number of cards*(millions, 2008)

Europe and US lead credit card global penetration

Global 99 billion transactions (2008)

Middle East & Africa

2% 90 (↑24%)

Canada 3% 107

Latin America 7% 461(↑6%)

Asia 15% 2,059 (↑17%)

Source: Nilson Report, November 2009), Euromonitor International

* Credit, debit and pre paid cards

Defining success criteria is key

• Success does not have to be high booking volume

• Key to determine what success is and how to measure it

• Going online does not have to mean choosing only one• Going online does not have to mean choosing only oneway

So let’s have a look at some of the building blocks

Travelport confidential 15

Building blocks of online success

User Experiencein Online Travel

ANALYTICAL ANALYTICAL SEM & SEOSEM & SEOUSABILITYUSABILITY

PARTNER’S PROGRAMMES

PARTNER’S PROGRAMMES

GRAPHICAL INTERFACEGRAPHICAL INTERFACE

IBE TECHNOLOGY

IBE TECHNOLOGY

in Online TravelCALL CENTER PROCEDURESCALL CENTER PROCEDURES

SALES PROCESSES

EFFECTIVNESS

SALES PROCESSES

EFFECTIVNESSBENCHMARKINGBENCHMARKING

TOOLSTOOLSSEM & SEOSEM & SEOUSABILITYUSABILITY

16Travelport confidential

Building blocks of online success

• The 7 Habits of Highly Effective People®

by Stephen R. Covey

1. Be Proactive

2. Begin with the End in Mind2. Begin with the End in Mind

3. Put First Things First

4. Think Win-Win

5. Seek First to Understand, Then to Be Understood

6. Synergize

7. Sharpen the Saw

17Travelport confidential

IBE technology

• Technology providers

• Contracting third party for customized projectfor customized project

• In-house development

18Travelport confidential

• Where should I click now?

• Is it available?

• How can I search for a hotel?

• Where am I?

• How to start?

Usability / don’t make me think!

• How to start?

• Where did they put_______?

• What’s important here ?

Let me use it!

19Travelport confidential

Usability / don’t make me think!

20Travelport confidential

Road with accent on USABILITY

Road with accent on USER EXPERIENCE

22

brand B/OS support

design speed

uptime trust

stability

Accessibility

Findability

SOFT PRODUCT

mapsGuest reviews

descriptions

rich media

Features and functionalityfiltering

sorting

comparison

search

browsingnavigation

breadcrumbs

START – HOME PAGE

1. Home page

2. Search results

3. Hotel information

UX model in online travel

HARD PRODUCT

mapsdescriptions

images

Privacy policy

basket

Booking path

safety

Payment methods

cancellations

currencies

Loyalty program

Bookability

FINISH - PAYMENT

4. Rooms and guests

5. Booking screens

6. Payment

23

So what influences conversion?

UsabilityUsabilityTrends/ contextTrends/ context

Product

Crisis / cycles

Market maturity

Price shopping

Source vs target

Trust to buying online

PAPPAP

PlatformPlatform

Brand / DesignBrand / Design

CompetitionCompetition

User qualityUser quality

Product

Availability

Price

onlineoffline

Meta search engines

efficiency

speed uptimetrust

Loyalty Program

awareness24

25Travelport confidential

Search Engine Optimization – SEO

Travelport confidential 26

Search Engine Optimization – SEO

Travelport confidential 27

Search Engine Optimization – SEO

Travelport confidential 28

Search Engine Optimization – SEO

Travelport confidential 29

What’s next?

Booking fee models will soon become dinosaurs…

31Travelport confidential

66%

40%

36%

40%

59%

40%

36%

32%

Search engine

Airline website

Hotel website

Websites of the destination

visiting

A third of traveller s

using the internet to

research used a

You said you researched your trip using the internet, specifically what type of websites did you use?

Non transactional websites will become more important

31%

25%

15%

11%

10%

32%

29%

26%

16%

14%

11%

visiting

Travel websites (eg TripAdvisor,

Lonely Planet, Rough Guide)

Online travel agency

Website of a high street travel

agent

Car rental website

Social networking website

Leisure

Business

travel website which

may have an

element of social

networking e.g.

TripAdvisor

Base: 59,499 Leisure traveller s and 3,064 Business traveller s

Travelport confidential 32

The distinction between Suppliers, Tour Operators and OTA’s will continue to blur

Online Travel Agencies

Tour Operators Suppliers

Travelport confidential 33

Air Transactions will become much more complex

34Travelport confidential

Social media & smartphones have created new opportunities for travel companies to provide services but how can this be monetised?

Augmented reality makes it possible to overlay data on the real life experience

Facebook Places, Foursquare and Google Places provide users with local content (offers, check-in) most useful on the mobile web

82% of travellers using Priceline’s mobile app booked within 24 hours of arrival compared with 45% of desktop bookers

35

Does it have potential to change the

industry?

Apple iTravel

Produced by Market Strategy and Pricing, CMO

Key take aways

• Online sales channels are becoming more and more important

• Online is not offline on the Internet

• Define your model and what success is

• Many building blocks

• Coming next

– Pure Play Booking Fee Models will be dinosaurs

– Non Transactional Websites will increase in importance

– Co-opetition will be the model

– How to monetise new opportunities social media & smartphones

have created?

Travelport confidential 36