FT – Letter to the Editor

Posted on January 3, 2005. Filed under: Uncategorized |

Web-based travel companies must evolve to continue offering value

Published: August 18 2004 05:00 | Last updated: August 18 2004 05:00

From Mr Joseph E. Buhler.

Sir, With reference to Comment & Analysis (August 16): online travel companies have had the staying power, and have not become victims of the post-bubble bust, because travel is an ideal service to be purchased conveniently online at any time.

What has recently changed for online intermediaries is that the low-hanging fruit has largely been picked and future growth can only be sustained by a shift away from price-focused individual component sales to the online sale of leisure packages. To achieve that requires significant investment in new technology that offers web users a much improved online travel-buying experience.

Dynamic self-packaging of individual multi-destination travel components that in combination make up the entire trip content will have to become the standard to take online leisure travel to the next level.

Offering online travellers not the cheapest price but true added value is the profitable way forward. Seamless, real-time connectivity between online agencies and suppliers will not only make this possible but also result in cost efficiencies that will allow online intermediaries to continue to play an important role in the marketplace and offer competitively priced, bundled services.

The purchase of single components for a simple single destination trip will shift even more to large supplier websites but there will always be a much larger number of small- and medium-sized suppliers, especially in the accommodation sector, that must rely on intermediary sales to attract customers in any market and online travel companies will continue to be their most cost effective partner.

Joseph E. Buhler, Chief Executive, netStrategic, New Canaan, CT 06840, US

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