IGNORE:TravelMole Q&A with Sidestep

Kevin Eyres is managing director of online travel comparison service Sidestep Europe. He spoke to Linda Fox about travel search, plans for 2007 and online travel trends

Q: The market place is becoming crowded now with Travelsupermarket and Kayak’s launch last week and others, how will you differentiate?

A: One thing to keep in mind is that it’s a very large market and it’s growing from the point of view of travel online as well as Internet penetration. About 40% of the UK population is now online. We see Kayak and Travelsupermarket as our main competitors and Kayak has good product but it’s only flights while we have flights, hotels, car-hire and user-generated content. Travelsupermarket has more of the breadth of product but doesn’t incorporate some of the things we do. We have this funnel of research, planning and shopping and we’re more about how a user would research their travel, plan their travel and shop for it than ‘I know I want to go to this place, what’s the best price?’ It’s more of a holistic view. If you look at the basic foundation of Sidestep we aggregated data from around the world into one place but now our content deal with Frommers has been expanded and we incorporate about 10 sources around the web and provide the definitive on what people are saying about a destination. It’s makes it more compelling for the user and it’s beyond just comparison shopping for prices.

Q: Sidestep recently announced it had raised funding of US$15 million, how much of that is earmarked for the UK and what it will be invested in?

A: We have not put out specific notes on what the funding will be invested in except to say that it will be acquisitions, additional marketing and international expansion and all three of those could hit the sectors over here. From an acquisition standpoint, we acquired customer review site Travelpost last November and we are looking for more content areas to help the research process.

For international expansion France and Germany are two big obvious markets for us to move into and then others as they come up. We’re very active at the moment and we did not raise the money without having some plans.

Q: What are Sidestep’s plans for the UK this year and how is the market different to the US?

A: We’re going to make it more UK-friendly and adapt it more to this market. One of the differences over here is the number of low-cost airlines. There is only a handful in the US but in the UK, at the last count, it was approaching 100. Also, here, you can’t just jump in the car and drive to a holiday destination and even France and Spain are more difficult to get to which is where the low-cost airlines come in. Travel search is a very compelling product because of the low-cost airlines and if you really want to make sure you have the best deal you need to go to a place that has access to all that so we’ll be expanding our air side this year. Similarly, hotels in the US are 80% branded whereas in the UK there are more independent properties so we want to expand our hotel product and create more relationships to offer a wider breadth of hotels.

Q: How are you dealing with the trend for consumers to go direct and suppliers increasingly wanting to encourage direct bookings?

A: People wanting to go direct is great. We provide the information to allow them to do that. We have relationships with online agents and properties and we present all the information and let the customer book. Nobody books with us. We’re finding that the different properties and airlines etc like our model because they end up owning the customer. Research from Merrill Lynch on the contribution of travel search to direct booking predicted more than US$9 billion in bookings for suppliers from travel search by 2007 so we really help the direct market. Our distribution model is more that of a specialised travel search engine and advertising makes up the majority of our revenue. Companies now see us as a viable way of advertising and a low-cost way of driving business that they are ultimately going to retain.

Q: With traditional tour operators and agents fighting back do you think online travel agents have had their day?

A: They have to keep up with the market evolving as fast as it is but I still think there is a place for online travel agents. We can’t combine the different travel elements together and have one consolidated checkout point. It’s quite difficult from a technical standpoint. There are things like Orbitz’s TLC scheme that we really can’t do and that’s where online travel agents can start to add value. There is definitely room for all these different pieces to survive and they see us a good, valuable, lead-generation platform.