| Journal: TWUK | Section: |
| Title: | Issue Date: 19/06/00 |
| Author: | Page Number: 38 |
| Copyright: Other |
Pow Wow: On-line travel by Alan Moore
Web bookings reach $6.5bn in US market
Distribution methods evolve
AMERICANS booked more than $6.5bn worth of travel on-line last year – almost triple the amount of business taken over the Internet in the US in 1998, according to a top American Express executive at Pow Wow.By the end of next year this is expected to increase to around $20bn, said Brian Froelich, senior vice-president and general manager, consumer travel services, for American Express.
In his opening address to delegates at Pow Wow, he said this served to emphasise the rapid transformation of the global travel distribution system.
Froelich added: “This is bigger than anything any of us ever imagined, and if the industry wants long-term success we have got to make the transition to an interactive environment.
“The Internet is not going to go away, and the rest of the world, including Europe, Asia and Latin America, is also starting to book travel on-line.
“This means investing in technology either by doing it ourselves or buying it from others.
“It also means forming strategic partnerships and alliances, sometimes with competitors, and sometimes making targeted acquisitions.”
Froelich cited an example of how one of the newest on-line US travel agencies, vacation.com, is already tackling the US domestic market.
“It has built a network of 9,000 traditional retail travel agencies by buying up a bunch of consortia and providing them with Internet services,” he said.
“These traditional agencies couldn’t afford to build their own sophisticated Web sites but they have now been given a level playing field in order to compete with the big on-line companies, such as travelocity.com.”
Froelich added that travelocity.com had now merged with Preview Travel in a $2.2bn deal to create a base of 17m registered users.
“This is called creating scale by joining forces with your biggest competitor.”
In another example of rapid on-line development in the industry, he said travelcity.com has also signed a deal with priceline.com to create a Web service that offers seamless access to each other’s airline ticketing.
“It’s a smart move because it opens up new opportunities and new customers for both parties – it’s called multi-channel distribution,” said Froelich.
He revealed that a travel specialist referral network has also been set up by travelocity.com in conjunction with a US company called Virtuoso, formerly API Travel Consultants.
Customers can browse Virtuoso travel specialists for a particular booking and be charged a $25 referral fee for the service.
On the net: US bookings are expected to rise to $20bn by 2001