Online travel taking off (see bold)
Thursday, November 12, 1998 Published at 06:45 GMT
MSN Expedia UK launches as a one-stop online travel shop
By Internet Correspondent Chris Nuttall
Microsoft is set to become the biggest player in the UK online travel industry with the launch on Thursday of its Expedia service.
Chris Nuttall: Traditional High Street shops can't afford to ignore the digital revolution
Expedia promises the availability of hundreds of thousands of flights for booking online and 75,000 package holidays. Information is updated every 20 minutes so that œ99 week in Majorca is still there when you try to buy it.
The service will give official published airfares next to ones at bucket-shop prices. It has the equivalent of 32 volumes of travel guides on its Website and 360-degree views of major tourist attractions. There are car hire and hotel booking services and the same level of security that has seen the US version avoid a single slip-up in its two-year history, according to the company.
High Street shops under threat
Expedia's launch could lead to a major shake-up in the UK online market.
But, in the long run, it could do more damage to the traditional High Street travel agent by boosting consumer confidence and awareness of the advantages of buying over the Internet.
At present, most people still prefer to buy their holidays face to face with their travel agent. But 25% are now booking by telephone, 10% use teletext, while less than 1% are using the Internet.
Those figures are expected to change dramatically over the next five years, with the growth of Net usage and interactive television entering the equation.
The travel business is the largest electronic commerce category with around 40 per cent of the market. "We reckon that by 2002 e-commerce in Europe will be worth about œ16bn," says Simon Breakwell, head of MSN Expedia International, "We reckon that travel will be thirty to fifty per cent of that market." In the US, Expedia has been growing at 250 per cent a year, with $7m in sales every week and the millionth ticket recently sold.
The UK is the fourth-largest travel market in the world after the US, Germany and Japan and British companies are seeing a quick uptake of their own online services.
Flightbookers, based on London's Tottenham Court Road, is currently seeing business growing at 20 per cent a month on its Website. It was launched as far back as 1996 and Net sales are perhaps 10% of its overall business, with telesales taking up more than 80 per cent and the rest coming from customers visiting its handful of shops.
"Expedia has very deep pockets, which other online booking services don't have," says Firdaus Ruttonsha, managing director of Flightbookers.
"Expedia is a threat to the industry as a whole, but a greater threat to those travel agents that are not so far advanced with e-commerce. But it will give the online business greater credibility and expand the market for us."
EasyJet, the discount airline company, recently sold 30,000 seats over the Web during a five-week promotion with two national newspapers.
America's Travelocity launched a UK home page on Wednesday giving access to the Sabre computer reservation system used by 40,000 travel agents around the world. Content is being provided by Britain's Emap Online through sites such as Bargainholidays.com and A2Bairports.com.
Abta warns of extinction
The annual meeting of the Association of British Travel Agents (Abta) was told last week that a revolution was coming in the way holidays were booked.
High Street travel agents who do not excel in what they do may not survive the competition, warned holiday company chief Warren Sandral.
And the managing director of the Airtours package holiday firm, Chris Mottershead, said: "We have to take every opportunity to sell our products. Those who bury their head in the sand will simply wither in the heat of the battle they don't have the wit to compete in."
Expedia 'not a category killer'
Graham Barnes, chairman of the IT consultant to the travel industry ABTECH told News Online by e-mail: "Microsoft have very deep pockets and are investing heavily in the hope that Expedia will be one of the 'category killers' that Americans love. It won't be. It may give a return on investment eventually but category killers and the Internet don't mix.
"The same person may buy a flight via Teletext, a city break from a kiosk, a summer holiday from a High Street agency and a business flight on the Internet at different times.
"The Internet will not cut out the middleman, but it will certainly put their added value under scrutiny." |
