Tumultuous, this is the word that springs to mind to characterize 2011 for our industry, whereas last year saw online travel companies at the mercy of economic conditions it seems that 2011 has been more defined by competitive forces and players. Survival of the fittest has evolved into only the savvy prosper.

As a case in point one only has to look back and reflect how business as usual has been disrupted by the following milestones:

1. Early 2011: The ‘direct connect' distribution paradigm as typified by the Orbitz - Travelport – AA - Expedia spat. The dust has settled somewhat after much legal wrangling but the bold move signified a power shift in favour of travel suppliers. Or did it? GDSs command about 60% of the roughly 1 billion tickets issued worldwide each year and many would say that this direct distribution model is only sustainable for large, established suppliers with vast consumer bases.

2. Google get serious about search by acquiring ITA in a $700 million deal this April. After approval by the DOJ with conditions and repeated assurances that Google would not sell airfares, the deal meant that Google would combine its 65% dominance of the search market with ITA's airline data technology & pricing engine. Great news for consumers, panic stations for online intermediaries like Kayak, Expedia and companies in the FairSearch Coalition.

3. Google then set its sights on redefining hotel search with the ‘Hotel Finder Experiment' in July, enabling users to search by geography, dates and price range as well as compare prices in real time and shortlist favourites and booking options. It remains to be seen whether Google's Hotel Finder can topple the long-standing Expedia and Hotels.com favourites but here again the move levels the playing field for hotels to compete with online travel agents and have an equal chance to succeed in securing the final booking. Good news for hoteliers wanting to drive direct bookings via your hotel website, but what hoops will Google have you jump through?

4. Social / Flash buying explodes onto the travel scene with Groupon Getaways, LivingSocial Escapes and Travelzoo local deals all garnering spectacular traction and bookings. The debate rages as to whether the short-term benefits (demand creation, phenomenal marketing exposure, new customer acquisition, low-season revenue) outweigh the inherent disadvantages (massive loss of margin, brand/loyalty erosion, ‘paying for business'). Whatever your stance, the fact remains that this phenomenon is continuing to exert enormous influence on the industry as we know it, but for how long?

5. Most recently there has been widespread interest and speculation over TripAdvisor being investigated by the ASA for publishing fake reviews intended to inflate or assassinate the character of hotels. This trend has dogged the company for many years but this represents the most damaging development to the companies "Get the truth, then go" mantra.

Indeed a quick Google search here in the U.K revealed several companies offering to post up to 100 individual reviews on your hotel or that of your competitors. How TripAdvisor deal with this fresh scandal will be critical to maintaining its dominance as the go-to website for travel reviews. Get the full story here

All of these key trends and many more besides will be debated at EyeforTravel's TDS North America Summit next week in Las Vegas. The summit features over 100 expert speakers from leading travel brands like IHG, AA, Expedia, Google, Wyndhams, LivingSocial, United-Continental, Hilton, Facebook, Las Vegas Sands, Hipmunk, Travelocity, Starwood, TripAdvisor, Air Canada and Sabre.

You can see the program agenda and speaker line-up here: http://events.eyefortravel.com/tdsusa/conference/speakers.shtml

For more details on registration, please contact me directly.

Marco Saio
marco@eyefortravel.com
EyeforTravel  Senior Industry Analyst
US Toll Free: 800 814 3459 ext. 7219