IGNORE: Traditional operators and meta-search sites ‘challenging online travel giants’

Online travel agents such as Expedia and Travelocity are facing a squeeze from a fightback by traditional operators and challenges from meta-search sites in the battle for internet bookings, a new report claims.

Multinational companies such as TUI and Thomas Cook will pose a “significant challenge” to online travel agents, particularly given their established brand names within the travel industry, according to the Global E-travel habits report by Euromonitor International.

Traditional operators are improving their online facilities and investing in their websites in order to compete with online travel agents, the report says.

Online bookings in the UK increased from 7% in 2002, to 35% of all bookings in 2006, according to Euromonitor International.

Meta-search sites, such as kayak.com and SideStep.com, which trawl the internet on behalf of the consumer, look set to grow in strength as e-travel providers, the report predicts.

With consumers becoming increasingly strapped for time and ever-more aware that online travel agencies like Expedia and Travelocity are not the only option when it comes to booking travel, meta-search sites look likely to gain significant market share.

Other types of online operator will also continue to pose challenges to both online travel agents and direct travel suppliers.

Euromonitor strategic analyst Helen Roberts said: “It is possible that Google will enter the travel arena in the future, joining the likes of Yahoo!, Lycos and eBay, which will also continue to improve their travel functionality”.

Traditional tour operators are realising the potential and now view the internet as the only way forward, the report says.

Thomson, which is planning to merge with First Choice, recently enhanced its main website with a raft of new features and content, in an attempt to retain customers and encourage them to book through the site.  It also introduced additional editorial content to help consumers, as well as to enable the site to be picked up by Google in natural searches.

Traditional tour operators have made significant progress with their websites and now rank among the major online travel sites in terms of visitors. For example, in the week to January 13, Hitwise, monitors of internet usage, reported that MyTravel had overtaken the online travel agency, lastminute.com, for the first time, with a 5.2% share of visits to travel agency websites.

Euromonitor strategic analyst Helen Roberts said: “Major operators believe they are in a strong position to challenge online companies because of their brand strength and high level of vertical integration.

“The fact that they own their products means they are in control of the quality of their offerings”.

But online travel agents are employing more innovative strategies in order to survive as they also face competition from other rivals, including internet giants Yahoo! and eBay, as well as information providers and general retailers in the online travel retail industry, the report says.

A number of strategies identified by Euromonitor include:

• partnerships with environmental groups offering travellers the opportunity to contribute financially to carbon emission reductions;

• adding dynamic packaging functionality to their offering;

• improving customer service and transparency with the introduction of “Live Person” technology.

Online players are also stepping up their marketing campaigns, with more innovative tactics being used to reach consumers, such as ‘top-deal’ email bulletins.

Roberts said: “These moves not only serve to make companies such as Travelzoo a household name, but also help travel suppliers improve their reach and visibility”.

by Phil Davies

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