Internet Merchandising Systems

Going Mobile: How IAd and AdMob Move Apple Vs. Google to a New Playing Field

What spending in the mobile advertising industry lacks in heft, it more than makes up for in buzz. Witness Google's recent purchase of AdMob, which brings together the two largest mobile ad networks, and Apple's recent efforts to gain a stronger foothold in the market.
On May 21, the Federal Trade Commission signed off on Google's $750 million acquisition of AdMob, a move that originally created antitrust fears because the two are the biggest players in the market of bringing ads to consumers' smartphones. Fears of dwindling competition were quashed in part due to Apple's own attempts to become a stronger player in the sector. Following an unsuccessful bid to buy AdMob, Apple in January purchased Quattro Wireless, the third largest mobile ad network, for $275 million. Last month, Apple introduced iAd, a service that places ads inside applications running on the company's mobile devices, including the iPhone and iPad.

In a statement permitting the Google/AdMob deal to move forward, FTC officials said they had "reason to believe that Apple quickly will become a strong mobile advertising network competitor," and that any competition lost because Google and AdMob are no longer jockeying to place ads on the former's Android platform will be made up for by rivalry between Android-enabled devices and the iPhone, where Apple will be using its iAd network exclusively.



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The battle between two major players could represent a tipping point for mobile advertising, Wharton experts and others say, and suggests that the sector could become a significant money-maker in the future. "Mobile advertising is likely to be the next big thing," says Wharton marketing professor Eric Bradlow. "People are increasingly using their portable devices as computers and will have the same expectations for targeted ads as they do on the web today. What exact form those ads will take is unclear, especially with [the growth of] geo-targeting," or the ability to target a consumer based on where he or she lives, or is spending time at a given moment.

AdMob, one of the largest mobile ad networks, services billions of personalized ad impressions (views). The company reaches 160 countries and provides a suite of data and analytics services to help marketers track the traffic their ads receive. The company was founded in 2006 by Omar Hamoui who, in a past interview with Knowledge@Wharton, compared AdMob's services to the way Google handles ads on the Internet. While iAd will be specific to Apple products, Quattro -- which offers similar services to AdMob -- said at the time of its purchase that the company will continue to offer its network on all devices and platforms.

The motive behind Google's and Apple's acquisitions is clear: Define the market while the industry is young. Mobile ad spending in the United States, including text messaging-based formats, reached an estimated $416 million in 2009, compared with almost $24 billion that was spent overall for online advertising, according to eMarketer, a New York-based business information service. But the company predicts that spending on mobile ads will grow to $1.56 billion in the United States by 2013.

Meanwhile, the mobile ad land rush heightens the competition between Apple and Google, two companies that are already going head-to-head on mobile operating systems (Google's Android vs. Apple's iPhone OS) and the applications that go with those platforms, Wharton experts note. "Google's acquisition of AdMob is a smart move when you consider that Apple is also looking at mobile advertising," says Andrea Matwyshyn, a legal studies and business ethics professor at Wharton. "Google views advertising as core to its self definition. It couldn't cede mobile advertising to Apple."

Two Different Strategies

The companies' approaches to mobile advertising will be heavily influenced by their overall business strategies.

Apple is entering the sector with an eye to how it already markets other aspects of its product line -- charging higher prices, but promising more bang for an advertiser's buck in terms of innovation and the opportunity to reach a coveted consumer audience. The company is constrained in the number of consumers it could reach with iAd because the service is limited to those who own its mobile devices. Google's Android operating system, however, is already offered on a number of different smartphone brands, and the ranks continue to grow. During the first quarter of this year, for example, phones running the Android system outsold the iPhone for the first time, according to NPD group, a research company.

"Apple won't be able to sustain the same reach with just a couple of devices, and advertising is fundamentally a medium about how many consumers you can reach," says Noah Elkin, a senior analyst with eMarketer. "But the profile of iPhone users is so attractive to advertisers that Apple is betting on being able to sell an advertiser on having access to this audience -- that the cost may be a little more, but they are ultimately getting more in return."

Bloomberg BusinessWeek reported that Apple is expected to charge about $10 per 1,000 times an ad is displayed and $2 each time it's clicked on by a user, which works out to about $30 per 1,000 impressions. AdMob charges $10 to $15 on average and is paid for either ad impressions or clicks, as opposed to both, the magazine reported.

During the introduction of iAd last month, Apple CEO Steve Jobs demonstrated the type of media-rich promotions the company is hoping to bring to mobile devices. As an iPhone screen was displayed for the audience, he clicked on a banner ad for the movie Toy Story 3 that stretched across the bottom of a search results page listing entertainment news. The ad took up the phone's entire screen and included video clips, a game and a way to search for theaters showing the movie.

"The idea of ads as content has been ... bandied about by advertisers for a long time but has never really been brought to fruition because consumers just see them as ads," Elkin states. "Apple's proposition [is] that it's going to create ads, but people will want to click on them because they are getting something valuable in return."

Matwyshyn says it should be interesting to watch how Apple and Google compete and shape their respective strategies for mobile advertising. "Apple's approach is less predictable," she notes. "If Apple comes up with something uniquely innovative with promotional opportunities, it could be perceived as a benefit by consumers, and Apple could gain users." At the same time, Apple could alienate users if it comes on too strong with mobile advertising.

Although Apple is hoping to cash in on the allure of its customer base, users of the Android platform have a similar profile, Elkin says. They are affluent enough to afford a smartphone and tend to be highly engaged with the devices.

"Google controls close to 70% of [computer] search; that's the core part of their business and I think they recognized that, with the iPhone and the growth of mobile apps, app stores and ad-supported apps, Apple has really hit on something," Elkin notes. "They realized that in addition to [focusing on] search on mobile devices, there was this important display ad medium, whether it was on websites accessed through a mobile browser or apps that are supported by display advertising. [Mobile advertising] was a market they couldn't ignore."

The AdMob acquisition gives Google "the dominant position in the mobile advertising space," says Kartik Hosanagar, an operations and information management professor at Wharton. "This not only opens up a new growth opportunity for Google but also has great synergies with Google's existing offerings. Google can now offer advertisers a single platform to access the lion's share of search and mobile ad inventory."

In a blog post, Susan Wojcicki, vice president of product management at Google, wrote that growth in mobile advertising "is only going to accelerate," and publishers, developers, marketers and consumers should all benefit. The combination of AdMob's network with Google's Android operating system, search advertising, analytics and DoubleClick, which serves online display ads, offers a powerful ecosystem to advertisers, says Hosanagar.

Meanwhile, Apple is trying to leverage its market advantages to take hold of a similar opportunity. "There's a lot of money to be made here," says Kendall Whitehouse, director of new media at Wharton. "Apple is already a content gatekeeper on its mobile platforms, and moving to advertising is a straightforward transition.... Apple's vertical integration with the iTunes store, mobile devices and the Mac gives it a strong hand in moving into advertising."

But Elkin points out that both companies' models have advantages and limitations. "Having an open platform is an advantage; it makes it easier for partners to work with Google [including] handset partners and ad networks.... The downside of it, and this is where Apple's value proposition lies, is not having control over the experience from beginning to end. Of course, having so much control has its downside, too, in terms of what the consumer ultimately gets and also the perception that you're not really free to do what you want, whether you're an advertiser or a consumer."

Despite the companies' different approaches, it is doubtful either will cede control of the mobile advertising space, Hosanagar says. "Given Apple's penchant for control over its full ecosystem, I doubt Apple is going to watch someone else extract all the ad dollars that will be generated on its platforms."

Why Mobile Advertising

How big is the growth potential for mobile advertising? Big enough to be a potential game-changer for the companies, Wharton experts say.

"Mobile advertising certainly represents the biggest growth opportunity for Google," says Hosanagar. To date, Google has mostly been a one-trick pony, with most of its revenue deriving from Internet search advertising. With the purchase of AdMob, the company's future growth could revolve around mobile advertising.

The combination of Google and AdMob will derive revenue from five primary sources, according to Caris & Co. analyst Sandeep Aggarawal. The merged companies will service mobile advertisements and deliver ads within mobile applications, paid search results on mobile phones, text messaging ads and recommendations to download particular applications.

"There are close to four billionmobile phones globally vs. only 1.2 billion computers," Aggarawal wrote in a research note. "Google generated $1.00 in paid search revenue per PC in the installed base in 2003, [a figure] that reached $21.50 by the end of 2009. Even if Google can generate $1.00 per mobile phone in the installed base by 2013, it can be a $4 billion revenue opportunity." In addition, the ability to better target users with mobile ads means that Google's advertising partners could more easily convert clicks to actual purchases. "What you see in the Google and Apple moves is the importance of data and analytics," says Steve Ennen, managing director of the Wharton Interactive Media Initiative. "With mobile advertising, you can see what users are actually doing [behaviorally]."

It's unclear whether the relationship between Google and Apple will be further strained by their respective forays into mobile advertising. Google's services power multiple features on the iPhone, ranging from search to YouTube to Google Maps. While those features may continue, Apple may move to control more of the advertising revenue derived from those services. "On the advertising side, both Google and AdMob make significant revenue from iPhone and apps," Aggarawal wrote. "We believe that Google's and AdMob's combined revenue [from] Apple is around $150 million to $200 million."

While both Google and Apple see mobile advertising as a future growth market, the industry is still emerging. United Kingdom-based Juniper Research estimated in June 2009 that mobile advertising will be a $6 billion market worldwide in 2014. However, that sum will only account for 1.5% of the global spending on advertising in 2014.

"Both acquisitions are about the ecosystem and the move to mobility," says Ennen. "This moves beyond just smartphones to the iPad and other devices."

Wharton management professor David Hsu agrees, noting that interest in mobile ads will grow along with the rapidly expanding smartphone market. "Moves like Wal-Mart discounting the iPhone 3GS to $97 will have a substantive impact. And that's just the hardware side," he says. "The carrier fees for data access are still not necessarily accessible by the majority of the population, but that's likely to change. People will become more accustomed to accessing data on the go, and it's on those platforms that mobile ad networks become quite important."

AdMob founder Hamoui was in Hsu's classes as a Wharton MBA student when he came up with the idea for the ad network. "That was in 2006 and, just a few short years later, Apple and Google are fighting over the company," Hsu says. "I think that shows how quickly movement within the space is [happening] with respect to its development."

A Challenge of Location and Context

Advertising within mobile applications will be "as big as [its ability to be] contextual and targetable," Bradlow notes. By harnessing the data related to location and customer habits available from smartphones, Google and Apple can do a better job of positioning ads as a helpful tool for consumers, rather than nuisances that get in the way of a search or the use of an application.

But the companies may find that the mobile ad market is more complex than that of traditional Internet advertising. For one thing, ads are only one way to generate revenue in the mobile arena. "The reason advertising was so successful on the web was that it was the only game in town for monetizing content," says Whitehouse. Mobile users are already paying to load their phones with applications, ringtones and music; bombarding them with ads as well may be perceived as too pushy, he adds. "People will tolerate some mobile advertising, but there may be barriers to user acceptance at the beginning. Marketers will need to make sure their ads aren't too intrusive."

Matwyshyn suggests that mobile advertising could overcome some of those roadblocks by combining promotions with a social networking component that would "encourage consumers to make a decision on one vendor over another." As an example, she pointed to Groupon, a website offering markdowns on restaurants, attractions and services that are activated only after a certain number of consumers commit to purchasing. Those who have already signed up for the site are encouraged to invite friends to do the same in order for everyone to earn the day's discount.

The more Google and Apple understand their users, the more intimate mobile advertising will become, notes Hosanagar, who describes mobile advertising as "a combination of location and context." Companies are getting more adept at delivering ads based on a user's location, but are still learning how to offer discounts within the context of a consumer's activities at that location. "It does not help to show an ad from a neighborhood restaurant or salon if they are not relevant to my current context," Hosanagar points out. "Am I sipping coffee at a cafe? Or in a meeting with colleagues from work? Or looking for dining options? The context part can be inferred from the content being browsed -- something Google does well -- and also from user-specified updates like those on [location-based social networking sites like] Foursquare. At the end of the day, being able to combine location with context will drive consumer response in mobile advertising."


This article is reprinted with permission from Knowledge@Wharton.

Smaller Independent Hotels Should Think 'Big' - By Neil Salerno

For many years, small independent hotels suffered from a tilted marketing playing field, which was dominated by their big budget competition. During the recession, they had to contend with larger franchised hotels, many of which had lowered rates, placing further sales pressure on smaller hotels. In normal times, these larger hotels wouldn't dream of competing with small independent ones.
To promote their hotels during lower demand periods, independent hotels have to compete with franchised hotels possessing a larger sales talent-base, GDS exposure, and much larger advertising budgets. The Internet is their only alternative.

The Internet has leveled the sales playing field, but many smaller hotels have yet to take advantage of it. The Internet is the great equalizer, but only if smaller independent hotels use it properly. Independent hotels with modest budgets can stand shoulder-to-shoulder with their franchised neighbors if they learn to think big.

The return-on-investment, for even a modest Internet sales investment, is still fast with some careful planning and execution. An investment in site design and promotion need not be financially out-of-reach, if one shops around. There are many savvy independent website developers, with hotel marketing knowledge, who can build or modify your website within a modest monthly budget.



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Beware of pretenders offering to design a beautiful site, more for their own egos and income, and more website than you need. The Internet is an advertising medium where content, good navigation, and ease-of-use counts much higher than its overall appearance.

There is an abundance of beautiful big budget hotel sites which fail to function well because appearance meant more to them than the site's ability to be found and sell reservations. Don’t judge a book by its cover. The true measure is what your website produces in reservations, not simply the number of visitors it gets.

Start with a plan. If you already have a site, have an expert review it to check its functionality and recommend changes to make it more productive. Often this can be done for a very modest one-time fee. This website review will then become your road-map for improving room production from your website.

Search engines judge and rank your site on its functionality, keyword-rich content, popularity, ease of navigation, inbound links, and relevancy. No matter what some so-called experts may say, search engines still don’t favor flash elements.

If you're serious about tapping into the vast Internet market, forget about simply having a website; you must be prepared to market your hotel through the site. After a site is properly designed, embark upon a continuing program for search engine optimization and marketing.

There are many hotels out there which have spent $4,000 or more for a very pretty but totally ineffective website. Frankly, if you have that kind of money to spend, it would be better directed towards the marketing of your site; not just its design.

Your web site is an interactive ad, not unlike a newspaper or magazine ad, and should be designed to showcase your location, facilities, and entertainment in your surrounding area. A website needs a clear delineation of these elements. Distractions such as too many morphing images, weather links, and the like, do little to enhance the functionality of your site.

There are several indicators of poor site and content design.





•One has to guess where the hotel is located because the site lacks an address and a focus on its location on the home page.


•Location is still the most important aspect in hotel selection; yet we still see sites with just an address, your address is just part of your location; location involves much more; like where the hotel is in relation to local room night generators.


•Very sophisticated and complicated sites with no clear navigation theme.


•Sites designed with unnecessary flash elements because it looks pretty.


•Sites with few links; a free element, but extremely ineffective.


•Sites which were obviously designed by committee; messages crammed into every square inch of web page.


•Sites without a booking engine; the majority of Internet users want to make real-time reservations. The return on this investment is enormous and quick.



These are just a few telltale signs of poor design. There are many more; poorly chosen meta tags, no search engine optimization, and others.

For many hoteliers, there are still many misconceptions and mysteries surrounding the effective use of this miraculous tool. For that matter, there is much disagreement among those who work with it daily as well. As with any supplier, seek those who offer a full explanation for everything they propose.

Find someone who has a genuine caring for the success of your website and is willing to assume responsibility for room production from your site; not simply the way it looks.


Contact:
Neil Salerno, CHME, CHA
Hotel Marketing Coach
Email: NeilS@hotelmarketingcoach.com
Website: www.hotelmarketingcoach.com

Cendyn and TripCraft Partner to Market Hospitality's Newest Enterprise Mobile Platform to Increase Bookings

TripCraft’s Integration to Cendyn's CRM Suite Enables Hotels to Manage Entire Mobile Customer Engagement Process via TripCraft’s Easy-to-Use Dashboard
As TripCraft LLC’s first authorized reseller, Cendyn, the leading single-source provider of turnkey online marketing solutions is now marketing TripCraft’s new innovative mobile reservations and technology platform for hotels to Cendyn’s extensive customer base of more than 9,000 hotels worldwide. Experience hospitality’s most exciting mobile solution at HITEC. Meet with Cendyn and TripCraft executives at Cendyn’s booth #931 for a demonstration.

TripCraft developed the hotel industry’s first enterprise-level platform and consumer application that delivers rich hotel content, real-time reservations, on-property services and local destination information via smart phones. TripCraft connects hospitality companies with current and potential customers through their innovative mobile dashboard to increase bookings and revenue.

TripCraft’s attractive mobile enterprise portal will leverage Cendyn’s clients’ guest CRM data to provide a branded mobile commerce experience to guests. The new offering will drive greater conversions with compelling, guest-centric hotel applications.

“The integration of Cendyn's CRM Suite with TripCraft's Enterprise Server puts our hotel client's brand in traveler's hands by offering them direct marketing, reservations, guest service, and communication,” said Charles Deyo, Cendyn’s president. “The latest consumer behavior research shows the importance for travel brands to seize the mobile opportunity. The numbers speak for themselves.”

Mobile adoption is increasing rapidly:





•1.2 billion people now carry handsets capable of rich, mobile commerce


•These devices will soon eclipse the PC as the leading channel for travel activity


•Smart phones will overtake PCs as the most common web access device in 2013.



Mobile platforms meet travelers online

Cendyn’s relationship with TripCraft will enable its hospitality clients to take advantage of the expanding use of mobile devices and deliver the most advanced technology platform available to drive business.

“Most hoteliers need TripCraft’s platform because the look and usability built into a hotel’s web site does not translate well to mobile devices,” said Deyo. "TripCraft developed a native application that accesses its proprietary content-servers which can integrate directly with a hotel’s CRM, central reservations system, property management system and other internal systems, enabling real-time access to dynamic content and reservations capabilities.

“With our CRM Suite integrated with TripCraft, we extend our CRM capabilities to the most advanced mobile platform and provide hotels with a turnkey solution that leverages the power of our central guest marketing database," Deyo said.

For chain operators, the TripCraft Service will have two-way connectivity to Cendyn's CRM Suite and deliver:




•Brand awareness in the pockets of mobile customers


•Direct and personalized guest marketing, service, and communication


•Comprehensive media capabilities that sell the brand experience


•Ability to publish updated content and have it immediately available for consumers without updating the device app


•On-property service capabilities for concierge, auto check-in/out, activities, events, etc.



For consumers, TripCraft’s mobile service delivers:




•A comprehensive brand and property experience beyond a mobile brochure and booking platform


•In-app media gallery, maps, directions, city guides, events, social media to engage consumers with the brand


•Direct communication with the brand and property for service and promotions


•The ability to use different mobile devices with the system maintaining a guest’s profile, preferences, history and communications.



TripCraft technology enhances travelers’ mobile experience:




•Native app performance and user experience with dynamic online content and more functionality than any other platform


•Intelligent management of in-app (non-browser) data with online content servers allows consumers to use the app even when no internet connection is available


•In-app reservations process and customer account management with direct access to (brand) back-office systems


•Cross platform in development for iPhone, Android and Blackberry.



Cendyn is an authorized reseller for TripCraft and will provide Cendyn clients with a white-label managed-service offering that includes configuration, training and ongoing support.

Follow Cendyn on and


About Cendyn

Cendyn, based in Boca Raton, Florida, leads the hospitality industry in broadening revenue by applying a managed services culture and approach to a single source of integrated solutions uniquely proven in the hospitality and tourism market.

Established in 1996, Cendyn is a full-service interactive sales and marketing agency whose solutions are used by over 9,000 hotel and travel destinations worldwide. The company is a solid resource of hospitality professionals who innovate solutions that include website marketing, website design, branding, search engine marketing and interactive products such as eProposal™, eConcierge™, eSurvey™, eInsight™, eContact™, eConnectivity™, eBooker™, and eMenus™. Clients include Starwood Hotels & Resorts, Ritz-Carlton Hotel Company, Hyatt Hotels and Resorts, Hilton Family of Hotels, Marriott and other chains and independent properties. Cendyn, the recipient of prestigious awards for website design, innovation and marketing programs, extends its “Power of We” culture into the community through sponsorships of the YMCA, youth teams and community outreach; the Boca Helping Hands food bank; George Snow Scholarship Fund; Boca Raton Historical Society; Florence Fuller Childhood Development Centers, and community projects of the Junior League of Boca Raton. To learn how Cendyn’s products and services may broaden your revenue base, please visit our website www.cendyn.com. Let Cendyn show you how far an idea can go!

About TRIPCRAFT LLC

Launched in early 2010 by well-known travel technology innovators Bill Nicholson and Mike Murray, TripCraft LLC is a privately held technology start-up that has developed the hotel industry’s first enterprise-level mobile platform and private-labeled consumer application for smart phones and other mobile devices. Leveraging native mobile application capabilities and proprietary server architecture, TripCraft’s solution provides rich, robust and elegant functionality that extends the hotel’s brand image, providing real-time reservations capabilities and destination content to its hotel customers’ guests. For more information, info@tripcraft.com or www.tripcraft.com . Follow TripCraft on Twitter at @TripCraft


Contact:

Cendyn

Robin Deyo, Executive Vice President
Boca Raton, Florida
Toll Free: 1-800-587-0975 begin_of_the_skype_highlighting 1-800-587-0975 end_of_the_skype_highlighting
Email: info(at)cendyn.com
www.cendyn (dot) com


Media Contact
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Softscribe Inc.
180 River Springs Drive NW
Atlanta, GA 30328
Phone: (404)256-5512 begin_of_the_skype_highlighting (404)256-5512 end_of_the_skype_highlighting
Email: Julie(at)softscribeinc(dot)com
http://www.softscribeinc(dot)com
http://www.marketingsnacks(dot)com

Hotels.com Hotels Price Index Reveals Now Is the Time to Book Your Five Star Room and Pay a Three Star Price

Great Deals Revealed from One to Five Star Hotels in More Than 60 International Destinations
Hotels.com®, a leading provider of lodging worldwide, has unveiled its Star Ratings prices, comparing three, four and five star room prices at the world's best properties and for the best possible rates. These price comparisons have been gleaned from the Hotels.com 2009 Hotel Price Index(TM), the definitive annual report on hotel prices paid around the world.

"Higher quality rooms in four and five star properties are now within the reach of more travelers who previously may have chosen two or three star properties," said Taylor L. Cole, APR, director of public relations for Hotels.com. "By filtering searches by star ratings during a Hotels.com trip planning session, travelers can find the highest quality rooms at the lowest prices and even take advantage of upgrades for holidays like the 4th of July."

Due to continued inventory and economic pressures, consumers have a very timely opportunity to snag great deals and upgrade their accommodations and travel experience. These deals won't necessarily last, but with the fluctuating economy, prices have hit lows and are only now starting to climb back.

In 2009, a three-star property in Chicago cost an average of $132 per room, a 21 percent decrease from the 2008 rate of $168. Below is a list of the top five U.S. destinations for U.S. travelers (as ranked by the 2009 Hotels.com 2009 Hotel Price Index(TM)).



Percent
2008 2009 Difference
Star Average Average Year-to-
City Country Rating Room Rate Room Rate Year
---- ------- ------ --------- --------- ----------
United
Las Vegas States 1 $65 $41 -37%
--------- ------- --- --- --- ---
United
Las Vegas States 2 $65 $49 -25%
--------- ------- --- --- --- ---
United
Las Vegas States 3 $83 $63 -24%
--------- ------- --- --- --- ---
United
Las Vegas States 4 $149 $121 -19%
--------- ------- --- ---- ---- ---
United
Las Vegas States 5 $287 $201 -30%
--------- ------- --- ---- ---- ---
United
New York States 1 $144 $108 -25%
-------- ------- --- ---- ---- ---
United
New York States 2 $226 $163 -28%
-------- ------- --- ---- ---- ---
United
New York States 3 $301 $225 -25%
-------- ------- --- ---- ---- ---
United
New York States 4 $410 $308 -25%
-------- ------- --- ---- ---- ---
United
New York States 5 $554 $422 -24%
-------- ------- --- ---- ---- ---
United
Orlando States 1 $49 $43 -13%
------- ------- --- --- --- ---
United
Orlando States 2 $67 $57 -15%
------- ------- --- --- --- ---
United
Orlando States 3 $119 $104 -12%
------- ------- --- ---- ---- ---
United
Orlando States 4 $199 $162 -19%
------- ------- --- ---- ---- ---
United
Orlando States 5 $305 $248 -19%
------- ------- --- ---- ---- ---
United
Chicago States 1 $93 $80 -14%
------- ------- --- --- --- ---
United
Chicago States 2 $118 $100 -15%
------- ------- --- ---- ---- ---
United
Chicago States 3 $168 $132 -21%
------- ------- --- ---- ---- ---
United
Chicago States 4 $214 $162 -24%
------- ------- --- ---- ---- ---
United
Chicago States 5 $472 $301 -36%
------- ------- --- ---- ---- ---
United
Los Angeles States 1 $94 $86 -8%
----------- ------- --- --- --- ---
United
Los Angeles States 2 $98 $87 -12%
----------- ------- --- --- --- ---
United
Los Angeles States 3 $152 $127 -17%
----------- ------- --- ---- ---- ---
United
Los Angeles States 4 $278 $221 -21%
----------- ------- --- ---- ---- ---
United
Los Angeles States 5 $557 $357 -36%
----------- ------- --- ---- ---- ---




"Broadening a family's options when it comes to booking is just one way Hotels.com can help enhance a family's summer vacation," adds Cole. "To help customers further capitalize on these lower rates, Hotels.com is currently running a 'Family Sale.'"

Rooms can be booked through July 5th for travel between now and July 31. Some featured family hotels include:

Anaheim, CA - Anabella Hotel - 3.5 star - $102 (Travel 6/29-7/1)

Orlando, FL - The Buena Vista Palace Hotel & Spa - 4 star - $69 (Travel 6/29-7/03)

San Antonio, TX - The Historic Menger Hotel - 3.5 star - $104 (Travel 7/4-7/8)

San Diego, CA - The Dana on Mission Bay/Sea World - 3 star - $129 (Travel 6/16-6/18)

Denver, CO - The Burnsley All Suite Hotel - 3.5 star - $74 (Travel 7/2-7/4)

Hotels Beware: Do Not Check-in Corruption

As U.S. based hotel franchise, management and investment companies recover from the recent economic recession and seek growth in international markets, operators should be aware of certain regulatory risks associated with international expansion.
As U.S. based hotel franchise, management and investment companies recover from the recent economic recession and seek growth in international markets, operators should be aware of certain regulatory risks associated with international expansion. Of particular concern in the lodging industry should be compliance with the Foreign Corrupt Practices Act ("FCPA").

Lodging companies should be aware of the corruption risks as they expand their global footprint into the emerging markets and should continuously assess whether their anti-corruption policies and procedures are effective in helping stop corruption from "checking-in."

This publication briefly summarizes





•The provisions of the FCPA


•Its potential impact on the lodging industry,


•Certain actions that lodging companies may consider in mitigating the risk of corruption within their organization


The FCPA environment

The FCPA is a U.S. statute initially enacted in 1977. The FCPA has two main provisions – an anti-bribery and a books and records provision.

The anti-bribery provision states that a company cannot corruptly make an offer, promise, or payment of ‘anything of value’ to a ‘foreign government official’ for the ‘purpose of influencing his or her official actions’ for the advantage of the company. The FCPA defines a foreign government official very broadly to include not only government officials, but also employees of state owned enterprises, politicians, party officials, and candidates. It is important to note that the actions of the company’s agents, consultants, or representatives, acting on behalf of the company, can be attributed to the company. The anti-bribery provisions apply to U.S. companies and citizens, foreign companies that issue stock in the U.S. and are traded on public exchanges, or any person’s acts while working in the U.S.

The books and records provision requires companies who file reports with the Securities and Exchange Commission ("SEC") to maintain accurate books and records and also to maintain an adequate system of internal controls.

Throughout the last few years, there has been an increase in the level of activity regarding FCPA matters, including prosecution of individuals, multi-jurisdictional investigations, large FCPA settlements, and additional regulator resources focusing on investigations, particularly within the Department of Justice and the SEC.

In May of 2009, Mary Shapiro, SEC Chairman, stated that "FCPA violations have been and will continue to be dealt with severely by the SEC and other law enforcement agencies. Any company that seeks to put greed ahead of the law by making illegal payments to win business should be aware that we are working vigorously across border to detect and punish such illicit conduct". The SEC has established a new unit of enforcement which will focus on new and proactive approaches to identifying violations of the FCPA. This may result in more investigations and conducting industry wide assessments.

This regulatory environment should be top of mind for lodging companies – particularly as many companies in the industry expand into Asia and other emerging markets. According to Lodging Econometrics, China continues to lead the Asia Pacific region in terms of new hotel development. Over 600 new hotels encompassing over 150,000 rooms are set to open in China in the next two years.

Many new hotel projects are also slated for India and the rest of the Asia/Pacific market.

Unfortunately, there is a relatively higher risk of corruption in these countries, and lodging companies should be aware of these circumstances as they expand their footprint into the region. For example, Transparency International, a nonprofit organization whose mission is to identify and reduce global corruption, has developed a "Corruption Perception Index" to assess the perceived level of corruption in each of the 180 countries that it surveys. In 2009, China ranked number 79 and India number 80 out of 180 countries in terms of the perceived level of corruption (country no. 180 having the highest perceived level of corruption). These survey results demonstrate the heightened level of corruption risk when doing business in this region.

Corruption schemes

Lodging companies may be prone to a wide range of potential corruption schemes. This may include payments to government officials – whether directly or indirectly (via agents or consultants) to secure or expedite the acquisition, development, or construction of the hotel property. The construction and development of the property generally includes the need to obtain licenses and/ or permits from various government agencies. For example, a hotel developer will likely need to obtain operating and occupancy permits; fire, safety, and health permits; construction and environmental permits; and liquor licenses from various government agencies. There is a potential risk that bribe payments may be made to government agencies in order to expedite or overlook certain criteria for obtaining such permits or licenses. Hotel developers may also seek local partners, including joint venture partners, to assist them in their hotel development.

Lodging companies should perform due diligence in order to understand the relationship their partners have with local government officials, as well as whether there are integrity concerns with their partners’ prior business dealings.

Since some of the potential areas of concern of corruption surround hotel development and construction, lodging franchisors may be at risk of unknowingly lending money to their franchisees which in turn is used to fund bribery payments. For example, loans are generally given to franchisees to either develop new or renovate existing properties. Budgets are generally prepared that detail out the use of the funds –such as for new construction, new room additions, renovations, or new branding style. As stated above, this development generally would require the need to obtain various permits and licenses. There is a risk that these funds may be used by the franchisee to fund bribes to government officials for the obtaining of permits and licenses. In this scenario, both the franchisee and the franchisor would benefit from the results of any corrupt payment.

Other potential schemes impacting the lodging industry may include payments to tax inspectors or real estate assessors to achieve favorable tax treatment or avoid penalties or even advertising of the hotel property on state-owned or operated television or radio stations.

In addition to direct cash payments, bribery can take many forms, such as providing gifts of jewelry, donations to an official’s favorite charity, "comp" stays at hotel properties, or reimbursement for non-business related travel and entertainment.

Compliance program

To deal with these risks, lodging companies should develop an anti-corruption compliance program that is structured to prevent, deter and detect potential violations of the FCPA. Although the programs and controls will vary in their complexity and degree of rigor, the program should include the seven hallmark elements established by the Federal Sentencing Guidelines. This includes prevention and detection procedures, high level oversight, due care, training and monitoring, consistent enforcement and response and prevention, and the tone of the top.

An effective program should address the risk of corruption in a comprehensive and integrated way. This generally begins with the development of a risk assessment.

Surveys

One way to perform this risk assessment is to survey the legal, accounting, finance, sales/marketing and M&A personnel as well as franchisees to gauge their understanding and awareness of potential corruption risk areas. These areas may include business and government relationships, government "touch points", employee conduct, record keeping and controls, use of agents and other third parties, and joint ventures. This information will also assist management in assessing the company’s knowledge regarding FCPA and compliance activities. Based on the results of these surveys, lodging companies will be able to perform a more focused risk assessment – tailored to their business. This will help in the development of specific anti-corruption policies and procedures. For example, policies may need to be revised or updated to address the identification of new franchisee relationships, the process for entering into management agreements, and disbursements for charitable or political contributions, and gifts and entertainment to foreign officials.

Background Checks

Lodging companies may also consider performing background checks on franchise owners, joint venture partners, developers, suppliers, agents, distributors, and other intermediaries to help identify integrity concerns or potential conflicts of interest. These checks could alert lodging companies about the relationships these individuals have to government officials and whether the individual or company is involved in other nefarious areas such as organized crime, terrorist groups, money laundering, as well as bribery and corruption, in business practice. This information may also identify whether the company or vendor included on certain domestic and international sanction and embargo lists.

Trainings

Lodging companies may also consider developing and delivering focused anti-corruption trainings as part of their compliance program. These trainings may be developed in local languages and be specifically structured to the respective audience or function – such as executive management, regional management, sales teams, franchise owners, franchise administration, internal audit, and construction agents. Trainings may also include real life or hypothetical case studies to give the participants a real life feel for the FCPA and anti-corruption matters. Companies may also consider obtaining compliance certifications from employees, franchisees, and other agents, including developers regarding their compliance with the FCPA.

Protocol

A successful anti-corruption compliance program must also include investigative protocol when allegations of violations arise. This protocol may include the need to retain outside counsel and forensic investigators to perform swift and appropriate independent investigations.

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Rise in Satisfaction for Airlines May Be Short-Lived; Big Gains for Many Hotels, Restaurants and Fast Food Chains

Strong Improvements for Burger King, KFC, Papa John’s, Hyatt, and United Airlines; Drops for Delta Air Lines, McDonald’s, and the U.S. Postal Service
Customer satisfaction results for five industries show improvement for many of the largest companies in the travel and restaurant industries, according to a report released today by the American Customer Satisfaction Index (ACSI). The report covers satisfaction with the quality of products and services provided by airlines, hotels, restaurants, fast food, and express delivery services.
“Airlines are creating more satisfied passengers, but the ACSI data suggest this won’t last for long”

Airlines: Passenger Satisfaction Gains May Not Last

Passenger satisfaction with airlines improves for a second straight year, up 3% to an ACSI score of 66. Still, airlines remain near the bottom of all industries in ACSI. Lower passenger volume and relatively stable fuel prices are part of the satisfaction boost, but travelers are better at shopping for deals and avoiding fees. More are opting for carry-ons rather than paying baggage fees. In addition to the savings, this is also reducing the problems related to lost or damaged luggage.

“Airlines are creating more satisfied passengers, but the ACSI data suggest this won’t last for long,” said Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. “Airlines are already beginning to charge higher fares. Flights are becoming more crowded, and the increasing number of carry-ons could lead to cabin congestion and delays. Added to that mix are rumblings about fees even for carry-ons and another big merger looming on the horizon between United and Continental, which is likely to take a toll on passenger service at least in the short term.”

Southwest Airlines drops 2% to 79, but still leads all airlines for a seventeenth straight year. The nearest legacy airline is Continental, up 4% to 71. The aggregate of all smaller airlines such as Jet Blue and Alaska Airlines is in between, dropping 3% to 75. American Airlines and US Airways are far behind but show sizeable improvements, up 5% to 63 and 62, respectively. United makes the biggest gain, up 7% to 60, although it is still last in the industry. Delta drops in the wake of its merger with Northwest, falling 3% to 62.

Hotels: Discounting Keeps Big Chains on Top

Low rates, lots of promotions, and free perks are keeping customer satisfaction with hotels steady at 75 for a third straight year. Most of the big hotel chains make strong gains, better leveraging value for money compared with their smaller competitors. The aggregate of smaller chains, individual luxury hotels and bed and breakfasts drops 3% to slightly below the average at 74.

Hilton leads the category again, up 1% to 80, this time tied by Marriott which surges 4%. Hyatt follows closely at 79, after a 7% gain. Intercontinental, led by its Holiday Inn brand, and Starwood also improve, up 4% to 78 and 77, respectively. Two companies that operate mostly budget chains come in below the industry average. Choice Hotels falls 3% to 74, while Wyndham Worldwide (Ramada, Super 8, Days Inn) rounds out the bottom of the category, unchanged at 70.

Dining Out: Many Fast Food and Restaurant Chains Serving Up Satisfaction

While most of the largest chains improve, the opposite is true for McDonald’s and the smaller ones. Frequent price promotions and new menu items contribute to increasing customer satisfaction for the largest restaurant and fast food chains. Pizza makers are riding the top of the wave. Papa John’s leads the fast food category, jumping 7% to 80. Pizza Hut (+5%) and Little Caesar (+4%) follow at 78. KFC and Burger King are the other big gainers, up 9% to 75 and 7% to 74, respectively. Domino’s is stuck at 77, despite rolling out new ingredients that reinvented their pizzas from the crust up. McDonald’s alone drops, falling 4% to an industry low of 67.

“This may seem somewhat paradoxical in view of McDonald's sales growth over the past year, particularly compared to competition,” said Fornell. “But as increasingly frugal consumers have made price more salient, McDonald’s has acquired more customers. These newcomers seem less satisfied, and were it not for the economy some of them would probably rather eat somewhere else.”

Olive Garden leads the restaurant category, up 4% to 84, followed closely by Red Lobster, up 4% to 83. Outback and Chili’s gain too, but are well behind. Outback improves 4% to 80, while Chili’s is at the bottom, rising 5% to 78.

Express Mail: FedEx Delivers

Customer satisfaction with express mail services used by consumers to ship packages improves 1% to match its highest score in more than a decade at 83. FedEx leads the category for a thirteenth straight year, up 1% to 85. UPS follows, unchanged at 82, while the U.S. Postal Service trails far behind both, up 1% to 77. The Postal Service shows a much stronger performance for express delivery than for its regular mail service, which drops 4% to 71, matching its lowest level in nearly ten years.

About ACSI

The American Customer Satisfaction Index is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The national index is updated each quarter and as of May 2010 results for different sectors of the economy are released on a monthly basis to provide more current data. The overall ACSI score factors in scores from more than 200 companies in 44 industries and from government agencies over the previous four quarters. The Index was founded at the University of Michigan's Ross School of Business and is produced by ACSI LLC. ACSI can be found on the web at www.theacsi.org.

Content Managed Mobile Websites Change the Game for Hoteliers

VIZERGY announces the release of a next generation mobile platform. As the mobile smart phone industry rapidly gains momentum, the hospitality industry is forced to keep up. With over 2.5 billion wireless subscribers worldwide, the need to go mobile is essential. eMarketer reports nearly two-fifths of smart phone owners reported doing at least some of their leisure travel research on their mobile device, and more than one-quarter completed at least some of their bookings on their phone. However, many hoteliers struggle to see where mobile fits in their hotel Internet marketing plans. To help ease the confusion and bring hoteliers up to speed, VIZERGY offers its clients fully content managed mobile sites.

The fully content managed mobile site is not only the first of its kind, but provides a host of new marketing opportunities for hoteliers to boost bookings from a market that has yet to be fully infiltrated by the hotel industry. The Brown Hotel, a luxury historic hotel in Louisville, KY, and Royale Parc Suites, a French Quarter styled resort near Disney World in Orlando, FL, are among the first to use the fully functioning content managed mobile Websites.

“We’re excited about the unveiling of the new Royale Parc Suites mobile site, it’s a great opportunity for us to tap into a growing market with unlimited potential,” says John Shreve, Royale Parc’s director of sales and marketing. “It extends our visibility and offers an easily navigable mobile option for travelers on the go.”

These sites are managed on the Web World Publishing system, a proprietary VIZERGY tool, which provides extensive analytics to help understand trends and buying habits of a property’s mobile users. While there are several tools to help marketers, such as the ability to change content, photos and pages at anytime, the tools for a mobile site’s visitors are even more exciting. Thanks to a translation tool, visitors across the globe can view the site in their native language, making the booking process easier. The integrated smart phone functionality also allows for one touch auto dialing and one touch mapping with street views, a great tool for guests on the move.

“It’s all about convenience. Mobile Websites are an amenity that guests will come to expect. We work hard to stay ahead of the curve and offer our clients products and services that help make marketing their properties simple,” says VIZERGY President & CEO Joe Hyman.

VIZERGY®, recognized as the global search marketing leader, provides Internet marketing for hotels, resorts, luxury apartments, condos and vacation rental communities. Established in 1998, VIZERGY offers results driven hotel Internet marketing strategies, digital design services e-commerce solutions, an online reservation system and GDS services. VIZERGY’s award winning track record and proprietary software helps clients drive more revenue and aggressively compete online.

For more information on VIZERGY and its services, please visit www.vizergy.com, call Amakeda Ponds at 904.389.1130 begin_of_the_skype_highlighting 904.389.1130 end_of_the_skype_highlighting Ext. 179 or email Amakeda.p@vizergy.com. Join us on Facebook and Twitter.

Google Moves into Online Travel Business

Google, the world's most popular search engine, is expanding its reach in the lucrative online travel business.
In March, Google added hotel links to its Maps application, listing hotels with room rates available to some users.

Google also is reportedly in talks to pay $1 billion to acquire ITA Software, which develops fare-shopping software for online travel agencies, airlines and fare-search-only sites, such as Bing Travel and Kayak.

Incorporating fares into Google search results would keep customers more engaged in its applications while they plan for travel, a prospect that could unnerve other fare sites. Users would be able to type in their destination and travel dates, and see flights and prices.

Now, Google users can plug in dates and cities, but only get links to other booking sites, such as Orbitz, Expedia and Hotwire.

Google declined to comment about the acquisition talks. But, says Google spokeswoman Victoria Katsarou, "We always have travel in mind. We're trying to make it easier for our users."

The potential acquisition, if completed, "would be a game changer and a clear signal of Google's interest in travel," says Steve Kaufer, CEO of TripAdvisor.

Reserve Interactive Software Releases Reserveit 2.0 Enhanced Online Dining Reservation Software For Restaurateurs

ReServe Interactive, a leader in hospitality management software solutions, announces the latest upgrade to ReServeIT, the company’s online dining reservation software. Using state-of-the-art Web 2.0 technologies, ReServeIT now offers a more customizable and flexible platform designed to further improve the end user experience, including an enhanced user interface for easy navigation and set-up; improved performance features such as centralized control over multiple sites; and additional customization options allowing restaurateurs to create customer facing pages that reflect their brand throughout the reservation process.
"The flexibility of the ReServe Interactive software allowed us to create a customized system for our seven week LudoBites pop-up restaurant at Gram & Papas. The event completely booked out in 18 hours through the ReServe system without problem,” says Kristine LeFebvre of LudoBites, a guerilla style pop-up restaurant event created by Chef Ludo Lefebvre. “After the fast sell-out, ReServe quickly provided a solution that allowed us to maintain a wait list reservation system, relieving the manual burden of having to take hundreds of phone calls or answers voluminous amounts of emails."

ReServeIT provides restaurateurs with a solution that allows guests to book real-time dining reservations directly from their website 24 hours a day and seven days a week without being charged per seat transaction fees. When requested reservation times are unavailable, guests are offered alternative available times in the restaurant, keeping them on the website and in the dining room, eliminating the risk of lost revenue. In addition, reservation data is owned and maintained by the restaurateur, allowing them to market and service guests more effectively.

About ReServe Interactive

ReServe Interactive specializes in Catering, Event Management, Dining Reservation and Table Management software applications for the hospitality industry. By combining intuitive workflows with intelligent tools, the company has been helping its customers optimize their hospitality operations since 1996. ReServe Interactive software is used by more than 6,000 industry professionals across more than 1,000 hospitality venues nationwide including hotels, restaurants, sports and entertainment facilities, golf clubs, private clubs, cultural institutions and wineries. The company has offices in Livermore, California and Delafield, Wisconsin. For more information, visit www.reserveinteractive.com.

Check www.imscart.com for its FoodCourt software

Pegasus - Hoteliers Getting Back To Business

Rising occupancy rates over the first quarter, along with strong future booking volumes, substantiate that hotel demand seems to have turned the corner, especially in the business travel segment.
Future bookings through the GDS channel are up for five of the next six months compared to 2009. Additionally, GDS and ADS bookings for Q1 2010 outpaced comparable periods for 2007, 2008, and 2009. March bookings for GDS and ADS combined exceeded March 2009 by +7.96%, along with showing significant gains over March 2008 and 2007, up +19.91% and +27.18% respectively. Even more importantly, global GDS ADR is slightly up. This reveals the first glimmer of hope for the easing up of ADR declines.

While we see some improvement, the struggle for ADR still remains. It continues to lag and, in some regions, is even decreasing. “We’re seeing good recovery in the number of rooms being sold and average occupancy, and now an average daily rate that is starting to creep up. Do we expect it to return to 2008 levels? Not this year,” said Timothy O’Neil Dunne, Managing Partner at T2Impact Ltd. “As long as people are still somewhat concerned about paying their mortgages, or hesitant to ask for increases in their business travel budgets, they won’t be upgrading rooms or purchasing the extra services and concierge items that drove the level of revenues we saw in 2008.”

Looking at the numbers, ADR for March 2010 compared to March 2008 & 2007 is down by -12.16% and -7.3% respectively. Those hotels that plan ahead for the upswing in business should expect to begin increasing room rates to close the ADR gap. Marriott International reported in April that they are seeing “a strong uptick in business travel, boosting occupancy in the first-quarter this year and soon expected to be positioned to begin increasing room rates.”

Revenue shows positive growth for March 2010, coming in up +8.29% over 2009, +0.91% over 2008 and +10.97% over 2007. Overall, the first quarter of 2010 also compares favorably with revenue up +5.42% over 2009, down -6.99% over 2008 and up +5.58% over 2007. As previously mentioned, proper revenue and yield management strategies can help position hotels to begin raising rates and thus gross revenue.

Confirming that business has begun to rebound, most in the travel industry are expecting full-year 2010 to show positive growth, as has been indicated by first quarter 2010 results. “We are definitely seeing year-over-year growth and are very optimistic this will continue in 2010,” said Jason Harris, senior director for BCD Travel - Global Hotel Relations. With the positive movement in business travel, substantiated by future bookings, the coming summer leisure travel season should help determine if the current growth we have seen is sustainable over the long haul.