Leader September 2007 – Aiming for the higher ground

Ian McCaig of Lastminute.com argues the number of so-called ‘big’ travel companies will reduce in size over the next two years.

His mantra is that as ‘product differentiation approaches zero and price differentiation approaches zero’, we will see further consolidation at the high volume end of industry. What this means for the travel companies ‘in the middle’ is yet to be seen and many will be reluctant to specialise after years of continually striving for high volumes.

It is imperative that suppliers, agencies and search providers begin to look at the ‘value’ – not the price – of what they are selling.

In addition, the user experience they provide to online customers should now be of equal importance, given that despite the continued growth in the number of products being sold online there are a plethora of new entrants on the scene. The first generation of web sellers are also overhauling their online offering.

Travel companies must take note of the findings contained in this edition of Travolution, lest they miss out one of the greatest opportunities the industry has seen in years.

Older web users may not be willing to embrace Facebook-style social networking generally, but it appears they are looking for more than just sites that allow them to buy a travel product. Travel companies willing to provide useful, well-written content, multi-media and simplicity it seems would score highly with older generations.

Indeed, a gentleman in his early 60s, taking part in one of our focus groups, summed it up rather nicely. He wanted travel websites to treat him like a magazine reader, with search and booking just one of many pieces of functionality.

The opportunities appear to be endless for any travel provider hoping to reach younger consumers. Their enthusiasm for the web shows no bounds and the travel industry will do well to meet any of their needs with the same degree of fervour.

But all this optimism must be matched with a few words of warning. There is less enthusiasm – or indeed recognition – for traditional forms of online advertising by almost all the age groups. The marketing will have to be much smarter in order to lure consumers to the finely tuned websites the industry will no doubt produce in the years ahead. No-one, if you believe McCaig, will want to be stuck in the middle ground.

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