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Travelocity Flies With $40M Repositioning Effort

Travelocity.com Inc. will spend $40 million on a campaign to convince consumers that it is more than just a purveyor of airline tickets.

The campaign, using the “Travelocity Can” tagline, will promote the site and 888-Travelocity across print, radio, television and online media. The goal is to position the brand as a destination for travel packages, a much more lucrative proposition than simply commissions from air ticket sales.

“Most people know us for air, and so what we're trying to do is really differentiate our site in the minds of consumers and educate them … that it's really the one-stop shop for all your travel needs,” said Mike Stacy, senior vice president of marketing at Travelocity, Fort Worth, TX.

The campaign follows the March purchase by Travelocity of Site59.com, a New York company that sold last-minute travel packages.

Stacy said Travelocity's previous two campaigns focused on the breadth and depth of offerings: the site's alliances with 700 airlines and 50 car rental companies, plus 5,000 vacation and cruise travel packages.

This effort seeks to accelerate a trend at Travelocity, a Sabre Holdings Corp. firm: First-quarter 2002 revenue outside of airline tickets rose 35 percent from the same period last year.

Created by The Richards Group, Dallas, the campaign pushes Travelocity as a “travel dream factory” for all consumer travel needs. Copy in certain ads read, “Travelocity has the tools to plan, tools to save, tools to make your trip better.”

Two 30-second spots illustrate that premise. One, titled “Wedding,” shows travelers in various parts of the world and how Travelocity helped get them there. Another spot, “Elephant,” shows how Travelocity travel tools helped people do things they would never do, like renting an elephant.

The company is intent on noting site features such as Dream Maps, which offers consumers an array of destinations and flight costs for a specific budget. Another feature is Intellideck, which lets consumers virtually tour cruise ships and book the appropriate cabin.

The campaign tries to identify the key emotions generated by people on their travels. This can range from the thrill of collecting new stories and experiences for recounting later or meeting with family or friends.

Travelocity is leaving no stone unturned to ensure the campaign is widely viewed.

It bought media on TV cable channels like CNN, ESPN, VH1, The History Channel and Golf Channel. Radio takes the form of spot and network buys for the New York metropolitan area.

In print, the media plan includes lifestyle, news, business and travel publications like People, Smithsonian, Newsweek, Money and Golf Digest. While the magazines will sell the brand, newspapers will push offers in the relevant metropolitan market.

Online, Travelocity has taken out search engine placements through Overture and ads on sites like Yahoo Travel and Travelzoo.com. The ads will tout specific offers.

Newspapers, TV and online broke in May, and magazine ads will run in July and August.

Travelocity's spending is slightly lower than the $43.8 million it spent on advertising last year. It faces stiff competition from Expedia and Orbitz, Nos. 1 and 3, respectively, among online travel sites in sales. Travelocity is No. 2.

According to ad tracking firm CMR, Microsoft Corp.'s Expedia last year spent $30.5 million on advertising and Orbitz, owned by five major U.S. airlines and under antitrust investigation by the federal government, spent $17 million. Another rival, Cendant Corp.-owned Trip.com, also broke an estimated $45 million campaign this spring.

Up for grabs is dominance in what arguably is the world's third-largest economic category, travel. The global travel industry is valued around $220 billion, of which online comprises about 10 percent.

But for all the talk of expanding into higher-margin travel segments like packages, Travelocity's campaign also aims to hang onto market share.

Since it bought rival Preview Travel in 2000, Travelocity's market share has dropped from 35 percent to 24 percent in the first quarter of this year, according to Sherman, CT, consultancy PhocusWright.

Expedia's share rose from 25 percent in 2000 to 33 percent in first-quarter 2002. Orbitz doubled to 16 percent this first quarter vs. last year.

Stacy hopes the new ad campaign helps distinguish Travelocity from its competition.

“The challenge,” he said, “is communicating to consumers that we're much more than just airline tickets and how we present ourselves to the consumer and the tools that we offer to the consumer that are much different than our competitors.”

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