Lastminute.com warns of ‘zero’ differentiation

Lastminute.com chief executive Ian McCaig has given a stark warning that as the online travel industry matures, product and price differentiation will “tend towards zero.” That will be followed by deterioration in supplier economics, which ultimately will mean making money will be more difficult, he told the Travolution Summit in London this week. The renewal…

Lastminute.com chief executive Ian McCaig has given a stark warning that as the online travel industry matures, product and price differentiation will “tend towards zero.”

That will be followed by deterioration in supplier economics, which ultimately will mean making money will be more difficult, he told the Travolution Summit in London this week.

The renewal of the web by new sites means that even established community sites such as Friends Reunited or MySpace were being superseded on university campuses by WAYN, Facebook and Second Life, he said.

“I can imagine a situation where people network together through Facebook and Wayn to rendezvous at a music event, which should prompt thinking along the lines of ‘What is the disposable income of that group – and can I get a piece of it? Or will your CFO ignore that group, and focus on ‘Mrs Muller’, who spends E10,000 on overseas trips? he asked.

“You have to ask yourself where you’re going to play and how deep you understand your customers. You’ll have to go deeper than you ever have before – or you won’t make it,” he warned.

“Those with the deepest understanding of the market, their customers, and those with the best plans are the ones who’ll be in the vanguard of what’s to come over the next few years.”