UK tour operators are well placed to compete against the online travel agencies, according to a report by PhocusWright.
The US-based travel and tourism research firm said TUI, Thomas Cook and MyTravel are “extremely powerful” and were a threat to online players like Travelocity and Expedia.
Echoing the findings of a report on internet booking trends by Mintel (see earlier story) the PhocusWright report said traditional tour operators and airlines have been late with their online strategies but were now making up for lost time.
“In both segments, the move by the established players, while in many cases at least one year late, has been aggressive in the UK, effective and strongly driven by internet marketing, raising the profile of search and deals publishers,” it said.
“Tour operators are either zeroing in on their own highest margin product distributed through their own channels, or they are moving online with unbundled products, dynamic packaging and third party inventories, directly challenging online travel agencies.”
It said market share has now shifted, so that in 2005 66% of internet bookings in Europe were through supplier and tour operator websites and 34% through online agencies. In 2002, the split was 54% to 46%.
“Long term relationships with traditional airlines and leisure hotels offer tour operators some advantage over online travel agencies and there is a clear trend of tour operators withholding their best prices and inventory from the online travel agencies.”
The report said 15% of TUI’s bookings across Europe were online in 2005, while call centre and online bookings combined accounted for 25%.
It said TUI aims to double this to 30% pure online bookings in 2008.
“TUI seeks to be the director of traffic for its product, going as far as to imply that it may develop a travel search engine for its own products and even for third parties.”
By Bev Fearis
