A WAR of words has broken out between TUI and
Lastminute.com over the success of global distribution system
suppliers snapping up online agencies.

At the Eye For Travel conference in London this week, TUI group
corporate director of strategy Thies Rheinsberg dismissed the
“forward integration”of Sabre, Amadeus and Cendant as a
waste of time.

Amadeus now owns a 74% stake in Opodo after originally taking a 55%
stake last year.

Cendant bought Ebookers earlier this year, while Sabre owns
Travelocity and is on the brink of buying Lastminute.

Rheinsberg argued the online agencies are being squeezed by
traditional operators and new travel search websites and said the
vast majority of consumers want content which the traditional
operators own.

He also claimed customers trust online travel search portals more
than online agencies and that consumers will use these websites to
compare prices before booking direct.

“In the US, online agencies have dominated, with 80% of
online sales through the Internet agencies and only 20% with
suppliers. But this year the lines will cross and direct supplier
sales will outstrip those through online agencies,” he
said.

“Content is king and the search engines are seen as far more
neutral than online players.”

He slammed the GDSs for competing against their traditional
customers.

He said: “How do they explain to their traditional customers,
the high-street travel agents, that they are now competing against
them?”

Hoberman, who has agreed to sell Lastminute to Sabre in the latest
of the forward integration deals, hit back.

He said: “More than a third of our business is through
agents. Travel agents want deeper content which is what the GDSs
can offer.

“Search engines are over-hyped. They make a commodity of the
product which is no good for anybody. No search engine can pull
together dynamically packaged prices. They use old data and their
sales conversion rates are appalling,” he said.

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