History of online travel – 2002
A new web venture, Opodo, backed by nine European airlines, is launched in February, with the promise to undercut high-street agents by up to a quarter.
But it’s not travel agents who are quaking in their boots. Established online players Expedia and Travelocity make submissions to the European Commission expressing concern that the shareholding airlines – Aer Lingus, Air France, Alitalia, Austrian Airlines, British Airways, Finnair, Iberia, KLM and Lufthansa – may abuse their dominant position.
Expedia managing director James Vaile is particularly outspoken, saying Opodo is not competing on a level playing field.
A similar operation, Orbitz, was launched in the US in June 2001 and, by early 2002, is one of the top 10 travel agencies in the US.
Agents in the UK don’t seem unduly bothered, though, and it doesn’t take much research to show that cheaper fares can actually be found elsewhere.
But Opodo has a marketing budget that most travel companies would die for, setting aside £19 million to raise awareness of the company’s name in a major marketing drive using multi-media brand and price-led advertising.
Initially offering flights, hotels and car rental, Opodo says it will sell packages within two years.
In fact, the package holiday option comes much sooner, and is launched in July 2002, backed up by a call centre for people who do not want to book online.
Developed by Holiday Express, Digital Travel Services and Comtec, the service has product from all the big four operators and others.
By September, Opodo says sales of package holidays have increased by 12%. The company declines to give precise figures, but says it has sold “hundreds” so far.
Acquisitions are prominent throughout 2002. In April, Lastminute.com buys Travelselect.com, one of the country’s first Internet-based travel businesses. The move gives Lastminute.com access to consolidated fares of 85 airlines.
Other acquisitions include the Destination Holdings Group for £12 million and European travel website Travelprice.com in a deal worth £31.9 million.
Ebookers announces in the autumn that it will embark on a major acquisition spree and will refocus its business in an attempt to push sales up to £1 billion a year. The company is worried Expedia has cash and sales that pose a very serious threat to its business. Ebookers admits it is considering selling to Lastminute.com.
The ability to allow users to create their own package holidays on the web is pioneered in the UK in 2002, but the name dynamic packaging has yet to be coined.
In January, Expedia.co.uk announces its system, Flight+, will be launched later in the year. Expedia has had ‘e-packaging’, as it’s known, on its US site for some time and, in 2001, it accounted for 15% of package sales.
Priceline.com also recently launched an e-packaging facility in the US with the intention of adding it on to Priceline.co.uk, although no timetable has been put in place.
By the end of the year, Lastminute.com and Ebookers add tailor-made packaging tools to their sites.
- Travel Technology Initiative agrees standards that will allow all package holiday sales to take place on the web.
- Expedia.co.uk says turnover and passenger numbers are up 170% on this time last year for package holidays.
- The Dreamticket.com site is given a new lease of life as it is bought by Selsdon Travel in Croydon.
- Amadeus is to combine operations into a new business unit to develop its online technology, called e-Travel.
- Sabre is poised to complete the $420 million takeover of Travelocity.
- Air Miles expands its site to feature online bookings for flights, hotels and car-hire after teaming up with Amadeus.
- Priceline.com European chief technology officer and US vice-president of development Nigel Addison Smith joins Ebookers as chief financial officer.
- ABTA launches a high-profile fight against online agencies that are not bonded with the association.
- British Airways launches BA Direct – putting online sales through BA.com, telephone sales and BA Travel Shops under one umbrella.
- First Choice tells the City it will have all its inventory online by December.
- Thomas Cook looks to introduce e-brochures.
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 2002