History of online travel – 2003
There is an obvious move towards dynamic packaging in 2003, blurring the lines between operators, agents and online players.
The surge in online bookings for low-cost and scheduled carriers has created a flight-only market, forcing operators to launch accommodation-only brands to mop up. For example, Cosmos, launches Somewhere2stay.com, while First Choice experiments with flexible durations on high-margin routes because people don’t want ‘off the shelf’ packages anymore.
In April, a session on dynamic package at Global Travel Group’s conference in Marbella is the best attended of the whole event, while a survey by Advantage Travel Centres shows that 41% of consumers prefer non-packaged holidays.
The foray into dynamic packaging opens a can of worms as far as consumer protection goes.
The Civil Aviation Authority says tailor-made holidays created by clients on the web may not offer adequate consumer protection and issues a leaflet pointing out that not all websites are ATOL protected. The major players, such as Expedia, OTC and Lastminute.com, however, do have ATOL protection.
In October, mini ATOLs are launched, allowing cut-priced bonding for companies that do a small amount of dynamic packaging.
There are also calls for a level playing field and for websites to be policed.
The Office of Fair Trading launches an investigation after discovering 40% of online agents make potentially misleading claims.
Meanwhile, retailers complain that they are put at a disadvantage by airlines that place cheaper inventory on sites such as Opodo or Expedia and their own websites.
Cosmos commercial director Stuart Jackson says online agencies such as Ebookers and Expedia are growing at an alarming rate and claims: “The ability to sell our holidays is diminishing.”
Research by NTL Business shows that 82% of agents operate their own websites, 41% are selling online and 44% have the ability to make real-time bookings.
For years, operators have dreamt of finding an end to costly brochure production. In 2003, there’s a feeling that they may have found a solution, with online brochures. Panorama launches the industry’s first exclusively online brochure when it puts its 59-page Canaries programme on the web.
Kuoni claims it received 5,000 requests for its special offers e-brochure in less than a month, and hopes to reduce print runs by up to 20% within two years.
It’s not just operators that see the value. Advantage Travel Centres sales and marketing director Colin O Neill urges suppliers to provide electronic brochures to make distribution more effective.
Acquisitions continue to make the news in 2003, and the year starts with Ebookers buying Travelbag for £55 million.
The three brands, Travelbag, Travelbag Adventures and Bridge the World, are retained for the time being and 10 high-street shops stay open.
In April, Holiday Autos is snapped up for £39.7 million by Lastminute.com in what Holiday Autos founder Clive Jacobs calls a “revolutionary deal”. Jacobs personally pockets £20 million and, in addition to retaining his existing role of Holiday Autos chairman and chief executive, becomes executive director and vice-chairman of Lastminute.com.
In December, Lastminute.com buys Medhotels.com in a cash-plus-shares deal worth up to £22.6 million. The acquisition forms the focal point of online agency’s trade-focused dynamic packaging tool, to be launched in 2004.
Lastminute.com’s annual report shows chief executive Brent Hoberman earned £173,930 in 2002, while group managing director Martha Lane Fox earned £146,207.
- BA reports 12% of customers booked online at BA.com in the first two weeks of the year, compared to 7% in 2002.
- Opodo reveals plans to increase its business travel bookings, currently 30% of all its business.
- Gazetteers are taken online with continually updated, independent reviews at Gazetteers.com.
- OTC buys Deckchair.com and Leisurehunt.com for £150,000, from World Travel Holdings.
- Travelbag almost doubles its web sales since being bought by Ebookers, with 31% online sales.
- Lastminute.com appoints former Nokia UK managing director Ian McCaig as chief operating officer.
- Cendant Travel Distribution Services buys Travel 2/Travel 4 for an undisclosed sum.
- Thomas Cook revamps its site to increase the number of holidays on offer from three million to 13 million including MyTravel, Thomson and First Choice.
- Martha Lane-Fox quits Lastminute.com.
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 2003