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Day 2 Highlights – 2010 Association of Travel Marketing Executives Conference

Robert Cole

An interesting thing happened on the second day of the Association of Travel Marketing Executives Conference in Boston. Day 1 had summoned in the Summer of Love for social media in travel; Speakers and audience members alike were abuzz with the potential of tapping into social graphs, engaging with customers and increasing the relevance of customer touch-points. Day 2 introduced a healthy dose of skepticism and pragmatism to the mix.

The 2010 Association of Travel Marketing Executives Conference was held at the The Hyatt Regency Cambridge June 15-16, 2010

Allow me to provide a bit of commentary before summarizing the highlights.

Two keynoters in particular provided some stark contrast to the unabashed optimism of the previous day. First, Brett Keller, Priceline CMO casually asked “Social is a little hyped up, don’t you think?” What a buzzkill…

Later, Wyndham Worldwide EVP Marketing Flo Lugli closed her talk by describing a fundamental function of her job: protecting her team from the distraction of new revenue generating projects. Total bummer…

Actually, framing these two talks with the rest of the conference landscape provided a complete picture of the state of travel industry marketing. That last comment in no way takes anything away from the great content and outstanding presentations provided by Henry Harteveldt, Susan Black and the other presenters; quite the contrary.

Because of the quality information provided throughout the breadth of the conference, the Priceline and Wyndham perspectives provided critical insights into the challenges facing the industry.

It worked out well that Brett had missed the first day of the conference – That eliminated the risk of tailoring his message or softening his stance on social media in deference to existing audience perceptions. While I disagree with his downplaying the impact social media can have on customer engagement, for Priceline, he was right on target.

Priceline has never been an experiential, end-to-end travel player. Within the 7-step travel cycle of Inspire-> Research -> Plan -> Validate -> Book -> Travel -> Share (Repeat), Priceline’s heritage has been about all about delivering deals and converting the transaction.

Priceline is not looking for “Likes,” followers or fans; its key performance measures are ad impressions, clicks and bookings.

And this is where I see the Priceline philosophy totally in alignment with the sentiments of Day 1’s social media proponents: the most essential process is to define clear objectives, execute efficiently and tirelessly measure results. Every company is different and customer relationships run the gamut. Priceline is focused on generating bookings and that focus has served them well.

Priceline should be embracing social media to engage its legion of fans and reinforce its market position. Competing purely on price is a dangerous positioning strategy. If Priceline relies purely on price to differentiate itself, a more efficient new entrant willing to narrow the gap between consumer pricing and the cost of the underlying travel components can put Priceline in a world of hurt. If Priceline believes that its reverse-auction / opaque product business model makes them immune to such a threat, that complacency could be even more dangerous.

For people dismiss Priceline as a niche player in the travel industry, think again. Take a look at the five year trend of Priceline’s market capitalization ($8.47 Billion) compared to Expedia’s ($6.23 Billion.) That’s right, Wall Street values Priceline 36% ($2.24 Billion) higher than Expedia.

Priceline's Market Cap exceeds Expedia's by nearly $2 1/4 Billion

Brett wisely cautioned the massed crowd of Twitter followers and Facebook fans that blind idealism in the panacea of social media is definitely risky (and perhaps foolish) when compared to proven sales generation.

It is clear that resources should never be allocated to social media if there are operational gaps that negatively impact the product offering, or hinder the ability to provide quality service delivery. There is no substitute for effective operational execution – it eliminates the need to apply social media reaction cycles.

One additional editorial comment, I strongly disagree with Brett Keller’s conclusion that price drives conversion. He got that totally wrong. Value, not price is the defining factor in travel conversion.

Where Priceline’s Keller was driven in his single minded focus on booking conversion, Wyndham’s Flo Lugli stressed the importance of focus to create a solid technology foundation and resisting the distraction of new projects.

Flo went as far as saying that even the tough decision of sidelining revenue generating projects was essential to ensure resources were allocated to ensure that the core systems are in place and able to support mission-critical functions.

Despite the opportunities and compelling figures presented by the mobile panelist, Lugli matter-of-factly stated, “I don’t want to spend any money on an iPhone App if my websites are falling apart.” With consumers embracing new distribution channels, mobile applications, location based services, social media and a vast array of promotional deals, Lugli understands that none of those strategic or tactical opportunities can be successful without a reliable technical infrastructure to support them.

With 7,000 properties, a dozen brands and a global footprint, despite the economic downturn, Wyndham is investing heavily in its organization to ensure those systems get built right. Flo announced that they are actively hiring an additional 70 staff to support the effort.

By deferring new, sexy, innovative projects, Wyndham may need to play catch-up in the near-term, but their discipline will undoubtedly position them over the mid-term to surpass competitors who elect to make technical trade-offs to opportunistically engage in trendy initiatives.

With all the industry focus on how to harness the latest, and in some cases, bleeding-edge technologies, it is refreshing to see organizations that have a clearly defined strategic direction and are dedicated to accomplish those objectives.

While responding to “What’s new and exciting?” with “continuing what we do best” or “strengthening our organization to succeed in the future” may not generate a big wow factor, Priceline and Wyndham both have smart leadership and solid strategies. Ultimately, while Priceline could be more social media friendly and Wyndham more technologically experimental, every travel industry should recognize the importance of strategic planning and the focused execution of those plans in many cases dictates success, often more than the various tactical initiatives that those plans may encompass. Kudos to both groups for sticking by their guns.

Now, back to our regularly scheduled programming – the recap of the ATME Conference.

On Day 2, “The New Now & The New Next” agenda, continued, this time including perspectives from marketing leaders at Priceline and Wyndham, a panel covering mobile marketing, eCommerce lessons from retail and how Boeing approaches social media to engage its client’s clients.

ATME Chairman Joel Chusid welcomed back the audience, and again, dove straight into the program.

Priceline Chief Marketing Officer Brett Keller handled the morning keynote with the theme “Deals Gone Wild”

Jeff DeKorte, Senior Vice President Digital, Rand McNally introduced the members of the mobile marketing panel:

Forrester Research Vice President Henry Harteveldt then interviewed Bob Kupbens, Delta Airlines Vice President-eCommerce who previously served as Vice President of eCommerce for Target Corporation to compare travel with the retail industry.

Flo Lugli, Senior Vice President Marketing, Wyndham Worldwide then spoke about hotels getting better at eCommerce

Mims Wright of Black & Wright moderated a panel focusing on new distribution channels featuring:

Established Players –
Sandra Johnston, Manager, Business Development, US & Canada, Cheapflights;
Shirley Tafoya, President, Travelzoo;
New Up & Comers –
Drew Patterson, CEO, Jetsetter.com;
Kristen Kopplin, Vice President Marketing, Travelscream

Boeing Managing Director, Airline Marketing Jeff Cacy closed the conference by providing an informative update on the state of the airline industry and their use of social media:

In short, ATME 2010 was a very successful conference. Perhaps not quite enough name calling, fisticuffs & hair pulling to satiate those seeking pure entertainment, but good informative content. Much more like having a nice satisfying meal than a flashy presentation without much taste or nutritional value.

Since pictures are always worth 1,000 words and presenters are always looking to use images to catch the attention of the audience, thought I would close with a couple that will stick with me.

NOTE: Henry Harteveldt’s mutant-bacon images were disqualified from the competition. Why? because I’m certain, somewhere in the Old Testament, the Bacon-tini was clearly identified as being a creation of pure evil and a harbinger of the apocalypse. Look it up, it’s in there somewhere…

First, Rob Torres provided a gentle reminder of where mobile phones started in 1988. What a steal at only $1,500! I suppose the only justification could be that it weighed 28 ounces. Looking at it on a price per ounce basis, we are in the same ballpark, right? By the way, since I am in the market for a new smartphone, take a look at my blog post covering the leading candidates and vote in the poll: What Smartphone Should I Buy?

Rob Torres of Google reminded everyone that Mobile has changed just slightly since its inception. Check out that price!

Flo Lugli provided a montage of images that illustrated exactly what happens when you build a big, important project on a weak foundation. The project itself may appear substantially complete, but without a solid foundation, chances are that it may become very difficult to accomplish the original objective.

Flo Lugli of Wyndham Worldwide reminds everyone how important a strong foundation can be. Aside from the one problem, everything else looks pretty good, right?

Moral of the story (and the conference)? First, what we think is incredibly cool technology today is going to seem embarrassingly outdated 20 years from now. Second, if we do not dedicate the time to building a solid technological and strategic foundation, we should anticipate that big problems will be encountered down the road. The New Now & The New Next are rapidly changing the travel industry.

In case you missed it, here is a link to a post recapping the presentations from Day 1 of the ATME Conference.

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