On Holiday Group chief executive Steve Endacott has admitted his online virtual tour operation Fresh Holidays has not taken off as expected but he remains convinced there is a place for it in the market.
Speaking at an E-Tid event in London this week Endacott blamed a number of restrictions including issues with ATOL that makes dynamic packaged holidays cheaper and a lack of profile among the public.
“They key thing about Fresh is the overheads; having to be bonded. It’s therefore cheaper for an agent to do it themselves,” he said adding he was not convinced all holidaymakers were interested in building their own trips and there was still demand for pre-created packages.
Fresh Holidays creates 10 million packages a day by searching airlines and accommodation-only suppliers, this compares to the 3 million Thomson is able to offer, according to Endacott.
He said one of the key benefits of the virtual tour operator model is that airlines and other suppliers can hide their margins in a way they cannot under the transparency of dynamic packaging.
“Consumers like dynamic packaging but lots of suppliers don’t because you can’t hide any of your pricing and you don’t know what your pricing is until you’ve done all the work. I believe there is a role for this [virtual tour operating] alongside dynamic packaging.”
Endacott forecast as much of 75% of commodotised mass market product could be sold online within three years although he was not convinced the public will opt to cut out the travel agent completely.
“The only problem is booking. How many people will click that button for a £2,000 holiday? People will probably rush online and then come back again, as things do not go perfectly, to travel agents,” he said.