Dynamic packaging can’t replace personal service – TravelMole Comment by Jeremy Skidmore

A recent report revealed dynamic packaging will account for more than a third of the UK online travel market in two years.

Around the same time, TUI UK announced it was cutting 2,000 staff after originally stating only 800 people would go.

Could the two possibly be related?

The great thing about predictions, particularly regarding events two years in the future, is that no-one remembers if you are wrong. However, if you are right you can trumpet your success from the rooftops.

I may be doing a disservice to Multicom, the online booking solution providers which came out with the forecast about dynamic packaging, but at first glance the survey doesn’t seem particularly convincing.

Apparently, the dynamic packaging market is predicted to grow to £740 million in 2005 and, taking into account stock market reports and industry forecasts, Multicom claims this figure will grow to £2.4 billion by 2007, representing 34% of the estimated £7.2 billion UK online travel market.

Meanwhile, the package travel market is, at best, static and companies like TUI are having to cut their costs.

But how seriously can we take all these predictions? As Mike Cogan of Equinus says on TravelMole, it depends on your definition of dynamic packaging.

Speak to some of the old hands in the industry and they’ll tell you that dynamic packaging, which is often described as putting together separate elements of a holiday in ‘real time’, with hotel rooms and flights that are actually available as you book, has been around for donkey’s years. Transferring it to the internet is not exactly revolutionary.

More people want the flexibility of booking hotel beds and flights that suit them instead of being locked into seven and 14 night cycles, particularly for short hops to the Continent.

But I tend to agree with Mike that, for the whole travel market, the change to dynamic packaging will be more gradual.

None of these predictions take into account the time you have to spend shopping around on the internet, looking for the best deals when booking your own flights, hotels and extras. It’s just not for everyone.

Add-on services like airport parking and travel insurance are simple enough to book yourself online. But companies like Holiday Extras have thrived in recent years, with much of the business coming via the telephone. A lot of people don’t want the hassle of organising their holiday if someone else will do it.

Furthermore, the growth of dynamic packaging does not necessarily spell doom and gloom for traditional tour operators.

The horse may have been restless and just about to bolt before companies like TUI jumped on the bandwagon of selling hotel beds and low-cost flights, but they know they can still grab a significant chunk of the market. Holidaymakers are happier dynamically packaging with a name they feel they can trust, like Thomson, than Fred Bloggs Travel.

Multicom was surely right when it claimed agents who ignore dynamic packaging online will find themselves competing with an ever declining market.

But there will always be room for a bit of personal service.

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