History of online travel – 1999
The big four vertically integrated companies are watching the development of the Internet, but as yet, there’s disagreement as to whether the web or home TV is the way to go.
Both are seen as peripheral for selling purposes, although with huge potential for getting product information out. Neither appears to figure large in the plans of the major retailers at the beginning of the year.
In April, Thomson looks set to become the first major UK operator to sell holidays over the web, with deputy managing director Shaun Powell saying it is “only a
matter of months” before a system will be launched. At this stage, Thomson’s website enables clients to look at resorts but not access availability information or pricing.
Powell projects modest sales in the short term, saying: “It will bumble along and then suddenly go exponential.”
In May, Airtours launches Airtours.co.uk, featuring late deals and information on job opportunities within the company. The site follows research by Going Places that shows older people are more likely to book holidays on the Internet than the young, and the group that most preferred to book on the web is the 45 to 64-year olds.
In September, Thomas Cook decides it will not offer online bookings on its upgraded Internet site, because it believes customers prefer to purchase holidays over the telephone. The operator has spent £2 million upgrading its two-year-old site, but rather than taking credit-card details over the Internet, it will offer a call-back service. However, with 2.5 million holidays, Thomas Cook’s upgraded site offers the widest range of any travel site.
In December, First Choice’s new managing director of UK distribution Peter Shanks spearheads an e-commerce revolution as the operator looks to build its electronic distribution channels. The company plans to develop Internet, digital TV and telephone booking capabilities. “It is unchartered territory and we need to explore every opportunity,” says Shanks.
A new website, Travelchoice.com will be launched in January 2000, with other operator sites to follow later.
Meanwhile, First Choice chief executive Peter Long says: “E-commerce is an ideal opportunity. I can see it representing 25% of the business in two or three years’ time.”
Technical hitches cause embarrassment in April for Sir Bob Geldof, whose new site, Deckchair.com, crashes on the day of launch. Geldof decided to create the site after becoming frustrated when he tried to find a deal to take his family on holiday to Florida.
He uses cash from his Planet 24 TV company to fund the project.
“I tried using different agents and got different prices, so I used websites such as Expedia and Travelocity. I still had zero information three hours later,” he explains. “It took nine pages to get through registration and advertising. I ended up paying too much for a flight.”
Geldof claims fares are up to 70% cheaper than published fares, and he plans to add charter flights, insurance, car hire and packages within 12 months.
The budget airlines are thriving in the online world, with EasyJet taking a quarter of its bookings over the Internet after just one year. The airline claims it made 160,000 sales via the website in February and March 1999, taking revenue of £7.7 million, compared to 911 seats sold in April and May 1998.
Twice as many customers book over the Internet than the telephone and EasyJet wants to increase online sales to 60%. In December, Ryanair creates an Internet service to sell reduced fares.
- Systems supplier FSS sets up a dedicated department to create sites for its clients.
- Microsoft’s Expedia says it has exceeded its £2 million sales target since it launched its online Internet booking product to the UK three months ago.
- Hyatt sees a “genuine switch in trends”, claiming sales over the Internet are set to double this year, with $30 million of business being booked online.
- Phonelink, which owns online provider Tel-Me, purchases Seaforths Travel.
- Expedia prepares to offer package holidays online. The online agency presently only has access to 70,000 last-minute holidays, fulfilled by Thomas Cook call centres. Globally, Expedia is getting more than five million visitors a month, with sales of $15 million a week.
- Former Thomson managing director Charles Newbold becomes chairman of fledgling web company iglu.com.
- Online agency Travelstore.com makes history by becoming ABTA’s first online member.
- Royal Caribbean International, Princess Cruises and Norwegian Cruise Line announce they will roll out Internet services.
- Travelocity and Preview Travel merge.
- Flightbookers relaunches its website, Ebookers.com, to include FareAlert, allowing users to access price changes.
Click here for The Influential Ten – the pioneers and innovators in online travel from 1996 to 2005.
Other notable events in 1999