SideStep Moves Forward as Travel Industry Revives

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In an indication of a reviving travel industry, online travel search engine SideStep Inc. has built a base of 4.75 million users who downloaded its tool to compare prices of flights, hotels and rental cars over the Internet. The milestone comes three years after SideStep opened.


"U.S. travelers are on the move again," said Phil Carpenter, vice president of corporate marketing at SideStep, Santa Clara, CA. "But both our advance-booking data and anecdotal evidence from our travel industry partners suggest a keen interest in destinations that are familiar or close to home."


SideStep user trends suggest Hawaii, Mexico, Canada and the Caribbean are high on the list. It is here that services like SideStep play a critical role in pointing consumers to the best deal.


SideStep is not an online travel agency. After the tool is downloaded, SideStep opens a window to enable side-by-side price comparisons when a user searches for travel packages or options on sites like Expedia or Travelocity.


When consumers are ready to buy, SideStep takes them directly to the sites of its partners to book their travel. As an intermediary, SideStep connects travel buyers with suppliers, not itself selling products.


The company typically searches dozens of sites for travel deals. These include agencies like Orbitz, consolidators like Hotels.com and suppliers' sites like HolidayInn.com and Continental.com.


SideStep also includes advertisers in its service. And that list includes sites like Priceline, Travelocity and Orbitz. Other advertisers are Aloha Airlines, Thrifty Car Rental, Dollar Rent a Car, US Airways, Homestead Hotels and Radisson Hotels & Resorts.


"SideStep was designed to search for information that is constantly in flux, like the pricing and availability of travel inventory," Carpenter said. "With dynamic information, you need to conduct your searches in real time as SideStep does.


"Google and other search engines search for and then store information," he said, "and if that information is dynamic, it soon becomes out of date. Traditional search engines simply can't do what SideStep does."


Indeed, SideStep has the same real-time advantage over comparison-shopping services such as Shopping.com, MySimon, NexTag or PriceGrabber. And while these services compare prices of most consumer categories, they largely ignore travel.


SideStep is as sure of its business model as it is of its technology. It makes money by helping partners sell travel-related products and services online. Like Google and Overture, it charges for every click that leads to the site of its advertisers.


Advertisers can reach SideStep users many ways. Among them are targeted in-product listings to e-mail promotions and text links within SideStep TravelDeals. Also, a companion site highlights unique flight, hotel, rental car, vacation and cruise deals.


Moreover, more than 1 million active travelers monthly see SideStep advertiser messages when they visit. The firm claims these visitors are affluent, educated professionals who frequently book travel online.


Of course, a rising tide lifts all boats. SideStep has benefited from the consumer's growing preference to book travel over the Internet. Online travel gained last year despite industry-wide woes, according to travel industry researcher and trade show host PhoCusWright, Sherman, CT. Online travel sales rose 47 percent while overall industry numbers fell 5 percent, PhoCusWright research shows. Merchant-rate hotel sales and an emerging vacation-packaging business helped.


Also, suppliers are investing more heavily in Web sites to control online distribution even as they are dependent on a few powerful online travel agencies.


But there is no denying the shift in power over the Internet in the consumer's favor, propelled further by eagle-eyed search services like SideStep.


Public relations and word of mouth have helped SideStep come a long way. Promotions with partners also help in subscriber acquisition. Firms like US Airways and Accor North America, owner of the Red Roof Inn and Motel 6 brands, push SideStep on their sites and e-mails to customers.


For all its accomplishments, SideStep knows that the competition is all Gulliver-types.


"Consumers generally look at the major online agencies such as Expedia and Travelocity in comparison to SideStep," Carpenter said. "In the competition for advertisers, however, we contend for advertising dollars with Google and Overture."


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