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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Tim Luke who wrote (7402)	1/13/1999 10:52:00 AM
From: puborectalis	Respond to of 90042

Reply # of 50 Ariella, The Bear Stearns article significantly understates the case. Maybe only 22% of hotels are bookable on the Internet, but closer to 85% of RELEVANT US hotel ROOMs are bookable on the Internet -- i.e. those hotels that one would bother to book in advance. TravelWeb for example has about 20,000 hotels (http://www.travelweb.com) of which roughly 80% are US. That's 16,000 hotels and about 2.7 million rooms, out of a total stock of 45,000/3.2 million. And there are LOTS of hotels not on TravelWeb - last I heard, for example Travelocity (http://www.travelocity.com) had about 47,000 hotels worldwide. Further, for leisure travel (particularly mid-market and upscale, I hear of surveys that 40-60% of travelers do their research on the net, even though less than 5% actually book that way. HotelView is part of the research & advertising piece, and not a booking engine, so it can participate in the revenue streams for the 40-60%. Of course it is also there for people who go straight to a booking engine (for an example, go to TravelWeb and look up one of the hotels that is in the HotelView library). DestinationView and ResortView also benefit from this trend. It's only a matter of time before the leisure travel planning process migrates from the home office/study and PC to the family room and the TV with full video on demand - just what VDAT has been quietly laying the groundwork for for several years. What better way to plan a vacation than for Mom, Dad and the kids to look at different options on the boob tube and negotiate their decision? Let's see, in round numbers, 100 million households, 100 million vacation trips a year, look at 10 different suppliers' videos per trip, that's a billion views, at let's say a dime apiece to VDAT (not bad for highly targeted marketing), that's $100 million from US alone, for one product line. Oh yeah, once they've got the library of all the relevant hotels, destinations, resorts, etc., who else is gonna pay to film 'em all again from scratch when they can get them at 10 cents a view? Once VDAT gets critical mass in a product line, not only should the revenues look great, but so should the costs. Hotels, for example, get refurbished every five years or so, so all they have to do is refilm the bits and pieces that change. With first-rate contract crews scattered all over, this won't cost them much. Technology costs are basically fixed except for some server and comms costs that continue to drop. I think the business has the potential for 80-90% long-term gross margin in those product lines where they can achieve critical mass soon enough to make it not worth anyone else's while to refilm everything. Of course the trick is gaining that critical mass, which isn't cheap (but I think VDAT can do it cheaper than anyone else, and they're already further down the path). Cheers, dr ------ Tim..this VDAT is going to be big!! Previous