by John Bray, PhoCusWright Inc.

Throughout the last year, a lot of buzz has been generated around the emerging impact of a phenomenon dubbed Web 2.0. It was about how consumers were “taking back the Web” and relying more on new technologies like social networking and mashups to make buying decisions, essentially rejecting traditional marketing channels as sources of persuasion.

All around there are signs of this emergence. Leading the buzz were startups like real estate mashup Zillow (founded by the former CEO of Expedia, Richard Barton), and tagging site, which gained a lot of press because of its viral grassroots empowerment of consumers. While many dispelled this Web 2.0 buzz as a “fad”, strictly about the mythical younger generation, the explosive growth of these sites (i.e. MySpace) both in usage and market value proved these technologies were here to stay.

Still, like the winter itself, online travel distributors and suppliers seemed dormant in the Web 2.0 area, perhaps grappling with the potential disruption of complete transparency that these products and services portended. Ironically, as online travel agencies and suppliers were spending more and more on traditional and first-generation Internet marketing for customer acquisition, in hopes of gaining loyalty at some point, consumers were conversely abandoning these channels for word-of-mouth, peer-driven recommendations.

Seemingly, with the arrival of spring, several recent announcements have signaled that more players in online travel are investing in these technologies and embracing these new behaviors of consumers in hopes of driving new revenues.

Case in point #1 TripAdvisor imitates Wikipedia.
Many hotel suppliers were at first frightened both by the explosive growth and by the brazen transparency that user-generated sites like TripAdvisor and IgoUgo offered. Seeking to infect the democratic effects of consumers, suppliers began to post their own glowing reviews of their properties to these sites. Perhaps smarting from recent articles that seemed to dispel the utility of user-generated sites because of the relative ease of which they had been corrupted, TripAdvisor has doubled-down their bets on the consumer. It has taken charge by transforming itself from a single-point review space (i.e., about my hotel room) into a complete travel experience aggregator. By launching a new area that empowers consumers to contribute to a serial online guide of their experiences, effectively a “Wikipedia” for travel, TripAdvisor has brought currency of user-generated reviews to the forefront, trumping those that would seek to dilute the purity of this medium.

Case in point # 2 Yahoo! integrates travel.
Clearly seeing the trajectory of page views at MySpace in their rear-view mirror (when school starts in fall 2006, MySpace will be the #1 most visited site on the Web let that sync in for a minute), Yahoo! is embracing Web 2.0 strategies throughout all of their properties, including travel. When a consumer visits any part of Yahoo! and enters a search query relevant to travel (e.g., “compare hotels in Denver”), shortcuts appear that can whisk them off to a mash-up where maps, user-reviews, stored trips, as well as rates, are provided to simplify the travel planning as well as buying experience.

Case in point #3 Starwood’s and
Kudos to Starwood for its recent foray into Web 2.0, where it has not only sought to dabble with these tools, but to move beyond the purely transactional nature that so many travel providers seem so ensnared by. Starwood now supports the entire travel experience in ways that more and more consumers have come to expect.

A definite “A for effort” goes to the recent re-launch of the site. Timed to correspond with its recent rebranding efforts for the aspirational mid-scale chain, the site features a simple Google-like search box asking visitors where they want to stay. A bold move, and one predicted by PhoCusWright for some time. The jury is still out on the utility of this search-box approach, as how Starwood performs at providing the results returned from what visitors search for, and not simply that it is search enabled, will determine its ultimate success.

However, search is not Starwood’s only Web 2.0 foray. Recently announced, offers a blog featuring expert travel journalists sharing their musings about recent adventures. Unfortunately, Starwood did not choose this opportunity to open TheLobby up for its guests to contribute their experiences as well.

Travel distributors must come to grips quickly with this exploding channel, embracing and discovering ways to offer products and services that will virally infect these communities, telling consumers they are truly open to this transparency. These cases-in-point highlight companies that are at least experimenting so that they can become involved in this space, and understand where the opportunities for this buzz lie. What are you doing to do the same?

Related Link: PhoCusWright, Inc.