History of Online Travel – 2005
Worldwide, travel-related spending in 2005 accounts for a third of all web expenditure and, even if many in the industry were slow to realise the Internet’s potential for selling holidays, they are now beginning to grasp it.
Thomson claims more than half of all holidays will be booked online within the next four years, while parent company TUI claims to be leading the market in Europe, making E1.25 billion from online sales last year, an increase of 73% on the previous year.
Agents, too, are becoming increasingly Internet friendly, with Kuoni, Neilson and Cosmos all reporting increased take-up of their online product.
In 2005, 75% more agents use Kuoni’s e-brochure product than the previous year.
According to technology company Multicom, dynamic packaging industry was worth between
£108 million and £162 million in 2004, representing between 2.5% and 3.8% of the whole UK market. The company estimates the figure will increase to between £530 million and £740 million this year.
Online travel is so big that this year sees two industry firsts – a dedicated publication, Travolution, and a dedicated domain name. In April, the Internet Corporation for Assigned Names and Numbers gives the go-ahead to a dot-travel domain name, with the aim to act as a badge of trust for online agencies.
Two months later, ABTA receives 25 applications to join the new domain, although it is unlikely that established brands like Lastminute.com will change to a new domain.
Three of the big four get heavy and incur the wrath of agents when they ban them from using their brand names as keyword searches on Google.
First Choice, Thomson and Thomas Cook say they have to do what they can to protect their brand. Holiday Express MD David Powell says the move prevents him from using slogans such as:“Holiday Express is the first choice for Cosmos holidays, because it uses the term ‘first choice’.”
A survey of 124 travel firms carried out by travel marketing company Nucleus reveals more than half have had their brand name used by other companies. These included rivals and firms that didn’t have permission to sell their stock.
There is further consolidation in the market as two of the biggest players, Lastminute.com and Ebookers, headed by Dinesh Dhamija, are snapped up.
In February, Cendant Travel Services buys Ebookers for £209 million, just weeks after purchasing Gullivers Travel and Octopus Travel in January and US agency Orbitz in December 2004.
In July, Sabre subsidiary Travelocity buys Lastminute.com for £577 million, with the latter becoming the dominant brand in the UK, and the enlarged company being run by Brent Hoberman.
The deal is announced on the same day Lastminute.com records its first-ever half-year profit of £100,000 for the six months to the end of March 2005, compared to a loss of £2.6 million for the same period last year.
- Travel Counsellors introduces its first part of its dynamic packaging technology, using Comtec’s Flight Booking Engine.
- Global Travel Group launches a dynamic packaging facility for members, as part of an ongoing £1 million investment in technology.
- Lastminute.com group commercial director Simon Terry and Holiday Autos group operations director Doug Sawyers leave the company.
- Global Travel Group announces it will launch a new dynamic packaging system in July.
- Cheapflights.co.uk launches a short-breaks website under the name Cheapshortbreaks.com.
- Yahoo! goes live with Yahootravel.com.
- Octopus Travel launches Octopustravel-gay.com, with gay-friendly property and gay-friendly staff in its call centre.
- Lastminute.com improves conversion rates by 20% after installing new technology.
- Gold Medal announces it is to phase out Hotelbank and introduce its Holiday Wizard dynamic packaging technology.
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 2005