February 15, 2008
News here from ZDNet that some of the largest online travel agencies in the U.S. may shift their focus abroad in order to keep growing their business. Chief execs at Priceline, Orbitz and Expedia all said at a summit this week that they would be focusing on emerging markets in an aim to capture as much of those markets as possible.
Asia-Pacific seems to be the particular focus but there is still work to be done in Europe by some of these large players. Orbitz, Priceline and others such as Travelocity do not have the profile in Europe that Expedia have built up. I’d expect to see some more aggressive tactics over here from companies like them.
This could make it an even tougher year from domestic players especially with the economic climate in the U.S If the Americans stop spending I’d expect them to put their efforts into regions which are not so economically challenged.
February 13, 2008
Reuters have been holding a Travel & Leisure Summit in Los Angeles and this was one of the topics of conversation. The main answer seemed to be that deals will be key!
While consumers may tighten their belts, hoteliers may give better rates to online travel agencies as they will be more eager to fill their rooms. This should really benefit the large online agents such as Priceline, Expedia, Orbitz etc.
While a recession could erode demand generally it can also have the opposite effect in the activity of bargain and deal hunters as more people hunt for something affordable. This could benefit not just the big players but also the price comparison websites as they have access to so many rates they are the obvious place for any bargain hunter to start their search.
Another factor of economic weakness could be airlines who cannot fill all their seats, this should push them to offload unsold stock to online travel agents and may mean that there are some better deals than usual available.
Of course this is all conjecture, at the moment we have no idea how bad an economic downturn could get (wait for the commercial property market to show it’s weakness) or how long it could last.
My tip for this year is price comparison websites. They are positioned well as far as price goes for a year of weaker demand and this has to be the year that they finally improve their user experience to a point where they are so easy to find deals that they start to erode market share of slower moving websites (remember, a lot of price comparison sites are technology companies rather than travel). Looking forward to seeing how Kayak, Mobissimo, Travel Supermarket etc get on in this economic climate!