History of online travel – 2000
Come the millennium, come a change in attitude from investors who start to back away from online travel.
The year starts off well, with several high-profile figures announcing they are launching web companies, and, initially, the money is there from venture capitalists.
Among them, former Going Places chairman Tony Bennett announces Destinex.com; Lawrence Hunt and Jo Rzymowska launch Dreamticket.com; and Thomson takes a 30% stake in start-up Travelchest.com.
For Bennett, nine months of work ends in personal disaster in October after talks with a major investor break down and he fails to find another backer.
Bennett says venture capitalists feel there are simply too many travel Internet start-ups, and he admits he overestimated the public’s willingness to make complicated travel bookings over the Internet.
“It’s now clear that sales of more complex travel transactions over the Internet will be a lot slower than people, including me, had anticipated nine months ago,” says Bennett.
By December, Travelchest.com, which was launched in a blaze of publicity at the beginning of the year, is left fighting for its life when shareholder Thomson decides to switch away from investing in third-party websites in favour of concentrating its own brands.
Come December, chief executive Nigel Carpenter says he needs £2.5 million within a matter of days.
Why the sudden change of heart among investors?
Bennett later blames Lastminute.com’s stock market flotation for the demise of his own, and several other Internet ventures.
Eighteen months after launching, and still to make a profit, Lastminute.com floats on the London Stock Exchange at £3.80 a share in March.
After an initial sharp rise, share prices quickly slump back, and within 48 hours have dropped by half.
“Until that point, we had positive conversations about further investment,” Bennett says later.
“But you have never seen investors run away so fast when they realised Lastminute.com had become a disaster. They regarded it as too high risk.”
For investors, the Internet bubble has clearly burst, and Dreamticket.com hangs on for dear life as the industry looks to a brighter 2001.
In May, Airtours unveils its £100 million e-commerce strategy, which encompasses the web, digital TV, mobile phones and inflight and in-hotel room entertainment systems, under the
global umbrella brand, Mytravelco.
The product range includes a Mytravelco.com website; Lateescapes.com to auction off bargain holidays and late-availability packages; and Flycheap.com, selling seats on Airtours’ European airlines. Internet café-style outlets could replace some of Airtours’ 1,000 shops over the next few years.
Meanwhile, chairman David Crossland says he will block Lastminute.com and other recent industry entrants from selling Airtours products.
First Choice chief executive Peter Long launches a stinging attack on Internet start-ups that sell travel, calling them “parasites”. Long tells delegates at the ABTA Convention in November that most start-ups will be short-lived, and are fronted by people who have no idea how to run a business.
He says: “Nine months ago, us old-economy companies were all going to die because we were all going to be taken over by the web companies. The whole thing is nonsense. Some of the business plans of Internet start-ups are unbelievable. There is no foreseeable reason why they are going to work. They are wasting their time.”
- Google launches a pay-per-click advertising package.
- Avro founder Paul Dendle returns to the seat-only market with the launch of Internet-based Choiceair.com.
- Expedia.co.uk launches a TV advertising campaign, the first by an online travel agency in the UK.
- Hotel and destination site TripAdvisor.com and online travel agent Orbitz launch in the US.
- Travelstore.com buys Amersham Travel for £23 million.
- Thomson launches Thefirstresort.com.
- ABTA revises its code of conduct to include companies selling travel on new media.
- Newly floated Lastminute.com overtakes British Airways to become the most recognisable online travel brand.
- Telecommunications watchdog Oftel orders BT to give rival Internet services cheap, unmetered access to its network, meaning web users will get cheaper deals.
- Airtours auctions holidays online from £1.
- Holiday Hypermarkets installs a cybermarket in its new Sheffield store.
- Travelocity.com installs a chat facility on its site to enable up to three friends to communicate while checking out holidays on the site.
- Lunn Poly adds direct bookings to its site.
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 2000