The future of dynamic packaging is as debatable as the meaning of the term itself, which appeared about six years ago and is now an accepted industry expression.
In the beginning, dynamic packaging companies sold hotels. Then came transfers, followed by other components of traditional holiday packages, such as flights, car hire and travel insurance.
The result is that agents and consumers can now go to dynamic packaging companies’ sites and put together a package, just as they might book a package with an operator.
So is the distinction between a dynamic packaging company and operator becoming blurred?
Definitely not, according to somewhere2stay.com managing director Stuart Jackson, who also maintains there is no such thing as a dynamic packaging company.
“There are flight-only companies and accommodation-only suppliers, and there are online agencies such as Lastminute and Expedia which use new technologies to pull together packages using components on the web,” he said.
“A traditional operator presents a package to clients as a fait accompli; dynamic packaging is just a technological term to describe creating a package on the fly. There are no dynamic packaging companies.”
Jackson added: “We have links to flights and car hire on our site, but if agents want to book either, they leave the site and make the booking direct with the supplier.
“If clients want a holiday, they go to Cosmos, if they want a hotel they use somewhere2stay.com. That might change, but I can’t see it.”
However, youtravel.com sales and marketing director Paul Riches believes the lines between dynamically packaged holidays and traditional packages are becoming blurred as dynamic packaging companies become a one-stop content shop.
But he also said there is a future for companies such as youtravel.com, which offers links for customers to book flights after they have booked a hotel on the site, but are not dynamically packaging the content.
He said: “Most agents are still using different providers to build a package for their clients, using our hotels and pulling flights and transfers from other suppliers because it is still significantly cheaper than a traditional package.”
Holiday Taxis sales and marketing director Russell Parr said bed banks that take allocations and sell stock under their own brand are operators by another name. Those that resell another company’s allocation are not.
Vacenza.com non-executive director Richard Carrick said there is growing demand for dynamic packaging, but the future is grim for bed banks that sell through the trade.
Vacenza.com only sells hotels and transfers through the trade at the moment, but is close to giving agents access to flights, car hire and travel insurance. However, consumers can book all three components through Vacenza.
Carrick said: “The market can’t support so many bed banks. Those that sell through the trade are trying to become more consumer-facing because that is the future.”
He added: “Money is being made but it’s difficult to say how much. Agents who are on the ball will look to transact with hotels and make better margins.”
Jackson described vacenza.com is an online retailer, but Carrick, who also heads up Hoseasons, said it is an operator by another name. “We are giving clients a menu of options from which they can select what they want to create their holiday and we pay agents’ commission.”
Despite the popularity of dynamic packaging, Carrick said there will always be demand for traditional packages.
“The traditional package market is not growing but packages are still very suitable for a large number of people so they won’t disappear. However, operators will increasingly package specialist holidays that consumers can’t put together themselves. That is what we are doing at Hoseasons.”
How dynamic packaging companies are growing
Vacenza.com
- December 2006: Vacenza.com launches, offering agents’ access to hotels and transfers in more than 4,000 destinations. Vacenza.com is a sister company to consumer-facing alpharooms.com.
- April 2007: More than 1,300 agents are signed up to the website.
- January 2008: Consumer site is trialled, offering flights, car hire and travel insurance. These will be moved to Alpharooms.com.
- Early 2008: Agents will be able to book flights, car hire and insurance.
Youtravel.com
- February 2006: Youtravel.com launches in Athens.
- October 2006: UK launch. The site offers hotels, but also links for agents to book flights, transfers, car hire and travel insurance. It notches up more than 500,000 hits in the first two days of trading.
- November 2006:Youtravel.com takes on principal status.
- March 2007:Youtravel.com joins ABTA.