Friday, November 25, 2005

Supermarket giants could sqeeze smaller travel brands

Expedia's belief that increasing numbers of non-travel companies will muscle in on the sector appears to be spot-on.
Formula One - a travel site of sorts you may argue - is launching a white-label site using Expedia's inventory and technology. Tesco, already working with lastminute, has hinted at a more aggressive approach in selling holidays. Now ASDA has got in on the act, launching a travel site aimed, in line with its target market, at the "cost-conscious" traveller.
This, as Expedia reckoned, will be the tip of a very large iceberg.
All of which puts pressure on the traditional travel players who are fighting to get themselves established as online brands.
The likes of Expedia, lastminute and ebookers, together with major offline brands such as Thomson and Thomas Cook, will hardly be losing sleep. They are well-known and reliable brands with significant marketing budgets and expertise to cope with an increasingly competitive marketplace.
But it's those smaller brands attempting to make a mark on the web which could find themselves squeezed out.
Tesco is not a travel brand yet it hardly matters. Such is its power and brand identity, it could easily make an impact and even buy in the skills and knowledge necessary to make it work.
The question is though, why does Tesco, ASDA and other non-travel retailers want to bother with travel? Yes, it's hugely popular, but it's a volatile industry and the margins are notoriously small.
But in it they are and they could make a mark.

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