Ed Whiting – Taking Ownership

Today there are more holidays available for consumers to buy online than ever before.

The vast majority of travel companies can now offer consumers the ability to search and book a holiday via their website – be it a traditional fixed package or a dynamic package.

And it’s not only travel agents and tour operators that are now offering holidays. Airlines, bed banks and flight consolidators, for example, are also now very much in the game of selling multi-component, packaged, travel arrangements.

They are all extending their traditional product offering in an attempt to increase their share of their customers’ overall travel spend – and to achieve a better margin.

The Internet has fuelled this expansion of online holiday availability. Just two to three years ago, investment in technology still determined whether travel companies offered online holiday availability and booking. Consumers at this time were sometimes frustrated by an inability to gain access to their preferred holiday products online.

However, today technology has largely caught up with demand. Technology has provided the ability for consumers to buy holidays packages created, either in real-time or on a pre-packed basis, using any combination of flight and accommodation availability – all via a single search enquiry, matched to the varied lifestyles of travel consumers.

As a result, the online channel has been flooded with holiday availability.

This all sounds great news for travel companies. However, the problem, of course, is that if, in theory, every travel company has the opportunity to offer almost unlimited access to holiday product, how does the consumer decide where to buy?

As there are still only a finite number of plans and places to stay, it seems likely that many online travel companies are offering access to the same product. So how can the customer proposition be differentiated?

Well, the key differential in the mass market holiday sector is product ownership. That is, those travel companies that own airlines and/or own accommodation, either physically or contractually.

The inherent value in product ownership will result in companies extending their brands further and forming strategic relationships with similar like-minded product owners – to form new holiday brands that entice consumers to increase travel spend via their online channel.

This is evident with the likes of EasyJet launching EasyJet Holidays and Steve Endacott moving away from his own holiday business, the On Holiday Group, to form a venture with Jet2 to form Jet2Holidays.

The question remains as to how will travel companies that don’t own product compete in the future? The honest answer is I am not totally sure. However, my feeling is that they may again now turn to technology to create differential within their consumer proposition.

When are we likely to see evidence of this? With the pace at which the Internet and technology is moving it could be here sooner rather than later. I have my own ideas and thoughts as to how and when this may manifest itself – but that’s a subject for another day!

Ed Whiting is e-commerce director at Comtec (Europe)

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