Who and what are you (including personnel and backgrounds)?

Touristlink provides a totally new way for travellers to find and book services online, especially those they have a hard time finding elsewhere on the web.

Members can use our simple form to request whatever they want whether it is a “Taxi Pickup from an Airport” or a “Guided trip to Mt. Kilimanjaro”.

Once a request is made it goes out to our network of travel agents and guides who can then make offers from which the member is free to choose one if he likes. This functionality is seamlessly built into a content rich social platform where travellers can interact with each other and with local businesses.

Touristlink is developed by GoTripIndia, a web development firm founded by David Urmann in 2005 which now employs over 70 IT professionals.

Prior to launching Touristlink we launched several other successful travel sites including: Travelaffiliatepro, an affiliate program for travel website owners, and Hotelkhoj, an online hotel booking portal developed exclusively for the Indian market which lists over 2,000 hotels.

• David Urmann is the Founder and CEO. His global perspective and scientific background have helped him launch successful business ventures in both the travel and outsourcing industries. He is an avid traveler having visited over 40 countries and is the author of a travel guide book on his home state of Utah.
• Jayesh Badge is the Cofounder and COO. He has 9+ years of experience in advertising agencies & IT. He oversees the Indian operations of the company.
• Deepak Gupta is the lead programmer at Touristlink engaged in the development of client side, server side scripts. He specializes in the LAMP & Open Source Software.
• Ganesh Chavan is the manager of customer support & public relations, Ganesh has 6+ years of experience with leading names in industry like IBM and GE for Banking solutions.

Our entire team can be seen here.

What financial support did you have to launch the business?

We are bootstrapping the launch from our existing revenues. We are looking forward to a point where it makes sense for us to bring on additional funding.

What problem are you trying to solve?

Our conversations with travellers and feedback from customers showed us a clear need for a service that would connect travellers to local service providers.

Many of our existing customers have mentioned how hard it is to find local service providers online for things like trip packages, tour guides and arranging ground transport.

This feedback from customers was reinforced for me by lots of personal experiences. For instance, last year I planned a weeklong tour in Rajasthan with my wife and mother but didn’t really want to book an overpriced tour with a travel agency which I didn’t have any experience with and who wanted me to wire half the money before I arrived.

As it happened we ended up finding a great guide but it was just by chance. Another example occurred on a trip I took to China where I remember looking for a translator / city guide and I ended up finding someone on Craigslist but I wasn’t sure who I was really dealing with and it would have made me feel better if I could have seen reviews from other customers to help me know I was making the right choice.

Touristlink solves this travelling dilemma by letting local providers sign up and then offer their services in response to requests by our members.

Describe the business, core products and services?

Touristlink looks to target the travel activities market by providing a service that lets travellers request the exact services they need and then receive multiple offers from travel providers.

Most transactions in this $80 billion marketplace are still occurring offline and 90% of providers state that they face product display and cost issues with existing distribution channels which are significant barriers to increasing sales.

Touristlink intends to solve these problems and become the primary website for these transactions by providing a marketplace which is seamlessly built into a content rich social platform where travellers can interact with each other and with local businesses.

One thing keeping us excited is our mobile application which we will be launching in the New Year.

The mobile app is very simply the request that allows travellers to request services no matter where they are. We are essentially giving our members a very simple application which will put them directly in contact with our entire network of travel providers.

We think that making this service accessible to be people on the go and actually travelling will be an important key to our success.

Who are your key customers and users at launch?

We are focusing on marketing locally and we currently have marketing teams in several popular tourist locations in India who are directly introducing our service to both local travellers and foreigners.

The initial response is encouraging and we hope that as we improve conversions we will be able to scale this operation to more locations.

Did you have customers validate your idea before investors?

Touristlink is a direct result of conversations and feedback from our customers which showed us the need for this type of service.

We have been in the online travel business for four years and are responsible for the successful of development of several websites.

What is the business AND revenue model, strategy for profitability?

Once a traveller selects an offer from a travel provider he pays 10% of the total price which we keep as our commission and the rest is paid on delivery.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Touristlink aims to target a giant market in which no dominant competitor exists and most of the transactions are still occurring offline. The opportunity lies in bringing these transactions online.

They occur offline as many of the providers in the segment are small businesses doing less than a million a year in revenue and even if they have websites they often lack the ability to manage transactions or availability.

That such a large market exists with no dominant leader signifies to us the need for a fundamentally different solution.

All of our competitors are trying to force a traditional online booking system on to small businesses with highly variable products – a booking engine in which products are defined by a set of standard variables and availability is managed independently for each.

Having dealt first hand with over 2,000 hotel owners in India, we do not think this is the right approach and instead believe the request-offer model that we are offering will be much more suited to this market where the products are highly variable and where getting providers to correctly upload products and then continuously update availability is difficult at best.

Even if we are not asking providers to take on the complicated task of uploading products we must still face the fact that many of the providers have limited experience marketing services on the web.

This means many of them need to be individually worked with and essentially trained on how to use our system. This implies a relatively high workload per provider but being located in Nagpur one of the least expensive cities in India might give us an edge over competitors trying to do the same on a large scale elsewhere.

If one quickly browses through Touristlink it is clear that it is much more than a transactional platform it is for the visitor primarily a social network and destination guide. Every Touristlink member is different and this is reflected in his online profile.

We believe that the travel providers who will be most successful on the site will be able to take advantage of this and customize offers based on the members profiles.

A key part of the Touristlink strategy is making the site a place where travellers can build relationships with providers and ask questions and get advice even if the end result is not a sale.

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

Sometimes it feels like everyone is a critic and I think the best thing you can do with the criticism is not to take it personally but to try to learn from it.

We have built enough websites to know that it is a constant testing and refinement process as you interact with visitors.

The key thing to success is just to move forward everyday and try to make the product better. We were invited to attend Seedcamp, an early stage mentoring and investment program, this past November in Barcelona and we received some great advice.

I thought we had a pretty defined business concept going into this program but in-depth discussions with our mentors definitely pointed us in some new directions and certainly made us focus on what our key concepts are.

What is your success metric 12 months from now?

If we are engaging our users and getting them to come back and use our service then we will be successful.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

So, inevitably, I was certainly happy to see a large number of presenters at this year’s Travel Innovation Summit at the PhoCusWright conference talk about having their APIs available to third parties.

In my experience though, most of these APIs will see very little in terms of large scale integration.

You don’t have to look much further than the Programmable Web directory to find that there are, already in the market, close to a hundred APIs tagged as travel.

There are also about 490 mashups (sites that integrate one or more APIs) that are considered travel-related.

I would argue that many of the innovations presented at the Innovation Summit, especially the social trip planning ones fall under the heading of mashups, combining travel apis from Expedia, Hotwire, or Orbitz along with the Facebook OpenGraph, Google Maps, or other non-travel related APIs.

Some innovations, like FlexTrip, are meta-aggregators of APIs, combining many different feeds primarily from tour and excursions providers like Viator, Urban Adventures, TourCMS, Rezgo, and others, normalizing the content in a local database and then displaying the content in a unified homogenous manner.

In the case of FlexTrip, it is even providing an API to its own aggregated content which, when you think about it, is one big pipe that is fed by many smaller pipes.

One of the big complaints with travel APIs, however, is that they are complex and cumbersome to use.

Many of the larger, more powerful APIs require commercial agreements and most, if not all, have documentation and support that is hidden behind corporate portals.

In essence, the big gatekeepers of data make it tough to use their data.

One example of how simplifying an API can increase adoption is to look no further that Google Maps. Out of all the mashups listed on the ProgrammableWeb directory, the most prevalent API used is the Google Maps API with 2,309 mashups.

The next most popular API is Twitter with about 653 mashups.

So, why is the Google Maps API so popular? Because the API is incredibly simple to use, easy to access, fast, well documented, and supported by a large community of users.

In a more vertically specific example, we saw, at the THack Boston earlier this year, Amadeus (which has listed its APIs on Programmable Web) release a mini-API for hotel search that was very simple, light weight, fast, and easy to access.

For that event, it was the most used API, not because it was the most powerful or provided the most data, but because it was easy to implement.

At the end of the day, there are more great ideas and clever developers to implement them than there are APIs to support them.

Many of the most successful travel innovations have been built on APIs.  You need not look further than Kayak or the more recent Hipmunk to see that tapping into data and adding a layer that makes it easier for consumers to manipulate that data can be a successful model.

But these success stories are few and far between when you consider the number of potential success stories that are out there.

To all those innovators out there, including the existing legacy travel technology providers, I say the following:

Take a close look at the data that your company has locked away and think to yourself whether or not there may be some value in making some of that data available through an API.

You may even find that others are willing to pay for access to that data if it is compelling enough.  In addition to making your data accessible, look to organizations like OpenTravel to provide messaging structure and support.

Who knows, some clever developer out there may do something amazing with your data that you had never considered before.

Those discoveries and sparks of genius can only happen if you’re willing to support it by opening up and simplifying access to your content.

NB: Image via Rumpleteaser on Flickr.

Given how much the web has changed though, isn’t it about time businesses started taking back their customer reviews?

The question is not that easy to answer because there are a number of factors that affect the efficacy of reviews and their influence on consumers.

Do you remember those comment cards that were placed in your hotel room or on your restaurant table that asked you in earnest: “How was your experience?”.

How often did you fill those comment cards out and, if you did fill one out, did you ever expect to get a response from anyone.

Probably not, because you expected that this was a one-way communication process. You left your comment and it was up to the establishment to take action or not.

Regardless of whether your comment was good or bad, no one ever saw the comment except for the establishment.  In essence, you had to trust that the company was going to do something (anything!) with your feedback instead of filing it in the old circular filing cabinet.

Trust is a powerful thing and demands a level of accountability and transparency that just didn’t exist with paper comment cards.

There was no visibility into the process of reviewing the comment cards and certainly no indication that a suggestion would be taken seriously.  Now, however, with review sites, customers can voice their concerns for everyone to see.

Now it’s up to the company to watch and listen for comments in order to stay on top of their reputation.  Instead of filling out a comment card, happy and disgruntled guests are going to sites like TripAdvisor and leaving their comments.

But, is what they are writing different then what they would write on a comment card?

No system is infallible and both corporate and consumer trust of sites like Yelp and TripAdvisor is being questioned.  Recent moves by the advertising regulator in the UK and the countless complaints from hotels are an indication that, although TripAdvisor is clearly a benefit to consumers, many businesses don’t like the idea of having to compete with their own brand.

Just how impartial are customer reviews anyway?  When you have a site as large and powerful as TripAdvisor (in terms of search engine optimization) there are going to be those that try to game the system.

You don’t have to search very hard to find all kinds of complaints about fake reviews, libellous comments, and a lack of support for businesses.

I think that most of the reviews on sites like TripAdvisor and Yelp are genuine. However, if the individual companies had better mechanisms for handling, processing, and posting their own reviews, then their customers would be less likely to turn to sites like Yelp or TripAdvisor.

Recent experience tells me, however, that hotels (for one) are still ill-prepared to handle customer feedback. After a recent trip I received a customer feedback survey that was over twenty questions long.

I have no idea how long it would have take to complete the questionnaire because answering ten questions was already seven questions too many.

Think about it though, if you stayed at a hotel and they asked you to write an honest review about your stay that would be posted without alteration on a publicly viewable review section of their site, would you do it?

Many reservation systems now capture an email address, so it shouldn’t be hard to send a follow-up email to the customer asking for feedback. I know I would take the time to complete a review if I trusted that the company was going to take my review seriously.

If the claims are true and over 70% of the reviews out there are positive, it seems to me that those reviews should be provided directly to the companies being reviewed rather than through review sites.

But do consumers trust reviews from travelers that are posted on a supplier website? Again, the question is whether or not the traveler can trust the source and the process for gathering the review.

Experience would indicate that verifying reviews or associating the authenticity of the review is key to trusting the validity of the comments left by the reviewer.

For example, if a customer was to sign-in with Facebook or identify the review with a specific itinerary number or reservation number, then the company and the viewing public would know that the review was written by a genuine guest.

Organizations like the Adventure Travel Trade Association (ATTA) are already investigating the possibility of creating a standard review structure that would allow companies to act as gateways to a larger distributed review store.

Hotels, unlike adventure operators, handle hundreds of customers a day so the available guest user base for reviews is quite high.  With systems like TripAdvisor and Yelp, the benefit is in the sheer number of reviews and looking at the average.

If there are fake or inaccurate reviews in the system, they have very little impact overall.  For a small operator who only handles a few hundred customers a year however, every review is important and will have an effect on the overall rating.

Assuming that operators stick with a standard structure, review content could be distributed along with standard tour content in order to help with conversion. By using a standard review structure, it is conceivable that reviews created on a related (or unrelated) website about an operator could be shared with the operator for use on their website in the same format.

Before all the SEO naysayers start going on about duplicate content, just think about it rather more objectively.

TripAdvisor does not care who books what, or links to what, on their site.  On any given attraction or hotel page you’ll find advertising for operators who are direct competitors to the one for whom you are reading reviews.

Why would an operator who has spent time building their brand send a customer off to TripAdvisor to read reviews only to end up losing them to a competitors link?  TripAdvisor needs the review content in order to maintain rank and drive eyeballs and clicks to paid advertising, so for them the duplicate content issue is very real.

A small operator uses reviews to help convert a visitor into a paid customer not necessarily to drive them to the site in the first place.  The full content of the review can be used on the site without the need to link off to a third party.

I mentioned earlier that verified reviews are critical for credibility.  I think that organizations such as ATTA and perhaps even tourism associations, have a possible role to play in setting a code of ethics around the use of reviews and for driving some adoption of a review standard.

Adding some industry validation and perhaps even oversight to the review gathering process could go a long way to ensuring the reliability of reviews.

Would standardizing the review structure and giving suppliers the ability to gather and distribute their own reviews have a long term negative impact on sites like Yelp and TripAdvisor?  I don’t think so.

I think, if anything, it would present these companies with an opportunity to aggregate data from a myriad additional sources without the need to duplicate effort.  Imagine, if you will, TripAdvisor reviews displayed along side ATTA verified reviews gathered by the supplier.

I certainly think operators would welcome the opportunity to harness their own reviews in a more open way, but will the large brands go for it?  Ask me again in a year.

So, now that I’ve made my opinions known regarding daily deals, I felt it was important for me to provide some tools to help small tourism businesses structure their deals in order to maximize their impact.

In a recent rebuttal to Rocky Agrawal’s guest series on Techcrunch, the owner of a BBQ restaurant wrote about his very positive experience with Groupon.

At the end of the day, bashing daily deals is fun but doesn’t really help small businesses protect themselves against making a mess of their finances.

In order to do this, tour and activity operators have to keep in mind that the business of running a scheduled fixed availability tour or attraction is quite different from the business of running a spa or restaurant.

As I outlined in my article Does the Groupon model lead tourism businesses racing for the bottom, tourism based businesses do not attract repeat customers, so they do not benefit from the argument that the daily deal is going to bring back loyal customers.

Activities generally don’t offer value-adds so the customer isn’t going to purchase more than the value of the coupon and, probably most importantly, tours and activities have limited inventory and are generally scheduled, which means they have to booked in advance.

Before considering a daily deal, make sure to read the agreement carefully.  There is an interesting analysis of the Groupon terms and conditions available here.  The advantage that tour and activity companies have over restaurants and spas is that they have the ability to manage inventory more efficiently.

Daily deals are a great opportunity to test out yield and channel management features if the reservation system supports it.

During your negotiation with the daily deal sales person, you should keep in mind that your goal should be to maximize your return on investment while reducing the impact to your administration.

Once you’ve had a chance to review the agreement and have checked your reservation system to make sure it supports channel & yield management, you will want to consider the following:

1. Limit inventory for deal seekers

If your reservation system has the ability to allocate specific inventory to the deal, then you should do this well in advance of the deal running, and make sure that “Limited Availability” is built into your deal terms.

For example, if you offer 15 seats you may want to allocate a maximum of 5 seats to be available for daily deal customers.

This serves to limit your exposure to 33% of your inventory on any given tour and still allows enough inventory for regular paying customers.

2. Limit redemption of your deal to slow days

Most tour and activity operators have busy days and slow days.  The problem is that, like most of your customers, your deal seeker customers are probably going to want to book the tour on popular days.

Consider limiting the deal seekers to slow days or, if you want to allow deal seekers to purchase during your busy times, refer to the previous suggestion of limiting the number of seats available to deal seekers.

This is basic yield management and is a practice often done by hotels and other accommodation providers to fill rooms during slow periods.  If you add this limitation, it ensures that your busy days will be filled with your highest paying customers, therefore maximizing your revenues.

3. Force deal seekers to online bookings

Make it clear that deal seekers need to use your online booking system to redeem their vouchers or book your tours.  This allows you to control how the deal is redeemed and what restrictions will be applied.

For example, if the deal seekers do a search for availability and you specify that they must book a specific tour, then you can limit the number of seats they can book and the pricing that is displayed to the customer.

Limiting the deal seeker to online bookings also has the added effect of reducing your administration and reducing your costs for managing the booking.  Since your revenue for deal seekers is going to be much less, it is important to find ways to reduce the human costs for managing these tours.

Even though you may pay a little more for your technology to handle the booking, the cost will always be less than the cost of a human to process the same booking.

4. Create a unique offering for deal seekers

Instead of discounting your regular tours or activities, try creating something totally different for your deal based customers.  This has the effect of allowing you to determine the costs and revenues for a specific product rather cannibalizing your core products.

It also allows you to limit the bookings and availability for the specific product which guarantees that your existing products will not suffer from deal seeker overload.

The unique offering should be different enough from your regular offering to avoid confusion and to reinforce the value of the deal.  When creating a deal offering like this, consider partnering with other local services to enhance the deal without increasing your costs.

For example, consider including a discounted meal at a local restaurant, free admission to a partner attraction, or a coupon for a local retailer.  In this way, you can actually extend the benefits of the deal to your partners who may run a similar deal that includes your business in the future.

5. Cash equivalent versus discounted service

This is by far, my number one recommendation.  Let’s take the example of a sightseeing operator who offers a daily tour for 15 people.  The tour is valued at $150.

If you offer your tour at a discount of 50% off and stick with the average 43% commission to the daily deal provider, then your revenue on the tour will be $42.75.

Given that the customer purchasing this voucher is not going to be a repeat customer and is not going to purchase anything beyond the value of the coupon, your revenue on this sale will be $42.75.  If you change the voucher to be a fixed value voucher with a cash equivalent, for example $20 towards any tour for $10, then your revenue changes dramatically.

Using the same example, your tour is $150 – $20 = $130.  Subtract the additional $4.30, which is the daily deal cut and your take on the tour is actually $125.70.

This is quite a big difference compared to $42.75.  Offering the cash equivalent deal has an added benefit of not devaluing your core offering.  The tour is still $150.

Companies like the Gap, Old Navy, and others have offered these cash equivalent deals so there is precedence.

If the sales person you talk to says that this is not possible, then remind them of these high profile examples.  They work well because they don’t limit what the customer can purchase which means that the up-sell potential is higher but they are not as good for the deal provider because the deals are smaller.

Structuring your deal this way also means not having to change your existing pricing or product offerings.

6. Be confident with your numbers

Don’t let the sales person pressure you into doing a deal that doesn’t work for you.  For many businesses who have not been careful with their deals, only the deal provider and the customer benefit.

If you use the aforementioned suggestions for structuring your deal and stick to your requirements, then you will increase your chances of ensuring that your deal is 1) good for your business 2) great value for your customers 3) successful for the deal provider.

The overwhelming response to any daily deal cautionary post has been that businesses need to do their due diligence and plan their deals properly.  Just take a look at the comments on my previous Groupon post for example.

I would argue that the hordes of daily deal sales people are not doing small business any favours by being so aggressive with their sales tactics and, therefore, it makes sense to empower small businesses to protect themselves.

Conclusion

If you are a tourism based small business or you work with small tour and activity operators, please encourage them to prepare themselves.

There is no doubt that Groupon, Living Social, and the rest of the daily deal horde will be knocking on the doors of more and more small tourism businesses.

If we help them prepare, hopefully we can reduce the number of daily deal victims we so often read about online.

“This unsub is young but well organized.  He has all the trappings of success but is in fact hemorrhaging money trying desperately to maintain an air of normalcy and control.

“He is profit-motivated, using charm to convince his victims to give away their goods at a fraction of their true value and when he is done collecting his cut, he leaves them to pick up the pieces.

“He lacks empathy and targets victims that are highly trusting, some might say naive. They go along with the unsub’s plan because they feel they have too, not knowing that they are walking into a trap.”

I know it sounds like an episode of Criminal Minds, but in fact it’s a profile of a different kind of killer – a killer app.

What’s the difference between this killer app and a serial killer?  Well, in this case the unsub is a media darling about to IPO and the victims are small businesses left to dig themselves out of a proverbial shallow grave.

Think I’m off the mark in describing this company as a psychopath?  Two of the most common traits of psychopathy are a lack of empathy and narcissistic tendencies.

In fact, author Joel Bakan in his book The Corporation: The Pathological Pursuit of Power describes it as follows:

“The operational principles of the corporation give it a highly anti-social ‘personality’: it is self-interested, inherently amoral, callous and deceitful; it breaches social and legal standards to get its way; it does not suffer from guilt, yet it can mimic the human qualities of empathy, caring and altruism.”

Now, I’m not known to rant and generally speaking I try to focus on the positive but sometimes “something” comes along that makes my skin crawl and the hair on the back of my neck stand up.

In 1999-2001 it was businesses going public with no business model,s spending obscene amounts of money on Super Bowl commercials and taking average investors for a very expensive ride. These days, that “something” is the daily deals craze.

I can’t seem to get through a single day without being bombarded with talk of Groupon this or LivingSocial that.

With Groupon’s S1 filing and imminent IPO, some much needed light has been pointed at the daily deals business model and, now, finally, people are starting to look under the covers and ask questions.

In January 2011, I wrote an article titled Does the Groupon model lead tourism businesses racing to the bottom? in which I discussed the importance of analyzing daily deal promotions.

It proved to be one of my most popular posts and generated a lot of discussion around the daily deal model as it applies to travel.

Given all the discussion happening on sites like TechCrunch and Mashable about daily deal horror stories, I think it is safe to say (six months later) that “I informed you thusly”.

I’m not going to go back and rehash any of the things I talk about in my previous article.  If you like, just read it later.

In fact, I’m going to go a step further and say that if you run a daily deal for a small tourism business, I think you are potentially making a bad business decision.

I’ll go even further and say, if you’re a large travel business and you’re planning on partnering with such a company to make a quick buck in the daily deals space, then shame on you.  Would you knowingly go to bed with a psychopath?

I fully appreciate the fact that Groupon has made a boat load of money for its founders and investors and that it has provided a bunch of deal-seekers with some great savings on stuff they either would have already purchased or would not normally have purchased.

It has also helped fuel a daily deals industry that is growing at a ridiculous pace.  You only need to blink and “POOF!” a new deal site is launched.

All of these sites, however, are fishing for the same fish, the small business, and increasingly small tour and activity business are on the sonar.

With this daily deals love fest, everyone seems to focus on two things, the daily deal company (in this case Groupon and its IPO) and the consumer (and about how much they are saving by using daily deals).

What most people seem to forget is the small business in the middle that is fueling this “hot” segment.

The problem is that deal site “inventory” is delivered by small businesses that are most at risk of failing if they make a bad business decision.

In this excellent series on TechCrunch, Rocky Agrawal explains why daily deals are bad for business. Rocky explains (as I have before) that small businesses tend not be marketing experts or business analysts and, as a result, they are susceptible to hype and pressure sales tactics.

As a result of the daily deal craze, small businesses eager to hop on the daily deal bus are instead getting hit head on with the reality of delivering on an unsustainable discount and are littering the sides of the “super-highway” like so much other roadkill.

Some of you are probably asking “So what? Some Joe Shmoe doesn’t do his homework, runs a bad deal, and goes out of business. Big deal.”  Well, it is a big deal. It’s a very big deal for Joe – and that’s my main point.

This trend isn’t just about money and how much Groupon’s stock is going to rise.

A bunch of already rich people are going to make a stink load of money when Groupon hits the public markets – that’s a given.

But it’s not about them, it’s about all the Joes and Janes out there trying to make a success on their own terms. It’s about understanding and appreciating the role that small businesses play in our local economies and about how important they are to the health and vitality of communities.

It’s also about how small businesses can make or break the tourism experience for a visitor.  It’s about treating small business as a renewable resource rather than one to be exploited.

Fundamentally, this trend is about empathy and the lack thereof for the people most affected by daily deal failures. Believe me when I tell you that no small business is going to get rich running daily deals. Most are lucky to break-even.

Small tourism businesses have a hard enough time making ends meet.  It’s easy to say they don’t matter and that “Oh well, so sad, another one bit the dust”, but at the end of the day, it does matter and it matters a lot.

So, that said, instead of eroding the value and offerings that these small business people struggle to deliver, why don’t we find ways to empower them to deliver superior products and services to a market that is actually interested in the experience and not the deal?

Let’s wave a joyous goodbye to the deep discounted daily deal trend and usher in a new future, one that treats small business with respect, nurtures them to succeed, and focuses on mutual benefit.  Let’s focus on delivering value to travelers rather than pandering to the notion that cheaper is better.

That future sure looks a lot better to me than standing around a shallow grave site surrounded by police tape thinking about how I’m going to explain to a family that their small business just fell victim to a serial killer app.

When my company first developed Rezgo we decided that we wanted open connectivity to be part of its DNA. We didn’t want the API to be an afterthought or something we’d eventually get to when we had time.

We wanted to “eat our own dog food” and build an API that we would use every day, so we would know that it worked and we could share it with other developers.

But building an API, especially one from scratch is time consuming and laborious, so we decided to look around and see if anyone else had an XML API that we could duplicate or at least use as a starting point for our own.

You see, that’s how most software companies work, they look for code that already exists and they re-purpose it so they don’t have to re-invent the wheel. No one wants to re-invent the wheel.

One of the first places we looked was the OpenTravel schemas.  Why? Because they are the holders of all travel messaging are they not?

Well, for us, they were not.  Having found no existing tour and activity schemas that we could use, we eventually developed an entire set of eighteen XML messages from scratch.

But that’s not the end of the story.

You see, when the opportunity arose, we chose to donate the schema for those eighteen XML messages to OpenTravel in order to jump start the development of standard messages for the tour and activity space.

“But that’s your intellectual property, why on Earth would you open source it like that?” I hear you ask.  Simply put, our intellectual property does not reside in the messages that we develop, it resides in the sophistication of the system that produces and consumes those messages.

This, it seems to me is the reason why the importance of messaging standards is shifting. You needn’t look further than Google, Twitter, or Facebook to realize that making your application available through an API (most likely XML) can have a significant impact on its adoption.

In the early days of travel distribution messaging, the focus was of moving messages away from edifact and into a more flexible container, like XML.

What we saw, however, was a duplication of message structure only wrapped in XML tags versus in edifact format.  Over the years, we’ve seen messages balloon to hundreds of elements each one dealing with a unique business need championed by one or two trading partners.

Even though the core OpenTravel messages are used by hundreds of trading partners millions of times a day, they are highly complex and not particularly easy to implement, and they were certainly not designed for the web, mobile, or the world of mashups that we live in today.

But with new opportunities comes change and a desire to evolve.  At the recent OpenTravel Advisory Forum in Las Vegas, I saw fierce competitors leave their brands and business rivalries at the door and sit down together at working group meetings to talk about ways to make the standards better, not just for them, but for the industry as a whole.

During the Tnooz THack Vegas event, I saw small companies, in some cases individual developers, create applications that combined APIs from 2,3, and even 4 different data sources in a mobile web application that was built in a week with no budget.

I saw light bulbs go off, eyes widen, and hands come together in applause for what could be and for what is the connected web; a web where APIs rule, where XML is key, and where simplicity rather than complexity is the order of the day.

Later, a developer from one of the GDSs stood up and asked: “Why are we talking about APIs at a standards conference?”.

Simple, I thought, because the practical application of the messaging standards that we strive to build and foster everyday are the APIs that use them.

The APIs, though many of them were not built on the messaging standards, should have been, if the standards supported lighter weight implementations.

Welcome to OpenTravel 2.0

No, it’s not a take on Web 2.0 and has nothing to do with social media or the rise of user generated content. OpenTravel 2.0 is an evolution of the way the messaging standards we are developing are changing to better suit the interconnectedness of the web and the needs of lightweight applications.

The goal behind OpenTravel 2.0 is to make it easier for trading partners to use OpenTravel standard libraries to create messages, that are based on the standards, but specific to their requirements.  It’s innovative, timely, and relevant.

In the last two years, I’ve seen a shift happening in OpenTravel.  The big messages like air, car, and hotel are still there and they still get a lot attention, but we’re now seeing more and more demand from developers, just like me, who don’t want to re-invent the wheel.

These developers aren’t building mainframe programs, Windows Desktops, or apps for IBM AS/400.  Most of them are developing web applications like hotel reservation systems, dynamic packaging applications, golf tee time booking platforms, and even insurance quotation systems.

The key, however, is that these are applications that live in an interconnected world, they co-exist with other systems, they feed and are fed by other applications and data sources.  In other words, they all require messaging.

I’m excited by what I’ve seen.  Don’t get me wrong, there will always be competing interests and priorities, but having an organization like OpenTravel helps bring everyone to table and makes sure that the egos are checked at the door.

If there is one thing I have learned as the chair of OpenTravel, it’s that a standard is only a standard if it gets used and OpenTravel based messages are used millions of times a day across the globe.

As with the in-destination tour and activity segment in general, there is a lot of potential to capitalize on the mobile and local channels for in-destination tours and activities.

Unfortunately, it’s still too early to consider mobile as an effective actionable channel, and here is why.

Location based services are neither influential nor actionable

Despite what services like FourSquare, Gowalla, and Facebook would hope, for travellers, these mobile apps are neither influential nor actionable.

For the most part, they just plain stink when it comes to compelling people to do a locally offered tour or activity.

That’s not to say they are not relevant for locals, but for travellers, becoming the mayor of a coffee shop or checking into a favorite cafe just isn’t realistic.

For tour or activity providers, whose primary clientele are inbound tourists, incentives for repeat visits make even less sense.

The other issue with location based services is that tours that travel through a city or around an area don’t have “a” location, they in fact have many locations.

Local deals don’t influence travellers

If you’ve read my articles in the past, you probably already know that I don’t drink the local deals kool-aid. I don’t have anything against the business model, in fact, the local deals model works very well for about half of the businesses who use them and extremely well for the local deals companies.

That said, as actionable as local deals are, they don’t have any influence on inbound travellers and don’t build repeat customers for local businesses who offer tours and activities.

They are a great way to get locals to try something new, but ultimately a local probably isn’t going to use a tourism service again and they more than likely won’t pay full price for it.

Maps on mobiles are important but operators aren’t ready

Only a small percentage of local tours and activities are geo-tagged.  Since most (86%) of small tourism businesses don’t store their product data in a reservation system, it is safe to assume that most don’t have geo-location data available for their products either.

The number one requirement for location based mobile search and booking of tour and activity products is that the product must be searchable using a location aware device.

If a traveler is standing somewhere and pulls up a mobile application that will find tours and activities around them, the assumption is that the tours and activities around them have been geo-tagged.

Since that is not the case with nine out of ten operators, the chances of actually finding anything “around you” is pretty slim indeed.

Bookings are actionable, listings are listings

As it stands, the best bet to find a local tour or activity operator is to use the local yellow pages app for an iPhone or Android device.

But, if you plan on doing that, then you might as well browse those endless brochures in the hotel lobby as well.  The bottom line is that, even if you can find a tour or activity using a mobile device, you probably won’t be able to book it.

Why? Because building a decent mobile app is expensive for a small business and it’s a one off install anyway.

Think about it, how likely are you to download and install an application for a sightseeing company and you’re only going to use once?

So, you’re left with apps made by the OTAs or an aggregator, in which case the product is probably being offered through a third party reseller who doesn’t have direct access to live availability and cannot book without at least a one or two day cut-off or even a confirmation from the supplier.

Searching, browsing, and finding a local tour or activity that is compelling will inevitably lead to the traveler wanting to consummate the relationship with a booking and right now, that means a “click to call”.

Is it any wonder that 36% of travelers still use brochures to search for local tours and activities?

So when will the tours and activities segment get their mobile MOJO?

I hate to sound like a broken record here but mobile and social MOJO will elude the tour and activity segment until the small businesses that make up the majority of the segment start adopting reservation systems, get websites, and start taking ecommerce seriously.

But, we as an industry, can’t expect small business to take these things seriously if we don’t show that there is a pent up demand for what they offer.

With the recent surge in tour and activity metasearch sites like Goby, Flextrip and PocketVillage, we may be at the beginning of something different, a growing trend focused on the promotion of unique products offered by small businesses.

For now, however, the only thing mobile about this MOJO is the brochure you pick up and stuff in your pocket.

In fact, the current state of activities distribution is one of the findings of the PhoCusWright report [When They Get There (and Why They Go)] about the tour and activities market that I found most surprising.

Because the tour and activities segment is dominated by small long tail businesses who, as the report indicates, have small budgets and little or no technological sophistication, the idea of direct connects (like those in the airline space) are simply out of the question.

With only 14% of these businesses having any kind of central reservation system, it makes it very hard to electronically aggregate product across the segment. Hence the reason why so many intermediaries and aggregators exist in this space.

But being an aggregator in the activities space is no easy task. It involves a tremendous amount of work to source, load, and maintain activity content on a product by product basis from small businesses all over the World. Companies like Viator, Isango, Kijubi, and GetYourGuide are all based on this model.

Once product is on the sites (identified in the PhoCusWright report as Online Activity Specialists I or OAS I), the aggregator now has to get it to market. This may include driving traffic using natural search, pay per click campaigns, affiliates, and other creative techniques.

When the tour or activity is booked, the aggregator issues the customer a voucher and, after some specific period of time, the operator of the tour or activity receives their net fee for the sale, usually around 70-75% of retail cost. For the most part, the tours or activities are sold on a free sale or request basis. Nothing is real-time.

So, for the bulk of the “source” products that exist in the activity distribution supply chain, we have content that is neither controlled by the supplier or available for booking in real-time (except as free sale). Already, you can see we have a problem. So now the fun begins.

Now that these aggregators have spent the time to catalog and organize all these activities, it’s time to build scale and deliver the content through partners. In many cases, these partners are OTAs or other third party sales organizations. In some cases, the partner is what is referred to in the PhoCusWright report as an Online Activities Specialist II or OAS II.

Are you still with me?

So these OAS II businesses are essentially meta aggregators or aggregators of aggregators. OAS II businesses, such as BeDynamics and iSeatz, pull in feeds from OAS I companies and combine them all together to make super feeds. For this, the OAS II will get some split of the commission from the OAS I, usually around 6-10%.

Now that the OAS II has aggregated all this tour and activity content, they develop some kind of unified interface that can then be integrated into another website, like an airline, cruise, travel agent, hotel, or destination website.

For this service, the OAS II splits their commission with the partner website, usually 50% of net commission, or between 3-5%.

Once on the site, the tour or activity is ready to be purchased by the traveller. Based on an average per person booking value of $100, we are looking at a $25 commission being split three ways, $15 for the OAS I, $7 for the OAS II, and maybe $3 for the partner website.

Since the OAS I is usually the one handling payment and customer service costs, their net is probably closer to $10. Each link in the chain needs to pay for marketing and technology costs out of this revenue.

Don’t get me wrong, there is a whole lot of sophistication happening behind the scenes here. Content writers busily bang away on keyboards writing “unique content” in order to avoid getting stung by Google duplicate content algorithms,  XML feeds are being pulled into programs and deduplicated, sorted, and added to some local cache database for the purposes of “fast search”.

There are images, videos, and location data being added to the mix at every level. There are vertical search engines, mobile applications, mobile websites, widgets, gadgets, interactive maps, social buying, email offers, and all kinds of other cool and inventive things being created on top of this OAS I and OAS II layer.

In the end however, there is one important and critically fundamental player missing from this distribution chain… the supplier.

Once the product content is loaded, in most cases, the supplier is out of the picture until the customer actually experiences the tour or activity they purchased.  In many cases, the customer doesn’t even know who is delivering the tour until after they’ve booked it.

For many long tail businesses, distribution just doesn’t make sense. Not because their products are too complicated or “unique” to be delivered electronically, but despite all the sophistication, technology, and innovation focused on the mid-tier of activity distribution, intermediaries only accounted for about 5% of the online travel activities market in 2009.

Don’t despair though, that percentage is predicted to increase to 8% by 2012.

Let’s face it, the cat is out of the bag now folks. It’s only a matter of time before some smart Harvard grad spends a week in a basement with a supply of chips and red bull and figures out a way to completely transform this dysfunctional segment by developing a new wizbang interface that will make it easier for travellers to book activities.

Except, like the so many other layers of make-up on this proverbial pig, it will be just another shade of lipstick.

The deeper problem, and the one that needs to be addressed sooner rather than later, is that there is a fundamental disconnect between the activities supply chain and the source of supply.

As I have mentioned in my two previous articles about the size of the activities market and how destinations need to focus on activities, this segment needs supplier engagement in the worst way.

For the distribution chain to continue to thrive and to scale, it needs content. As more and more intermediaries enter the playing field, they are going to demand a piece of a pie that relies on human intervention to curate and manage.

The answer is for technology partners at all points of the distribution chain to start finding ways to make the supplier accountable for their content and availability. This means pulling product content and availability directly from supplier reservation systems and distributing them through the chain and pushing bookings back through the chain directly into the reservation systems.

There is nothing to say that points in the distribution chain can’t add value or augment content in order to maintain a competitive advantage over others in the chain, that’s their prerogative, but at the end of the day, the supplier is managing inventory and bookings from multiple channels in a single source.

What we want to avoid is the operator receiving bookings via fax and email, which are both the predominate method for receiving confirmations from intermediaries today.

Don’t expect suppliers to push this mandate, however. These small businesses don’t know and frankly don’t care about XML messaging schemas, APIs, or standards.

They care about running their businesses and providing their guests with the best possible experience they can. That means that the people who have to push this mandate are the people at businesses that service this small business market.

Everyone from the reservation provider to the OAS I, OAS II, hotel, airline, cruise, and destination company that wants to tap into this market needs to buy into the concept that the buck stops with the supplier.

This is not about cannibalizing an existing market or undermining anyone’s existing market share, if this works EVERYONE stands to benefit from the influx of content.  More direct access to content means more diversity, choice, and more opportunity to segment products by niche.

Maybe then, those new shades of lipstick won’t just be for decorating the pig.

NB: Author is CEO of Rezgo, a sponsor of the PhoCusWright Report.

NB2: Photo credit - Theilr

Like many publicly funded organizations, Destination Marketing Organizations (DMOs) are often tasked with impossible objectives, saddled with lengthy and cumbersome vendor tendering processes, and a mandate to serve everyone equally all the time.

The biggest underlying issue, in my opinion, is the reliance on tax revenue generated from hotel stays and the subsequent focus of DMOs on putting “heads in beds”.

I can hear the proverbial gasps now.

Don’t get me wrong, I know how important this tax revenue is to most DMOs and although a steady source of revenue is a good thing from a funding perspective, it inevitably results in DMOs focusing too much on their (generally speaking) sole source of revenues.

I’ve been involved with enough local tourism initiatives to know that, in many cases, the advisory boards and boards of directors of DMOs are made up of hotel representatives that eagerly focus the long term strategy towards their own marketing goals.

Why shouldn’t they? After all, they are the ones who have to collect the tax, right?

The small businesses, predominately tour and activity operators are often left feeling ignored and subordinate to the tax revenue generating hotels.

What most DMOs fail to see is that unduly focusing on hotel marketing is squandering the immense opportunity to influence travellers earlier in the buying life cycle.

Think about it, when are travellers choosing at which hotel they are going to stay?

Do they do it before they have decided where to go? I couldn’t find any statistics to show when in the buying life cycle travellers book their hotel stay, but I think it is safe to say that it is after they have already decided where they want to go.

In other words, there is no direct correlation between hotel marketing and the choice of destination. Since destinations are trying to influence travellers to come to them rather than a competing destination, marketing one’s hotels seems to have little impact on influencing the decision making process.

In the recent report on in-destination tours and activities, PhoCusWright found that certain tours and activities had a profound affect on the decision making process. Snow sports such as skiing, sporting events such as championship games (or the Olympics), and artistic performances such as band tours, are major drivers.

In these cases, the traveller is choosing a destination based on what they intend to do at the destination first. How the traveller gets to the destination and where they stay are ancillary to the activity.

Realistically though, these locales make up a small number of destinations.

So, what can destinations do to make their tours and activities drivers rather than add-ons to a trip? The first, and most important step is to expose as much of the long tail product as possible.

As I mentioned in my earlier article (Why the activity segment is an iceberg of Titanic dimensions) the majority of tour and activity product lives below the surface and off the radar of most travellers until they are in destination.

The study showed that print is still an important channel for in-destination activities. In fact, 36% of active travellers used brochures and 39% used printed guide books as their shopping method for activities.

The most important shopping method, however, remains the web, with 80% of active travellers opting to search for activities on-line. For those activity providers savvy enough to have a website, this is good news but clearly, there is a large number of businesses that currently have no influence on the decision making process.

The first and most important step a DMO can take is to engage with their small business members. Some DMOs are starting to make concerted efforts to educate their stakeholders and to bring more of the long tail tour and activity product to the surface (ie. the web).

The Australia Tourism Data Warehouse (ATDW), is one excellent example of an initiative to bring all members of the tourism industry to a higher level. The ATDW Tourism E-Kit is a multi-part workbook that is freely available to all tourism businesses and provides a step by step guide to getting a tourism business on-line.

The E-Kit was commissioned by the ATDW and developed by Fabienne Wintle and her team at UntangleMyWeb.com, a tourism consulting company in Queensland.

I mention this specifically to point out that there are, in almost every destination, those in the community that have the expertise to help put these tools together. The E-Kit stands out as one of the best examples of educating and engaging small business and should be emulated by all DMOs.

The long term benefit to the tourism industry is the increase in content (text, photos, and videos) generated by these operators and their customers that can then be used for the purposes of marketing destinations at all levels; nationally, regionally, and locally.

ATDW has also developed a program called Tourism Exchange Australia (TXA) which is a distribution platform. Software vendors can connect to the TXA for the purposes of exposing their customers (activity operators) to larger distribution opportunities in the Australian market.

A structure like TXA in other countries could serve as an aggregation tool for increasing distribution of long tail products. Unlike the TXA model, however, which uses a proprietary data structure and a private partner, I believe a public and open model would have wider adoption.

Of course, I am biased given my preference for Open Travel XML messaging.

Nevertheless, as more and more tour and activity products begin to surface, the more revenue opportunities will inevitably become available to the DMO.

Destinations, more than most other organizations, have access to the vast majority of local stakeholders. Companies like Groupon and Living Social would kill for access to most DMO’s Rolodexes.

Yet, these contacts and the potential they represent go largely untapped. Once operators make their products available, DMOs can use their budgets for the purposes of providing creative marketing opportunities that generate a return for their stakeholders and travellers alike. If the services are meaningful, relevant, timely, and measurable, businesses will pay for them.

In the end, DMOs need to recognize that marketing a destination is about influencing the traveller earlier in the travel buying life cycle.

This means giving travellers reasons to travel to their destination and that means working with experience companies. This also means that DMOs need to generate more of their revenues from the tour and activity segment.

Until there is equal representation from all segments of the tourism landscape both from a governance and revenue standpoint, destinations will miss the opportunity on an important local economic driver and they will continue to leave a sizable pile of money on the table.

NB: Author is CEO of Rezgo, sponsor of the PhoCusWright report and chair of the OpenTravel Alliance.

NB2: Photo Credit - Redwood Photography

Now that the genie is out of the bottle – through the release of the PhoCusWright report When They Get There (and Why They Go)- and a dollar value has been attached to the segment, how can anyone continue to ignore the in-destination activity space.

$26.8 Billion for the US market alone is a huge number, but still pales in comparison to the potential global activities market.

So, just how big is the activity space?

Well, the addressable portion of the activity space (ie. the bookings that can be tied to travelers and not local buyers) is estimated at $20 Billion, which is more than double the value of the car rental industry, and three times the size of the packaged vacation or cruise market. That makes the activity segment the third largest segment of the travel industry after hotel and air.

Wow, who would have guessed!

Before all you VCs start grabbing your check books, I have some sobering thoughts.  The issue with the $26.8 billion activity market (I love quoting that number) is that it’s a lot like fishing.

This segment, unlike almost every other segment, except for maybe the vacation rental market, is made up of tiny fish.

I’m not talking tuna here, I’m talking sardines. The report shows that 81% of the businesses surveyed generated less than $1 million in bookings per year, with 33% generating less than $250,000.

Based on my anecdotal research, this may actually be understated considering the businesses that were surveyed tended to be more technologically aware.

Don’t get me wrong, I’m not trying to diminish the importance of each and every one of these businesses. My point is that these are very small businesses, perhaps even better qualified as micro businesses, and yet, in aggregate, they wield as much economic impact as the car rental and cruise segments combined.

Much like the food chain of every major ocean – the smallest of creatures often make up the basis for an entire ecosystem.

Undoubtedly, now that this report is published there will be all sorts of new businesses and services that will emerge to help these small businesses move towards automation, increased revenues, and increased distribution through new and emerging channels.

I can imagine we’ll see more intermediaries jump into the murky waters hoping to bring order to the chaos by aggregating and distributing activities.

But is distribution what this segment needs?

Companies like Viator and CityDiscovery, both sponsors of the report, and others like Isango, Kijubi, and GetYourGuide currently use a merchant model working with these small companies to distribute and sell their tours and activities to travellers who book in advance.

Yet with the growing number of these dedicated activity retailers, we still only see 14% of bookings coming through these channels.

Most suppliers who were surveyed (90%) said that cost and display limitations were primary reasons for not distributing through sites I’ve mentioned.

The bulk of bookings (64%) are still made in person or over the phone.

Why? Because only 36% have websites that allow any kind of on-line booking! Even fewer, about 12% of suppliers have a reservation or CRM system.

The vast majority of businesses rely on tools like Microsoft Excel or paper ledgers to keep their businesses organized. Frankly you can’t even start a discussion about online distribution if the business doesn’t have a website, it’s just not feasible.

So where does that leave us?

Well, imagine the activity segment as an iceberg.  Right now, on-line travelers can see less than a third of that iceberg (if they even know where to look).

The remainder of that vast iceberg remains submerged and invisible to travelers on-line and certainly to the rest of the industry.

The challenge with this segment is not on-line distribution, process automation, or building better reservation systems. The biggest challenge is one of educating this fragmented set of businesses in the importance of having a web site so that more of the iceberg is exposed.

Not to diminish the innovation potential with this segment, but we need to keep in mind that we cannot expect this segment to run when two thirds of it isn’t even crawling yet.

We are still a long way away from realizing the on-line potential of the in-destination activity space but at least now we can see the iceberg and we have some notion of just how big it truly is.

NB: Author is CEO of Rezgo, a sponsor of the PhoCusWright report.

NB2: Photo – Alan Light.

Update: Corrected the stat regarding number of suppliers with websites that support booking.

The deals service, which has been running in the US since the last quarter of 2010, is attached to the place pages and allows businesses to offer a variety of promotions to Facebook members who check-in to venues using their Facebook mobile applications.

In the last 18 months, Facebook has continued to develop services around engaging businesses, a smart move, in my opinion.

How does a service like Facebook Deals affect social buying services like Groupon, LivingSocial, WagJag, and others?

For starters, Facebook has made it clear that it will not be charging for the deal platform, which is a fundamental difference from social buying services.

As I have pointed out in previous posts, trying to understand the true costs of running a Groupon is a hot button issue for many who have used a social buying service or are considering it.

The other key difference is the shear number of engaged members and the motivation of the members using their mobile devices.

Where services like Groupon and others are focused primarily on providing hugely discounted offers to deal seekers, the Deal platform allows businesses to tailor the deals to their audience, for example offering a free coffee, a discount, or a donation to a charity in exchange for checking into the location.

In a recent PhoCusWright special report (When They Get There & Why They Go), focusing on in-destination tours and activities, it was determined that location based services such as FourSquare and Gowalla are neither influential nor actionable for travelers because there is a lack of critical mass and an inability to target users based on preferences.

In essence, current location based services lack the smarts to be able to offer true value to travelers.

On the flip side, group buying sites like Groupon and LivingSocial are actionable but lack any influence because they tend to focus on locals and not travelers.

Bring in a service like Facebook Deals which combines location based service, deep profiling, and combine it with the ability to offer actionable deals and now you have something very interesting for both businesses and consumers.

It is this combination of elements that make me believe that Facebook Deals could score a big hit against the social buying sites.

The three elements of location awareness, access to preferences through member profiling, and the ability to offer actionable deals combined together make the Facebook Deals platform much more compelling for consumers than any one of the other competing platforms on their own.

For businesses, the ability to control the offers and the cost (or lack there of) will be important motivators to try the Deals platform.  As we see more success stories, I wouldn’t be surprised if we start to see more buzz and hype around the platform.

For now, the overall reaction for small businesses has been limited as most try to understand how to take advantage of the platform.

It is still early days for Facebook Deals, but with over 200 million Facebook users engaging with smartphones and the exponential growth in the number of businesses joining Facebook, it’s not hard to see that a service like Deals could have a significant impact on competing services.

The biggest driver for small business engagement could very well be the access to a large user base at a fraction of the cost of running a social buying deal.

For small tourism businesses, this means being able to deliver offers and build brand and service awareness beyond rack cards and hotel concierges, both of which are still important drivers for local tour and activity operators.

Regardless of the effectiveness of the Deals service in the future, small tourism businesses should be claiming their place pages and, at the very least, ensuring that their businesses are available on Facebook.

Like any other social media channel, Facebook and, more specifically, Deals should be treated as only one part of a larger marketing plan.

NB: Here is a clip from Facebook regarding the Deals service:

But is Groupon, and other group discount sites, changing the way people shop for the better or doing it at the expense of small business?

There is no doubt that the Groupon business model has been a tremendous success, you just have to look at the amount of money they’ve made and how quickly they’ve grown to realize they are on to something big.

The growth has been a result of two important factors:

• An economy that has pushed consumers (especially those in the US) into a mindset of extreme deal seeking.
• Small businesses desperate to generate revenue at whatever cost.

But are there enough small businesses to make this model survive? In a word… yes.

When you consider that, on average, about 80% of businesses in the U.S. alone are small businesses with less than ten employees, there are a lot of potential customers to keep the likes of Groupon and other deal sites churning out the revenue for many years to come.

But the bigger question is whether or not these deal sites are really doing anyone any favours.

Part of my issue with group deal sites is not specifically the model but the hype and lack of clear understanding of the costs associated with these advertising models.

For many small tour and activity businesses, where the owner of the business does not necessarily have a business background, the seduction of acquiring hundreds of new customers without investing any upfront cash can seem too good to be true.

But, frankly, it is too good to be true and the downstream costs for a small business, once all the numbers are crunched, are perhaps not what a business owner might have expected.

You don’t have to look very far on the web to find stories of disgruntled retailers, spa owners, restauranteurs, and even photographers who have been stung by a Groupon promotion. What seems to be a common theme across all of these stories, however, is the lack of understanding of the true costs of running a group buy promotion and the impact it has on cash flow and future revenue.

Let’s take a look at the example of  asightseeing tour as way of determining the costs of running a Groupon campaign for this particular business type.

• A local sightseeing company with a 15-passenger van decided to try and attract new business by offering 50% off its $140 tour.
• Groupon sold a very modest 250 coupons.
• In this case, Groupon took 50% plus credit card costs as commission, so at the end of the day, the operator received $8,312.50 for $35,000 worth of tours and Groupon received $9,187.50.

Not bad, considering Groupon doesn’t have to handle fulfilment or customer service.

Group buying sites have suggested that the money spent on acquiring new customers should be looked at as advertising and not necessarily as the cost of sales.

For a small business whose profit margin is on average 5%, an advertising campaign that costs, in this example, $27,000 and brings in 250 new customers is not sustainable when you consider that locals (the primary consumers of group deals) are less likely to re-use a tourism based product or service again.

The other dilemma facing tourism related businesses is that there is little or no opportunity for upgrading or upselling their product. In most cases, the customer is only going to spend what the value of the coupon, so the business loses out on the up-sell potential.

Think about this for a moment, at 5%, this operator would have to sell $540,000 worth of tours to cover the cost of this one “advertising” campaign. This works out to about 3,857 full paying customers to subsidize 250 deal seekers.

Sobering numbers for a small business owner who has to spend his or her days trying to provide the best possible experience for their customers and pay the bills at the same time.

Now, don’t get me wrong, group buying sites have worked well for many types of businesses, I just think that before a business, especially a small tourism business, chooses to execute a group deal, they must look beyond the hype, do their research, and crunch the numbers. There is no such thing as quick cheap cash.

By participating in a group buy promotion a business is essentially extending credit to hundreds or thousands of customers for which they are now liable, at least until the coupons expire.

In the previous example, the company is adding $8,312.50 in revenue but they are also adding $35,000 in short-term liabilities for tours not yet delivered for the life of the coupon, that would give any accountant a mild heart attack.

The other side of this equation is the consumer and the affect that group sales sites are having on the perception of value of local businesses. Consumers don’t know the individual business’ costs or how much revenue they are making from each customer.

What many consumers will do is assume that you’ve built in enough mark-up to make the deal worthwhile because why on Earth would you run a deal like that otherwise?

Over time, this has the effect of eroding the perceived value of the service being provided and the service runs the risk of becoming, GASP, a commodity. No one wants their service to become a commodity.

Patrick Lefler through CustomerThink:

“The risk here is that profitable customers become conditioned to wait for sales and discounts–reluctant to ever pay full price again.”

In a segment dominated by small businesses, the in-destination tour and activities segment is an excellent target market to advertise on group buying sites like Groupon.

Considering, however, that over 85% of these businesses don’t distribute their products through sites like Expedia and Viator because they consider 20-30% commissions to be too high, it seems ironic to me that they would be willing to jump on a model that charges an effective commission of 75%!

Stephen Joyce (Rezgo)

Prediction 2010 #1:

Google will finally release a phone capable of competing with the iPhone, both in terms of performance and stylishness. This will result in a surge in mobile applications developed for the Android.

Although this will initially have little effect on the stronghold that Nokia has on the European and Asian markets, we will see the North American fragment further with Android taking market share from both the iPhone and Blackberry markets.

The new Google phone will allow convergence of various Google technologies including more social applications based on Google FriendConnect, maps, latitude, tours, and Street View.

On reflection:

Google Nexus One did set a new bar for Android phones and as a result we saw a surge in the development of high end Android 2.1 and 2.2 smartphones that now compete quite handily with iPhones and certainly with Blackberry. Android market has also increased and more travel applications are being ported to Android.

Prediction 2010 #2:

Alternate distribution will be the name of the game. There will be a surge in the number of micro-distribution channels throughout the accommodations and tour and activity space.

Individual hotels and chains will be using new and existing technologies to automate concierge functions and provide their guests with a more inclusive experience.

Clever hoteliers will turn their hotels into tourism information and booking hubs for the guests. DMOs, desperate for funds after two years of cuts and reductions, will be looking at new revenue sources. As distribution channels they will want to provide a common interface by promoting standard messaging and connectivity.

On reflection:

Alternate distribution didn’t have as much of an impact as I had hoped.  We did, however, see a surge in travel planning websites including a new batch of “social” travel planning sites as witnessed at the PhoCusWright travel innovation summit.

Who and what are you (including personnel and backgrounds)?

TourWrist is developed by SPARK LABS.  SPARK, founded eight years ago, is a nationally–recognized leader in integrated marketing and branding. With combined team experience stretching to countless national brands (Nike, Herman Miller, Firestone, etc.), our team knows the importance of a well–organized and managed identity.

Under the SPARK umbrella, we’ve reinvented HSN, boosted Florida’s tourism industry (Visit Florida), and introduced the world to a new supermarket brand (Sweetbay).

During the first five years of this period, we also took stock of a widely unmet need: user–centric product development. Thus, three years ago, we introduced a sister agency dedicated to this.

SPARK LABS is an application development company with an appetite for the new and innovative.  From the LABS
side, we’ve accomplished many things others considered impossible. From web to mobile apps (and even including a few tangible products), our greatest value lies in our ability to optimize business, technical and creative objectives in balanced products that put the consumer first.

As CEO of SPARK LABS, Charles Armstrong balances creative vision, cutting-edge technical expertise, and strategic business insight. From national award-winning website projects to revolutionary, new product IP, his is a proven record of groundbreaking concepts and successful implementations.

In recent history, Charles has overseen the launch of Tour Wrist, a powerful, new mobile platform which allows users to view and share locations in immersive 3D.

What financial support did you have to launch the business?

Tour Wrist development has been entirely financed through revenue from SPARK LABS client projects.

What problem are you trying to solve?

To better engage people in search of remote places. To provide a better user experience, and to leverage undervalued new technologies.

Describe the business, core products and services?

At its core, Tour Wrist is a location search engine. By allowing users to search for places via geography, keywords, and popularity, it’s our intent to make the world remotely accessible in tactile, engaging new ways. Presently, Tour Wrist offers a remote viewing app available for all iOS devices.

Soon, this will be supported by Tour Wrist Capture, a recording app that allows anyone with an iPhone 4 or iPod Touch 4 to capture and share their surroundings as virtual tours on the platform.

Furthermore, Tour Wrist Manager is on the way, offering a powerful toolset for content providers with large libraries of listings. This product will allow for batch tour creation, interactive hotspot annotations, property detail updates, and much more.

For a quick overview of the TourWrist App, watch this video:

Who are your key customers and users at launch?

Still in its infant stage, Tour Wrist has seen incredible adoption from the panoramic photography industry, which is helping fuel end-user adoption. As our content base continues to grow, we expect our value proposition to increase equally, further supporting a “search anywhere” approach to discovery.

Did you have customers validate your idea before investors?

Our product has seen the interest of multiple Fortune 100 companies and large government organisations, which has certainly added credibility to our claims. No outside capital has been solicited.

What is the business AND revenue model, strategy for profitability?

Many entities stand to gain from better connections between people and places. Whether from CVBs, hospitality companies, property owners, travel companies, or the photographers documenting them, we’re at the forefront of what we believe to be a very fruitful new industry.

Specifically, we have the following programs in place to monetize this marketplace:

• Photography service commissions
• Capture application sales
• Tour Wrist SDK (engine) licensing
• Private labeling
• Hotel booking commissions
• Contextual advertising

SWOT analysis – strengths, weaknesses, opportunities and threats?

At risk of sharing too much about our company, we’d prefer not respond in great detail. Broadly however, we’ve identified the following:

Strengths:

• Unique, valuable, timely

Weaknesses:

• Heavily reliant upon content

Opportunities:

• Further means of engaging and empowering users in search of inaccessible places

Threats:

• New market entrants

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

Many people suggested that our viewing experience was not possible on non–gyro devices. After a year of development, we proved many people to be wrong.

What is your success metric 12 months from now

150,000 tours, 150,000 users.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

We have always known that activities tend to be the last thing that people book when they go on holidays.

For the most part this is due to two important factors:

• For online travel agency sites that provide airport transfers and activities, these offerings are treated as an add-on at the end of the booking after flight, hotel and car.  This makes it very easy to skip during the booking process.
• The majority of in-destination offerings are not available online.  The ones that are provided are generally consolidated through multiple aggregators, such as a local destination marketing company and then the OTA.

It seems, however, that when the booking process is treated completed separately and the supplier has the ability to offer real-time availability, payment, and confirmation, the bookings tend to move closer to the date of travel.

Here are some of our findings:

• 13.6% are booked between 16 and 30 days of travel.
• 14.4% are booked between 8 and 15 days of travel.
• 52% are booked within 1 week of travel.
• Total of 80% of all bookings are made within 30 days of travel.

I was very surprised to see that over half of all bookings in the system are made within one week of travel.  Unlike airline and hotel bookings that tend to average 23-30 days prior to travel, this seems to confirm that travelers are booking their activities much later in the travel cycle.

Given that most tour operators require a one or two day cut-off period for booking, it is safe to assume that the majority of the bookings are made between three and seven days of the date of travel.

So what does this tell us about traveler behaviour when it comes to booking in-destination activities?

First, the last minute nature of the bookings indicate that travelers are probably not thinking about things to do at their destination until they are close to the travel date.

This would seem to further indicate that the activities at the destination are probably not the reason why people are traveling to the particular destination.

Once people realize they are getting close to the departure date, they are thinking about what they might do when they are at the location and then deciding to book a few days in advance so they can avoid line ups or to just plan ahead.

Second, this booking pattern indicates that travelers are still more likely to book their air and hotel and confirm the major travel components before they commit to the “little extras” that make up their trip.

Without actually asking the customers why they choose to book only a few days before their travel date, it is hard to fully understand why they choose to wait until the last minute.

The opportunity about last minute behaviour, however, is that travelers are looking to book these kinds of activities and will do so with a short window.

This means that real-time inventory and the ability to book on mobile devices will become important.

Anecdotal research seems to indicate that 80% of bookings for activities are done in-destination, which means that there is tremendous room for growth in last minute online bookings, if the suppliers can support it.

With a PhoCusWright report focusing on in destination tour and activities coming out shortly, I am hoping we’ll be able to shed more light on traveler behaviour as it pertains to the booking of vacation activities.

The DiscoverPad has taken much of the work it performed on the development of its popular iPhone app platform, which is primarily designed for destination marketing organizations, and ported it for the iPad.

This is, however, not just a straight port from one device to another, but a considerable re-work to take advantage of the iPad’s larger screen and other features.

Like Discover Anywhere’s other applications, the DiscoverPad platform is built using the live data  that a destination has already published. Discover Anywhere does all of the maintainance for the DiscoverPad application, including ensuring the data is up-to-date and managing the Apple App Store submissions.

The DMO gets a downloadable iPad application that is branded for the destination.  Traveler get an application on their iPads that is specific to the destination they are visiting, similar in nature to the various iPhone applications that Discover Anywhere has submitted on behalf of its destination clients.

The Discover Anywhere website says the DiscoverPad application includes:

• Complete events calendar;
• Complete listings database, organized by theme/category;
• Viewing of listings and events on a map and in “detail mode,” showing contact information, listing details, a photo album and integrated videos;
• “Map locking” to explore what’s available in a particular neighbourhood;
• The “My Trip” organizer, allowing quick drag-and-drop planning for multi-day trips;
• “Send to iPhone,” allowing visitors’ trip plans to be wirelessly transferred to their iPhones;
• “Upload My Trip,” to allow visitors to store their trips for sharing and printing — each trip gets it’s own web page with listing descriptions, Google Maps and contact information;
• “E-mail My Trip,” to allow people to mail their trip plans to their friends and also to provide opt-in capture email addresses for direct marketing;
• “Kiosk-mode,” for optimal deployment to hotels and visitors centers;
• Pre-planned trips for getting visitors started and to highlight points of interest in the destination; and
• Discover Anywhere Mobile’s “no CMS” solution, designed to minimize the work the DMO needs to do to maintain its DiscoverPad (and other Discover Anywhere Mobile) solutions.

The DiscoverPad application is slated to be available to existing and new customers starting September 2010.

Who and what are you (including personnel and backgrounds)?

Vayant is an industrial distribution platform for real-time flight search and pricing, with the ability to finalize bookings in the availability-delivery system of our clients’ choice. Our technology is cost effective and built on a set of powerful, proprietary algorithms that enable dynamic routing and pricing.

We reduce distribution costs by providing extremely focused, personalized search results that are significantly more likely to be converted into bookings – thus delivering higher ROI through the simultaneous reduction of Look-to-book (LTB) ratios, shortened pathway to booking and, over time, development of greater loyalty among our clients’ customers.

Our highly modular design lends itself to strategic partnerships with industry incumbents and is fully controllable by our clients. We serve airlines and alliances, online travel distributors and marketers and diversified airline technology/infrastructure providers.

• Atanas Christov (CEO) is a graduate of Harvard Business School and his industry-related focus includes over 7 years of passenger pricing and distribution, fleet planning and strategic alliances for leading global airlines for McKinsey Consulting NYC. In his recent career he led AIG’s restructuring and divestiture efforts for the Commercial Aircraft Leasing division (ILFC) in the wake of the 2009 market crash. ILFC represents the world’s largest commercial jet aircraft fleet, serving over half of the world’s commercial airlines.
• Eric Dumas (CCO) has spent a decade managing successful startups in Europe, Japan, and the US, with the bulk of his professional career straddling engineering and software development. He was previously Vice President and Country Manager at Tumbleweed (successful IPO and traded on Nasdaq) and PostPath.
• Boyan “Bobby” Manev (Biz Dev) possesses over ten years of first hand experience in the online travel industry. He has worked closely with travel agencies, consolidators, and airlines throughout the European market including TUI and Alitalia, and in close partnership with both Worldspan and Galileo.

What financial support did you have to launch the business?

New Europe Venture Equity LP (NEVEQ).

What problem are you trying to solve?

There is a better way to search for and price itineraries, and Vayant has found it.

Our technology provides results that are more directly relevant to the end consumer. Higher propensity of our client’s customers to book a solution from Vayant’s first set of results demonstrates our technology’s ability to significantly reduce inefficiencies related to delivery of large but substantially unused volumes of data prevailing in the industry today.

Describe the business, core products and services?

We look at data differently.

Vayant Search: We started from scratch, using “tabula rasa” algorithms to arrive at the most optimal solutions for any query, within a multitude of customizable parameters – and all within a single search.

Virtual Alliances: Modified split search rules within Vayant searches allows clients to consistently identify opportunities that are otherwise lost within traditional airline travel searches. This tool generates untapped itineraries within an expanded virtual network, allowing our clients to better serve their markets, and reach new ones.

Intelligent Cache: Vayant’s intelligent cache acts as the primary touch point for search queries and ensures that only focused queries are submitted to the client’s mainframe for a substantial reduction of IT/host ops costs.

Who are your key customers and users at launch?

We will be launching with a well known meta-search engine.

Did you have customers validate your idea before investors?

Absolutely, with a well known meta-search engine and mid-size European airline at the head of the pack.

What is the business AND revenue model, strategy for profitability?

We make money when our clients make money.

We’ve purposefully designed a revenue model that demonstrates our willingness to collaborate by aligning ourselves with our clients’ growth. Pricing is developed individually for each client and relies on licensing revenues generally based on number of revenue transactions enabled for our clients.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• Being the right technology for today’s industry – highly customizable design, seamless integration capabilities, complete source data, split ticketing, extremely focused search results

Weaknesses:

• We’re newcomers to the scene, but we came to the party at the right time.

Opportunities:

• Any player looking for a smarter way to search and price.

Threats:

• Moving up the vision scale faster than we move across the ability scale.

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

There’s a lot of public opinion and published thoughts out there that say this space is just too complex and too convoluted to navigate. These are opinions were read and hear about every day, so in a way you can say there is a general mindset out there that is telling us we’re not going to make it in this industry.

We decided to listen to a greater message. Look at companies like Google, Apple, Amazon, Zappos, Virgin – these are companies that totally went in the face of that kind of thinking. We want to be part of the fundamental changes we see all around us.

What is your success metric 12 months from now?

Anyone can get customers. In 12 months we want a select group of extremely satisfied clients who go on to become advocates of Vayant technology.

TLabs Showcase is part of the wider TLabs project from Tnooz.

Known as Discover Anywhere Tours, the system provides visitors to a destination with pre-designed walking or driving tours loaded by the local DMO (Destination Marketing Organization).

Each tour contains check-points or points of interest that have geo-tag data, photos, and relevant details as the visitor progresses through the tour.

Tours allow users to track where they’ve visited and where they should go next by allowing the user to check-off the point of interest after they’ve visited.

In addition to getting information about a destination such as dining options, general tourist information, and local businesses, the Discover Anywhere Tours directly integrates lists of tours into your visitor’s travel app experience and allows the visitor to use the app as a guide for seeing the destination based on a particular theme.

Visitors can view lists of interesting tours and select which ones they wish to take. Tours consist of thematically grouped places to visit within a destination. Tours are defined by DMOs/CVBs and like all Discover Anywhere Mobile data sets, can be updated at any time — even on deployed apps.

When visitors approach nearby places in an active tour, they receive a notification allowing them to view the place and mark it as “visited”. Further actions can also be triggered, like playing an audio file, starting a video, or even sharing the trip experience on popular social media sites like Twitter and Facebook.

Discover Anywhere Tours lets visitors track the status of their tours, displaying the number of places visited, the number of places to go, the next place to visit and how far away it is. All “visited” places are marked with a checkmark so visitors can easily identify what they’ve experienced so far.

Discover Anywhere Tours takes advantage of Apple’s new iOS4 features. Visitors using Tours on iOS4 will receive “background notifications” when approaching the next place on a tour, even if another app is running. To ensure the best experience possible, tours will temporarily pause if the visitor’s iPhone is running low on power.

Here’s a video clip:

httpv://www.youtube.com/watch?v=nQ0Pi1TddEI

In the travel business, these two ways of distributing products and services to travelers are quite different.

The problem is that travelers are generally unaware of the difference and, as a result, don’t understand what they are getting when they look for experiences through a curator or an aggregator.

Let’s first define the terms.  According to Oxford, the term “aggregate” means:

verb /agrigayt/ combine into a whole.

The term “curate” means:

verb select, organize, and look after the items in (a collection or exhibition).

Already you can see that the verbs mean entirely different things.  Aggregation implies combining a variety of objects to create a whole, whereas curation implies selection, organization, and care.

In the travel business, aggregation is very much the combining of distinct sources of product and delivering it as a single unified list of products from which the traveler can choose the best product for their needs.

In the case of airlines and hotels, this would be done using a combination of direct connects and GDS connections. When a traveler searches for a given location and time of year, the system scours through the various sources for the best matches and displays the results.

The system makes no judgments on the quality or appropriateness of the product but rather provides an unbiased (or so it would seem) list of matching results. In the case of the aggregator, the accountability of the product or service delivered is usually left to the supplier who actually provides the service since, in most cases, the aggregator will make it clear that they do not take responsibility for the deliver of the service.

Curation is a very different approach to delivering products to consumers. Although there may be an aggregation component to the curation process, primarly for the purposes of sourcing the products for curation, the curator is then responsible for selecting the products that they feel are the best fit for their customers, organizing them, and maintaining them in the collection.

When a traveler searches for experiences from a curated source, they are relying on the experience and expertise of the curator to ensure quality, viability, and credibility of the source.

In the case of curation, the customer may not even know the source until after the booking is made relying entirely on the reputation of the curator.  It’s a little bit like the old saying “Any friend of Jim, is a friend of mine”.

To the traveler, it may be difficult to know whether a travel site is an aggregator or a curator just by looking at it.  One way, I have found is to look at their tag line or mission statement and see if they fall into either of these criteria:

• The site is most likely an aggregator if it claims to have the largest number of sources (ie. hotels, flights, car, whatever), promotes the number of locations or properties/flights (ie. 50,000+ hotels), and offers customer reviews but does not provide it’s own reviews/editorial.  Many online agencies and metasearch sites like Expedia, Travelocity, and Kayak would fall into this classification.
• The site is most likely a curator if it claims the best selection of products from reputable sources, promotes the quality of the products over the quantity, offers a combination of customer reviews and editorial, and manages & updates the source content directly. Many experiential travel sites like Viator, isango!, Kijubi, Expedia’s Activities/Attractions, TravelDragon, and others would fall into this category.  The reason why most of these sites curate is partly because aggregation of content for experiential product is almost impossible given the lack of standard distribution standards and systems.  Curation does occur in other more traditional segments such as hotels.  The Mr & Mrs Smith site, for example, would be considered a curation site for selected boutique hotels.

In the end, the two methods for distribution offer their own benefits.  Aggregation will most likely offer the most number of choices and require the consumer to filter and sort based on their preferences.

Curation, on the other hand, will provide a fewer number of choices defined by the curator’s preferences and presented as a collection.  Both options are valid and serve consumers in different ways.

How effective the two options are depends a lot on the reputation of the brand and the trust the consumer has with the site.  In the end, both approaches provide consumers with choice and that is never a bad thing.

Pic: Espos.de on Flickr and Shopkitson.

But are we marching down a path that will ultimately lead to the removal of all human intervention in what is undoubtedly one of the most relationship-rich segments of the economy?

We are already frustrated with convoluted phone trees, robotic cancellation messages, and overly complex on-line booking engines, should we really be looking at more ways to automate the travel experience before we find ways to make the current automation better?

Recently, IHG announced that is using a new technology called OpenWays which allows you to use your smartphone as a hotel room key.

[More background on the OpenWays system]

The OpenWays system would send a custom sound file to the guest’s smartphone in advance of arrival allowing the guest to bypass the reception desk and go directly to the room.

Sounds like a great idea, right? But let’s think about this from a human interaction standpoint.  The reception desk in any hotel is usually the first point of contact for the guest with the hotel.

The front-desk staff acts as the face of the hotel and provides the guest with an opportunity to create a relationship, not only with the person but with the hotel.

I can hear the arguments already… “What about flight check-in, that can be fully automated, why not hotel check-in?”.

Fair enough, however, there are actually more human touch points before boarding, for example with luggage drop-off, at the gate, and boarding the aircraft.

What does this type of technology represent in the long term? From a technologists perspective, I can fully appreciate the convenience of using my smartphone as a room key.

I can also appreciate the coolness factor of being able to offer the service.  But are these types of technologies really where the industry should be going?

I don’t think so.  Why? Because with each small removal of human contact in the customer experience, we devalue the customer and introduce more potential customer service issues.

Think about it for a moment, what message do you send a customer when you say… “Skip the reception desk and go straight to your room using our convenient smartphone key service.”

This message says that the reception is a barrier to you going to your room and is less convenient than automated service.  Who works at the reception desk afterall? People do and in providing an opportunity to bypass the humans you are implying that people are an inconvenience.

In many cases, automation represents a bottom line savings to a corporation looking to increase profitability.

I argue that there are many areas of business process that can be automated and streamlined using technologies, but there are an equal number of areas that scream out for more human intervention.

Feel free to automate the phone and entertainment systems, use technologies to make the booking process faster, easier, and more reliable, and use tools to contact me after my stay.

But use these automation tools and systems to make it easier and more efficient for the people in the industry to do their most important job, provide guests with the best experiences possible.