The members of the Travolution board have been at the forefront of the digital revolution in travel or have helped shape their companies’ transition to become leading online players. We asked them what the key moment of the past decade was in online travel. Brent Hoberman, Lastminute.com The tragic events of September 11 2001 proved…
Ten Years of Online Travel – View from the board
The members of the Travolution board have been at the forefront of the digital revolution in travel or have helped shape their companies’ transition to become leading online players. We asked them what the key moment of the past decade was in online travel.
Brent Hoberman, Lastminute.com
The tragic events of September 11 2001 proved a pivotal moment in the history of the online travel industry, as travel companies around the world turned to major online intermediaries to help them shift huge excess inventory.
Availability and prices were attainable online which simply weren’t accessible in the offline world – something which would not have been possible five years earlier and which highlighted the flexibility and speed of online distribution.
Andrew Botterill, Global Travel Group
From recollection, the most pivotal moment within the online travel industry actually took effect in 1995 with the inception of EasyJet, which not only revolutionised the airline market with the introduction of what was conceived as no-frills/low-cost flights but also through the introduction of its website which followed in 1998.
The latter was driven by the former. From a volume of 30,000 passenger carryings in its first year, I believe it now carries somewhere in the region of 29 million passengers and more to the point – virtually all bookings are made online.
There is no doubt in my mind that the formation of the EasyJet business, to a large degree, was responsible for the birth of the online travel revolution. If we look at what followed in many areas of travel from that point on, it merely confirms my view.
Carsten Willert, BA.com
They say that September 11 2001 changed the world – and for me it was the pivotal moment for online travel too.
At British Airways our website moved almost overnight from being an “interesting tool” to becoming the focus of our client communications in the days that followed the tragedy.
After that, the perilous state of the airline’s finances forced many tough decisions on the reduction of distribution costs. This was coupled with the recognition that investment in BA.com was critical to the future.
In fact, BA started its transformation by increasing development and focus of its website (not only selling activities but also customer servicing and check-in facilities).
Additionally, within the company online tools were increasingly being used to deliver more effective staff communication. Of course, much of BA’s experience was replicated across the airline world, making this a true turning point for the online travel industry.
Today, a world without online distribution is unthinkable for BA and further development and investment in our website is central to our business strategy.
Graham Donoghue, TUI UK
This is such a wide topic, and there have been so many key stages over the past 10 years. For me, the development of the browser has to be one of the key moments in bringing together and the parsing of data in a legible way to users.
The work that Sir Tim Berners Lee did at CERN and the development of the Mosaic browser put some sense into the Internet for the average Joe.
When it comes to specific moments in the development of travel online, I have to give praise to EasyJet for more or less defining a whole new way of buying travel online and delivering it to the masses.
EasyJet pioneered the way and built confidence in consumers to buy more expensive trips online.
Dermot Halpin, Expedia
The tragedy of September 11 2001 underscored both the vulnerability of the industry and also how inflexible the traditional distribution channels are.
Supply struggled to meet demand, and brochures just didn’t help.
So, suppliers turned to the more dynamic Internet channel, which flourished as supplier partners found willing customers.
What were the implications? Clients got to plan and book travel the way they wanted, as technology gave them choice and liberated them from the tyranny of the package tour.
Suppliers found a flexible and responsive route to market.
With regards to competition and industry structure, Internet-based travel companies grew rapidly, with Expedia rising to become the fifth biggest operator in the UK, and one of the world’s biggest travel companies, with $15 billion of bookings last year.
Tour operators and suppliers have followed and, as we foresaw, they now have a significant online presence.
Tim Frankcom, Yahoo!
Search has been the most important development in travel in the past 10 years.
Search has effectively helped shape and create the online travel industry as we see it today.
It created an essential bridge between travel shoppers and travel providers and has played a key role in helping users to make sense of the mass of travel information now available online.
By allowing customers to find sites either through the natural listings or by sponsored search listings it has facilitated the creation of travel websites around the world, catering for every taste, from the mass market websites to niche travel sites.
Highly competitive marketing costs have reduced and even removed the barriers to entry in this sector.
There is still plenty of opportunity for smaller players to generate excellent return on investment by bidding on specific keywords that relate directly to their business as opposed to the broader, highly competitive key terms such as ‘cheap flights’.
All online search and media campaigns are trackable and so companies large and small have been able to monitor their return on investment, down to the penny, which in turn has enabled them to justify increasing their spend online.
Verticalisation of search in the guise of travel search has also played an important role in the evolution of travel in the past 10 years. It has further enabled consumers to track down the right offer, frequently saving them time and money by searching multiple sites in a matter of seconds.
By creating a highly targeted environment it has also offered travel companies the opportunity to reach users who are further down the purchase process by offering strong conversion rates and returns.
Search will continue to help shape the travel industry. The evolution of social and community search products such as Yahoo! Answers, will enable consumers to search and find the opinions of other web users who have visited attractions, restaurants, villages, towns, cities and countries, creating a virtual web community.
Mike Nelson, Travelport
I don’t know that there was any inflection point for the industry as a whole, as there wasn’t much question about whether online travel would succeed.
The questions were more around who would succeed: suppliers, traditional agencies, newcomers (online travel agencies) or all of the above.
I’ve been part of an OTA (Orbitz and recently Ebookers) for the past six years and attribute the success of the OTA model to improving the transparency and convenience of purchasing travel.
The improvement is ongoing as OTAs continue to refine inventory, technology and marketing capabilities to the benefit of consumers and supplier partners.
Esteban Walther – Google
A key year from my point of view (also because that is when I moved my career from the offline travel to the online travel world) was 2001, the year when the Orbitz and Opodo airline-backed ventures launched in the US and Europe.
These two companies were set up by the leading six US and nine European airlines that realised it was time to start taking part of the major opportunity that online distribution would represent over the coming years. This created a momentum in the industry similar to when Amadeus was launched in 1987 by Air France and Lufthansa.
The two ventures showed how even after the Internet crash that had taken place the year before, the airline suppliers were serious in considering the web as a channel that would allow them to achieve significant reductions on their distribution costs.
Terry Fisher, Gold Medal
Without question a pivotal point in the history of online travel to date is the emergence of dynamic packaging as the ‘killer app’ for the leisure travel market.
Why? Well to answer this we need to examine the some of the challenges facing today’s online travel agent: clients are becoming ever more sophisticated with more complex requirements; the advent of broadband means users are much more empowered and willing to shop around more; increased competition from traditional offline tour operators and suppliers entering the marketplace; and declining margins across all areas.
Managing the expectations of the modern user in this environment means online travel agents have had to become much more sophisticated in order to survive and try to make an already difficult business model profitable.
The emergence of dynamic packaging has helped online travel agencies face these challenges head on. It has given customers the tools they need to plan and tailor-make their own holiday online and provides much-needed cross selling from flight-only into hotel, car and excursion sales.
This provides a much more sustainable model in a cut-throat environment.
Of course, dynamic packaging is not an easy thing to master.
The ability to take an incredible amount of complex business logic wrapped up in a succinct user interface that works quickly without issue is something that has been attempted by many but mastered by few.
Still in its infancy, dynamic packaging has revolutionised the way we think about online travel over the past couple of years and will become an ever-more critical aspect of the online travel sector as we move ahead.
