New technology brings lower travel calling costs

ChatSim is a SIM card that offers users the ability to message on certain apps for a baseline price of $12 per year.

An Expedia.com study recently revealed what most suspected: The majority of travelers consider their smartphones to be the most important item to bring on trips. But signing up for and using overseas calling plans offered by U.S. wireless companies are among the most frustrating, and among the most expensive, experiences consumers encounter in their journeys.

Travel advisers have taken note: The importance of keeping their clients connected internationally has not escaped them, and many are now offering more convenient options for staying connected, including applications that enable cheap international calling via WiFi, in an attempt to combat the historically expensive and confusing international plans offered by most domestic carriers.

T-Mobile is now including in some of its simple choice plans international roaming in about 140 countries with unlimited data and texts. The plans start at $50 per line per month. WiFi calls made back home to the U.S. are free, but WiFi calls to another country are 20 cents per minute, the same rate as cellular calls.

Other carriers have more complicated  — and more expensive — ways to make international calls. For example, AT&T offers a three-tiered plan for coverage in some 190 countries with base charges of $30, $60 and $120. Each includes unlimited texting, but depending on the base plan, a user could pay as much as $1 per minute for calls and more for data.

In contrast, Wireless Traveler offers several popular solutions that travel advisers can share with their clients. In addition to renting and selling global phones, the company has an eponymous app that offers international calling for as low as 2 cents per minute over WiFi. It is a  voice-over-Internet-protocol (VoIP) service that is available wherever there is WiFi.

Rates vary by country, but for example, a traveler in France could call another country from the app for 3 cents per minute. Calling another person who has the app is free.

The company also offers a white-label version of the product, working with agencies and tour operators such as Valerie Wilson Travel and Collette Tours to create branded apps that offer the same calling technology. Wireless Traveler also has preferred-supplier relationships with Virtuoso, Ensemble Travel Group and others, according to CEO Ian Benson.

Valerie Wilson Travel Co-President Kimberly Wilson Wetty said she uses her company’s branded app when she travels and is impressed with the quality of the service for the price.

“It is the cheapest thing I have ever used as a service,” she said, calling the quality “so clear it was unbelievable.” Her agency promotes the app to its clients, including leisure and corporate travelers.

Wetty particularly likes that the app carries her agency’s name and logo, keeping it in the forefront of clients’ minds.

“As an agency owner, that’s one of the concerns as we look at the increased advancement of travel technology,” she said. “How do you maintain your own brand and your own relevance in a world where there’s information 24/7 and completely at your fingertips?”

Elaine Carey, an affiliate of Travel Experts, uses the app as a gift that she gives to some of her younger, more tech-savvy clients. Before they travel abroad, she pre-loads an app with $20 for them. It also provides them with a good — and free, for them — way to get in touch with her if something goes wrong on their trip, she said.

Benson said that while some agents do gift within the app, “not enough [do] in my opinion. … I think it’s a fabulous gift to give to somebody because it’s so relevant.”

Nicole Mazza, chief marketing officer of Travelsavers and NEST, said the companies encourage their agents to gift WiFi calling credit within their Affluent Traveler Talk App. Many use it as a value-add for their clients.

In addition to the Wireless Traveler app, the company offers global SIM cards, which Benson said are his biggest sellers. They work in most countries in the world through partnerships with some 400 carriers. The card costs $24.99, with $15 of free airtime included; it also includes a U.S. and European phone number.

Rates vary, but for example outgoing calls from France to the U.K. have a 40-cent connection fee and are 65 cents per minute. Text messages and data are available at additional per-country costs.

Like the Wireless Traveler app, Benson said there are agents who gift global SIM cards to clients, as well as the company’s pocket WiFi hotspots.

It is important to note that Wireless Traveler’s global SIM cards only work on unlocked GSM cell phones, meaning they will not work with Verizon handsets.

Travelers could, of course, purchase local SIM cards if they have a compatible phone once they reach their destination, but Benson said

he only recommends that for longer stays because it eats into vacation time, and the local cards cannot travel from country to country. They also expire after a set amount of time, while the global SIM card does not.

ChatSim, another relatively new international telecom service, is making its way into the U.S., and its investors are hoping agents here will start using the technology themselves and gifting it to clients, as the company is seeing internationally.

ChatSim is a SIM card that offers users the ability to message on certain apps for a baseline price of $12 per year. The card itself is also about $12, but it does not expire at the end of the year.

ChatSim works on messaging apps WhatsApp, Messenger, LINE, WeChat, imo, Kakao Talk, QQi, Hike and BBM. It provides coverage in 150 countries by connecting to over 250 service providers.

Pierre Brais, an angel investor in ChatSim, said the company differentiates itself from others thanks to its flat annual $12 fee to chat within compatible apps. The card can be ordered online through Amazon for $25, which includes the card and the first year’s $12 fee.

For an extra $12, users can buy a multimedia package of 2,000 credits, which they can use to send photos and make voice calls within apps. ChatSim estimates 2,000 credits would give a user enough bandwidth to send up to 200 photos or 50 videos or make up to 80 minutes of voice calls. Brais said around 60% to 70% of people buying the card are also buying the multimedia option.

Costs are kept down by preventing other apps on a user’s phone from running in the background, eating up data, according to Brais.

“Our tests have shown that 90% of data traffic on a smartphone now is used by the background applications on your phone,” he said, not by what the user is actually doing. The ChatSim card automatically turns off non-messaging apps to limit the amount of data used.

ChatSim has been on the market for about a year, and 100,000 cards have been sold, including to travel agents and tour operators, who are gifting the cards or selling them to clients.

The company attended the recent New York Times Travel Show and got a positive reaction from agents, Brais said, marking the start of ChatSim’s push into the U.S. market.

Brais said the card works in most unlocked, SIM-capable phones, both GSM and CDMA, meaning that unlike Wireless Traveler’s SIM cards the CDMA version of ChatSIM will work with Verizon handsets.

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River cruising for millennials

It’s no secret that the dominant river cruising demographic is retirees. Older travelers have embraced river cruising with a fervor that has fueled the segment’s unstoppable growth for the last several years.

But there doesn’t seem to be any obvious reason why river cruising couldn’t appeal to younger travelers, as well.

In an ongoing attempt to widen the market beyond boomers, several river cruise lines — notably AmaWaterways with its recent partnership with Adventures by Disney — have been courting families. But what about travelers in their 20s, 30s and 40s? What about the Gen Xers and? Thus far, there really hasn’t been a river cruising product that caters to that segment of the market.

Some argue that river cruising is too expensive and too inactive for these younger folk. But perhaps G Adventures’ new foray into the river cruising market is an indication that there could be some room for more youthful travelers on river cruise ships.

G Adventures, which caters to a younger, more active and often more budget-oriented traveler, isn’t getting into traditional European river cruising just yet: the company has offered river itineraries on the Peruvian Amazon, and sailings will start on the Mekong, Ganges, Amazon and in France’s Burgundy region next year.

But the simple fact that G is dipping its toes in the river cruising market could indicate the dawn of a new era for river cruising, one where the booming travel trend isn’t reserved just for seniors anymore. It will be interesting to see what G Adventures’ version of river cruising looks like compared with competitors’ river product, and how and whether river cruising resonates with the G Adventures traveler.

As a 30-something who happens to have been on countless river cruises, I’ve always thought there was a bit of a missed opportunity in this market. Yes, the product would require some tweaks. It would help if the price point were lower and if more free time were built in (two things that are actually not mutually exclusive). More activities off the ship and fewer onboard meals included in the price (potentially freeing up passengers’ money for dining in town) could help, too.

But otherwise, there really isn’t any reason why the 25-to-45-set couldn’t, well, get onboard, so to speak. And maybe G Adventures is the perfect company to extend the gangway to them.

Why Google’s designs on travel aren’t good news for the big OTAs

by David Stevenson
by David Stevenson

by David Stevenson, FT columnist and Travel Weekly’s City Insider

Is the travel industry going the way of publishing – unwillingly turned into a digital product which is under the effective control of a single dominant player, such as Amazon or Google?

Until fairly recently I’d have laughed out loud at this kind of techno babble suggestion.

Travel is quite clearly completely different from publishing and being honest I’d be a wealthy man worth many millions of pounds if I’d have pocketed a £1 from each and every person who said Google is coming after travel.

Well, truth be told Google hasn’t actually done very much in travel to date and to compare its baby steps with Amazon’s omnipotent control of the publishing sector has until now been frankly risible.

Yet over the last few weeks I’ve slowly started to change my mind.

Big changes are afoot in the world of digital travel and we may eventually end up in a market place where Google has indeed built a dangerously powerful position.

My damascene conversion to the threat from Google has been prompted by a number of varying encounters and observations over the long summer months.

The first epiphany came via a friend in publishing who is trying at a very senior level to fight off Amazon’s predatory pricing regime.

He observed – with a deep sigh – that all business battles are in essence a fight between brands and channels, all mediated by the customer’s experience of both researching and then consuming a product.

In the good old days before the internet we physically shopped for product of course, and welcomed the choice and variety on the high street. In the new digital age the reality is very different.

We welcome lots and lots of brands producing varying products but in reality we actually only want a few channels to market and distribution.

No-one really takes pleasure in shopping in the digital ‘mall’ unlike the real world ones where there are nice coffee shops and fun places to visit and spend your money.

So the internet has the net effect of drastically reducing the avenues of distribution.

Book publishers thought the internet would be revolutionary and promising whereas what they’ve actually discovered is that everyone bar Amazon has failed to make a profit (and even they struggle) distributing the elusive ‘content’.

So in simple language the internet eventually consumes its channels and produces one or two omnipotent distributors.

Amazon is quite clearly that channel in books, but what makes us think that Google could eventually offer up that role in travel?

Cue my next conversation with a major West Coast VC who is also a good friend and sadly for my first acquaintance a very happy investor in Amazon.

This  venture capitalists view is simple – Google wants to rip apart the existing model of digital travel (populated by all manner of OTAs) and create a new architecture with it and TripAdvisor at the top of the ecosystem.

And once it realises that its vision is slowly becoming reality it’ll simply buy TripAdvisor – “I give it three years before it decides to spend a tonne of money on buying Trip”.

But why on earth would Google want to own the world’s dominant review site – one simple word should suffice, search.
This elusive term – which means so many different things to different people – is being revolutionised by mobile which is turn opening up a land grab.

Google is determined to own lock, stock and barrel this mobile opportunity as  part of its strategy to own multiple channels to personalised data.

It’s intuition is based on something I’ve been aware of for many years – travel is disjointed and profoundly annoying as a consumer.

Every day I look at my inbox and see multiple emails from the likes of Tripit asking me to organise my trips,

Hotels.com telling me about yet another private members only sale, Groupon shouting about some amazing local offer and TripAdvisor educating me about some of my favourite places.

In sum its confusing and disjointed and for the most part these emails end up in the deleted folder. But rather like the journalists who  use Google Alerts to keep them posted of all news about a favourite subject, what if Google could control all those flows of offers, and then personalise them to my own interests ? At minimum I’d let the message  into my inbox and may even be tempted to buy off its list.

This aggregation of research and search requires three essential components from a supplier :

a) I want it to inform me of the latest offers relevant to me
b) Tell me about products I trust, in places I like, supplied by people who I’ve used before or are recommended by friends
c) Last but by no means least, some of us may also be interested in a constant social conversation about the product to help shape my friends views (though quite why anyone would actually want to do that is beyond me). This step may involve not only views but also content and video.

It’s against this backdrop that a bunch of papers by US advisory firm Evercore stand out. Penned by Ken Seda and his colleagues these start to map out precisely what Google may be up to in the world of digital travel and search – and why the OTAs in particular have a great deal to fear.

The most recent report is from September and is entitled Google’s Travel Plans in a Post-Atomic Era, but you should also make a point of reading the earlier Google’s Summer Online Travel Plans report from March.

Seda and colleagues think that Google has essentially decided to cross the rubicon and take on its big customers like Priceline and Expedia. These huge OTAs have been very reliable customers for the search giant but history teaches us that eventually Google decides it can do the job better .

Starting with a number of small scale initiatives  Google is pushing into the OTA territory, with products such as Limited Offers linked to Google’s Hotel finder service.

Next up will come a yet to be branded ‘captive demand platform’ which will allow Google’s hotelier customers the ability to upload their secret lists of loyal, valuable customers into the Google engine and then churn out very special rates to customers.

Finally all this will be connected back to Google Wallet, allowing the search giant to control the whole process of research and booking.

This activity opens up a number of possibilities  not least the rise of opaque pricing based on personalised information – a huge departure from the existing rate parity agreements signed with the OTAs, with the potential to push prices below the advertised price on Priceline and Expedia.

Key to this push by Google is the bait for hoteliers – they keep the customer lists and transactions and don’t have to rely on the existing ‘atomic’ model managed by OTA merchants where between 15% and 25% of all revenues is taken as commission.

Data is now owned by the brand marketing channel, allowing them to aggressively market to their own private lists of customers.

According to Ken Seda at Evercore, the OTAs are going to lie down in this battle, with Priceline in particular fighting back by buying up specialist outfits such as Buteeq, HotelNinjas and Open Table – the game plan here is to effectively build another leg to the business allowing the OTAs to turn into white label customer intelligence and servicing propositions for hoteliers.

As these changes start to ripple through the industry I’d wager that we’ll see some profound changes, not least for the rabble of OTAs scrapping around for business.

The key challenge is that the direct travel model is a classic ‘middle man’ squeeze waiting to happen. Technology teaches us that eventually the market finds a way to squeeze out the expensive middle man, even if they provide a valuable service.

Lurking beneath this push for market control is a cold reality – the OTAs who account 20% of travel ad spend while contributing to 8% of global bookings, and they simply charge too much. According to the Evercore analysts they reckon that Priceline and Expedia “charge hoteliers over 20% of each booking  on average (adjusted to account for just hotels), whereas Amazon and EBAY take closer to 13% and 9%, respectively)….”.

Google is slowly but surely eying up this model and seeing a huge new market especially as mobile helps to redefine everything, almost instantly removing some traditional channel superiority.

This’ll force the OTAs to plump for one of  three options – be the biggest and offer the most comprehensive selection (the Expedia model), start to look at white labelling and working with hoteliers to provide optimisation services (the fast emerging Priceline approach) or become the brand customers trust and base your product around search and knowledge via reviews (the Tripadvisor model).

And what of the implications for the rest of the travel sector ? The obvious issue here is that Google has woken up to the simple realty that all travel research is about search and that what helps us all search better is personalised, valuable information.

Cut the jargon and one simple fact jumps out – we all want to cut the time we spend online working out what to do next.
Evercore cites a  Google Travel study presented to its Hotel Finder partners, which cited ” that travellers spend an average 55 minutes to book a hotel and flight, visit 17 websites, and click 4 different search ads per travel search, with 90% of those travellers conducting the booking process over multiple screens.

The point of its presentation seemed to be a need for a streamlined bookings path, one where Google can retain the traveller from Search to Research to Book”.

And Google already starts off with an advantage – according to the Evercore paper again “22 billion hotel searches are performed on Google per month with 58% of travellers (64% of business travellers) beginning their travel experience on Google, according to Ipsos MediaCT/Google Travel Study.  However, there is some question as to how many of those that start their search on Google were actually led to a booking decision by Google”.

My own slightly off-beat take on this is that most major existing travel businesses should give up thinking they can stop the Google juggernaut, back it in its fight against the OTAs and then build their own platforms on top of the search giants architecture.

And last but by no means least what happens to the poor old customer, befuddled by all the channels and brands?

Clearly the big game changer is mobile and the degree to which phones and tablets will become the main digital interface.

These relatively constrained devices will lend themselves to modern day equivalents of the old Compuserve walled garden i.e software based architecture that keeps the customer within the world of Google via browsing through Chrome and then paying through Wallet.

Or as Evercore’s analysts put it “we see the integration of HPAs to Google Wallet, Maps and Now as creating a seamless travel experience for the user (from search, to research, to book  — to travel and return)”.

And just in case you thought this was all pie in the sky remember that according to analysts at Evercore, “10%-20% of all online-booked occupancy is [already] driven by Google properties, including Search and Hotel Ads (aka Hotel Price Ads).  Moreover, this measure roughly equals all OTAs combined”.

My sense is that customers will happily live within these closed gardens because the net effect will be that prices – for most – will be driven down, not least by Google taking a hunk out of the OTAs revenues.

Sadly this downward pressure on prices will have two nasty knock on effects – more of that opaque pricing via personalised offers and a slow but steady move towards online forms of internet social stratification.

In the new world that is fast emerging, power will sit in the hands of those marketers with the right lists of wealthy travellers who also happen to be on the right loyalty card lists and have the right credit scores.

– See more at: http://www.travolution.com/articles/2014/09/19/8206/why-googles-designs-on-travel-arent-good-news-for-the-big-otas.html#sthash.vxicHuKY.dpuf