"We're travel evangelists," says David Miranda, with all the visionary brio that the world has come to expect of a would-be Internet pioneer. As chairman and founder of LastMinuteTravel.com, his particular vision, as the company name suggests, is to provide a marketplace in which travel managers can communicate their late available space to an audience of late buyers.
The concept began to develop four years ago when Miranda was working as worldwide brand marketing manager for Holiday Inn. His new business model bears many of the hallmarks of some genuine experience in handling distressed inventory. He likes to joke that "distressed" often refers as much to the condition of the marketing manager who cannot fill his rooms or seats than the inventory itself.
The web site essentially acts like an advertising medium, where travel and entertainment companies can post late availability offers, much as they would in a local newspaper. If the browser finds a flight deal they like, they are simply directed towards that airline's own web booking service. Like a newspaper, Last Minute Travel makes a rate-card charge with no commission or transaction fee involved.
Miranda says that this is an "e-media" site, keen to put some clear blue water between his new venture and on-line auction intermediaries such as priceline.com. Although a browser can register with Last Minute Travel to be informed of offers at the right time and price, unlike the auction sites, there is no binding contract that says either party has to do a deal. Also, argues Miranda, there is less risk of canabalisation since the airlines essentially stay in control.
Yet beneath the business logic there is still that touch of evangelism. Miranda is convinced that the travel industry's insistence on penalising late bookings and rewarding advanced planning has failed to keep pace with modern life. In short, that the average consumer no longer has the luxury of time to plan out travel. "The world has become more spontaneous, more unpredictable and the travel industry had not kept up or responded," he says. As the Internet swings the balance of power back in the consumer's favour, his hunch is that demand to book late but cheap will grow.
The simple concept behind Last Minute Travel is to put these buyers together with the sellers. "If you're a motivated supplier then you want to be introduced to a motivated buyer," he adds, recounting his frustration in the hotel business with rooms on offer and a nagging feeling that there must be someone out there somewhere to fill them.
He points to the vast amounts spent on advertising such deals in the pages of local and national newspapers - somewhere in the region of $2 billion a year in the USA alone. Miranda argues that the Internet has the potential to provide cheaper and broader coverage than the press. A carrier could be on his web page for two months for the price of a single $40,000 advert in a US national.
A deal could even be posted on the site for as little as an hour, testing the water in a way that would be impossible in a newspaper or problematic in the full glare of a computer reservation system. "You can make a stealth offer instead of creating a price war with a published fare," says Miranda. "Its the ultimate tactical tool." The airlines can also sign up to receive market intelligence from querying the site, such as the numbers of customers looking for a particular fare on a particular route and react accordingly.
So far the project is still in its infancy. Miranda and his young team have spent a couple of years laying the groundwork in the travel business: thus the company's presence at the IATA Revenue Management Conference in Chicago in November. The site is already in place, with around 45 travel brands on display, including more than a dozen mostly US airlines.
But the big push is about to start, with a $25 million brand-building advertising campaign due to kick off shortly. Its centrepiece is one of the fabled television spots during the Super Bowl early next year.
Whether or not the venture succeeds remains to be seen. Competition for on-line travel sales is showing no signs of abating, with the airlines now weighing in more convincingly to the fray. But Miranda's instinct about the demand for last minute travel looks sound enough.
Source: Airline Business