AOL localizes offers

Millions of people do it every day and night, and sometimes they perform this ritual several times daily, whether from work or home. They sign on to America Online (AOL), which sells travel.

Now, with recently released AOL 7.0 and a post-Sept. 11 emphasis on regional travel, AOL and its supplier and online partners are going after travel consumers with more effective, localized promotions.


In his first interview about the new direction of the AOL travel channel since becoming executive director of the company`s Travel Vertical Group in April, Jeffrey DeKorte explained the strategy.


“The one area we`re really trying to focus on is to localize [the travel content and present deals that are] relevant to the individual member,” said DeKorte, a former US Airways executive whose responsibilities take in the travel operations of AOL`s brands, including AOL, CompuServe, Netscape and Digital City.


AOL 7.0, released in October, automatically personalizes consumers` Welcome Screens with content, including travel promotions, based on members` hometowns.

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In addition, the AOL travel channel in December launched Quick Getaways, a series of themed promotions that combines partner offers and Digital City localized promotions based on six regions throughout the country.


So, for example, Quick Getaways recently offered northern New Jersey users information on day trips in the Adirondacks; local spas and restaurants, and a regional ski resort guide.


“Even before Sept. 11, we knew that the large majority of travel was regional travel,” DeKorte said.


“In the wake of Sept. 11, there`s even more of a need for that because we are seeing our members asking for shorter trips closer to home.”


AOL`s key travel partner, Travelocity.com, is heavily involved in the travel channel`s personalization effort and recently introduced last-minute offers through AOL.


Regarding the localized content, from the AOL travel channel home page, consumers see a “best fares from your city” feature, which is based on Travelocity`s Fare Watcher technology.


Consumers then can access low fares from their local airports without having to specify where they live.


The way it works, according to Michael Altomari, Travelocity`s vice president of distribution management, is that Travelocity sends AOL a data feed of fare changes “on a daily basis” and AOL matches the local airport fare information with users` home ZIP codes.


Rick Sicilio, owner of Classic Travel & Tours in Pittsburgh, said AOL, with its huge member database, clearly has the ability to take some business from agencies because consumers otherwise would call local agencies for regional travel.


But if agencies want to compete and capture clients` cruise and tour purchases, the best option is a local agency Web site along with “hands-on personal service,” Sicilio said.

AOL is pursuing its strategy with partners LastMinuteTravel.com, WorldRes.com, Priceline.com and others, but Travelocity is the exclusive travel booking system (with some exceptions) on AOL brands. 

Under a five-year agreement that runs through 2005, Travelocity must pay AOL $200 million and a percentage of Travelocity`s commissions on bookings from their co-branded sites. 

AOL, in turn, pays Travelocity a percentage of the advertising revenue AOL receives on those sites. 

“We`ve said publicly that 40% of our sales come from partnerships, and AOL is a very successful one,” said Travelocity`s Altomari. 

The exclusivity of Travelocity`s relationship with AOL and portals like Yahoo! have been criticized by Travelocity`s online agency rivals, who say they can`t advertise on AOL and that this is a bar to new entrants. 

DeKorte confirmed the advertising prohibition. 

“We certainly have a very strong relationship with Travelocity,” he said. “At the end of the day, it would not make a lot of sense for us to promote a competitive booking engine.” 

Regarding other AOL travel channel competitors—namely, traditional agencies—DeKorte said the destination information there makes it “a great tool” for agencies and their clients. 

“We know that 50% of the people who look on line book off line,” he said. “So there is an awful lot of business out there for travel agencies.” 

 
 
 

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