LONDON -- "Are dot-coms dot-toast?"
That question, based on recent comments in the press by some
industry leaders such as IBM's chief executive officer Louis
Gerstner, was a focal point of a forum held at World Travel Market
here entitled, "E-Travel, Evolution or Revolution?"
The panel, moderated by Cahners Travel Group vice president and
editorial director Alan Fredericks, agreed that any anticipated
demise of the dot-com world was over the top.
"The two largest on-line travel companies booked $1 billion in
sales last quarter," said Charles McKee, executive vice president
of Lastminute.com, referring to Travelocity and Expedia.
Lastminute.com is a U.K.-based firm that offers travel, retail
and restaurant deals in six countries.
"Travelocity and Expedia are well placed and well funded to spur
consolidation around the world," McKee said.
The Internet has dramatically changed the way travel companies
do business, McKee said, citing the emergence of airline/cruise
line consortium sites and the opening up of a once tightly
controlled distribution system.
Panelists balked at the idea that either Internet-only firms or
brick-and-mortar businesses would bring about each other's
demise.
"Will Thomas Cook eat Lastminute.com's lunch?" asked
Fredericks.
"Well, you could have said something like that about Hertz years
ago in relation to our company, but that hasn't happened,"
responded Clive Jacobs, chairman and chief executive officer of
U.K.-based Holiday Autos. "Instead, we revolutionized the [car
rental] business."
McKee said nobody was about to eat his lunch either.
"What we sell is very different than Thomas Cook. They have a
full range of travel product and ours is last minute," he said.
"A Web company that is exclusively travel and is trying to
imitate what is already out there, with no scale or niche, won't
work."
All of the panelists put forth that the Internet was part of
both a revolution and an evolution in business.
"I see the Internet as another source of distribution, so in
this way it's an evolution. The Internet is probably more suited to
travel than to any other product," said Jacobs.
McKee concurred, "It's a revolution because we are helping
suppliers sell product to a brand new and much wider audience. But
it's an evolution because it reflects a frustration with and old
way of doing business."
Responding to Fredericks' suggestion that the rapid emergence
and decline of some Internet companies was comparable to the
American Gold Rush, Jacobs said, "We are probably in the second
stages of that gold rush but in 10 year's time, we'll have no idea
where it's going."
The hype generated by the Internet does not always reflect the
reality of the marketplace, several panelists argued.
U.K.-based Thomas Cook's packaged tour division, for instance,
gets less than 5% of its bookings through the Internet, and though
chief operating officer Simon Vincent does not have high immediate
expectations, he predicted that in a decade it will account for
half of the company's bookings.
"The Internet lends itself to independent travel, that's what
we've seen on our site," he said, adding that the three-month-old
site was the first in the U.K. to offer take on-line tour
bookings.
So how should a brick-and-mortar firm create an Internet
strategy?
"Successful translation to the Web relies on the essence of what
those companies are." said Laura Haines -- managing director of
Appetite, a consulting firm -- who believes the company's existing
reputation in the marketplace is key to its Internet success.
Jacobs added that brand awareness could give emerging Internet
travel companies some trouble.
Vincent said, "It's taken us 13 years to build up our name in
the marketplace. Lastminute.com did it much quicker, but these
upstarts who come along and complete with long-established brands
might have some difficulties."
That's why Thomas Cook's on-line agency site can compete with
the high-profile Lastminute.com, he said, despite its
brick-and-mortar roots.
"We have already established a reputation with travelers. Trust
is the most important factor and that's what we stand for."
Jacobs, meanwhile, was not a fan of the CRS' approach to the
Internet.
Addressing the purchase of Vacation.com by Amadeus, he said, "GDSs are
afraid. They're dinosaurs. [The Amadeus purchase shows that]
they're not thinking strategically."
Service means survival
LONDON -- Brick-and-mortar agencies can compete and thrive in
the world of consolidations and Internet travel companies as long
as they provide a value-added service to consumers.
These sentiments were expressed by several travel industry
veterans during an e-commerce panel discussion here at World Travel
Market.
"They can offer choice," said Clive Jacobs, chairman and chief
executive of U.K.-based Holiday Autos.
Jacobs said that the most important way for agents to
differentiate themselves is by giving clients suggestions and
options that are available nowhere else.
Another panelist, Laura Haines, managing director of the
consulting firm Appetite, said agents should take advantage of "the
Internet's impersonal nature."
Citing an example of how the Internet is not the best way to
book even an airline ticket she said, "you shouldn't have to input
your airport and its code before looking at flights."
Agents can offer a much more personalized approach, said Haines,
"but this advantage might decrease with time if the Web becomes
more personalized."
Suppliers want any means of distribution they can get, the
panelists agreed, but Jacobs said he was not undercutting
agents.
"We give the same Web-only discounts to agents as we do to
consumers." Simon Vincent, chief operating officer of Thomas Cook,
predicted that tour operators would soon reserve parts of their
sites exclusively for agents.
"Many suppliers first went with a general Web model but now they
are looking at creating a business-to-business component of their
site to increase sales."