Tuesday, November 21, 2006

Must be time for a price war

There is some interesting speculation in the market this week following Expedia UK’s announcement yesterday that is launching an Early Bird booking incentive.

In a press release yesterday Expedia said its promotion, running to the end of November and for trips booked between 1 January and 31 August next year, would be going head-to-head with low cost carriers to ensure travellers “get the best deals and better availability”.

Not so sure about that, appears to summarise the whispers from some other online travel agencies and other industry watchers.

As reported today on the website, speculation is building that the crucial, booking-heavy January to March window, could see some of the UK’s OTAs come under some serious pressure for the first time.

Since the last peak booking season, operators and suppliers – airlines and hotels – have spent much of 2006 investing, building, relauching and generally beefing up their websites.

Clearly many of them now feel they can target consumers with above-the-line advertising campaigns that urge consumers to visit their website.

There are also millions of marketing pounds being spent on pay-per-click advertising. In short: suppliers and operators want consumers to book a product in the most direct way possible, with them – i.e. through them.

So if suppliers and operators are to see a major uplift in the amount of direct bookings, consumers will be coming from somewhere, even taking into account the steady increase in general online travel activity.

In some respects Expedia is going up against the likes of EasyJet and Ryanair, but if senior figures in the industry are to be believed then they – and perhaps other OTAs – could actually be taking a wider view of how business will play out early next year.

Or perhaps not. Send us your comments...

Kevin May, editor, Travolution

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