First Choice looks online in move to control distribution

A quarter of First Choice’s mainstream summer holidays were booked online in 2005 as the group continued to invest in its web platforms.
The operator said further investment would follow as increasing numbers of customers shop online.
"This is consumer driven. We are not force-feeding anything," chief executive Peter Long said.
Unveiling year-end record profits of £114 million, Long said the number of holidays booked online climbed from 15% in 2004 to 25% this year with further growth expected in 2006. Web business now matches that generated by First Choice’s high street retail network.
The operator said the online arena will help it drive 75% of sales through controlled distribution within three years.
"Since we launched our online site, firstchoice.co.uk, three years ago the percentage of sales which have been distributed through this channel have doubled annually," the company said. "Whilst this rate of growth will clearly slow, we are confident we will achieve our target of 75% through controlled channels by 2008."
The operator said it would invest around £8 million in 2006 to ensure the website is "sufficiently flexible" to meet customer requirements and to handle "ever increasing traffic."
In its specialist holidays division, First Choice said the majority of sites are now fully transactional, although only 10% of holidays in the sector were booked online in 2004 – of which 6% came via the UK.
"That is partly because Internet penetration is not as wide in other parts of Europe as it is in the UK," said Long. He said more resources will be ploughed into marketing online channels.
Meanwhile, the operator’s online accommodation platform, which includes Hotelbeds, Bedsonline and Hotelopia, doubled bednight bookings in 2005/06.
With hotelbeds.com, which allows tour operators to buy stock online, it said a "key imperative" is to deliver xml links to the top 300 tour operator accounts by the end of 2006.
"We are currently a third of the way through this project," the company said.
It described bedsonline, which provides accommodation, car hire and excursions to 5,000 travel agents, as a high-growth business "because it provides travel agents facing a rapidly changing competitive environment with an opportunity to meet the ever more demanding needs of the independent traveller."
Consumer site hotelopia meanwhile has seen "significant growth."
First Choice warned that the division will experience flat margins but increased revenue growth this year as it makes continued investment in marketing the brands.