Online market to intensify, Expedia predicts

The online market will become increasingly intense as more businesses develop full travel websites, Expedia has forecast.

Director of new channels EMEA Michael Anderson said companies increasingly want to branch out from their core market and offer a full range of ancillary products.

And he said the growth won’t be limited to travel firms. Companies outside the sector will also muscle in and take a share of the online travel boom.

Anderson’s comments came as Expedia prepares to operate a white-label site for Formula One, the official motor racing body. Under Expedia’s Private Label arm, it will provide the technology and inventory for the site.

“It will offer flights, hotels and race tickets. Everything you need for a trip to the Monaco Grand Prix or anywhere else,” he said. “All types of corporations outside the travel industry are looking at this.

“Looking ahead I see more competition but also more co-operation. Competition because more companies will start to sell other services and offer full travel websites. Traditional offline companies will also go radically online.

“But there will be co-operation because you cannot do everything yourself. It takes longer and costs far more money to develop the technology and build the inventory.

“To develop a dynamic packaging engine for example requires a considerable degree of investment which must be spread over thin margins.”

He predicted websites will increasingly turn to Expedia – “and others” – to provide the platform. “The barriers of entry are low as the technology and product are in place,” he said.

Where Expedia makes its money is by taking a share of the commission.

Expedia Private Label is expected to play an increasingly important role in the business as more customers go direct to suppliers.

Figures produced by Anderson show 71% are forecast to go direct in 2007, up from this year’s 65% “We are going deeper and deeper into marketing areas,” he said.

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