Wednesday, September 06, 2006

Is the real mash-up the industry itself?

Tim Walters from Fatwire writes:

Just when you get used to the idea that mashup is not the first step in the preparation of a capirinha, Air Berlin announces plans to merge with DBA.

This reminds the mainstream business press that BA is likely to take over Iberia; Lufthansa has an elective affinity with Austrian; and Air France-KLM still obstinately refuses to become further hyphenated via the seemingly inevitable purchase of Alitalia.

Emirates, meanwhile, might acquire Austrian. Or British Airways. Or Britain.

[Are you sure? - Ed]

Not to be outdone by the avian few, the rest of the travel industry also has a bout of merger mania (or its flip side, a hankering for “strategic reorganisations” and break-ups).

In August, Royal Caribbean buys Spanish cruise and tour operator Pullmantur; MFS is sweeping the better part of the Australian/New Zealand retail market under its skirts; Travelodge is sold to Dubai investors; and KarstadtQuelle is about to buy Thomas Cook from Lufthansa, only to immediately flip Condor to an unnamed venture group. Kuoni calls off the marriage with First Choice, and banishes the over-eager bridegroom.

Seeking to eliminate redundant cost centres, Thomson/TUI will merge Hapagfly and HLX. (Haflxpag?)

Hilton buys Hilton from Hilton. Then there is (or is not) Cendant (Travelport).

In short, nothing like a revolution in product distribution to shake up an industry.

But: what does the future hold? What do your tea leaves or cappuccino foamed-milk stripes tell you about the upcoming mergers, acquisitions and renderings-asunder?

When and how do the UK’s “Big Four” tour operators become the “Big Three” – or less?

How will the GDSs diversify to counter the rise in direct distribution?

Bubble or not (see Kevin May’s recent posting), how will the online ecosystem (OTAs, consolidators, meta-searchers, etc.) evolve?

Who eats and who gets eaten? Or will Google just buy everything, Emirates included?

Tim Walters, director international marketing and strategy, FatWire Software


Travolution blogger said...

1) Google would be highly unlikely to buy a online travel company. It probably couldn't afford it, despite the gushing from its many fans on Wall Street. And where would it put its existing relationships - on a PPC level - with other travel companies.

2) Big Four to Big Three: far more likely. whoever emerges victorious in the battle of the web will be in a very strong position to snap up one of the others. TUI and Thomas Cook lead the way in both on and offline, some argue, so worrying signs for the other two?!?

3) The GDSs are now marketing themselves as "technology companies". Amadeus et al need to diversify in order to survive. Isd Worldspan in a good position because it is the only "independent" and because it powers so much of the online travel industry already - probably not. Four into three in this area, too, perhaps.

4) consolidation in the LCC area is a distinct possibility, especially if the flag carriers continue to drop prices.

googletakeover said...

agree with previous comment about Google. it would never go down the acquisition route - it's popularity with travel companies is mixed at best, so whther it could afford any more antagonism is unlikely.

so what about a vertical search though? far more interesting. it has the tools and capability. but perhaps not the bottle.

Darren Cronian said...

I would be very surprised if Google bought an online travel company, but then Yahoo did acquire FareChase in 2004. What I can see is a Google travel search engine on the horizon - it wouldn't affect relationships with companies on a PPC level, and would prepare Google for the fight ahead.

What fight? I can see a “battle” between Google and Travel Meta search engines, like Kayak and The Travel Supermarket. The average internet user wants to find the best holiday deals available and quickly.

Comparing the two, you can see the advantages:

Google : Traditional search engine offering PPC and generic search engine results – the internet user clicks on a PPC ad or search result, which then directs them to the online travel website, where they complete a further search.

Travel Meta Search : The “Newer Kid on the Block” offering hotel, car hire and flight search – the internet user, enters their holiday search details, results are fired back at them from various online travel companies – they choose the best deal, book the holiday – deal done.

Meta search hasn’t YET really taken off over in the UK, and whilst I am not saying holidaymakers will leave Google in droves, they will be big competition, which could dip into the Google bank account, which is why I see Google having to launch such a product in the foreseeable future.

Anonymous said...

it makes a nice shame for tim not to be talking about cats for a change. :-)

Hotel Blogs said...

There is a repetitive pattern every year in this industry...mergers always take place end of the summer whether it is for hotels / otas / tas and so on...especially for companies listed on the stock market.

At the end of the day, it doesn't really matter because there is still a lot to create in the travel industry and travel search engines companies are the prime example of this for 2006. And those new ideas are not coming from the big players but from new entrants.

Now, Google is still the king of the Search and is very succesful because of the revenue driven by PPC..why will they compete with OTAs like Expedia who spend a lot money to be listed at the top of search engines. It doesn't make sense.
The fact that they might be interested to innovate and create the Ultimate travel search engine is possible. Google is still highly praised by their users and they want to keep it that way. So anything that could help them to search the right travel product without spending too much time by browsing different OTAs is relevant.

Let's see what is going to happen in the next coming months...