Published Sunday, April 26, 1998, in the St. Paul Pioneer Press
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Free Web tidbits may be pared to grow cyber dollars
Internet users, watch out! The free goodies on so many Web sites may soon
diminish sharply or disappear.
Most of what you currently find there is on the house. Some sites, like the
online edition of the Wall Street Journal, have access fees, and others
charge for special services, but the electronic tidal wave of free
information is overwhelming.
Much of it involves travel. You can comparison-shop ad infinitum for the
lowest air fare (Good luck!). You can see a hotel room before you book,
although it may bear little resemblance to what you'll get. You can get
detailed driving directions from Point A to Point B and find out what other
travelers liked and detested on a cruise to the Caribbean.
Not everything is mainstream. The Internet provides without charge such
relatively obscure information as Alaskan ferry schedules
(www.dot.state.ak.us/external/amhs/home.html) and where to eat in Bombay,
India (theory.tifr.res.in/sgupta/BoRe/index.html).
Many freebees have a sales pitch behind them, however. The idea is to
attract you to the site, then get you to buy air tickets and reserve hotel
rooms and rental cars online -- even, in recent months, to buy cruises and
tours. Some statistics indicate a resounding success.
According to Jupiter Communications, a New York-based media research firm,
more consumer online money is spent on travel than on anything else.
Jupiter expects such travel sales to total $11.7 billion by the year 2002,
including $7.1 billion for air tickets alone.
Preview Travel (www.previewtravel.com), a San Francisco-based electronic
mega-agency that is closely allied with America Online, claims to have
three million active users. It reported gross bookings of $80.4 million
last year, up 297 percent from $20.3 million in 1996. Meanwhile,
Microsoft's Expedia (www.expedia.com), which went online in October 1996,
has reported $12 million months and claims to be the fastest growing travel
site.
Despite such figures, no online agency claims to be profitable. Technical
costs and the expense of what they give away free are too high. If you shop
Preview or Expedia at length for the lowest air fare from from Squeedunk to
Eternity, it may cost you only your time, but it will cost the agency
plenty to search cyberspace for you. For that reason, Expedia tried last
year to block persistent nonbuying surfers -- such as inquisitive travel
writers -- and met loud objections.
Early on, Expedia poured millions into a sub-site called Mungo Park, edited
by the noted adventure tour operator Richard Bangs. It spent big money on
sending such personalities as Martha Stewart, Tom Clancy and Dr. Ruth
Westheimer on expeditions from which they sent e-mail reports for public
consumption. (Dr. Westheimer's was on sex habits in the Trobriand Islands
off Papua New Guinea.)
In February, Mungo Park, except for its archives, was dropped. Said Laura
Jennings, a Microsoft vice president, in an e-mail memo to the staff: "Our
research shows that with the exception of games, pure entertainment is not
what people find most valuable on the Web. What they're looking for are
tools and services that enable them to get everyday things done."
Since then, there has been a lot of trade talk about eliminating frills or
charging for them. At a recent online travel marketing conference sponsored
by Jupiter in Los Angeles, questions arose about the financial viability of
such current services as in-flight tracking (being able to learn where a
plane is at virtually any time), tracking of frequent-flyer accounts, free
searches for schedules and fares and links to other travel sites.
"I don't need to subsidize forever access to hundreds of sites," said Steve
Cossette, vice president for distribution planning at Continental Airlines.
"That can be pared down. We want to create a corelation between what we pay
for and what we receive (from online ticket sales)."
Many travel sites initially thought they could sell enough advertising to
support themselves, such as newspapers and magazines typically do. They
have largely been disappointed. So since someone must pay, many sites are
now looking toward consumers to pay fees and increase their buying.
A few agencies have attempted to make online travel shopping easier. For
example, last November the travel service TheTrip.com (www.thetrip.com)
started a unique subsidiary called Intellitrip (www.intellitrip.com). The
idea was that instead of scanning each travel service separately, the user
could turn to Intellitrip, which would scan all five major services and
transmit the results directly to the consumer, saving a lot of time. When
the consumer agreed on a fare, the order would be transmitted to the
appropriate agency for booking.
The trouble was that three of the agencies -- Expedia, Preview Travel and
Travelocity (www.travelocity.com) -- objected. Speaking at the Jupiter
conference, Simon Breakwell, Microsoft's group manager for Expedia, accused
Intellitrip of "uncontrolled screen scraping." He said, "The idea that
someone has just dropped into our site without knowledge of what the site
is all about is just a bad, bad idea." Others questioned the reliability of
Intellitrip's data because of the possibility that fares could change
between the time Intellitrip obtained them and the time of booking.
The three asked to be removed from the site, and Intellitrip complied. That
left it with the only the Internet Travel Network (www.itn.net) and
TheTrip.com, which shares the ITN data base. So in effect Intellitrip has
only one base, which isn't much help for comparison shoppers.
Amid all this brouhaha, a new entry, Priceline.com (www.priceline.com),
exploded onto the scene early this month. Using "Star Trek's" William
Shatner as its spokesman in widely broadcast commercials, it offered a
unique twist. You tell Priceline your proposed route, the dates of
round-trip travel and the price you're be willing to pay, and Priceline
either accepts it quickly or turns it down.
The idea is not to bid ridiculously low -- such as $25 from New York to Los
Angeles -- but first to surf the online agencies and airline sites and get
some feeling for what a reasonable lowball offer might be. When you make a
bid, you give your credit card details; you can do that by phone, if you
prefer, for a $3 surcharge.
Once Priceline confirms your bid, you're committed, either with an
electronic ticket at no extra charge or with a paper ticket with courier
delivery for $12.50. You must accept any departure between 6 A.M. and 10
P.M., up to one connection or stop en route and, if acceptable when you
make your bid, travel between alternative airports. Flights are only on
major airlines and their commuters, not on startups.
There are no blackout dates and no required Saturday night stays or advance
purchases. Tickets are nonrefundable, nonchangeable, nonendorsable and
usually do not earn frequent-flyer miles. All tickets are for round trips;
no open jaws. You are allowed one free Priceline request per trip. If that
one is rejected and you try again, it will cost $25.
Having pondered all this, I hesitated to try Priceline because I was uneasy
about a possibly unpalatable commitment. Andrea Butler, Priceline's vice
president for public relations, offered to test it for me without
obligation. So I bid $250 for Philadelphia-Atlanta for departure five days
later and no Saturday night stay. I based the bid on knowledge that TWA has
a $186 fare and United one at $258 with at least 14 days advance purchase
and a Saturday night stay.
My bid was rejected. Priceline said it could have accepted my price if I
agreed to a Saturday night stay. Based on my dates, however, the lowest
fare was $970.
At Butler's suggestion, I phoned Sue and Charlie Jordan in Orono, Minn.,
and asked about their experience with Priceline. Sue Jordan said she was 10
days from delivering a child, but that they had bid $913 for four tickets
from the Twin Cities to Jacksonville, Fla., in late May. "I thought I was
bidding for all four tickets," Charlie Jordan said, "but they interpreted
it as for only one.
Alarmed, he phoned Priceline. "They honored my perception as to what the
price was," he said. "They gave me all four for $913."
Butler explained the generosity as a good will gesture during Priceline's
startup. Would such generosity become standing policy? "I wouldn't count on
it," she replied.
Paul Grimes can be reached by e-mail at [log in to unmask]
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