History of online travel – 2001
The year starts as badly as 2000 finished, with more high-profile dot-com collapses.
In early February, operations are suspended at Travelchest.com, after the company fails to secure investment of £2.5 million.
Despite having to lay off 19 staff, chief executive Nigel Carpenter still hopes he can revive the company by the end of the month, although this is not to be.
But it is the collapse of Dreamticket.com the same month that causes the biggest upset when investors refuse to stump up any more cash.
The online retailer, launched in April 2000, spent nearly £5.5 million before taking the decision to close down on February 7, with the loss of 20 jobs.
Chief executive Lawrence Hunt, who invested more than £1 million of his own money into the venture, says bookings had been going well, with £2 million in revenue taken since launch. But it needed to raise £8 million to take it through to 2002, and found itself a victim of bad timing.
Investors, who had been throwing money at Internet travel start-ups, began getting nervous last year, and the money simply wasn’t there.
Ironically, Dreamticket.com was offered $28 million a year ago, when dot-coms were in vogue, but Hunt turned the offer down because he didn’t want to hand over control.
Analysts had viewed Dreamticket.com as an exemplary travel site.
At the time of the collapse, travel analyst Michael East says: “It had an excellent team and an excellent site. If they can’t make it work, it puts a serious shadow over whether third-party dot-coms can thrive in the package market.”
Dreamticket.com commercial director Jo Rzymowska joins Disneyland Paris as managing director, while Hunt later joins Rapid Travel Solutions as managing director.
On reflection, Hunt says he wished he had taken the $28 million when it had been offered to him, and warned others to secure funding and the right technology before embarking on similar ventures.
Microsoft sells its 70% stake in Expedia in July to media and entertainment company USA Networks, in a deal worth £1.5 million.
Along with other acquisitions the sale creates the largest interactive travel group in the world, a move described by Expedia.co.uk managing director James Vaile as “really exciting for us”.
The sell-off was not much of a surprise as Microsoft had always planned to sell Expedia when it reached a certain size.
“Operating a travel agency is not Microsoft’s business,” says Vaile. The sale came as Expedia announced a profit of $12 million for the year ending June 30, compared to a loss of $62 million in 2000.
Lunn Poly gives marketing and commercial director Hugh Edwards the task of exploring opportunities with digital TV, the Internet and WAP. Web-based selling systems, currently being piloted in some shops, will start early next year, and will be in all shops by 2003.
“Web bookings are currently a very small percentage of total sales and it’s hard to say what level it will reach,” says Edwards, although he estimates they could account for 5%-15% of business within three years.
- Lunn Poly opens first shop giving customers access to the Internet in Nottingham.
- STA Travel research finds 77% students are happy to book online.
- Sabre launches Sabre.Res, an online booking tool that enables agents to set up customised interactive websites.
- Travel Choice launches Travelchoice.com and plans to put standalone terminals in its 207 shops.
- Orbitz.com is launched in the US.
- Yahoo! launches Yahoo! Travel. Suppliers include British Airways, Go, Saga Holidays and Lastminute.com
- Travelocity acquires Air Tickets Direct.
- September 11 2001 sparks panic in the travel industry as consumers sit tight amid fears of global conflict.
- Ebookers looks to make redundancies.
- OTC attributes a 90% year-on-year increase in gross sales to its decision to focus on European short breaks and perceived low-risk destinations after September 11.
- Lastminute.com signs deal to provide content for Internet service provider AOL Europe.
- Lastminute.com chief executive Brent Hoberman challenges Airtours UKLG chief executive Richard Carrick to a £10,000 wager that Lastminute.com will be more successful than the MyTravel site in two years’ time.
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 2001