...of Users
If you've ever carried a travel guide with you, you are well aware of the very real weight of information provided in book form. When every ounce matters, do you really want to carry that 800 page, 2-pound guidebook with you - especially if you only need 80 pages, or 10 percent of the information?

...of Publishers
Travel information changes even as an author puts pen to paper - hotels and restaurants open and close, prices go up, and governments change. This fact, combined with publishing delays of at least a year, means a travel guide is out of date the moment it is published. Because of this, publishers pitch their guides at the masses, offering only certain geographical areas and middle-of-the road content. There is no time for, or profit in, creating guides which truly meet an individual traveler's needs.

TraveLite is looking to fill a market niche, to find the white spaces between current print and electronic publishers. TraveLite provides an end-to-end solution to assist traditional publishers in digitizing content and distributing it to handheld computers, and eventually to other digital formats. Publishers feel the need to go digital but their knowledge and resources are limited. As part of a value-added network, TraveLite helps publishers identify better ways to produce and distribute travel content by integrating the different areas of the value chain, leveraging publishers' strong brand identity and consumer loyalty. This helps publishers eliminate bottlenecks, minimize production costs, reduce operating costs and the amount of inventory required, and improve customer service by speeding delivery times.

The TraveLite web application allows travelers to sort through available travel information, choosing only the content they want to build a customized guide and download it in their preferred format. TraveLite provides the end-to-end solution to manage the customization, purchase, and distribution of digital guides.

The travel guide publishing industry currently generates approximately $168 million a year in sales, growing at a rate of 15 to 25 percent per year. (1) The use of handheld computers or PDAs has also increased in past years, up 62 percent in the first nine months of 1999. (2) The number of PDA users is expected to rise to 13 million by the close of this year. (3) PDAs are a suitable format for customized travel information. In a survey of electronic publications users might be interested in reading on a PDA, maps & travel content ranked first with 46 percent of respondents, more than any other kind of publication. (4)

There are indicators that the market is ready for TraveLite. People who use the Internet are travelers and use the 'Net to research and implement their travel plans. The Travel Industry Association of America, reported that the number of travelers using the Internet for information and communications increased 190 percent from 1996 to 1999. According to their report, 93 percent of Internet users took at least one trip of 100 miles or more in 1999. Travelers are using the Internet to plan and book their travel, in addition to communication and research while on the road. According to this research, the demographics of travelers who use the Internet heavily tend to be younger, have an annual household income above $75,000, be college-educated and work in a professional/managerial occupations. (5)

There are currently no direct competitors operating in this large and growing potential market for customized travel information. Booktailor, TraveLite's closest competitor, is planning to roll-out a service similar to TraveLite's model with a year.

• It has a new distribution channel in a growing market (in terms of growth in both the PDA market and the market for travel information in general).
• First mover advantage / first to market advantage. We are small, flexible and focused on our core services, able to quickly react to changes in technology.
• Quality content exists and is available, leaving TraveLite's core competency to digitization and electronic distribution. § We leverage existing brand identities, brand loyalty, and subject expertise.
• Installed user base of portable computing devices such as the PDA.
• An existing partnership with Lonely Planet to provide content for a functioning prototype may provide a "tipping point" (network effects) for other publishers.
• Team experience: 5 years experience in the travel publishing industry, all principals will earn master's degrees in Information Management in May 2001. All have expertise in content management and user interface design.
• Long-term: as wireless communication improves, TraveLite will be in the position to be on the bleeding edge of wireless travel publishing, integrating with GPS and other tools to provide dynamic guides-on-demand.

Revenues from publishers would consist of software purchases and installation fees, with additional costs for value-adds such as extranet access and other features of value to the publisher or their authors and staff. Given the high barriers to entry for traditional publishers, it is of more value to publishers to purchase TraveLite's end-to-end solution than to attempt to develop such applications on their own. Under this scenario, TraveLite could partner with a content management systems provider to install or customize a content management system and convert the publishers' content. Integration/installation fees would be negotiated in terms of task difficulty, plus a per-bit charge for actual content conversion from the publishers' format in the case of a full system installation. Base charges for production of a customized extranet for remote updates by authors would be negotiated based on the publisher's requirements.

The pricing model for TraveLite is deliberately flexible, leaving it up to the installing publisher to determine which pricing model fits their content or their customers' needs. For the purposes of the prototype, we use a product-based pricing model, with each guide set at a fixed cost regardless of content or size. This seems most appropriate given the current limited storage capacity of handheld devices. As technology improves, especially wireless transmission, other pricing models may be more appropriate. These alternatiave possible pricing models include:

• price by size (by byte or word);
• price by destination;
• a subscription model, where users subscribe either to particular segments of content, or to a travel information service as part of a larger community; or
• a hybrid model, similar to telephone service. In the case of a hybrid model, a small per-destination cost entitles the user to the basic introductory guide. Additional content could be added to a guide based on a cost-per-piece/per-use model.

In addition, the possibility of versioning also enables TraveLite to segment services or provide value-added options, such as offering a few popular destinations for free, or giving users the option of a free guide in exchange for targeted, context-sensitive ads in their PDA version of the guide.

There is also the potential for some limited advertising revenue on the browser-based interface, but this is not perceived as a main source of revenue.

The issue of users' price sensitivity is open. Costs will be structured to target guides at $20. Users we have interviewed indicated a price point of $20 per guide is appropriate. This is in keeping with the pricing of many PDA-based applications and the costs of print guides. However, a sense of urgency (to get travel information quickly and conveniently) or the convenience of having content available digitally may be inversely related to price sensitivity.

Notes:
(1) "Travel Guidebooks Go Wireless", Micheal Shapiro, Industry Standard July 31, 2000
(2) "Hand-Held Computer Sales Increase by 62%" Wall Street Journal 11/18/99
(3) "Mobile Computing", The PC Technology Guide October 14, 2000 http://www.pctechguide.com/25mob3.htm
(4) "E-BOOKS: Awareness, Usage & Attitudes" Seybold Reports Industry Survey http://www.seyboldreports.com/Specials/ebooksurvey
(5) "Travelers' use of the Internet" Hotel Online http://www.hotel-online.com