CENDANT and InterActive Corporation will dominate the
market in five years’ time while the big four will be reduced
to two, according to First Choice chief executive Peter
Long.
The prediction will be worrying news for the four existing
vertically integrated players, of which First Choice is one.
Long also forecast there would be a number of specialist
operators, including First Choice, alongside large players.
“Cendant and InterActive will dominate our market. We
don’t know if they’ll acquire differentiated content,
although they could afford to,” he said.
Speaking at a new State of the Industry lecture, sponsored by
Travel Weekly and Preferential Insurance, he added: “Scale or
specialisation are credible strategic options; being caught in the
middle is not.”
Already Cendant owns operators including French Life and Travel
2/4 while InterActive Corp has Expedia and TV Travel Shop in the
UK.
Long predicted low-cost airlines Ryanair and EasyJet would
survive and innovative agents would become stronger.
In the past the industry could be characterised by the big four,
medium-sized and specialist operators and independent travel
agents, said Long.
He described today’s market as being made up of low-cost
airlines, global distribution system suppliers, online travel
companies and the traditional operators and agents.
Despite online competition, he said: “We have the content
– they don’t. It won’t be a purely online world.
People want reassurance. We forget holidays are a key purchase of
the year.”
Long said mainstream operators had two options: either to
develop one brand for the airline, shops and tour operation,
develop a low-cost airline model, increase controlled distribution
and embrace dynamic packaging; or grow through segmentation –
First Choice’s option. This involves more flexibility, a
single brand, controlled web distribution, more exclusive product
and reducing flight-only and dependence on short haul.