Distribution Strategies

Disney magic, Orbitz puts New York in frame, Legacy players fight back, Law and the marketplace and more …our pick of the week’s news

Mirror, mirror…will cash-free work for Disney

It might be a magic experience for families but Disney World is, as we all know, a commercial operation and is constantly looking at new ways to streamline its business. The company has introduced a vacation management system called MyMagic+ which heralds the arrival of rubber bracelets – the MagicBand - embedded with credit card information. The New York Times reports that the bracelets will let users pay for things with a simple tap of the wrist and also guide them to attractions. The company is quoted saying that this will enhance the user experience. But it also opens a debate about how companies like Disney use personal information, which is increasingly in demand. The bracelets will, after all, allow Disney to track the customer and then use this data to market relevant and personal offers. Will consumers like it? It depends on how it is done but it is unlikely to be a quiet affair.

Love New York, love video

Video is an increasingly popular way to market to potential customers in the travel planning process. According to research last year by Google and Ipsos MediaCT around 45% of leisure travellers and 74% of affluent travellers book travel after viewing an online travel video. To tap into this, travel company Orbitz Worldwide has teamed up with Empire State Development (ESD), New York's chief economic development agency, which administers the well-known ‘I love New York’ tourism programme. And the result is a seven-part online video series known as ‘Orbitz Originals: New York State’ which can be viewed exclusively at Orbitz.com/NYState. This is Orbitz’s first attempt of feature a US destination using video. They have also used travel expert, Richard Bangs, to highlight the Catskills and Adirondacks’ regions. Future episodes, which aim to feature stunning visuals, will focus on other areas across the state.

Adapt to fly, or die

High fuel prices and tough competition from discount airlines made it a tough year for legacy carriers but two European firms are fighting back to regain market share. AirFrance is looking at a range of different fare structures. One of these will be to offer a €49 ($64) one-way, no-frills tickets which will be applied to 58 destinations from February 6. It is hoped that the move will help AirFrance back into the black by 2014. Loss-making Air Berlin, on the other hand, has a new leader and is working on a new cost-cutting programme.  Air France also began a cost cutting exercise, which saw 5,000 employees lose their jobs. The companies recognise that they have must compete on price as for medium haul flights at least that is a priority for many travellers. If they get their pricing structure right, this could pay off as other discount airlines continue to increase passenger numbers; Ryanair (passengers up 4% in 2012), easyJet (6.7%).

Bumpy year for Ryanair

The Telegraph newspaper provides some entertaining insights into the ”record-breaking year” of no-frills airline Ryanair. In the course of the year the airline proudly says it carried nearly 80 million passengers but it certainly wasn’t plain sailing. It may now be Europe’s second biggest airline in terms of passengers but Which? Readers voted it Europe’s worst short-haul airline, proving the point in the brief above that price, above all, really does matter to consumers. However, in the course of the year the firm has faced criticism for its safety standards and overpriced charges and food. Then there was the introduction of a 2% credit card charge, which attracted attention as did a cabin crew member describing the Italian city of Bari as ‘the city of the mafia’. And the list goes on.

GetYourGuide gets funding

Speaking of new disruptive services GetYourGuide, an online platform for booking travel tours and activities, has recently secured $14 million in Series A financing from Spark Capital and Highland Capital Partners Europe. GetYourGuide has offices in Zurich, Berlin and Las Vegas but will now has the resources for expansion into emerging markets. In a press release the company says this marks one of the largest Series A investments ever raised by a European tech startup from major US and European venture capital funds. In less than three years, GetYourGuide has grown to become the world’s largest platform for tours, attractions and activities, partnering with over 16,900 activities in more than 1,680 destinations worldwide. It has distribution partnerships with more than 1,000 online travel agencies, travel operators and media companies, such as TripAdvisor and Kayak.

Dreamliner’s dark cloud

A fire reportedly broke out Japan Airlines (JAL) Dreamliner plane that landed in Boston this week. The Boeing Dreamliner has been billed as one of the most passenger airlines ever built. But it has been hampered by technical problems and production delays. United Airlines had to ground one of its planes recently after an electrical problem resulted in an emergency landing. The incident has also hurt other airlines like Qatar, which had to ground a plane it had recently purchased as a result of the United incident.

A look at the law

The success of peer-to-peer marketplaces like Airbnb and Gidsy are hugely popular but in many cases using them can conflict with local laws and regulations. On EyeforTravel this week we take a closer look into how, if at all, the authorities are reacting and how these new players are causing friction between more traditional players. We interview a range of people from those who have been in the online rental space for some time, like NY Habitat, to executives from both Gidsy and AirBnb. While everybody agrees that there are questions to answer around the legality of peer-to-peer rentals, not everybody believes regulation should happen in the same way. Read the full story on EyeforTravel.com