History of online travel – 2004
Lastminute.com is constantly in the headlines in 2004, with a bricks-and-mortar presence, more acquisitions, and an attempt to woo the trade.
In January, it rebrands the outlets of hotel booking agency First Option Hotel Reservations to Lastminute.com, following a £12.1 million acquisition of the company.
However, head of sales Andrew Windsor says the rebrand represents no major shift in policy, and claims the shops are less about retailing and more about brand presence. “The model is online,” he says.
Two more acquisitions follow: Online Travel Corporation – which operates travel sites for consumer and trade brands including Thomas Cook and Lunn Poly – and Bracknell-based agency
Gemstone Travel. More buy-outs are likely, as chief financial officer David Howell says Lastminute.com still has an acquisition pot of £20 million.
A year after selling up, Holiday Autos founder and Lastminute vice-chairman Clive Jacobs announces he will leave the company in the summer.
The 43-year-old says he has “done his job” and the time is right to move on.
Later, figures show he is Lastminute.com’s highest-paid executive in 2004, earning £370,000 in nine months.
Around the same time, Lastminute.com announces it has halved pre-tax losses for its second quarter from £3.1 million to £1.5 million, and launches a trade division, Holidayandmore.com.
The organisation is now so big that the UK business is split into four divisions in the autumn and chief operating officer Ian McCaig heads a review of the group’s sub brands, to see if they should be rebranded Lastminute.com.
By the end of the year, the company announces 220 jobs will go in the UK, including 25 senior roles, which will contribute £3 million in cost savings.
Chief executive Brent Hoberman describes trading as “challenging” and says the company is experiencing higher volumes of low-margin flight sales and commission-heavy hotel sales than expected.
Former MyTravel director Steve Endacott enters the dynamic packaging arena, with Holiday Brokers, a trade-only site initially offering accommodation-only, flight-only and transfers.
Holiday Brokers is part of the On Holiday Group, which will launch consumer brands in the summer.
Trade reaction is positive, with Holiday Brokers signing up 65 travel agents at the Worldchoice conference in March.
Cosmos sales director Brian Young joins the company later in the year and, in December, Holiday Brokers adds a city-breaks option, Citybrokers.co.uk.
The dangers of selling unbonded product over the web are highlighted in August when independent city-breaks specialist Travelscene collapses.
While Travelscene is bonded, its accommodation-only brand, Citybedz, is not, although many agents who have booked Citybedz claim they were not made aware of this.
The whole debacle causes huge embarrassment for ABTA – Travelscene sales director John Harding is president and he is forced to stand down.
Harding had previously campaigned for loopholes in bonding to be closed and in 2003 had controversially called for the failure of a no-frills carrier to highlight the dangers of DIY packaging. His words now came back to haunt him.
Citybedz represents 25% of company’s business, or 3,750 passengers, and with agents and customers unaware that they were not protected, all eyes fall to ABTA. But the association says there are no grounds for it to pay out.
- First Choice announces it will go into dynamic packaging, as chief executive Peter Long says he has been “surprised” how high online margins could be.
- Yahoo! buys meta search site Kelkoo for E450 million.
- Travelstore.com becomes the first online travel management company to join the Guild of Business Travel Agents.
- Amadeus pays E62 million for a 55% stake in Opodo.
- Lastminute.com enters the top 10 of largest ATOL holders, overtaking Expedia.
- Expedia acquires World Travel Management as part of its bid to get into business travel.
- Former First Choice Holidays managing director Paul Evans launches Lowcostbeds.com.
- Former Thomas Cook tour operations managing director Simon Vincent becomes Opodo chief executive and reveals he is looking at acquisitions.
- Thomas Cook launches FlexibleTrips
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 2004