Big Four – Consolidation will not deliver ‘experience’

Posted on April 20, 2007. Filed under: Uncategorized |

Travolution.co.uk writes and I agree with Kevin’s comment on this subject.

I’ve long held the opinion that the major European “legacy” tour operators would move seriously online only in response to market pressure by the U.S. owned major OTAs. This has now happened and led to the recent mergers among the majors.

There are three advantages these players have:

– Brand recognition in their key source markets
– Contractual relationships with suppliers in key destinations (i.e. Mediterranean)
– Control of the air lift to key destinations

The OTAs don’t have these, as they have actually not competed in these markets but more on the city break type short trip market. On the other hand they are more flexible in their market approach, still have a technology advantage – for how long is uncertain as the majors are pouring money into this area – and don’t have an expensive physical presence to dismantle.

It’s too early to tell who the eventual winners will be and it will be interesting to see them fight it out. One thing is certain, customers will have more choice than ever and most likely lower prices for certain products.

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